Document:

lithia-secondamendmentto

Execution Version  39211237.v17  115525627.2 0063724-00082   SECOND AMENDMENT  TO  FOURTH AMENDED AND RESTATED LOAN AGREEMENT  This Second Amendment to Fourth Amended and Restated Loan Agreement (this  “Amendment”), dated as of June 2, 2022, is entered into among Lithia Motors, Inc., an Oregon  corporation (the “Company”), each of the Subsidiaries of the Company listed on the signature  pages of this Amendment (together with the Company, each a “Borrower” and any two or more  “Borrowers”), the Lenders under the Loan Agreement described below that are signatories to this  Amendment, and U.S. Bank National Association, as Agent for the Lenders (in such capacity,  “Agent”).  R E C I T A L S:  A. The Company, certain of its Subsidiaries, the Lenders and Agent have entered into a Fourth Amended and Restated Loan Agreement dated as of April 29, 2021 (as  amended by that certain First Amendment to Fourth Amended and Restated Loan Agreement,  dated as of February 7, 2022, and as may be further amended, restated, supplemented or otherwise  modified, the “Loan Agreement”).  Capitalized terms not otherwise defined herein shall have the  meanings given to such terms in the Loan Agreement.  B. The Company has requested that the Agent and the Lenders agree to the amendments to the Loan Agreement set forth herein.  C. The Lenders that are signatories to this Amendment, constituting the Required Lenders under the Loan Agreement, have agreed to the amendments to the Loan  Agreement set forth herein.  For valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, the parties agree as follows:  1. Amendments to the Loan Agreement.  From and after the date hereof (the “Second Amendment Effective Date”):   1.1 the Loan Agreement is amended pursuant to this Amendment to  delete the stricken text (indicated textually in the same manner as the following example: stricken  text) and to add the double-underlined text (indicated textually in the same manner as the following  example: double-underlined text) as set forth in the pages of the Loan Agreement attached as  Annex A to this Amendment;   1.2 Schedule 1 to the Loan Agreement is hereby amended by deleting  Schedule 1 of the Loan Agreement in its entirety and replacing it with Schedule 1 attached hereto;  1.3 Each of Exhibit B-1, Exhibit C and Exhibit O to the Loan Agreement  is hereby amended by deleting such exhibit in its entirety and replacing it with Exhibit B-1, Exhibit  C and Exhibit O attached hereto, respectively;  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***],  HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF  INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL 

 

- 2 -  39211237.v17  115525627.2 0063724-00082   1.4 Except as set forth in clauses 1.2 and 1.3 above, all other Exhibits  and Schedules to the Loan Agreement shall not be amended, modified, supplemented or otherwise  affected.  2. Condition Precedent.  The effectiveness of this Amendment is subject to  receipt by Agent of executed originals of this Amendment signed by Agent, each Borrower, each  Guarantor, and the Required Lenders.   3. Reaffirmation; Release.  By signing this Amendment or the attached  Acknowledgment:  3.1 Each Loan Party affirms that the representations and warranties in  each of the existing Loan Documents are true and correct in all material respects as of the date  hereof (except that such representations and warranties that speak as of a specified date or period  of time shall be true and correct in all material respects only as of such date or period of time), and  agree that (i) except as amended previously or in connection herewith, each Loan Document is  valid and enforceable in accordance with its terms (except as may be limited by bankruptcy,  insolvency, reorganization, moratorium, fraudulent transfer or similar laws relating to or limiting  creditors’ rights generally or by equitable principles) and (ii) such Loan Party has no claims,  defenses, setoffs, counterclaims or claims for recoupment against Agent, the Lenders, the other  Indemnified Persons or the indebtedness and obligations represented by the Notes, Guaranties,  Collateral Documents and other Loan Documents.  3.2 Each Loan Party hereby releases, acquits, and forever discharges  Agent, each Lender, their respective parent corporations, affiliates, subsidiaries, successors,  assigns, officers, directors, employees, agents, attorneys and advisors (collectively, “Indemnified  Persons”), and each of them, of and from any and all liability, claims, demands, damages, actions,  causes of action, defenses, counterclaims, setoffs, or claims for recoupment of whatsoever nature,  whether known or unknown, from the beginning of time to the date of this Amendment, whether  in contract or tort or otherwise, arising directly or indirectly from, or in any way related to the  Loan Agreement, this Amendment, the Notes, Collateral Documents and the other Loan  Documents, any other indebtedness or obligations of any Loan Party to Agent or any one or more  of the Lenders or to the relationship between any Loan Party and Agent, any Lender, or the  Indemnified Persons.  3.3 This Amendment is not a novation of the Loan Agreement or of any  credit facility or guaranty provided thereunder or in respect thereof.  Notwithstanding that the  cover page of the Amended Credit Agreement is dated “as of April 29, 2021” and Section 9.01 of  the Loan Agreement attached hereto contains those conditions which were applicable to the initial  Closing Date of April 29, 2021, the changes to the Loan Agreement effected by this Amendment  shall be effective as of the satisfaction to the conditions effectiveness set forth in Section 2 of this  Amendment.  The signature pages contained may be left off of the Loan Agreement attached  hereto.  4. References.  On and after the effective date of this Amendment, all  references in the Loan Agreement and the other Loan Documents to the Loan Agreement shall be  deemed to refer to the Loan Agreement as amended hereby.  

 

- 3 -  39211237.v17  115525627.2 0063724-00082   5. Representations and Warranties.  By signing this Amendment or the  attached Acknowledgment, each Loan Party represents and warrants to Agent and the Lenders as  follows:  5.1 Authorization.  (a) It has all requisite power and authority to enter  into this Amendment and to carry out the transactions contemplated by, and perform its obligations  under, the Loan Agreement as amended by this Amendment (the “Amended Agreement”), (b) its  execution, delivery and performance of this Amendment and the other Loan Documents to be  executed, delivered or performed by it have been duly authorized by all necessary entity action,  do not require the approval of any governmental agency or other Person, do not contravene any  law, regulation, rule, order, or restriction of any Governmental Body binding on it or its articles of  incorporation or other organizational documents, and do not contravene the provisions of or  constitute a default under any agreement or instrument to which it is a party or by which it may be  bound or affected, and (c) this Amendment has been duly executed and delivered by each Loan  Party and this Amendment and the Amended Agreement are the legally valid and binding  obligations of each Loan Party, enforceable against such Loan Party in accordance with their  respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium,  fraudulent transfer or similar laws relating to or limiting creditors’ rights generally or by equitable  principles.  5.2 Absence of Default.  No Default or Event of Default has occurred  and is continuing or will exist after giving effect to the transactions contemplated by this  Amendment.  5.3 Each of the representations and warranties made by any Loan Party  in or pursuant to the Loan Documents are true and correct in all material respects on and as of the  Second Amendment Effective Date, except to the extent such representations and warranties  expressly relate to an earlier date, in which case such representations and warranties are true and  correct in all material respects as of such earlier date (except that, in each case, any representation  and warranty that is qualified as to “materiality” or “Material Adverse Effect” are true and correct  in all respects).  6. Expenses.  Borrowers shall pay all reasonable costs, fees and expenses  (including without limitation, reasonable attorney fees of Agent’s counsel) incurred by Agent in  connection with the preparation, negotiation, execution, and delivery of this Amendment and any  other document required to be furnished herewith.  7. Recitals.  The Recitals are hereby incorporated herein.  8. Counterparts.  This Amendment may be executed in any number of  counterparts, each of which shall be deemed to be an original, and all of said counterparts taken  together shall be deemed to constitute but one document.  9. Disclosure.  Under Oregon law, most agreements, promises and  commitments made by a lender concerning loans and other credit extensions which are not  for personal, family or household purposes or secured solely by the borrower’s residence  must be in writing, express consideration and be signed by the lender to be enforceable.   

 

- 4 -  39211237.v17  115525627.2 0063724-00082   10. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY,  AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OREGON.    [Signature pages follow] 

 

 

 

SECOND AMENDMENT   115525627.2 0063724-00082   DCH MONTCLAIR LLC  DCH MOTORS LLC  DCH NANUET LLC  DCH NY MOTORS LLC  DCH OXNARD 1521 IMPORTS INC.  DCH RIVERSIDE-S, INC.  DCH TEMECULA IMPORTS LLC  DCH TEMECULA MOTORS LLC  DCH TORRANCE IMPORTS INC.  DESERT-CJD, LLC  FARMINGTON HILLS IMPORTS, LLC  FARMINGTON HILLS-CJD, LLC  FARMINGTON HILLS-H, LLC  FARMINGTON HILLS-N, LLC  FARMINGTON HILLS-T, LLC  FERNDALE-BG, LLC  FONTANA-H, INC.   FREEHOLD NISSAN LLC  FRISCO-K, INC.  GARDEN CITY-CJD, LLC  HOUSTON-A, INC.  HOUSTON-H, INC.  HOUSTON-I, INC.  HUTCHINS EUGENE NISSAN, INC.  HUTCHINS IMPORTED MOTORS, INC.  JACKSON-T, LLC  KATY-H, INC.  KNOXVILLE-CJD, LLC  LAD CARSON-N, LLC  LAD MISSION VIEJO-JLR, INC.  LAD-AU, LLC  LAD-MB, LLC  LAD-N, LLC  LAD-P, LLC  LAD-T, LLC  LAD-V, LLC  LAS VEGAS-CJD, LLC  LAS VEGAS-J, LLC  LAUDERDALE-A, LLC  LBMP, LLC  LEAGUE CITY-H, INC  LGPAC, INC.  LITHIA ACDM, INC.  

 

SECOND AMENDMENT   115525627.2 0063724-00082   LITHIA ANCHORAGE-C, LLC  LITHIA ANCHORAGE-H, LLC  LITHIA BAIERL-S, LLC  LITHIA BRYAN TEXAS, INC.  LITHIA BUFFALO-A, LLC  LITHIA CCTF, INC.  LITHIA CDH, INC.  LITHIA CIMR, INC.  LITHIA CJDO, INC.  LITHIA CJDSA, INC.  LITHIA CJDSF, INC.  LITHIA CM, INC.  LITHIA CO, INC.  LITHIA CRATER LAKE-M, INC.  LITHIA CSA, INC.  LITHIA DE, INC.  LITHIA DES MOINES-VW, LLC  LITHIA DMID, INC.  LITHIA DODGE OF TRI-CITIES, INC.  LITHIA FRESNO, INC.  LITHIA HAMILTON-H, LLC  LITHIA HAZLETON-H, LLC  LITHIA HDM, INC.  LITHIA HGF, INC.  LITHIA HMID, INC.  LITHIA IMPORTS OF ANCHORAGE, INC.  LITHIA JEF, INC.  LITHIA KLAMATH, INC.  LITHIA KLAMATH-T, INC.  LITHIA LSGF, INC.  LITHIA MBDM, INC.  LITHIA MEDFORD HON, INC.  LITHIA MIDDLETOWN-L, LLC  LITHIA MOON-S, LLC  LITHIA MOON-V, LLC  LITHIA MORGANTOWN-CJD, LLC  LITHIA MORGANTOWN-S, LLC  LITHIA MTLM, INC.  LITHIA NA, INC.  LITHIA NC, INC.  LITHIA ND ACQUISITION CORP. #3  LITHIA ND ACQUISITION CORP. #4  LITHIA NDM, INC.  

 

SECOND AMENDMENT   115525627.2 0063724-00082   LITHIA NF, INC.  LITHIA OF ABILENE, LLC  LITHIA OF ANCHORAGE, INC.  LITHIA OF BEND #1, LLC  LITHIA OF BEND #2, LLC  LITHIA OF BENNINGTON – 2, LLC  LITHIA OF BENNINGTON – 3, LLC  LITHIA OF BENNINGTON – 4, LLC  LITHIA OF BILLINGS II LLC  LITHIA OF BILLINGS, INC.  LITHIA OF CLEAR LAKE, LLC  LITHIA OF DES MOINES, INC.  LITHIA OF EUREKA, INC.  LITHIA OF FAIRBANKS, INC.  LITHIA OF GREAT FALLS, INC.  LITHIA OF HELENA, INC.  LITHIA OF HONOLULU-A, INC.  LITHIA OF HONOLULU-BGMCC, LLC  LITHIA OF HONOLULU-V, LLC  LITHIA OF KILLEEN, LLC  LITHIA OF LODI, INC.  LITHIA OF MAUI-H, LLC  LITHIA OF MISSOULA II, LLC  LITHIA OF MISSOULA, INC.  LITHIA OF POCATELLO, INC.  LITHIA OF PORTLAND I, LLC  LITHIA OF PORTLAND, LLC  LITHIA OF ROBSTOWN, LLC  LITHIA OF ROSEBURG, INC.  LITHIA OF SANTA ROSA, INC.  LITHIA OF SEATTLE, INC.  LITHIA OF SOUTH CENTRAL AK, INC.  LITHIA OF STOCKTON, INC.  LITHIA OF STOCKTON-V, INC.  LITHIA OF TF, INC.  LITHIA OF TROY, LLC  LITHIA OF UTICA – 1, LLC  LITHIA OF UTICA – 3, LLC  LITHIA OF UTICA – 4, LLC  LITHIA OF WALNUT CREEK, INC.  LITHIA OF WASILLA, LLC  LITHIA OF YORKVILLE – 1, LLC  LITHIA OF YORKVILLE – 2, LLC  

 

SECOND AMENDMENT   115525627.2 0063724-00082   LITHIA OF YORKVILLE – 3, LLC  LITHIA OF YORKVILLE – 4, LLC  LITHIA OF YORKVILLE – 5, LLC  LITHIA ORCHARD PARK-H, LLC  LITHIA PARAMUS-M, LLC  LITHIA PITTSBURGH-S, LLC  LITHIA RAMSEY-B, LLC  LITHIA RAMSEY-L, LLC  LITHIA RAMSEY-M, LLC  LITHIA RAMSEY-T, LLC  LITHIA RENO SUB-HYUN, INC.  LITHIA RENO-CJ, LLC  LITHIA RENO-VW, LLC  LITHIA SALMIR, INC.  LITHIA SEA P, INC.  LITHIA SEASIDE, INC.  LITHIA SOC, INC.  LITHIA SPOKANE-B, LLC  LITHIA SPOKANE-S, LLC  LITHIA TA, INC.  LITHIA TO, INC.  LITHIA TR, INC.  LITHIA VAUDM, INC.  LITHIA WEXFORD-H, LLC  LLL SALES CO LLC  LMBB, LLC  LMBP, LLC  LMOP, LLC  LOS ANGELES-M, INC.  MESQUITE-K, INC.  MISSION HILLS-H, INC.  MOBILE-S, LLC  NEW PORT RICHEY-V, LLC  NOVI-I, LLC  ORLANDO-JLR, LLC  PARAMUS WORLD MOTORS LLC  PHILADELPHIA-F, LLC  PHOENIX-T, INC.  PLYMOUTH-C, LLC  ROCKWALL-H, INC.  ROCKWALL-K, INC.  ROSEVILLE-C, INC  ROSEVILLE-K, INC  

 

SECOND AMENDMENT   115525627.2 0063724-00082   ROSEVILLE-T, INC  ROUND ROCK-K, INC.  SACRAMENTO-L, INC.  SALEM-B, LLC  SALEM-H, LLC  SALEM-V, LLC  SAN FRANCISCO-B, INC.  SANFORD-CJD, LLC  SHARLENE REALTY LLC  SHERMAN OAKS-A, INC.  SHERMAN OAKS-AC, INC.  SHERMAN OAKS-B, INC.  STERLING-BM, LLC  STERLING-RLM, LLC  TAMPA-H, LLC  THOUSAND OAKS-S, INC.  TROY EXOTICS, LLC  TROY-BG, LLC  TROY-C, LLC  TROY-CJD, LLC  TROY-H, LLC  TROY-I, LLC  TROY-JLR, LLC  TROY-M, LLC  TROY-N, LLC  TROY-S, LLC  TROY-T, LLC  TROY-V, LLC  TROY-VW, LLC  TUSTIN MOTORS INC.  UNION-H, LLC  URBANDALE-S, LLC  VALENCIA-A, INC.  VAN NUYS-C, INC.  VAN NUYS-H, INC.  VAN NUYS-L, INC.  VAN NUYS-T, INC.  WESLEY CHAPEL-C, LLC  WESLEY CHAPEL-H, LLC  WESLEY CHAPEL-M, LLC  WESLEY CHAPEL-T, LLC  YUBA CITY-CJD, INC.    

 

 

 

 

 

 

 

 

 

 

 

SECOND AMENDMENT  Internal MERCEDES-BENZ FINANCIAL SERVICES  USA LLC, as Lender  By:  Name:   Title:  Farrah Vaughn-Dixon Regional Dealer Credit Manager 

 

  SECOND AMENDMENT       M&T Bank, as Lender      By:        Name:        Title:          Brendan Kelly VP 

 

 

 

 

 

 

 

 

 

  SECOND AMENDMENT     BMO HARRIS BANK N.A., as Lender      By:        Name:  Ryan Schoen  Title: Director  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  SECOND AMENDMENT   39211237.v17  115525627.2 0063724-00082   ACKNOWLEDGMENT AND CONSENT OF GUARANTORS  Each undersigned Guarantor hereby acknowledges, consents, and agrees to all  terms and conditions of the foregoing Amendment.    797 VALLEY STREET LLC  ANN ARBOR-B, LLC  ANN ARBOR-CC, LLC  ANN ARBOR-CJD, LLC  ANN ARBOR-M, LLC  AUSTIN-H, INC.  AUSTIN-KI, INC.  AVONDALE-N, INC.  BAIERL AUTO PARTS, LLC  BAIERL AUTOMOTIVE CORPORATION  BAIERL CHEVROLET, INC.  BAIERL HOLDING, LLC  BEND-CDJR, LLC  BEND-N, LLC  CADILLAC OF PORTLAND LLOYD CENTER, LLC  CAMP AUTOMOTIVE, INC.  CARBONE AUTO BODY, LLC  CENTENNIAL-HY, LLC  CHAMBLEE-H, LLC  CLEAR LAKE-I, INC.  CLINTON-C, LLC  CORAL SPRINGS-A, LLC  COSTA MESA-CJD, INC.  CRANBERRY AUTOMOTIVE, INC.  DAH CHONG HONG CA TRADING LLC  DAH CHONG HONG TRADING CORPORATION  DALLAS COLLISION, INC.  DALLAS-H, INC.  DALLAS-K, INC.  DALLAS-T, INC.  DARON MOTORS LLC  DCH (OXNARD) INC.  DCH AUTO GROUP (USA) INC.  DCH BLOOMFIELD LLC  DCH CA LLC  DCH CALABASAS-A, LLC  DCH CALIFORNIA INVESTMENTS LLC  DCH CALIFORNIA MOTORS INC.  

 

SECOND AMENDMENT   115525627.2 0063724-00082   DCH DEL NORTE, INC.  DCH DMS NJ, LLC  DCH ESSEX INC.  DCH FINANCIAL NJ, LLC  DCH FREEHOLD LLC  DCH HOLDINGS LLC  DCH INVESTMENTS INC. (NEW JERSEY)  DCH INVESTMENTS INC. (NEW YORK)  DCH KOREAN IMPORTS LLC  DCH MAMARONECK LLC  DCH MISSION VALLEY LLC  DCH MONMOUTH LLC  DCH MONTCLAIR LLC  DCH MOTORS LLC  DCH NANUET LLC  DCH NORTH AMERICA INC.  DCH NY MOTORS LLC  DCH OXNARD 1521 IMPORTS INC.  DCH RIVERSIDE-S, INC.  DCH SIMI VALLEY INC.  DCH SUPPORT SERVICES, LLC  DCH TEMECULA IMPORTS LLC  DCH TEMECULA MOTORS LLC  DCH THOUSAND OAKS-F, INC.  DCH TL HOLDINGS LLC  DCH TL NY HOLDINGS LLC  DCH TORRANCE IMPORTS INC.  DESERT-CJD, LLC  DRIVEWAY MOTORS, LLC  FARMINGTON HILLS IMPORTS, LLC  FARMINGTON HILLS-CJD, LLC  FARMINGTON HILLS-H, LLC  FARMINGTON HILLS-N, LLC  FARMINGTON HILLS-T, LLC  FERNDALE COLLISION, LLC  FERNDALE-BG, LLC  FERNDALE-F, LLC  FH COLLISION, LLC  FLORIDA SS, LLC  FONTANA-H, INC.  FREEHOLD NISSAN LLC  FRISCO-K, INC.  FUSE AUTO SALES, LLC  

 

SECOND AMENDMENT   115525627.2 0063724-00082   GARDEN CITY-CJD, LLC  GREENCARS, INC.  HOUSTON-A, INC.  HOUSTON-H, INC.  HOUSTON-I, INC.  HUTCHINS EUGENE NISSAN, INC.  HUTCHINS IMPORTED MOTORS, INC.  JACKSON-T, LLC  KATY-H, INC.  KNOXVILLE-CJD, LLC  LA MOTORS HOLDING, LLC  LAD ADVERTISING, INC.  LAD CARSON-N, LLC  LAD MISSION VIEJO-JLR, INC.  LAD MOBU, INC.  LAD-AU, LLC  LAD-F, INC.  LAD-MB, LLC  LAD-N, LLC  LAD-P, LLC  LAD-T, LLC  LAD-V, LLC  LAS VEGAS-CJD, LLC  LAS VEGAS-J, LLC  LAS VEGAS-G, LLC  LAS VEGAS-HY, LLC  LATHAM FORD-F, LLC  LAUDERDALE-A, LLC  LBMP, LLC  LEAGUE CITY-H, INC.  LFKF, LLC  LGPAC, INC.  LITHIA ACDM, INC.  LITHIA AIRCRAFT, INC.  LITHIA ANCHORAGE-C, LLC  LITHIA ANCHORAGE-H, LLC  LITHIA ARMORY GARAGE, LLC  LITHIA AUCTION & RECON, LLC  LITHIA AUTO SERVICES, INC.  LITHIA BA HOLDING, INC.  LITHIA BAIERL-S, LLC  LITHIA BNM, INC.  LITHIA BRYAN TEXAS, INC.  

 

SECOND AMENDMENT   115525627.2 0063724-00082   LITHIA BUFFALO-A, LLC  LITHIA CCTF, INC.  LITHIA CDH, INC.  LITHIA CIMR, INC.  LITHIA CJDO, INC.  LITHIA CJDSA, INC.  LITHIA CJDSF, INC.  LITHIA CM, INC.  LITHIA CO, INC.  LITHIA CRATER LAKE-F, INC.  LITHIA CRATER LAKE-M, INC.  LITHIA CSA, INC.  LITHIA DE, INC.  LITHIA DES MOINES-VW, LLC  LITHIA DM, INC.  LITHIA DMID, INC.  LITHIA DODGE OF TRI-CITIES, INC.  LITHIA EATONTOWN-F, LLC  LITHIA FINANCIAL CORPORATION  LITHIA FLCC, LLC  LITHIA FLORIDA HOLDING, INC.  LITHIA FMF, INC.  LITHIA FORD OF BOISE, INC.  LITHIA FRESNO, INC.  LITHIA HAMILTON-H, LLC  LITHIA HAZLETON-H, LLC  LITHIA HDM, INC.  LITHIA HGF, INC.  LITHIA HMID, INC.  LITHIA HPI, INC.  LITHIA IDAHO FALLS-F, INC.  LITHIA IMPORTS OF ANCHORAGE, INC.  LITHIA JEF, INC.  LITHIA KLAMATH, INC.  LITHIA KLAMATH-T, INC.  LITHIA LBGGF, INC.  LITHIA LHGF, INC.  LITHIA LSGF, INC.  LITHIA MBDM, INC.  LITHIA McMURRAY-C, LLC  LITHIA MEDFORD HON, INC.  LITHIA MICHIGAN HOLDING, INC.  LITHIA MIDDLETOWN-L, LLC  

 

SECOND AMENDMENT   115525627.2 0063724-00082   LITHIA MMF, INC.  LITHIA MONROEVILLE-A, LLC  LITHIA MONROEVILLE-C, LLC  LITHIA MONROEVILLE-F, LLC  LITHIA MOON-S, LLC  LITHIA MOON-V, LLC  LITHIA MORGANTOWN-CJD, LLC  LITHIA MORGANTOWN-F, LLC  LITHIA MORGANTOWN-S, LLC  LITHIA MOTORS SUPPORT SERVICES, INC.  LITHIA MTLM, INC.  LITHIA NA, INC.  LITHIA NC, INC.  LITHIA ND ACQUISITION CORP. #1  LITHIA ND ACQUISITION CORP. #3  LITHIA ND ACQUISITION CORP. #4  LITHIA NDM, INC.  LITHIA NF, INC.  LITHIA NORTHEAST REAL ESTATE, LLC  LITHIA NORTHWEST REAL ESTATE, LLC  LITHIA OF ABILENE, LLC  LITHIA OF ANCHORAGE, INC.  LITHIA OF BEND #1, LLC  LITHIA OF BEND #2, LLC  LITHIA OF BENNINGTON – 1, LLC  LITHIA OF BENNINGTON – 2, LLC  LITHIA OF BENNINGTON – 3, LLC  LITHIA OF BENNINGTON – 4, LLC  LITHIA OF BILLINGS II LLC  LITHIA OF BILLINGS, INC.  LITHIA OF CASPER, LLC  LITHIA OF CLEAR LAKE, LLC  LITHIA OF CORPUS CHRISTI, INC.  LITHIA OF DES MOINES, INC.  LITHIA OF EUREKA, INC.  LITHIA OF FAIRBANKS, INC.  LITHIA OF GREAT FALLS, INC.  LITHIA OF HELENA, INC.  LITHIA OF HONOLULU-A, INC.  LITHIA OF HONOLULU-BGMCC, LLC  LITHIA OF HONOLULU-F, LLC  LITHIA OF HONOLULU-V, LLC  LITHIA OF KILLEEN, LLC  

 

SECOND AMENDMENT   115525627.2 0063724-00082   LITHIA OF LODI, INC.  LITHIA OF MAUI-H, LLC  LITHIA OF MISSOULA II, LLC  LITHIA OF MISSOULA III, INC.  LITHIA OF MISSOULA, INC.  LITHIA OF POCATELLO, INC.  LITHIA OF PORTLAND I, LLC  LITHIA OF PORTLAND, LLC  LITHIA OF ROBSTOWN, LLC  LITHIA OF ROSEBURG, INC.  LITHIA OF SANTA ROSA, INC.  LITHIA OF SEATTLE, INC.  LITHIA OF SOUTH CENTRAL AK, INC.  LITHIA OF SPOKANE II, INC.  LITHIA OF SPOKANE, INC.  LITHIA OF STOCKTON, INC.  LITHIA OF STOCKTON-V, INC.  LITHIA OF TF, INC.  LITHIA OF TROY, LLC  LITHIA OF UTICA – 1, LLC  LITHIA OF UTICA – 2, LLC  LITHIA OF UTICA – 3, LLC  LITHIA OF UTICA – 4, LLC  LITHIA OF WALNUT CREEK, INC.  LITHIA OF WASILLA, LLC  LITHIA OF YORKVILLE – 1, LLC  LITHIA OF YORKVILLE – 2, LLC  LITHIA OF YORKVILLE – 3, LLC  LITHIA OF YORKVILLE – 4, LLC  LITHIA OF YORKVILLE – 5, LLC  LITHIA ORCHARD PARK-H, LLC  LITHIA PARAMUS-M, LLC  LITHIA PITTSBURGH-S, LLC  LITHIA RAMSEY-B, LLC  LITHIA RAMSEY-L, LLC  LITHIA RAMSEY-M, LLC  LITHIA RAMSEY-T, LLC  LITHIA REAL ESTATE, INC.  LITHIA RENO SUB-HYUN, INC.  LITHIA RENO-CJ, LLC  LITHIA RENO-VW, LLC  LITHIA ROSE-FT, INC.  LITHIA SALMIR, INC.  

 

SECOND AMENDMENT   115525627.2 0063724-00082   LITHIA SEA P, INC.  LITHIA SEASIDE, INC.  LITHIA SOC, INC.  LITHIA SPOKANE-B, LLC  LITHIA SPOKANE-S, LLC  LITHIA SSP, LLC  LITHIA TA, INC.  LITHIA TENNESSEE HOLDING, INC.  LITHIA TO, INC.  LITHIA TR, INC.  LITHIA UNIONTOWN-C, LLC  LITHIA VA REAL ESTATE, LLC  LITHIA VAUDM, INC.  LITHIA VF, INC.  LITHIA VIRGINIA HOLDING, INC.  LITHIA WEXFORD-H, LLC  LLL SALES CO LLC  LMBB, LLC  LMBP, LLC  LMOP, LLC  LOS ANGELES-M, INC.  LSTAR, LLC  MEDFORD INSURANCE, LLC  MESQUITE-K, INC.  MILFORD DCH, INC.  MISSION HILLS-H, INC.  MOBILE-S, LLC  NEW PORT RICHEY-H, LLC  NEW PORT RICHEY-V, LLC  NORTHLAND FORD INC.  NOVI-I, LLC  ORLANDO-JLR, LLC  PA REAL ESTATE, LLC  PA SUPPORT SERVICES, LLC  PARAMUS COLLISION, LLC  PARAMUS WORLD MOTORS LLC  PERSONALIZED MARKETING, LLC  PHILADELPHIA-F, LLC  PHOENIX-T, INC.  PLYMOUTH-C, LLC  RAMSEY HOLDINGCO, INC.  REDWOOD-HY, LLC   RFA HOLDINGS, LLC  

 

SECOND AMENDMENT   115525627.2 0063724-00082   ROCKWALL-H, INC.  ROCKWALL-K, INC.  ROSEVILLE-C, INC.  ROSEVILLE-K, INC.  ROSEVILLE-T, INC  ROUND ROCK-K, INC.  SACRAMENTO-L, INC.  SALEM-B, LLC  SALEM-H, LLC  SALEM-V, LLC.  SAN FRANCISCO-B, INC.  SANFORD-CJD, LLC  SHARLENE REALTY LLC  SHERMAN OAKS-A, INC.  SHERMAN OAKS-AC, INC.  SHERMAN OAKS-B, INC.  SHIFT PORTLAND, LLC  STERLING HEIGHTS-F, LLC  STERLING-BM, LLC  STERLING-RLM, LLC  SUBURBAN AUTO AGENCY, LLC  TAMPA-F, LLC  TAMPA-H, LLC  THOUSAND OAKS-S, INC.  TN REAL ESTATE, LLC  TROY COLLISION, LLC  TROY EXOTICS, LLC  TROY-A, LLC  TROY-BG, LLC  TROY-C, LLC  TROY-CJD, LLC  TROY-F, LLC  TROY-H, LLC  TROY-I, LLC  TROY-JLR, LLC  TROY-M, LLC  TROY-N, LLC  TROY-S, LLC  TROY-T, LLC  TROY-V, LLC  TROY-VW, LLC  TUSTIN MOTORS INC.  UNION-H, LLC  

 

 

 

ANNEX A  39211237.v17  115525627.2 0063724-00082   Amended Loan Agreement      [see attached]. 

 

Execution Version Conformed through First Amendment to Fourth Amended and Restated Loan Agreement Conformed through Second Amendment to Fourth Amended and Restated Loan Agreement Deal CUSIP 53679VAB62  New Vehicle Floorplan Facility CUSIP 53679VAD2 Used Vehicle Floorplan Facility CUSIP 53679VAC4          Service Loaner Vehicle Floorplan Facility CUSIP 53679VAE0 Revolving Line of Credit Facility CUSIP 53679VAB6 FOURTH AMENDED AND RESTATED LOAN AGREEMENT Among LITHIA MOTORS, INC., CERTAIN OF ITS SUBSIDIARIES, THE LENDERS PARTY HERETO FROM TIME TO TIME, and U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent and Agent and JPMorgan Chase Bank, N.A., Toyota Motor Credit Corporation, Mercedes-Benz Financial Services USA LLC, and Bank of America, N.A, as Co-Syndication Agents U.S. Bank National Association, J.P. Morgan Securities LLC and Toyota Motor Credit Corporation, As Co-Lead Arrangers and Joint Bookrunners 110393723.6 0063724-00082 39715749 115525625.4 0063724-00082 

 

American Honda Finance Corporation and TD Bank, N.A., as Co-Documentation Agents Dated as of April 29, 2021 2 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

TABLE OF CONTENTS ARTICLE 1 DEFINITIONS AND INTERPRETIVE PROVISIONS 1 1.1 Defined Terms 1 1.2 Divisions.. 44 1.3 Other Interpretive Provisions. 44 1.4 LIBOR Notification.Rates. 46 1.5 Limited Condition Acquisition. 46 ARTICLE 2 NEW VEHICLE FLOORPLAN LINE OF CREDIT 47 2.1 New Vehicle Floorplan Loans. 47 2.2 New Vehicle Swing Line Loans. 50 2.3 Terms Applicable to New Vehicle Floorplan Loans and New Vehicle Swing Line Loans. 54 2.4 New Vehicle Floorplan Borrowers. 56 2.5 Addition of New Vehicle Floorplan Dealerships 61 ARTICLE 3 USED VEHICLE FLOORPLAN AND SERVICE LOANER VEHICLE FLOORPLAN LINE OF CREDIT 64 3.1 Used Vehicle Floorplan Loans. 64 3.2 Used Vehicle Swing Line Loans. 67 3.3 Service Loaner Vehicle Floorplan Loans. 70 3.4 Service Loaner Vehicle Swing Line Loans. 73 ARTICLE 4 REVOLVING LINE OF CREDIT 77 4.1 Revolving Loans. 77 4.2 Revolving Swing Line Loans. 80 ARTICLE 5 LETTERS OF CREDIT 83 5.1 Letter of Credit Commitment 83 5.2 Existing Letters of Credit 83 5.3 LC Agreements 83 5.4 Expiry Date 84 5.5 Requests for Letters of Credit 84 5.6 Participation in Letters of Credit 84 5.7 Payments 85 5.8 Terms Satisfactory to LC Issuer 85 5.9 Obligations Absolute 85 5.10 Letter of Credit Fees. 86 5.11 LC Collateral Account 86 5.12 Borrower Indemnification 87 5.13 Lenders’ Indemnification 87 ARTICLE 6 CERTAIN ADDITIONAL PROVISIONS 88 6.1 Interest. 88 6.2 Evidence of Debt 88 6.3 Borrowing Procedure. 89 6.4 Obligations Several 89 6.5 Non-Receipt of Funds by the Agent 89 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

6.6 Authorization 90 6.7 Interest and Fee Basis 90 6.8 Method of Payment 91 6.9 Payment by Automatic Debit 91 6.10 Late Charges 91 6.11 Limitation of Interest 91 6.12 Increase Option. 92 6.13 Authorization 93 6.14 Defaulting Lenders. 93 6.15 Replacement of Lender 97 6.16 Per Annum Fee 97 6.17 Reallocation of Commitments. 97 6.18 Extension of Commitments. 99 6.19 Designation of Dual Subsidiaries. 100 6.20 Erroneous Payments 102 ARTICLE 7 YIELD PROTECTION; TAXES 103 7.1 Yield Protection 103 7.2 Changes in Capital Adequacy Regulations 104 7.3 Availability of Types of Advances; Adequacy of Interest Rate 105 7.4 Taxes. 107 7.5 Selection of Lending Installation; Mitigation Obligations; Lender Statements; Survival of Indemnity 111 ARTICLE 8 SECURITY AND GUARANTIES 111 8.1 Security. 111 8.2 Guaranties 113 ARTICLE 9 CONDITIONS PRECEDENT 113 9.1 Initial Conditions Precedent 113 9.2 Conditions Precedent to Each Credit Extension 115 9.3 Conditions Precedent to Initial Advance to any New Vehicle Floorplan Borrower 116 9.4 Real Property Conditions 117 ARTICLE 10 REPRESENTATIONS AND WARRANTIES 118 10.1 Existence and Standing 118 10.2 Authorization and Validity 118 10.3 Conflict; Government Consent 119 10.4 Financial Statements 119 10.5 Material Adverse Effect 119 10.6 Taxes 119 10.7 Litigation 119 10.8 Subsidiaries and Affiliates 120 10.9 ERISA 120 10.10 Accuracy of Information 120 10.11 Regulation U 120 ii 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

10.12 Material Agreements 120 10.13 Compliance with Laws 121 10.14 Ownership of Properties 121 10.15 Plan Assets; Prohibited Transactions 121 10.16 Trademarks; Patents, Etc. 121 10.17 Burdensome Restrictions 121 10.18 [Reserved] 121 10.19 Investment Company Act, Etc. 121 10.20 Solvency 121 10.21 Franchise Agreements; Material Business Relationships 122 10.22 Security Interests 122 10.23 Continuing Representations and Warranties 122 10.24 Anti-Corruption Laws; Sanctions 122 10.25 EEAAffected Financial Institution 122 ARTICLE 11 FINANCIAL COVENANTS AND INFORMATION 123 11.1 Financial Covenants. 123 11.2 Financial Information 124 ARTICLE 12 AFFIRMATIVE COVENANTS 126 12.1 Maintenance of Existence and Permits 127 12.2 ERISA 127 12.3 Inspection 127 12.4 Collateral Audits 127 12.5 Books and Records 128 12.6 Maintenance of Properties 128 12.7 Taxes and Other Obligations 128 12.8 Insurance. 128 12.9 Compliance with Laws 129 12.10 Agreements with Sellers 129 12.11 Repurchase Agreements 129 12.12 [Reserved] 129 . 129 12.13 Landlord’s Consents 129 12.14 Notification 130 12.15 Further Assurances 131 12.16 Deposit Accounts 131 12.17 Joinder of New Subsidiaries 132 12.18 Use of Proceeds 132 12.19 Anti-Money Laundering Compliance 132 12.20 Joinder of Additional Dual Subsidiary Lenders 133 ARTICLE 13 NEGATIVE COVENANTS 133 13.1 Mergers, Etc. 133 13.2 [Reserved]. 134 13.3 Liens 135 iii 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

13.4 Restricted Payments 137 13.5 Subordinated Debt 138 13.6 Loans and Investments 138 13.7 Transactions with Affiliates 140 13.8 Type of Business 140 13.9 Structure 140 13.10 Indebtedness 140 13.11 Margin Stock; Speculation 142 13.12 Restrictive Agreements 142 13.13 Permitted Acquisitions 143 13.14 Accounting Changes; Fiscal Year 145 13.15 Excluded Tax Credit Investment Subsidiaries 145 13.16 Dual Subsidiaries 145 13.17 Additional Credit Support Documentation. 146 ARTICLE 14 DEFAULT AND REMEDIES 146 14.1 Events of Default 146 14.2 Consequences of Default; Rights and Remedies.  Time is of the essence of this Agreement. 149 14.3 Application of Payments 150 ARTICLE 15 HAZARDOUS SUBSTANCES 151 15.1 Representations and Warranties 151 15.2 Activities 151 15.3 Inspections 151 15.4 Release and Indemnity 151 15.5 Survival 151 ARTICLE 16 THE AGENT 151 16.1 Appointment; Nature of Relationship 151 16.2 Powers 152 16.3 General Immunity 152 16.4 No Responsibility for Loans, Recitals, Etc. 152 16.5 Action on Instructions of Lenders 153 16.6 Employment of the Agents and Counsel 153 16.7 Reliance on Documents; Counsel 153 16.8 Reimbursement and Indemnification 153 16.9 Notice of Event of Default 154 16.10 Rights as a Lender 154 16.11 Lender Credit Decision, Legal Representation. 154 16.12 Successor Agent 155 16.13 Agent’s Fees 155 16.14 Delegation to Affiliates 155 16.15 Execution of Collateral Documents 156 16.16 Collateral Releases 156 16.17 No Advisory or Fiduciary Responsibility 156 iv 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

16.18 Co-Documentation Agents, Syndication Agent, etc. 156 16.19 Certain ERISA Matters. 156 ARTICLE 17 MISCELLANEOUS 157 17.1 Expenses; Indemnification 158 17.2 Successors and Assigns 159 17.3 Participations. 159 17.4 Assignments. 161 17.5 Register 162 17.6 Dissemination of Information 162 17.7 Ratable Payments 162 17.8 Setoff 162 17.9 Amendments and Waivers. 163 17.10 Waiver; Cumulative Remedies 164 17.11 Notices. 164 17.12 Integration; Conflicting Terms 166 17.13 Governing Law 166 17.14 Consent To Jurisdiction 166 17.15 Documents Satisfactory to the Agent and Required Lenders 167 17.16 Exhibits 167 17.17 Headings 167 17.18 Nonliability of Lenders 167 17.19 Survival of Representations 167 17.20 Governmental Regulation 167 17.21 Counterparts 167 17.22 Severability 168 17.23 Construction 168 17.24 USA Patriot Act Notification 168 17.25 Nonreliance 168 17.26 Confidentiality 168 17.27 Ford Letter Agreement 169 17.28 Waiver of Jury Trial 169 17.29 Disclosure 169 17.30 Acknowledgement and Consent to Bail-In of EEAAffected Financial Institutions 169 17.31 Amendment and Restatement 170 17.32 Acknowledgement Regarding any Supported QFCs. 170 SCHEDULE 1 – COMMITMENTS SCHEDULE 2 – DUAL SUBSIDIARIES PRICING SCHEDULE DISCLOSURE SCHEDULE EXHIBIT A – COMPLIANCE CERTIFICATE v 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

EXHIBIT B-1 – USED VEHICLE BORROWING BASE CERTIFICATE EXHIBIT B-2 – SERVICE LOANER VEHICLE BORROWING BASE CERTIFICATE EXHIBIT C – REVOLVING LOAN BORROWING BASE CERTIFICATE EXHIBIT D – ASSIGNMENT AGREEMENT EXHIBIT E –  PLEDGE AGREEMENT EXHIBIT F –  SECURITY AGREEMENT EXHIBIT G – COMMERCIAL GUARANTY EXHIBIT H-1 – LOAN PARTY TERMINATION AGREEMENT EXHIBIT H-2 – SILO SUBSIDIARY TERMINATION AGREEMENT EXHIBIT I –   BORROWER JOINDER AGREEMENT EXHIBIT J –   GUARANTOR JOINDER AGREEMENT EXHIBIT K –  EXISTING SUBSIDIARY JOINDER AGREEMENT EXHIBIT L –  BORROWER TERMINATION AGREEMENT EXHIBIT M – ADDITIONAL LENDER AGREEMENT EXHIBIT N –  INCREASING LENDER AGREEMENT EXHIBIT O –  REALLOCATION REQUEST vi 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

FOURTH AMENDED AND RESTATED LOAN AGREEMENT This Fourth Amended and Restated Loan Agreement (“Agreement”) is entered into as of April 29, 2021, among Lithia Motors, Inc., an Oregon corporation (the “Company”), each of the Subsidiaries of the Company listed on the signature pages of this Agreement or which hereafter becomes a Borrower hereunder, each financial institution listed on the signature pages of this Agreement or which hereafter becomes a party hereto (each a “Lender” and any two or more, “Lenders”); and U.S. Bank National Association (“U.S. Bank”), as the Agent for the Lenders. RECITALS A. The Company, certain of its Subsidiaries, the lenders from time to time parties thereto, and the Agent, are party to that certain Third Amended and Restated Loan Agreement dated as of December 9, 2019 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Existing Loan Agreement”), pursuant to which such lenders under the Existing Loan Agreement extended a revolving credit facility to the Company and certain of its Subsidiaries, such lenders extended a new vehicle floorplan line of credit to the New Vehicle Floorplan Borrowers, such lenders extended a used vehicle floorplan line of credit to the Company, and such lenders extended a service loaner vehicle floorplan line of credit to the Company. B. The Company and the other Borrowers have asked the Lenders and the Agent to further amend and restate the Existing Loan Agreement to (a) increase the “Aggregate Commitment” specified in the Existing Loan Agreement from $2,800,000,000 to $3,750,000,000, and (b) make such additional amendments and modifications to the terms and conditions of the Existing Loan Agreement as are more specifically set forth herein. In consideration of the mutual covenants and agreements set forth herein and for other valuable consideration, the parties hereto agree that the Existing Loan Agreement is amended and restated in its entirety as follows: ARTICLE 1 DEFINITIONS AND INTERPRETIVE PROVISIONS 1.1 Defined Terms.  As used in this Agreement, the following terms shall have the following meanings: “Access Laws” means the Americans With Disabilities Act of 1990; the Fair Housing Amendments Act of 1988; all other federal, state and local laws or ordinances related to disabled access; and all statutes, rules, regulations, ordinances, orders of governmental bodies and regulatory agencies and orders and decrees of any court adopted, enacted or issued with respect thereto; all as now existing or hereafter amended or adopted. “Acquisition” has the meaning set forth in Section 13.13. “Acquisition Subsidiary” means any Subsidiary to be acquired in an Acquisition. 1 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Additional Commitment Lender” has the meaning set forth in Section 6.18.4. “Additional Lender” has the meaning set forth in Section 6.12.2. “Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to (a) the Term SOFR Base Rate 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. “Adjusted Daily Simple SOFR” means, for any day (a “SOFR Interest Day”), an interest rate per annum equal to the greater of (a) the sum of (i) SOFR for the day that is five Business Days prior to (A) if such SOFR Interest Day is a Business Day, such SOFR Interest Day or (B) if such SOFR Interest Day is not a Business Day, the Business Day immediately preceding such SOFR Interest Day and (ii) the Simple SOFR Adjustment and (b) the Floor; provided that if SOFR is not published on such Business Day due to a holiday or other circumstance that the Agent deems in its sole discretion to be temporary, the applicable SOFR rate shall be the SOFR rate last published prior to such Business Day. Any change in Adjusted 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 Company. For purposes of determining any interest rate hereunder or under any Loan Document which is based on Adjusted Daily Simple SOFR, such interest rate shall change as and when Adjusted Daily Simple SOFR shall change. “Advance” means a New Vehicle Floorplan Advance, Used Vehicle Floorplan Advance, Service Loaner Vehicle Floorplan Advance, Revolving Loan Advance, or (unless otherwise expressly provided), a Swing Line Loan. “Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution. “Affected Lender” has the meaning set forth in Section 6.15.  “Affiliate” means with respect to any Person (a) each other Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more of the stock or other ownership interests having ordinary voting power of such Person; (b) each Person that Controls, is Controlled by or is under common Control with such Person or any Affiliate of such Person; and (c) each of such Person’s executive officers, directors, joint venturers, members and general partners. “Agent” or “Administrative Agent” means U.S. Bank in its capacity as contractual representative of the Lenders pursuant to Article 16, and not in its individual capacity as a Lender, and any successor Agent appointed pursuant to Article 16. “Aggregate Commitment” means, at any time, the sum of the Aggregate New Vehicle Floorplan Commitment, plus the Aggregate Used Vehicle Floorplan Commitment, plus the Aggregate Service Loaner Vehicle Floorplan Commitment, plus the Aggregate Revolving Loan Commitment, as adjusted from time to time pursuant to the terms hereof, provided that, except 2 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

as provided in Section 6.12, the Aggregate Commitment shall not be more than $3,750,000,000.00. “Aggregate Lender Commitment” means, for any Lender, the sum of such Lender’s New Vehicle Floorplan Commitment, Used Vehicle Floorplan Commitment, Service Loaner Vehicle Floorplan Commitment, and Revolving Loan Commitment. “Aggregate New Vehicle Floorplan Commitment” means, at any time, the aggregate of the New Vehicle Floorplan Commitments of all Lenders at such time. “Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the Outstanding Credit Exposure of all Lenders at such time. “Aggregate Outstanding New Vehicle Floorplan Exposure” means, at any time, the aggregate of the Outstanding New Vehicle Floorplan Exposure of all Lenders at such time. “Aggregate Outstanding Revolving Loan Exposure” means, at any time, the aggregate of the Outstanding Revolving Loan Exposure of all Lenders at such time. “Aggregate Outstanding Service Loaner Vehicle Floorplan Exposure” means, at any time, the aggregate of the Outstanding Service Loaner Vehicle Floorplan Exposure of all Lenders at such time. “Aggregate Outstanding Used Vehicle Floorplan Exposure” means, at any time, the aggregate of the Outstanding Used Vehicle Floorplan Exposure of all Lenders at such time. “Aggregate Revolving Loan Commitment” means, at any time, the aggregate of the Revolving Loan Commitments of all Lenders at such time; provided that the Aggregate Revolving Loan Commitment shall not at any time be more than 20.0040.00% of the amount of the Aggregate Commitment at such time. “Aggregate Service Loaner Vehicle Floorplan Commitment” means, at any time, the aggregate of the Service Loaner Vehicle Floorplan Commitments of all Lenders at such time; provided that the Aggregate Service Loaner Vehicle Floorplan Commitment shall not at any time be more than 3.0% of the amount of the Aggregate Commitment at such time. “Aggregate Used Vehicle Floorplan Commitment” means, at any time, the aggregate of the Used Vehicle Floorplan Commitments of all Lenders at such time; provided that the Aggregate Used Vehicle Floorplan Commitment shall not at any time be more than 20.00% of the amount of the Aggregate Commitment at such time. “Agreement” has the meaning set forth in the introductory paragraph. “Alternate Base Rate” means, for any day, a rate of interest per annum equal to the highest of (a) the Prime Rate for such day, (b) the sum of the Federal Funds Effective Rate for such day plus .50% per annum and (c) the Eurocurrency RateAdjusted Daily Simple SOFR in effect for such day plus 1.50%, provided that.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate, foror the avoidance of doubt, the 3 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Eurocurrency Rate for any dayAdjusted Daily Simple SOFR shall be based oneffective from the rate reported by the applicable financial information service at approximately 11:00 a.m. London time on such dayeffective date of such change. If the Alternate Base Rate is being used when Daily Simple SOFR Loans are unavailable pursuant to Section 7.3, then the Alternate Base Rate shall be the highest of clauses (a) and (b), without reference to clause (c) above. “Alternate Base Rate Margin (New Vehicle)” has the meaning set forth in the Pricing Schedule. “Alternate Base Rate Margin (Revolving)” has the meaning set forth in the Pricing Schedule. “Alternate Base Rate Margin (Service Loaner Vehicle)” has the meaning set forth in the Pricing Schedule. “Alternate Base Rate Margin (Used Vehicle)” has the meaning set forth in the Pricing Schedule. “Anniversary Date” means each anniversary of the Closing Date. “Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder, and any other anti-corruption law applicable to any Borrower and its Subsidiaries. “Applicable Law” means all applicable provisions and requirements of (a) all constitutions, statutes, ordinances, rules, regulations, standards, orders, and directives of any Governmental Bodies, (b) Governmental Approvals, and (c) orders, decisions, decrees, judgments, injunctions, and writs of all courts and arbitrators, whether such Applicable Laws presently exist, or are modified, promulgated, or implemented after the date hereof. “Appraisal” means an appraisal of real property which is (a) ordered by the Agent, (b) prepared by an appraiser satisfactory to the Agent, (c) in compliance with all federal and state standards for appraisals and all regulatory requirements, (d) reviewed by the Agent, and (e) in form and substance satisfactory to the Agent in its sole and absolute discretion. “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender. “Assignee” has the meaning set forth in Section 17.4. “Assignment Agreement” means an agreement substantially in the form attached as Exhibit D. “Attorney Costs” means and includes all reasonable fees and disbursements of any law firm or retained counsel and of any in-house or internal counsel whether or not litigation or arbitration is commenced, and if litigation or arbitration is commenced shall include fees and disbursements incurred at trial, in any appellate proceeding, bankruptcy proceeding (including 4 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

efforts to modify or vacate any automatic stay or injunction) or receivership, and post-judgment attorney fees incurred in enforcing any judgment. “Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark orthat is or may be used for determining the length of an Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (v) of Section 7.3.1(b). “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEAAffected Financial Institution. “Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom,  Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings). “Benchmark” means, initially, the Eurocurrency Base Rate; provided that if a Benchmark Transition EventAdjusted Daily Simple SOFR, aAdjusted Term SOFR Transition Event, or an Early Opt-in Electionor the Term SOFR Alternative Rate, as applicable, and its related; provided that if a replacement of the Benchmark Replacement Date havehas occurred with respect to the Eurocurrency Base Rate or the then-current Benchmarkpursuant to Section 7.3(b), then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has become effective pursuant to Section 7.3.17.3(b). “Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by, and is administratively feasible for, the Agent for the applicable Benchmark Replacement Date: (1) the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment; (2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;(3) the sum of: (a) the alternate benchmark rate that has been selected by the Agent and the Company as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current 5 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Benchmark for U.S. dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Agent in its reasonable discretion; provided further that, notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above).  If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents. “Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement: (1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Agent:(a)  the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor; (b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and (2) for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Agent and the Company for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities;. 6 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Agent in its reasonable discretion. “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Advance” and “EurocurrencySOFR Loans,” the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents). “Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark: (1) (1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); (2) (2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date ofon 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 publicmost recent statement or publication of information referenced therein;(3) in the case of a Term SOFR Transition Event, the date that is 30 days after the date a Term SOFR Notice is provided to the Lenders and the Company so long as the Agent has not received, by such time, written notice of objection to such Term SOFR Notice from the Borrowersuch clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date; orand (4) (3) in the case of an Early Opt-in Election, the sixth Business Day afterspecified by the dateAgent in the notice of suchthe Early Opt-in Election is provided to the Lenders, so long as the Agent has not received, by 5:00 p.m. (New York CityCentral time) on the fifth Business Day after the date notice of such Early Opt-in 7 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders. For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof). “Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark: (1) (1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); (2) (2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or (3) (3) a public statement or publication of information by the regulatory supervisor for the administratorany of such Benchmark (or the published component used in the calculation thereof)entities referenced in clause (2) above announcing that all Available Tenors of such Benchmark (or such component thereof) are 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 each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof). 8 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 7.3.17.3, and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 7.3.17.3. “Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation. “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230. “Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan.” “Borrower” means a New Vehicle Floorplan Borrower, the Used Vehicle Floorplan Borrower, the Service Loaner Vehicle Floorplan Borrower or the Revolving Loan Borrower and “Borrowers” means any two or more of them. “Borrower Joinder Agreement” means an agreement substantially in the form attached hereto as Exhibit I. “Borrower Termination Agreement” means an agreement substantially in the form attached hereto as Exhibit L. “Business Day” means (a) with respect to any borrowing, payment or rate determination, aany day (other than a Saturday or Sunday) on which banks generally are open in New York City, New York or Seattle, Washington for the conduct of substantially all of their commercial lending activities, and interbank wire transfers can be made on the Fedwire system and dealings in Dollars are carried on in the London interbank market and (b) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in New York City, New York for; provided that when used in connection with a SOFR Loan, the component of the Alternate Base Rate based upon SOFR or any other calculation or determination involving SOFR, the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire systemterm “Business Day” means any such day that is also a U.S. Government Securities Business Day. “Canadian Dealership” means a Dealership whose primary business is the retail sales or retail sale and lease of new and/or used automobiles, trucks and/or motorcycles in Canada. “Canadian Receivables or Securitization Assets” means (a) any accounts receivable, mortgage receivables, loan receivables, equipment, royalty, franchise fee, license fee, patent or 9 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

other revenue streams and other rights to payment or related assets and the proceeds thereof and any securities backed by such assets and (b) all collateral securing such receivable or assets, all contracts and contract rights, guarantees or other obligations in respect of such receivable or asset, lockbox accounts and records with respect to such account or asset and any other asset customarily transferred (or in respect of which security interests are customarily granted) together with accounts or assets in connection with a securitization or receivable sale transaction. “Canadian Receivables or Securitization Transaction” means one or more transactions pursuant to which (i) Canadian Receivables or Securitization Assets or interests therein are sold or transferred to or financed by one or more Special Purpose Securitization Subsidiaries, and (ii) such Special Purpose Securitization Subsidiaries finance (or refinance) their acquisition of such Canadian Receivables or Securitization Assets or interests therein, or the financing thereof, by selling or borrowing against Canadian Receivables or Securitization Assets (including conduit and warehouse financings) and any hedging agreements entered into in connection with such Canadian Receivables or Securitization Assets; provided, that recourse to the Company or any Subsidiary (other than the Special Purpose Securitization Subsidiaries) in connection with such transactions shall be limited to the extent customary (as determined by the Company in good faith) for similar transactions in the applicable jurisdictions (including, to the extent applicable, in a manner consistent with the delivery of a “true sale”/“absolute transfer” opinion with respect to any transfer by the Company or any Subsidiary (other than a Special Purpose Securitization Subsidiary)). “Canadian Subsidiary” means any Subsidiary of the Company organized under the laws of Canada or any province in Canada. “Canadian Subsidiary Indebtedness” has the meaning set forth in Section 13.10(p). “Capitalized Lease” of a Person means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. “Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with GAAP. “Cash Collateralize” means to deposit in the LC Collateral Account or to pledge and deposit with or deliver to the Agent, for the benefit of one or more of the LC Issuer or Lenders, as collateral for the LC Obligations or obligations of Lenders to fund participations in respect of LC Obligations, cash or deposit account balances or, if the Agent and the LC Issuer shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Agent and the LC Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support. “Cash Equivalent Investments” means (i) short-term obligations of, or fully guaranteed by, the United States of America, (ii) commercial paper rated A-1 or better by S&P or P-1 or 10 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

better by Moody’s, (iii) demand deposit accounts maintained in the ordinary course of business, and (iv) certificates of deposit issued by and time deposits with commercial banks (whether domestic or foreign) having capital and surplus in excess of $500,000,000; provided in each case that the same provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency regarding the payment of principal or interest, (v) shares of money market mutual funds that are rated at least “AAAm” or “AAAG” by S&P or “P-1” or better by Moody’s, and (vi) other cash equivalent investments approved in writing by the Agent. “Change in Control” means: (i) the acquisition by any Person, or two or more Persons acting in concert, in either case other than Lithia Holding Company, L.L.C. and the Principal, of beneficial ownership (within the meaning of Rule 13d-3 of the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934) of 35% or more of the outstanding shares of voting stock of the Company on a fully diluted basis; (ii) within any twelve-month period, occupation of a majority of the seats (other than vacant seats) on the board of directors of the Company by Persons who were neither (x) nominated by the board of directors of the Company nor (y) appointed or approved by directors so nominated; (iii) the Company consolidates with or merges into another Person or conveys, transfers or leases all or substantially all of its property to any Person, or any Person consolidates with or merges into the Company, in either event pursuant to a transaction in which the outstanding capital stock of the Company is reclassified or changed into or exchanged for (A) cash or Cash Equivalent Investments or (B) securities, and the holders of the capital stock in the Company immediately prior to such transaction do not, as a result of such transaction, own, directly or indirectly, more than 51% of the combined voting power of the Company’s capital stock or the capital stock of its successor entity in such transaction or (iv) a “change of control” or “change of ownership” (or any term substantially equivalent to any of the foregoing phrases in this clause (iv)) occurs, in each case, as such term or phrase is defined in any indenture evidencing or relating to any debt securities of the Company or any Subsidiary thereof (other than a Canadian Subsidiary or an Excluded Subsidiary) issued in a transaction registered with the SEC or issued to qualified institutional buyers for resale pursuant to Rule 144A of the Securities Act. “Change in Law” has the meaning set forth in Section 7.1. “Claims” has the meaning set forth in Section 5.12. “Closing Date” means April 29, 2021, the date on which all conditions precedent in Section 9.1 are satisfied. “Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time or any successor federal income tax statute or code and the regulations and published interpretations promulgated thereunder. “Collateral” has the meaning set forth in Section 8.1.1. “Collateral Documents” means and includes the Security Agreement, the Pledge Agreement, and all deeds of trust, assignments, mortgages, security agreements, bank account 11 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

control agreements, and other documents executed or delivered to the Agent by any Person at any time to evidence and/or perfect security interests in the Collateral. “Commitment” means, as to any Lender, such Lender’s Revolving Loan Commitment, New Vehicle Floorplan Commitment, Used Vehicle Floorplan Commitment, Service Loaner Vehicle Floorplan Commitment, Letter of Credit Commitment, Revolving Swing Line Commitment, New Vehicle Swing Line Commitment, Used Vehicle Swing Line Commitment, or Service Loaner Vehicle Floorplan Swing Line Commitment. “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. Section 1 et seq.), as amended from time to time, and any successor statute. “Company” means Lithia Motors, Inc., an Oregon corporation. “Compliance Certificate” means a certificate substantially in the form attached as Exhibit A, or in such other form as is acceptable to the Agent. “Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes. “Contingent Obligation” means any guarantee of Indebtedness of any other Person or any agreement to maintain the net worth, working capital or other financial condition of any other Person in respect of such other Person’s Indebtedness, whether direct, indirect or contingent, including, without limitation, any purchase or repurchase agreement, comfort letter, or keep-well, take-or-pay, through-put or other arrangement of whatever nature having the effect of assuring or holding harmless any Person against loss with respect to any Indebtedness of such other Person; provided, however, that the term “Contingent Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined in good faith by the Person subject to such obligation. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise and “Controlled by” shall have the concomitant meaning. For purposes of determining whether a Minority Dealer is a Minority Dealer Affiliate or a Minority Dealer Subsidiary, “Control” shall be established when (i) a Loan Party is the manager of the Minority Dealer or (ii) the manager of the Minority Dealer has delegated to a Loan Party all or a substantial portion of such manager’s power and authority under the Minority Dealer’s operating agreement, bylaws, limited liability company agreement or other applicable organizational documents, and, in the case of clause (i) or (ii), such Minority Dealer is reflected in the audited, consolidated financial statements of the Company.  “Controlled Group” means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common 12 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

control which, together with any Loan Party or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code. “Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor. “Credit Extension” means the making of an Advance or the issuance of a Letter of Credit hereunder. “Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Agent decides that any such convention is not administratively feasible for the Agent, then the Agent may establish another convention in its reasonable discretion Loan” means any Loan bearing interest at a rate based on Adjusted Daily Simple SOFR (other than pursuant to the Adjusted Daily Simple SOFR component of the definition of “Alternate Base Rate”). “DFC” means Driveway Finance Corporation, an Oregon corporation. “DFC Indebtedness” has the meaning set forth in Section 13.10(r). “DFC Subsidiary” means any of (a) DFC and (b) each Subsidiary of DFC. “Dealership” means a Subsidiary of the Company whose primary business is the retail sales or retail sale and lease of new and/or used automobiles, trucks and/or motorcycles in the United States of America or in Canada. “Dealership Loan Limit” has the meaning set forth in Section 2.3.1(b). “Dealership Sublimit” has the meaning set forth in Section 2.3.1(b). “Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect. “Deemed Sale” has the meaning set forth in Section 2.3.3(c). “Default” means any Event of Default or any event which with the giving of notice or the passage of time, or both, would constitute an Event of Default. “Defaulting Lender” means, subject to 6.14.2, any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days after the date such Loans were required to be funded hereunder unless such Lender notifies the Agent and Company in writing 13 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied or waived, or (ii) pay to the Agent, the LC Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two (2) Business Days after the date when due, (b) has notified any Borrower, the Agent, the LC Issuer or the Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Agent or the Company, to confirm in writing to the Agent and the Company that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Company), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets (other than an Undisclosed Administration), including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 6.14.2) upon delivery of written notice of such determination to the Company, the LC Issuer, the Swing Line Lender and each Lender. “Default Rate” has the meaning set forth in Section 6.1.2. “Demo” means any New Vehicle (except that any mileage limitations included in the definition for a particular type of Vehicle shall not be applicable to Demos) that is used by a Dealership as a demonstration unit. “Disclosure Schedule” means the Disclosure Schedule attached hereto. “Dollar” or “$” means lawful money of the United States of America. “Dual Subsidiary” means a Subsidiary which has entered into separate floorplan financing arrangements with at least one Dual Subsidiary Lender. The Dual Subsidiaries as of 14 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

the Closing Date are set forth on Schedule 2. The Company may designate Subsidiaries as Dual Subsidiaries from time to time in accordance with Sections 6.19 and 13.16. “Dual Subsidiary Financing Commencement Date” means, with respect to any Dual Subsidiary, the date that such Dual Subsidiary begins to finance new Vehicles of any Removed Franchise, used and/or service loaner Vehicles through Permitted Dual Subsidiary Indebtedness as permitted by Sections 6.19 and 13.16. “Dual Subsidiary Lender” has the meaning set forth in the definition of “Permitted Dual Subsidiary Indebtedness”. “Early Opt-in Election” means, if the then-current Benchmark is the Eurocurrency Base Rate, the occurrence of: (1) a notification by the Agent to each of the other parties hereto that at least five currently outstanding U.S. dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as the then-current benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and (2)  the joint election by the Agent and the Company to trigger a fallback from the Eurocurrency Base Rate and the provisionthen-current Benchmark to the Benchmark Replacement, and a notification by the Agent to each of written noticethe other parties hereto of such election toand the Lendersproposed Benchmark Replacement.  “EBITDAR” has the meaning set forth in Section 11.1.2. “EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country whichthat is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country whichthat is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country whichthat is a subsidiary of an institution described in clausesclause (a) or (b) of this definition and is subject to consolidated supervision with its parent. “EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway. “EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution. “Eligible Account” means amounts owed by a customer to a Dealership for parts or accessories sold to such customer or for services performed for such customer, in which the Agent has a perfected first priority security interest, which is due and payable in full not more than 90 days after date of sale or invoice, and which is not more than 60 days past due. “Eligible Assignee” means (a) a Lender; (b) an Approved Fund; (c) a commercial bank organized under the laws of the United States, or any state thereof, and having total assets in 15 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

excess of $3,000,000,000, calculated in accordance with the accounting principles prescribed by the regulatory authority applicable to such bank in its jurisdiction of organization; (d) a commercial bank organized under the laws of any other country that is a member of the OECD, or a political subdivision of any such country, and having total assets in excess of $3,000,000,000, calculated in accordance with the accounting principles prescribed by the regulatory authority applicable to such bank in its jurisdiction of organization, so long as such bank is acting through a branch or agency located in the country in which it is organized or another country that is described in this clause (d); or (e) the central bank of any country that is a member of the OECD; provided, however, that neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee. “Eligible New Vehicle” means a New Vehicle owned by a New Vehicle Floorplan Dealership which is an Eligible Vehicle and in which the Agent has a perfected first priority security interest. “Eligible Real Property” means Real Property owned by any Real Estate Subsidiary or Dealership and which satisfies all requirements set forth in Section 9.4 and which is included in the Revolving Loan Borrowing Base. “Eligible Receivables” means amounts owing to the Company or a Subsidiary in which the Agent has a perfected first priority security interest, which are (a) Eligible Accounts; (b) commissions owed to the Dealerships by financial institutions or finance companies which are not Affiliates of any Loan Party in connection with the purchase by such institutions of retail installment contracts and leases arising from the sale or lease of New Vehicles and Used Vehicles (finance receivables), which have not remained unpaid for more than 90 days, or (c) amounts owed to the Company or a Dealership by a manufacturer of Vehicles as incentive payments, rebates, factory credits and the like, but excluding factory holdbacks (factory receivables), which have not remained unpaid for more than 90 days, subject to the exclusion by the Agent of such amounts which are owed to the Company or a Dealership by a manufacturer which has commenced or had commenced against it, any proceeding under any present or future bankruptcy law. “Eligible Service Loaner Vehicle” means a Service Loaner Vehicle  which: (a) is owned by a Dealership (other than a Silo Subsidiary), (b) is free of any Liens other than in favor of the Agent, except as otherwise agreed by the Agent in writing and (c) as of any date of determination, was not included in the Service Loaner Vehicle Borrowing Base on any date more than fifteen (15) months prior to such date of determination.  “Eligible Vehicle” means an automobile, truck or motorcycle with a gross vehicle weight of no more than 16,000 pounds, which satisfies the following requirements: (a) The vehicle is owned by a Dealership, subject to a perfected security interest in favor of the Agent, and free of any title defects, liens, security interests, leases, bailments, consignments or other interests of any Person other than Agent, except as agreed by the Agent in writing. 16 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(b) Unless the vehicle is a Demo, or is in transit from the seller, it is located at locations which the Dealerships disclosed to the Agent and which are acceptable to the Agent.  If the vehicle is in transit from a seller, then upon receipt by a Dealership it will be located at one of such locations. (c) The vehicle is held for sale or lease in the ordinary course of a Dealership’s business. (d) The vehicle is undamaged and of good and merchantable quality. (e) The vehicle is otherwise acceptable to the Agent. “Environmental Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to (a) Hazardous Substances, (b) the protection of the environment, (c) personal injury or property damage relating to the release or discharge of Hazardous Materials, (d) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water or land, or (e) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof, all as now existing or hereafter amended or adopted. “Environmental Reports” has the meaning set forth in Section 9.4.2. “Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest. “ERISA” means the Employee Retirement Income Security Act of 1974. “ERISA Affiliate” means, as applied to a Loan Party, any trade or business (whether or not incorporated) that, together with such Loan Party, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the failure with respect to any Plan to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (e) the receipt by any Loan Party or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Loan Party or any of its 17 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of any Loan Party or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by any Loan Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Loan Party or any ERISA Affiliate of any notice, concerning the imposition upon any Loan Party or any of its ERISA Affiliates of withdrawal liability under Section 4201 of ERISA or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA. “Erroneous Payment” has the meaning set forth in Section 6.20(a). “EU” means the European Union. “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time. “Eurocurrency Base Rate” means the greater of (a) zero percent (0.0%) and (b) the applicable interest settlement rate for Dollar LIBOR for one month appearing on the applicable Reuters Screen LIBOR01 as of 11:00 a.m. (London time) on the Business Day which is two (2) Business Days prior to the Reprice Date, provided that, if the applicable Reuters Screen LIBOR01 (or any successor or substitute page on such screen) for Dollar LIBOR (or any successor or substitute page) is not available to the Agent for any reason, the applicable Eurocurrency Base Rate for one month shall instead be the applicable interest settlement rate for deposits in Dollar LIBOR for one month as reported by any other generally recognized financial information service selected by the Agent, as of 11:00 a.m. (London time) on the applicable Business Day, provided that, if no such interest settlement rate is available to the Agent, the applicable Eurocurrency Base Rate for one month shall instead be the rate determined by the Agent to be the rate at which the Agent or one of its Affiliate banks offers to place deposits in Dollars with first-class banks in the interbank market at approximately 11:00 a.m. (London time) on the applicable Business Day in the approximate amount of the relevant Revolving Loan Advance, New Vehicle Floorplan Advance, Used Vehicle Floorplan Advance, Service Loaner Vehicle Floorplan Advance, or Swing Line Loan and having a maturity equal to one month.  For purposes of determining any interest rate hereunder or under any other Loan Document which is based on the Eurocurrency Base Rate, such interest rate shall change monthly on each Reprice Date. “Eurocurrency Loans” has the meaning set forth in Section 7.1(b). “Eurocurrency Rate” means the quotient of (a) the Eurocurrency Base Rate divided by (b) one minus the applicable Reserve Percentage (expressed as a decimal). “Event of Default” means the occurrence of any event described in Section 14.1. “Excluded Funded Debt” has the meaning set forth in Section 13.10(l). “Excluded Items” has the meaning set forth in Section 11.1.2. 18 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Excluded Property” means any of (a) any Equity Interests in any Dealership, any Canadian Subsidiary (except any Canadian Subsidiary that is a Financed Entity) and, to the extent prohibited by any manufacturer of Vehicles, any Subsidiary of the Company that is the holder of five percent (5%) or more of the Equity Interests in any Dealership; (b) any real estate or interest in real estate, including a lease or rents thereunder, and any improvements and fixtures, unless any of the foregoing constitute Eligible Real Property; (c) any voting stock of any direct Subsidiary of any Loan Party that is a controlled foreign corporation (as defined in Section 957 of the Internal Revenue Code (a “CFC”)) in excess of 65% of the total combined voting power of all classes of stock of such CFC that are entitled to vote (within the meaning of Section 1.956-2(c)(2) of the Treasury Regulations), to the extent the pledge of a greater percentage would reasonably be expected to result in material adverse tax consequences to any Borrower, as reasonably determined in good faith by the Borrowers; (d) any lease, license or other agreement or contract or any property subject to a purchase money security interest, Lien securing a Capitalized Lease Obligation or similar arrangement, in each case permitted to be incurred under this Agreement, to the extent that a grant of a security interest therein would require a consent not obtained or violate or invalidate such lease, license, agreement or contract or purchase money arrangement, Capitalized Lease Obligation or similar arrangement or create a right of termination in favor of any other party thereto (other than the Company or an Affiliate of the Company), in each case after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code (“UCC”) and other Applicable Law and other than proceeds and receivables thereof; (e) any United States intent-to-use Trademark applications to the extent that, and solely during the period in which, the grant, attachment or enforcement of a security interest therein would, under applicable federal law, impair the registrability of such applications or the validity or enforceability of registrations issuing from such applications; (f) any asset or property to the extent that the grant of a security interest is prohibited by Applicable Law or requires a consent not obtained of any Governmental Authority pursuant to such applicable law, rule or regulation, in each case after giving effect to the applicable anti-assignment provisions of the UCC and other Applicable Law and other than proceeds and receivables thereof; and (g) with respect to any Dual Subsidiary, any Vehicles or related assets that such Dual Subsidiary acquires with Permitted Dual Subsidiary Indebtedness and related assets (including proceeds) with respect to which the Agent has expressly agreed, in an Intercreditor Agreement, are not Collateral under the Loan Documents; provided, however, that “Excluded Property” shall not include any proceeds, products, substitutions or replacements of any Excluded Property (unless such proceeds, products, substitutions or replacements would constitute Excluded Property). “Excluded Subsidiary” means any of (a) each Excluded Tax Credit Investment Subsidiary; and (b) each DFC Subsidiary. “Excluded Swap Obligation” means, any Swap Obligation with respect to a Lender-Provided Swap if, and only to the extent that, all or a portion of the guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof), including by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Swap 19 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Obligation.  If a Swap Obligation arises under a master agreement governing more than one Swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guarantee or security interest is or becomes illegal. “Excluded Tax Credit Investment Subsidiary” means any of (a) LCDC and (b) any present or future Subsidiary of the Company that is formed for the sole purpose of making Investments permitted under Section 13.6(p). “Excluded Taxes” means, in the case of each Lender or applicable Lending Installation, the LC Issuer, and the Agent, (a) Taxes imposed on its overall net income, franchise Taxes, or branch profits Taxes, in each case, (i) imposed on it, by the respective jurisdiction under the laws of which such Lender, the LC Issuer or the Agent is incorporated or is organized or in which its principal executive office is located or, in the case of a Lender, in which such Lender’s applicable Lending Installation is located, or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any U.S. federal withholding tax that is imposed on amounts payable to such Lender pursuant to the laws in effect at the time such Lender becomes a party to this Agreement or designates a new Lending Installation, except in each case to the extent that, pursuant to Section 7.4.1, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Installation, (c) Taxes attributable to a Lender’s, the LC Issuer’s or the Agent’s failure to comply with Section 7.4.6, and (d) any U.S. federal withholding taxes imposed by FATCA. “Existing Letters of Credit” has the meaning set forth in Section 5.2. “Existing Loan Agreement” has the meaning set forth in Recital A. “Existing Subsidiary Joinder Agreement” means an agreement substantially in the form attached hereto as Exhibit K. “Extending Lender” has the meaning set forth in Section 6.18.5. “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection with the implementation of the foregoing.  “Federal Funds Effective Rate” means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Pacific time) on such 20 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion. “Financed Entity” means, at any time, a Person that owns any assets that are included in any of the Revolving Loan Borrowing Base, the Service Loaner Vehicle Borrowing Base or the Used Vehicle Borrowing Base at such time. “Fiscal Year” means the fiscal year of the Company and its Subsidiaries, the last day of which is December 31. “Fixed Charge Coverage Ratio” has the meaning set forth in Section 11.1.2. “Fleet Sale Contract” means an agreement or series of agreements by a Dealership to sell more than five New Vehicles to a purchaser if at any time there will be more than five Vehicles for which such Dealership has not been paid in full, and shall include all documents evidencing such sale, including the contract or contracts between such Dealership and the purchaser, delivery agreements and purchase orders. “Fleet Vehicle” means a New Vehicle that is to be sold by a Dealership pursuant to a Fleet Sale Contract. “Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Eurocurrency Rate.a rate of interest equal to 0%. “FLSA” means the Fair Labor Standards Act of 1938, as amended from time to time, and the regulations promulgated thereunder. “Former Lender” has the meaning set forth in Section 9.3.1. “Former Lender Loan” means a loan made by a Former Lender to finance a New Vehicle Floorplan Dealership’s New Vehicles. “Franchise Agreement” has the meaning set forth in Section 10.21. “Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the LC Issuer, such Defaulting Lender’s ratable share of the LC Obligations with respect to Letters of Credit issued by the LC Issuer other than LC Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s ratable share of outstanding Swing Line Loans made by the Swing Line Lender other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders. 21 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. “Funded Debt” means (i) Indebtedness of the type described in clauses (a), (b), (c) and (f) of the definition of Indebtedness, and (ii) all Contingent Obligations in respect of Indebtedness of the type described in clauses (a), (b), (c), and (f) of the definition of Indebtedness; provided, however, that Funded Debt shall not include unsecured trade accounts payable incurred in the ordinary course of business. “GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) which are applicable to the circumstances as of the date of application. “Governmental Approval” means any authorization, order, consent, adjudication, approval, certificate of compliance, license, permit, validation, or exemption from, contract with, registration or filing with, or report or notice to, any Governmental Body required or permitted by Applicable Law. “Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervisory Practices or any successor or similar authority to any of the foregoing). “Governmental Body” means (a) any foreign or domestic federal, state or local government or municipality or political subdivision of any government or municipality, (b) any assessment, improvement, community facilities or other special taxing district, (c) any governmental or quasi-governmental body, authority, board, bureau, commission, corporation, department, instrumentality or public body, (d) any court, administrative tribunal, arbitrator, public utility or regulatory body, or (e) any central bank or comparable authority. “Guarantor” means each Subsidiary which at any time executes a Guaranty of the Revolving Loan Obligations, Service Loaner Vehicle Floorplan Obligations and Used Vehicle Floorplan Obligations for the benefit of the Agent and the Lenders, it being understood that (a) a Subsidiary shall cease to be a Guarantor from and after the time (if ever) the Loan Documents permit the release of such Guaranty and such Subsidiary and the Agent execute and deliver a Loan Party Termination Agreement and (b) each present and future Subsidiary of the Company, 22 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

other than (i) Canadian Subsidiaries that are not Financed Entities and (ii) Excluded Subsidiaries, shall be or become a Guarantor. “Guarantor Joinder Agreement” means an agreement substantially in the form attached hereto as Exhibit J. “Guarantor Obligations” means all present and future indebtedness, obligations, liabilities, reimbursements, indemnities, covenants, warranties and duties of each present and future Guarantor of the Used Vehicle Floorplan Obligations, Service Loaner Vehicle Floorplan Obligations and Revolving Loan Obligations to the Agent and the Lenders pursuant to any Guaranty of the Used Vehicle Floorplan Obligations, Service Loaner Vehicle Floorplan Obligations and Revolving Loan Obligations at any time executed by such Guarantor; provided that the Guarantor Obligations shall exclude all Excluded Swap Obligations. “Guaranty” means each guaranty of the Revolving Loan Obligations, Service Loaner Vehicle Floorplan Obligations and Used Vehicle Floorplan Obligations heretofore, contemporaneously herewith or hereafter executed by any Person, substantially in the form attached hereto as Exhibit G. “Hazardous Substance” means (a) any substance or material now or hereafter defined or designated as a hazardous, toxic or radioactive material, waste or substance, or as a pollutant or contaminant (or designated by any other similar term), by any Environmental Law now or hereafter in effect; (b) asbestos and any substance or compound containing asbestos; (c) petroleum, natural gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) and ash produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources; (d) urea formaldehyde foam insulation; (e) polychlorinated biphenyls (PCBs); (f) radon; and (g) any other chemical, material, or substance, exposure to which (because of its quantity, concentration, or physical or chemical characteristics) is limited or regulated for health and safety reasons by any Governmental Authority, or which poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace or the environment. “Highest Lawful Rate” means, on any day, the maximum non-usurious rate of interest permitted for that day by applicable federal or state law, stated as a rate per annum. “Increasing Lender” has the meaning set forth in Section 6.12.2. “Indebtedness” means, without duplication, with respect to any Person, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (b) all obligations evidenced by bonds, notes, debentures, convertible debentures or other similar instruments, (c) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired (even though the rights and remedies of the seller or lender under such agreement in the event of default, acceleration, or termination are limited to repossession or sale of such property), (d) all obligations under letters of credit, bankers’ and trade acceptances, surety bonds and similar instruments, (e) all 23 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

obligations under Swaps, (f) all Capitalized Lease Obligations and all obligations as lessee under Synthetic Leases, (g) all indebtedness that is required in accordance with GAAP to be included as a liability on such Person’s balance sheet, (h) all Contingent Obligations, and (i) all Indebtedness referred to in clause (a), (b), (c), (d), (e), (f), (g), and (h) above secured by any lien, security interest or other charge or encumbrance upon or in property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, and (j) if any Event of Default described in Section 14.1.12 has occurred, the liability, if any, related thereto.  For purposes of this definition, the Indebtedness of any Person shall include the indebtedness of any partnership in which such Person is a general partner, unless such Indebtedness is expressly made non-recourse to such Person. In respect of Indebtedness described in clause (i) of the foregoing definition, the amount of such Indebtedness as of any date of determination will be the lesser of (x) the fair market value of the subject property as of such date and (y) the amount of such Indebtedness as of such date. “Indemnified Persons” has the meaning set forth in Section 5.12. “Indemnified Taxes” means Taxes imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document, other than Excluded Taxes and Other Taxes. “Initial Condition” has the meaning set forth in Section 9.1. “Intercreditor Agreement” means an intercreditor agreement to be entered into by and among the Agent, one or more Floorplan Administrative Agents (to be defined therein) and/or Floorplan Lenders (to be defined therein) required to be party thereto pursuant to this Agreement and each Dual Subsidiary Lender required to be party thereto pursuant to this Agreement and acknowledged by the Company on behalf of itself and its Subsidiaries and the Required Intercreditor Counterparties, which shall be in form and substance satisfactory to the Agent. “Interest Period” means, with respect to a EurocurrencyTerm SOFR Loan, a period of one monththree or six months (in each case, subject to the availability thereof) commencing on a Business Day selected by the applicable Borrower pursuant to this Agreement and ending on the day that corresponds numerically to such date one monththree or six months thereafter; provided that (a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such succeeding Business Day falls in a new calendar month, in which case such Interest Period shall end on the immediately preceding Business Day; (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (c) no Interest Period shall extend beyond the Termination Date; and 24 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(d) no tenor that has been removed from this definition pursuant to Section 7.3(b)(iv) may be available for selection by the Company.  “Investments” has the meaning set forth in Section 13.6. “ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto. “Landlord’s Consent” has the meaning set forth in Section 12.13. “LC Agreement” has the meaning set forth in Section 5.3. “LC Application” has the meaning set forth in Section 5.3. “LC Collateral Account” has the meaning set forth in Section 5.11. “LCDC” means Lithia Community Development Company, Inc., an Oregon corporation. “LC Fee” has the meaning set forth in Section 5.10.1. “LC Fee Percentage” has the meaning set forth in the Pricing Schedule. “LC Issuer” means U.S. Bank (or any subsidiary or affiliate of U.S. Bank designated by U.S. Bank) in its capacity as issuer of Letters of Credit hereunder. “LC Obligations” means, as of any date of determination, the sum, without duplication, of (a) the aggregate undrawn stated amount under Letters of Credit outstanding at such time, plus (b) the aggregate unpaid amount at such time of all Reimbursement Obligations. “LCA Test Date” has the meaning set forth in Section 1.5. “Lender” has the meaning set forth in the introductory paragraph and includes, as the context requires, the LC Issuer and Swing Line Lender. “Lender Party” has the meaning set forth in Section 6.20(a). “Lender-Provided Swap” means a Swap which is provided to the Company or any Subsidiary by the Agent, the LC Issuer, any other Lender or any Affiliate thereof (at the time such Swap is entered into). “Lending Installation” means, with respect to a Lender or the Agent, the office, branch, subsidiary or affiliate of such Lender or the Agent listed on the signature pages hereof (in the case of the Agent) or on its Questionnaire (in the case of a Lender) or otherwise selected by such Lender or the Agent pursuant to Section 6.3.2. 25 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Letter of Credit” means any of the Existing Letters of Credit and any letter of credit issued pursuant to Article 5. “Letter of Credit Commitment” (which is a sublimit of the Revolving Loan Commitment) means an amount equal to $50,000,000.0075,000,000.00. “Leverage Ratio” has the meaning set forth in Section 11.1.3. “LIBOR” means the London interbank offered rate. “Lien” means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority, or other security agreement or preferential arrangement, charge, or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the interest of a lessor under a Capital Lease or Synthetic Lease and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction to evidence of any of the foregoing). “Limited Condition Acquisition” means any Acquisition that is not conditioned on the availability of, or on obtaining, third-party financing. “Loan” or “Loans” means any one or more of the New Vehicle Floorplan Loans, Used Vehicle Floorplan Loans, Service Loaner Vehicle Floorplan Loans, Revolving Loans and Swing Line Loans. “Loan Documents” means this Agreement, the LC Agreements, the Letters of Credit, the LC Applications, the Collateral Documents, each Intercreditor Agreement, the promissory notes evidencing the Obligations, the Guaranties, and all other documents and instruments attached hereto, referred to herein, heretofore or contemporaneously herewith or hereafter executed or delivered to the Agent and the Lenders by any Loan Party in connection with the Obligations. “Loan Party” means any Borrower or Guarantor. “Loan Party Termination Agreement” means with respect to any Loan Party (other than a Silo Subsidiary) that shall cease to be a Borrower or a Guarantor hereunder, an agreement substantially in the form attached as Exhibit H-1. “Loan Year” means each 12 month period commencing on (and including) the Closing Date (or an Anniversary Date) and ending on (but excluding) the next succeeding Anniversary Date. “LRE” means Lithia Real Estate, Inc., an Oregon corporation. “Material Adverse Effect” means a (a) material adverse change in or material adverse effect upon the business, management, properties, condition (financial or otherwise), assets or operations of the Company and its Subsidiaries taken as a whole; or (b) a material adverse effect 26 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

upon or material impairment in (i) the attachment, perfection, or priority of the security interests of the Agent and the Lenders in the Collateral or in the value of any material part of the Collateral; (ii) the ability of the Company and its Subsidiaries taken as a whole to perform their obligations under this Agreement or any other Loan Document; or (iii) the legality, validity, binding effect or enforceability of or the rights and remedies available to the Agent and the Lenders under this Agreement or any other Loan Document. “Maximum Revolving Loan Amount” means, as of any date of determination, the lesser of (a) the Aggregate Revolving Loan Commitment minus any Reserve Amount; and (b) the Revolving Loan Borrowing Base at such time minus any Reserve Amount. “Maximum Service Loaner Vehicle Floorplan Amount” means, as of any date of determination, the lesser of (a) the Aggregate Service Loaner Vehicle Floorplan Commitment; and (b) the Service Loaner Vehicle Borrowing Base. “Maximum Used Vehicle Floorplan Amount” means, as of any date of determination, the lesser of (a) the Aggregate Used Vehicle Floorplan Commitment; and (b) the Used Vehicle Borrowing Base. “Measurement Period” has the meaning set forth in Section 11.1.2. “Minimum Collateral Amount” means, with respect to a Defaulting Lender, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 105% of the Fronting Exposure of the LC Issuer with respect to such Defaulting Lender for all Letters of Credit issued and outstanding at any such time and (b) otherwise, an amount determined by the Agent and the LC Issuer in their sole discretion. “Minority Dealer” means a Minority Dealer Affiliate or a Minority Dealer Subsidiary; provided, that the Company shall not designate more than a total of seven Minority Dealers at any one time, in addition to the designation of DCH CA, LLC as a Minority Dealer. “Minority Dealer Affiliate” means a Person, designated in writing by the Company to the Agent from time to time, (a) in which one or more Minority Dealer Partners, and one or more Loan Parties, has an equity ownership interest and (b) which is not otherwise a Subsidiary of the Company. “Minority Dealer Partner” means an individual of ethnic minority descent, designated in writing by the Company to the Agent from time to time, who owns any equity ownership interests in a Minority Dealer, and any Affiliate of such individual through which the individual holds his or her equity ownership interests in a Minority Dealer. “Minority Dealer Subsidiary” means a Subsidiary of the Company, designated in writing by the Company to the Agent from time to time, in which one or more Minority Dealer Partners owns, directly or indirectly, equity ownership interests of such Subsidiary or has the right to acquire, directly or indirectly, equity ownership interests of such Subsidiary. “Modify” and “Modification” has the meaning set forth in Section 5.1. 27 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Moody’s” means Moody’s Investors Service, Inc. “Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which any Loan Party or any ERISA Affiliate is, or in the immediately preceding six years was, a party to which more than one employer is obligated to make contributions. “Net Mark-to-Market Exposure” of a Person means, as of any date of determination, with respect to any Swap, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from such Swap.  “Unrealized losses” means the fair market value of the cost to such Person of replacing such Swap as of the date of determination (assuming the Swap were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Swap as of the date of determination (assuming such Swap were to be terminated as of that date). “New Loan Party” means an Acquisition Subsidiary that, pursuant to Section 12.17, is required to execute a Guarantor Joinder Agreement or Borrower Joinder Agreement. “New Vehicle” means a Vehicle that has never been owned except by a manufacturer, distributor or dealer (including a vehicle acquired by trade with another dealer); has never been registered or titled; is of the current or immediately preceding model year; and, except for a Demo, has not been driven more than 500 total miles. “New Vehicle Floorplan Advance” means a borrowing consisting of the New Vehicle Floorplan Loans to be made by the Lenders on any date. “New Vehicle Floorplan Borrower” means the Company, any Dealership executing this Agreement as a New Vehicle Floorplan Borrower and any Dealership which hereafter becomes a New Vehicle Floorplan Borrower in accordance with the requirements of this Agreement, in its capacity as a borrower under the credit facilities described in Article 2 of this Agreement. “New Vehicle Floorplan Borrowing Rate” means the sum of (a) the Eurocurrency RateAdjusted Daily Simple SOFR or the Term SOFR Alternative Rate, as designated by the Company from time to time, plus (b) the New Vehicle Floorplan Margin. “New Vehicle Floorplan Commitment” means for each Lender, the obligation of such Lender to make New Vehicle Floorplan Loans to the New Vehicle Floorplan Borrowers and to participate in New Vehicle Swing Line Loans, in an aggregate amount not exceeding the amount set forth for such Lender on Schedule 1, as such amount may be modified as the result of any assignment or as otherwise modified from time to time pursuant to Section 6.17 or the other provisions hereof. “New Vehicle Floorplan Commitment Fee” has the meaning set forth in Section 2.1.7. “New Vehicle Floorplan Commitment Fee Rate” has the meaning set forth in the Pricing Schedule. 28 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“New Vehicle Floorplan Dealership” means each New Vehicle Floorplan Borrower except the Company. “New Vehicle Floorplan Loan” has the meaning set forth in Section 2.1.1. “New Vehicle Floorplan Margin” has the meaning set forth in the Pricing Schedule.  “New Vehicle Floorplan Obligations” means all present and future New Vehicle Floorplan Loans, New Vehicle Swing Line Loans, and other debts, liabilities, obligations, reimbursements, indemnities, covenants, warranties, duties and obligations relating thereto of each New Vehicle Floorplan Borrower to the Agent and the Lenders under this Agreement, and the other Loan Documents, whether now or hereafter existing or incurred, whether liquidated or unliquidated, whether absolute or contingent, and including without limitation principal, interest, fees, Attorney Costs, expenses and charges relating to any of the foregoing. “New Vehicle Loan” means a New Vehicle Floorplan Loan or New Vehicle Swing Line Loan. “New Vehicle Loan Advance” means any New Vehicle Floorplan Advance or any New Vehicle Swing Line Loan made to finance Eligible New Vehicles. “New Vehicle Loan Advance Date” means (a) with respect to any New Vehicle (other than a New Vehicle previously financed with a Former Lender Loan or an advance under the Existing Loan Agreement), the date the New Vehicle Loan Advance was made to finance such Vehicle; (b) with respect to any New Vehicle previously financed by a Former Lender and refinanced with a New Vehicle Loan Advance, the date the advance was made by the Former Lender to finance the applicable Vehicle; and (c) with respect to any New Vehicle previously financed under the Existing Loan Agreement, the date the advance was made under the Existing Loan Agreement to finance the applicable Vehicle. “New Vehicle Monthly Payment Date” means the tenth day of each month, or if such day is not a Business Day, the next Business Day. “New Vehicle Swing Line Commitment” (which is a sublimit of the Aggregate New Vehicle Floorplan Commitment) means an amount equal to $60,000,000.00100,000,000.00 plus the aggregate balance in all PR Accounts.  “New Vehicle Swing Line Loan” has the meaning set forth in Section 2.2.1. “Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time. “Non-Extending Lender” has the meaning set forth in Section 6.18.2. “Non-U.S. Lender” means a Lender that is not a United States person as defined in Section 7701(a)(30) of the Code. 29 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Notice Date” has the meaning set forth in Section 6.18.2. “Obligations” means all present and future Loans, New Vehicle Floorplan Obligations, Used Vehicle Floorplan Obligations, Service Loaner Vehicle Floorplan Obligations, Revolving Loan Obligations, LC Obligations, and other debts, liabilities, obligations, reimbursements, indemnities, covenants, warranties, duties and obligations of any one or more of the Borrowers to the Agent and the Lenders under the LC Agreements, LC Applications, the Letters of Credit, this Agreement, and the other Loan Documents, whether now or hereafter existing or incurred, whether liquidated or unliquidated, whether absolute or contingent, and including without limitation principal, interest, fees, Attorney Costs, expenses and charges relating to any of the foregoing; provided, however, that the Obligations shall exclude all Excluded Swap Obligations. “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control, and any successor thereto. “Original Equipment Manufacturer” means the original manufacturer of a Vehicle. “Other Connection Taxes” means, in the case of each Lender or applicable Lending Installation, the LC Issuer, and the Agent, Taxes imposed as a result of a present or former connection between such Person and the jurisdiction imposing such Tax (other than connections arising from such Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document or sold or assigned an interest in any Loan or Loan Document). “Other New Subsidiary” means a Subsidiary, (a) 100% of the Equity Interests of which are owned, directly or indirectly by the Company, (b) which is not in the business of selling, servicing or leasing motor vehicles or owning real property and (c) with respect to which the Loan Parties have complied with the requirements of Section 12.17. “Other Service Loaner Floorplan Financing” means extensions of credit to a Dealership by an Other Service Loaner Floorplan Lender (other than extensions of credit under this Agreement), all proceeds of which are used to purchase or finance Service Loaner Vehicles. “Other Service Loaner Floorplan Lender” means a motor vehicle manufacturer or distributor or a financial institution or commercial finance company acceptable to the Agent which is affiliated with a motor vehicle manufacturer or distributor and which provides financing for Service Loaner Vehicles to a Dealership. “Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Sections 6.15 and 7.5). “Out of Balance Condition” means, with respect to (i) a New Vehicle Floorplan Loan, the outstanding balance thereof has not been paid in accordance with Sections 2.3.3 or 2.3.4, (ii) 30 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

a Used Vehicle Floorplan Loan, the outstanding balance thereof has not been paid in accordance with Section 3.1.8 or and (iii) a Service Loaner Vehicle Floorplan Loan, the outstanding balance thereof has not been paid in accordance with Section 3.3.8. “Outstanding Credit Exposure” means, as to any Lender at any time, the sum of (a) the then outstanding principal amount of its New Vehicle Floorplan Loans, Used Vehicle Floorplan Loans, Service Loaner Vehicle Floorplan Loans and Revolving Loans, plus (b) an amount equal to its ratable share of the aggregate principal amount of Swing Line Loans outstanding at such time, plus (c) an amount equal to its ratable share of the LC Obligations at such time. “Outstanding New Vehicle Floorplan Exposure” means, as to any Lender at any time, the sum of (a) the then outstanding principal amount of its New Vehicle Floorplan Loans, plus (b) an amount equal to its ratable share of the aggregate principal amount of New Vehicle Swing Line Loans outstanding at such time. “Outstanding Revolving Loan Exposure” means, as to any Lender at any time, the sum of (a) the then outstanding principal amount of its Revolving Loans, plus (b) an amount equal to its ratable share of the aggregate principal amount of Revolving Swing Line Loans outstanding at such time, plus (c) an amount equal to its ratable share of the LC Obligations at such time. “Outstanding Service Loaner Vehicle Floorplan Exposure” means, as to any Lender at any time, the sum of (a) the then outstanding principal amount of its Service Loaner Vehicle Floorplan Loans, plus (b) an amount equal to its ratable share of the aggregate principal amount of Service Loaner Vehicle Swing Line Loans outstanding at such time. “Outstanding Used Vehicle Floorplan Exposure” means, as to any Lender at any time, the sum of (a) the then outstanding principal amount of its Used Vehicle Floorplan Loans, plus (b) an amount equal to its ratable share of the aggregate principal amount of Used Vehicle Swing Line Loans outstanding at such time. “Pari Passu Funded Debt” means Funded Debt incurred by the Company and the other Loan Parties provided that each of the following conditions are satisfied: (a) such Funded Debt is permitted under subsection (l) of Section 13.10; (b) the Company has delivered to the Agent a Revolving Loan Borrowing Base Certificate certifying that, on the date of incurrence of such Funded Debt and after giving effect to such issuance as Pari Passu Funded Debt, the Revolving Loan Availability is not less than $1.00; (c) the proceeds of such Funded Debt are used by the Company to repay Revolving Loans (to the extent outstanding); (d) the stated final maturity and any required principal amortization of such Funded Debt is not earlier than 91 days following the Termination Date as in effect on the date of incurrence of such Funded Debt; (e) such Funded Debt is incurred or guaranteed by the Company and all other Loan Parties and no Subsidiaries of the Company that are not Loan Parties shall have any obligations in respect of such Funded Debt; (f) such Funded Debt is secured by the Collateral, and no property or assets of the Company or any of its Subsidiaries, other than the Collateral, secures such Funded Debt; (g) the terms and conditions (other than pricing, rate floors, discounts and fees) governing such Funded Debt are not materially less favorable to the Company or any other Loan Party than the terms and conditions of the Loan Documents; and (h) the Persons to whom such Funded Debt is owed, or their agent, collateral agent or other representative, have entered into an intercreditor 31 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

agreement with the Agent that (A) shall provide that the Agent is the collateral agent (on behalf of the Persons to whom the Pari Passu Funded Debt is owed) for all liens on Collateral securing any Pari Passu Funded Debt, all actions with respect to any Collateral must be taken through the Agent, and any proceeds of Collateral resulting from enforcement of rights and remedies must be applied as follows: first, to reasonable costs and expenses of the Agent in connection with enforcement of rights and remedies, including foreclosure, sale and collection of the Collateral, and second, ratably, to the Pari Passu Funded Debt and the Obligations (and certain designated Indebtedness that refinances the Obligations or the Aggregate Commitments), and (B) shall otherwise be in form and content satisfactory to the Agent and the Required Lenders. “Participant” has the meaning set forth in Section 17.3.1. “Participant Register” has the meaning set forth in Section 17.3.3. “PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended from time to time, and any successor statute. “Payment Commitment” means a commitment entered into between Agent and a manufacturer or distributor, providing for payment of funds directly to such manufacturer or distributor in payment for a New Vehicle Floorplan Borrower’s purchase of New Vehicles from such manufacturer or distributor. “Payment Commitment Collateral Account” has the meaning set forth in Section 2.3.5. “Payment Recipient” has the meaning set forth in Section 6.20(a). “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. “Per Annum Fee” has the meaning set forth in Section 6.16. “Permitted Acquisition” means an Acquisition which is permitted by Section 13.13. “Permitted Dual Subsidiary Guaranty” means, with respect to any Permitted Dual Subsidiary Indebtedness provided by any Dual Subsidiary Lender, the guaranty of such Permitted Dual Subsidiary Indebtedness by (a) the Company or (b) any Dual Subsidiary that operates one or more dealerships at which new Vehicle, used Vehicle or service loaner Vehicle Permitted Dual Subsidiary Indebtedness is provided by such Dual Subsidiary Lender. “Permitted Dual Subsidiary Indebtedness” means Indebtedness (including Permitted Dual Subsidiary Guaranties but excluding Indebtedness provided pursuant to this Agreement) incurred from time to time by any Dual Subsidiary consisting of floorplan financing for new Vehicles, used Vehicles  or service loaner Vehicles provided by financial institutions or manufacturer-affiliated finance companies (“Dual Subsidiary Lenders”) to such Dual Subsidiaries, provided that each Required Intercreditor Counterparty with respect to such Indebtedness is a party to and bound by an Intercreditor Agreement. 32 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Permitted Liens” means Liens permitted by Section 13.3. “Permitted New Dealership” means a Dealership (a)(i) 100% (or if the Company is not permitted to hold 100% of such Equity Interests because of limitations imposed by the relevant manufacturer's franchise agreement, at least 80%) of the Equity Interests of which are owned, directly or indirectly by the Company or (ii) that is a Minority Dealer Subsidiary, (b) which is organized to own and operate a newly established automobile or motorcycle dealership point, and (c) with respect to which the Loan Parties have complied with the requirements of Section 12.17. “Permitted Restrictions” means restrictions on the ability of any Subsidiary to declare or pay any dividend or make other distributions, or to advance or loan funds or transfer assets, to the Company or any other Subsidiary, to borrow money from the Company or any other Subsidiary, to grant Liens on the assets of such Subsidiary, to secure the Obligations or the Guarantor Obligations or to guaranty the Obligations: (a) as set forth on the Disclosure Schedule on the Closing Date, including restrictions imposed by existing Other Service Loaner Floorplan Financing arrangements; (b) pursuant to modifications to Other Service Loaner Floorplan Financing arrangements in effect on the Closing Date, provided that such modifications are not materially more restrictive; (c) pursuant to Other Service Loaner Floorplan Financing arrangements with any Other Service Loaner Floorplan Lender other than a Person which is an Other Service Loaner Floorplan Lender on the Closing Date; (d) applicable to a Person at the time such Person becomes a Subsidiary and not created in contemplation of such an event; (e) resulting from manufacturer-imposed modifications to any Franchise Agreement; (f) imposed by Applicable Law; (g) as set forth in the organizational documents of a Loan Party and consisting of requirements for director, manager, shareholder or member approval; (h) as set forth in any document relating to Funded Debt permitted under Sections 13.10(o), (p) or (s), but only to the extent applicable to Silo Subsidiaries, Canadian Subsidiaries (other than any Canadian Subsidiary that is a Financed Entity) or Dual Subsidiaries and to the extent such restriction does not directly or indirectly prohibit any Silo Subsidiary, Canadian Subsidiary (that is a Financed Entity) or Dual Subsidiary from guarantying, or impose any restriction on the ability of any Silo Subsidiary, Canadian Subsidiary (that is a Financed Entity) or Dual Subsidiary to guaranty, the Obligations; (i) as set forth in any document relating to Additional Funded Debt permitted under Section 13.10(l) or Canadian Subsidiary Indebtedness, in each case only to the extent such restriction does not directly or indirectly prohibit any Subsidiary from guarantying, or impose any restriction on the ability of any Subsidiary to guaranty, the Obligations; (j) as set forth in any document relating to Indebtedness permitted under Section 13.10(d); (k) on or with respect to any Excluded Subsidiary; or (l) in connection with any Canadian Receivables or Securitization Transaction; provided such restrictions are limited to obligors of Canadian Receivables or Securitization Transactions and do not include any Financed Entity. “Permitted Swap Obligations” means Swap Obligations of the Company under Swaps which are entered into or maintained by the Company with a Lender, which are entered into in the ordinary course of business for risk management purposes and not for speculative purposes. “Person” means any natural person, corporation, general or limited partnership, joint venture, limited liability company, firm, trust, association, unincorporated organization, 33 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

government, political subdivision or any agency, department, or instrumentality thereof, or any other entity or organization, whether acting in an individual, fiduciary or other capacity. “Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which any Loan Party or any ERISA Affiliate may have any liability. “Pledge Agreement” means an amended and restated pledge agreement substantially in the form attached hereto as Exhibit E. “PR Account” has the meaning set forth in Section 2.6. “PR Account Advance” has the meaning set forth in Section 2.6.2. “PR Account Borrower” has the meaning set forth in Section 2.6. “PR Account Payment” has the meaning set forth in Section 2.6.1. “Pricing Schedule” means the Schedule attached hereto which is identified as such. “Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by the Agent or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes. “Principal” means Sidney D. DeBoer, Bryan DeBoer or another successor, or successors, reasonably acceptable to the Agent and the Required Lenders. “Pro Forma” means, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the Measurement Period ending as of the most recent quarter end preceding the date of such transaction for which financial statement information is available.  Each of the terms “Pro Forma Basis” and “Pro Forma Effect” shall have an analogous meaning.  “Prohibited Transaction” means any prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code. “Properties” has the meaning set forth in Section 12.6. “Pro Rata Share” means, as the context requires (a) with respect to the Aggregate Lender Commitment or Outstanding Credit Exposure of any Lender, (i) the percentage obtained by dividing such Lender’s Aggregate Lender Commitment by the Aggregate Commitment, or (ii) if all of the Commitments have been terminated or have expired, the percentage obtained by dividing such Lender’s Outstanding Credit Exposure at such time by the Aggregate Outstanding Credit Exposure at such time; (b) with respect to the New Vehicle Floorplan Commitment or Outstanding New Vehicle Floorplan Exposure of any Lender (i) the percentage obtained by dividing such Lender’s New Vehicle Floorplan Commitment by the Aggregate New Vehicle Floorplan Commitment, or (ii) if 34 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

all New Vehicle Floorplan Commitments have been terminated or expired, the percentage obtained by dividing such Lender’s Outstanding New Vehicle Floorplan Exposure by the Aggregate Outstanding New Vehicle Floorplan Exposure; (c) with respect to the Used Vehicle Floorplan Commitment or Outstanding Used Vehicle Floorplan Exposure of any Lender (i) the percentage obtained by dividing such Lender’s Used Vehicle Floorplan Commitment by the Aggregate Used Vehicle Floorplan Commitment, or (ii) if all Used Vehicle Floorplan Commitments have been terminated or expired, the percentage obtained by dividing such Lender’s Outstanding Used Vehicle Floorplan Exposure by the Aggregate Outstanding Used Vehicle Floorplan Exposure; (d) with respect to the Service Loaner Vehicle Floorplan Commitment or Outstanding Service Loaner Vehicle Floorplan Exposure of any Lender (i) the percentage obtained by dividing such Lender’s Service Loaner Vehicle Floorplan Commitment by the Aggregate Service Loaner Vehicle Floorplan Commitment, or (ii) if all Service Loaner Vehicle Floorplan Commitments have been terminated or expired, the percentage obtained by dividing such Lender’s Outstanding Service Loaner Vehicle Floorplan Exposure by the Aggregate Outstanding Service Loaner Vehicle Floorplan Exposure; or (e) with respect to the Revolving Loan Commitment or Outstanding Revolving Loan Exposure of any Lender, (i) the percentage obtained by dividing such Lender’s Revolving Loan Commitment by the Aggregate Revolving Loan Commitment, or (ii) if all Revolving Loan Commitments have been terminated or expired the percentage obtained by dividing such Lender’s Outstanding Revolving Loan Exposure by the Aggregate Outstanding Revolving Loan Exposure; provided, however that when a Defaulting Lender shall exist, the Commitments, Outstanding Credit Exposure, Outstanding New Vehicle Floorplan Exposure, Outstanding Used Vehicle Floorplan Exposure, Outstanding Service Loaner Vehicle Floorplan Exposure and Outstanding Revolving Loan Exposure of the Defaulting Lender shall be disregarded in determining the Aggregate Commitment (or Aggregate Outstanding Credit Exposure), Aggregate New Vehicle Floorplan Commitment (or Aggregate Outstanding New Vehicle Floorplan Exposure), Aggregate Used Vehicle Floorplan Commitment (or Aggregate Outstanding Used Vehicle Floorplan Exposure), Aggregate Service Loaner Vehicle Floorplan Commitment (or Aggregate Outstanding Service Loaner Vehicle Floorplan Exposure) or Aggregate Revolving Loan Commitment (or Aggregate Outstanding Revolving Loan Exposure). “Quarterly Payment Date” means the tenth day of each January, April, July and October or, if such day is not a Business Day, the next succeeding Business Day. “Rate Adjustment Date” means the first day of each month. “Real Estate Subsidiary” means any Subsidiary that does not own any assets other than real estate, cash, and assets incidental to the operation of specific real estate. 35 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

 “Real Property” means real property acceptable to the Agent which is located in the United States, is owned by any Real Estate Subsidiary or Dealership and is occupied by a Dealership as a motor vehicle sales facilitythe Company or a Subsidiary. “Reallocation” has the meaning set forth in Section 6.17.1. “Reallocation Request” has the meaning set forth in Section 6.17.2. “Reference Time” with respect to any setting of the then-current Benchmark means (A)(1) if such Benchmark is the Eurocurrency Base Rate, 11:00Adjusted Term SOFR, 10:00 a.m. (LondonCentral time) on the day that is two London banking days precedingBusiness Days before the date of such setting, (2) if such Benchmark is Adjusted Daily Simple SOFR, then 3:00 p.m. (New York City time) four Business Days prior to such setting and (23) if such Benchmark is not the Eurocurrency Base RateAdjusted Term SOFR or Adjusted Daily Simple SOFR, the time determined by the Agent in its reasonable discretion or (B)(1) if such Benchmark is Daily Simple SOFR, then 3:00 p.m. (New York City time) four Business Days prior to such setting and (2) if such Benchmark is not Daily Simple SOFR, then the time determined by the Administrative Agent in accordance with the Benchmark Replacement Conforming Changes. “Refunding New Vehicle Floorplan Loan” has the meaning set forth in Section 2.2.6(a). “Refunding Revolving Loan” has the meaning set forth in Section 4.2.6(a)(i). “Refunding Service Loaner Vehicle Floorplan Loan” has the meaning set forth in Section 3.4.6(a)(i). “Refunding Used Vehicle Floorplan Loan” has the meaning set forth in Section 3.2.6(a)(i). “Register” has the meaning set forth in Section 17.5. “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System. “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System. “Reimbursement Obligations” means, at any time, the aggregate of all obligations of the Revolving Loan Borrower then outstanding to reimburse the LC Issuer for amounts paid by the LC Issuer in respect of any one or more drawings under Letters of Credit. 36 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Related Principal Portion” means, with respect to each New Vehicle financed with a New Vehicle Loan Advance, the principal amount advanced under this Agreement to finance that Vehicle. “Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto. “Removed Franchise” has the meaning set forth in Section 6.19. “Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided, however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code. “Reprice Date” means the first day of each month. “Repurchase Agreement” means an agreement by a manufacturer or distributor of New Vehicles (which may be a separate agreement or may be included in a Seller Agreement or Payment Commitment), in which such manufacturer agrees to repurchase New Vehicles originally purchased by a New Vehicle Floorplan Dealership from such manufacturer, all in form and substance reasonably acceptable to the Agent. “Required Intercreditor Counterparty” means, with respect to an Intercreditor Agreement relating to Permitted Dual Subsidiary Indebtedness: (a) each Dual Subsidiary Lender providing such Permitted Dual Subsidiary Indebtedness, or an agent authorized to act on behalf of each Dual Subsidiary Lender with respect to such Indebtedness, and (b) if required by the Agent, the Company (on behalf of itself and its Subsidiaries)and/or each Dual Subsidiary that is a borrower or guarantor of such Permitted Dual Subsidiary Indebtedness. “Required Lenders” means Lenders holding in the aggregate more than 50% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders holding in the aggregate more than 50% of the Aggregate Outstanding Credit Exposure provided that, Required Lenders shall at no time be less than two unaffiliated Lenders.  The Commitments and Outstanding Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders. “Required Repayment Date” has the meaning set forth in Section 2.3.3(b). “Reserve Amount” has the meaning set forth in Section 4.1.9. 37 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Reserve Percentage” means, the reserve percentage in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, special, supplemental or other marginal reserve requirement) with respect to eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D).  The Eurocurrency Rate for each outstanding Eurocurrency Loan shall be adjusted automatically as of the effective date of any change in the Reserve PercentageResolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority. “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in any Loan Party or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in any Loan Party or any option, warrant or other right to acquire any such Equity Interests in any Loan Party. “Revolving Loan” has the meaning set forth in Section 4.1.1. “Revolving Loan Advance” means a borrowing consisting of the Revolving Loans to be made by the Lenders on any date. “Revolving Loan Availability” means, as of any date of determination, an amount equal to (a) the Maximum Revolving Loan Amount at such time minus (b) the sum of the then outstanding principal balance of the Revolving Loans, Revolving Swing Line Loans and LC Obligations. “Revolving Loan Borrower” means the Company, in its capacity as an obligor on the Revolving Loan Obligations and LC Obligations which relate to the credit facilities described in Article 4. “Revolving Loan Borrowing Base” means, as of any date of determination: (a) an amount equal to the sum, without duplication, on such date of: (i) 100% of the amounts (excluding commissions included in clause (b) of the definition of Eligible Receivables) owing to the Dealerships in which the Agent has a perfected first priority security interest, which are owed to the Dealerships by financial institutions or finance companies which are not Affiliates of any Loan Party for the purchase by such institutions of retail installment contracts and leases arising from the sale or lease of New Vehicles and Used Vehicles (contracts in transit), which have not remained unpaid for more than 15 days. (ii) 80% of the amount of Eligible Receivables. 38 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(iii) 100% of the sum of the manufacturer’s or distributor’s invoices (including freight, advertising and holdbacks) for Eligible New Vehicles. (iv) 100% of the amount of the Used Vehicle Borrowing Base. (v) 75% of the Value of Eligible Real Property; provided, that this component of the Revolving Loan Borrowing Base shall not at any time exceed 25% of the lesser of (x) the Revolving Loan Borrowing Base and (y) the Aggregate Revolving Loan Commitment$1,000,000,000.00. (vi) 65% of (A) the net book value of the inventory of the Company and its Subsidiaries consisting of new parts and accessories in which the Agent has a perfected first priority security interest; minus (B) the unpaid acquisition cost owed to sellers or financers of such inventory. (vii) 40% of (A) the net book value of equipment (excluding fixtures, aircraft, and Service Loaner Vehicles) of the Company and its Subsidiaries in which the Agent has a perfected first priority security interest, minus (B) the principal amount of indebtedness or obligations to any Person (other than the Obligations) which is secured by such equipment. (b) Minus, the sum of the then outstanding aggregate principal balance of (i) New Vehicle Floorplan Loans less the sum of the aggregate amount held in the PR Accounts, in an amount up to $200,000,000, (ii) New Vehicle Swing Line Loans, (iii) Used Vehicle Floorplan Loans, (iv) Used Vehicle Swing Line Loans and (v) Pari Passu Funded Debt. Notwithstanding anything to the contrary in this Agreement, the amounts set forth in clauses (a)(i) through (a)(vii) above shall exclude all receivables, Vehicles, real property, inventory, equipment and other property and assets of any Silo Subsidiary, provided in no event shall the aggregate net book value of the Eligible Vehicles consisting of motorcycles included in the Service Loaner Vehicle Borrowing Base, Used Vehicle Borrowing Base and the Revolving Loan Borrowing Base exceed $25,000,000. “Revolving Loan Borrowing Base Certificate” means a certificate substantially in the form attached as Exhibit C, or in such other form as is acceptable to the Agent. “Revolving Loan Borrowing Rate” means the sum of (a) the Eurocurrency RateAdjusted Daily Simple SOFR, Adjusted Term SOFR or the Term SOFR Alternative Rate, as designated by the Company from time to time, plus (b) the Revolving Loan Margin. “Revolving Loan Commitment” means, for each Lender, the obligation of such Lender to make Revolving Loans to the Revolving Loan Borrower, and participate in Revolving Swing Line Loans and Letters of Credit in an aggregate amount not exceeding the amount set forth on 39 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Schedule 1, as such amount may be modified as a result of any assignment or as otherwise modified from time to time pursuant to Section 6.17 or the other provisions hereof. “Revolving Loan Commitment Fee” has the meaning set forth in Section 4.1.7. “Revolving Loan Commitment Fee Rate” has the meaning set forth in the Pricing Schedule. “Revolving Loan Margin” has the meaning set forth in the Pricing Schedule. “Revolving Loan Obligations” means all present and future Revolving Loans, Revolving Swing Line Loans, LC Obligations, and other debts, liabilities, obligations, reimbursements, indemnities, covenants, warranties, duties and obligations relating thereto of the Revolving Loan Borrower to the Agent and the Lenders under the LC Agreements, LC Applications, the Letters of Credit, this Agreement, and the other Loan Documents, whether now or hereafter existing or incurred, whether liquidated or unliquidated, whether absolute or contingent, and including without limitation principal, interest, fees, Attorney Costs, expenses and charges relating to any of the foregoing.  “Revolving Swing Line Commitment” (which is a sublimit of the Aggregate Revolving Loan Commitment) means an amount equal to $40,000,000.0060,000,000.00. “Revolving Swing Line Loan” has the meaning set forth in Section 4.2.1. “Risk-Based Capital Guidelines” means (a) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (b) the corresponding capital regulations promulgated by regulatory authorities outside the United States, including transition rules, and, in each case, any amendments to such regulations. “S&P” means Standard & Poor’s Ratings ServicesGroup, a Standard & Poor’s Financial Services LLC business. “Sanctions” means sanctions administered or enforced from time to time by the U.S. government, including those administered by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority. “Security Agreement” means an amended and restated security agreement substantially in the form attached hereto as Exhibit F. “Seller Agreement” means any material agreement between the Company or any of its Subsidiaries and a manufacturer, distributor or other seller of New Vehicles (including without limitation Franchise Agreements, distribution agreements, framework agreements, and the like). “Seller Notes” has the meaning set forth in Section 13.6(m). 40 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Service Loaner Vehicle” means a Vehicle that is obtained by a Dealership directly from a manufacturer or distributor and which is used for short-term rental in the ordinary course of business or as a service loaner. “Service Loaner Vehicle Borrowing Base” means, as of any date of determination, an amount equal to the sum, without duplication, on such date of 85% of the net book value of Eligible Service Loaner Vehicles, provided in no event shall the aggregate net book value of the Eligible Vehicles consisting of motorcycles included in the Service Loaner Vehicle Borrowing Base, Used Vehicle Borrowing Base and the Revolving Loan Borrowing Base exceed $25,000,000. “Service Loaner Vehicle Borrowing Base Certificate” means a certificate substantially in the form attached as Exhibit B-2, or in such other form as is acceptable to the Agent.  “Service Loaner Vehicle Floorplan Advance” means a borrowing consisting of the Service Loaner Vehicle Floorplan Loans to be made by the Lenders on any date. “Service Loaner Vehicle Floorplan Borrower” means the Company, in its capacity as an obligor on the Service Loaner Vehicle Floorplan Obligations which relate to the credit facilities described in Sections 3.3 and 3.4. “Service Loaner Vehicle Floorplan Borrowing Rate” means the sum of (a) the Eurocurrency RateAdjusted Daily Simple SOFR, Adjusted Term SOFR or the Term SOFR Alternative Rate, as designated by the Company from time to time, plus (b) the Service Loaner Vehicle Floorplan Margin. “Service Loaner Vehicle Floorplan Commitment” means for each Lender, the obligation of such Lender to make Service Loaner Vehicle Floorplan Loans to the Service Loaner Vehicle Floorplan Borrower and to participate in Service Loaner Vehicle Swing Line Loans, in an aggregate amount not exceeding the amount set forth on Schedule 1, as such amount may be modified as a result of any assignment or as otherwise modified from time to time pursuant to the provisions hereof.  “Service Loaner Vehicle Floorplan Commitment Fee” has the meaning set forth in Section 3.3.7. “Service Loaner Vehicle Floorplan Commitment Fee Rate” has the meaning set forth in the Pricing Schedule. “Service Loaner Vehicle Floorplan DDA” has the meaning set forth in Section 3.4.7(b). “Service Loaner Vehicle Floorplan Loan” has the meaning set forth in Section 3.3.1. “Service Loaner Vehicle Floorplan Margin” has the meaning set forth in the Pricing Schedule.  “Service Loaner Vehicle Floorplan Obligations” means all present and future Service Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line Loans, and other debts, 41 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

liabilities, obligations, reimbursements, indemnities, covenants, warranties, duties and obligations relating thereto of the Service Loaner Vehicle Floorplan Borrower to the Agent and the Lenders under this Agreement, and the other Loan Documents, whether now or hereafter existing or incurred, whether liquidated or unliquidated, whether absolute or contingent, and including without limitation principal, interest, fees, Attorney Costs, expenses and charges relating to any of the foregoing. “Service Loaner Vehicle Sweep Advance” has the meaning set forth in Section 3.4.7(a). “Service Loaner Vehicle Swing Line Commitment” (which is a sublimit of the Aggregate Service Loaner Vehicle Floorplan Loan Commitment) means an amount equal to $10,000,000.00. “Service Loaner Vehicle Swing Line Loan” has the meaning set forth in Section 3.4.1. “Shift” means Shift Technologies, Inc., a Delaware corporation. “Shift Facility” means a floor plan credit facility or debt financing provided by one or more lenders to Shift (and/or one or more of its subsidiaries) in an aggregate principal amount not to exceed $50,000,000 at any time outstanding, guaranteed in whole or in part by one or more Loan Parties. “Shift Investments” has the meaning set forth in Section 13.6(q). “Silo Subsidiary” means a Subsidiary designated as a “Silo Subsidiary” in writing by the Company to the Agent for the purpose of incurring Funded Debt permitted under subsection (o) of Section 13.10, provided that if, at the time of such designation, such Subsidiary is a Loan Party: (i) such Subsidiary shall have executed and delivered to the Agent a Silo Subsidiary Termination Agreement solely with respect to its status as a party to the Security Agreement, the Pledge Agreement and any other Collateral Documents and as a Grantor (as defined in the Security Agreement and the Pledge Agreement) and its status as a New Vehicle Floorplan Borrower (it being understood that such Silo Subsidiary Termination Agreement shall not terminate such Subsidiary’s obligations under its Guaranty, which shall remain in full force and effect), (ii) the Company shall have provided to the Agent a Revolving Loan Borrowing Base Certificate as of the date of and after giving effect to such designation of such Subsidiary as a Silo Subsidiary and certifying that after giving effect to such designation the Revolving Loan Availability is not less than $1.00, (iii) the Company shall have provided to the Agent a Used Vehicle Loan Borrowing Base Certificate as of the date of and after giving effect to such designation of such Subsidiary as a Silo Subsidiary and deduction of all Used Vehicles of such Silo Subsidiary from the Used Vehicle Borrowing Base, 42 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(iv)   the Company shall have provided to the Agent a Service Loaner Vehicle Loan Borrowing Base Certificate as of the date of and after giving effect to such designation of such Subsidiary as a Silo Subsidiary and deduction of all Service Loaner Vehicles of such Silo Subsidiary from the Service Loaner Vehicle Borrowing Base, (v) the Company or such Subsidiary shall have repaid in full the Related Principal Portion, together with accrued and unpaid interest thereon, with respect to each New Vehicle of such Subsidiary financed with a New Vehicle Loan Advance, (vi) the Company shall have repaid Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans to the extent necessary such that, after giving effect to such repayment and the designation of such Subsidiary as a Silo Subsidiary and deduction of all Used Vehicles of such Silo Subsidiary from the Used Vehicle Borrowing Base, (1) the outstanding principal balance of all Used Vehicle Floorplan Loans does not exceed, in the aggregate, as to all Lenders, the Maximum Used Vehicle Floorplan Amount, and (2) the outstanding principal balance of all Used Vehicle Floorplan Loans, plus the outstanding principal balance of all Used Vehicle Swing Line Loans, does not exceed, in the aggregate, as to all Lenders, the Maximum Used Vehicle Floorplan Amount, and (vii) the Company shall have repaid Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans to the extent necessary such that, after giving effect to such repayment and the designation of such Subsidiary as a Silo Subsidiary and deduction of all Service Loaner Vehicles of such Silo Subsidiary from the Service Loaner Vehicle Borrowing Base, (1) the outstanding principal balance of all Service Loaner Vehicle Floorplan Loans does not exceed, in the aggregate, as to all Lenders, the Maximum Service Loaner Vehicle Floorplan Amount, and (2) the outstanding principal balance of all Service Loaner Vehicle Floorplan Loans, plus the outstanding principal balance of all Service Loaner Vehicle Swing Line Loans, does not exceed, in the aggregate, as to all Lenders, the Maximum Service Loaner Vehicle Floorplan Amount. Effective upon any such designation and satisfaction of the conditions set forth in clauses (i), (ii), (iii), (iv), (v), (vi) and (vii) above, any Subsidiary so designated shall cease to be a New Vehicle Floorplan Borrower under this Agreement and the other Loan Documents, and the Dealership Loan Limit (if any) for such Subsidiary shall be deleted. “Silo Subsidiary Termination Agreement” with respect to a Silo Subsidiary, an agreement substantially in the form attached as Exhibit H-2. “Simple SOFR Adjustment” means a percentage equal to 0.10% per annum. “SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website at approximately 8:00 a.m. (New York City time), or in the case of an update to such rate by the SOFR Administrator, at approximately 2:30 p.m. (New York City time) on the immediately succeeding Business Day. 43 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time. “SOFR Interest Day” has the meaning specified in the definition of “Adjusted Daily Simple SOFR”. “SOFR Loan” means any Daily Simple SOFR Loan, Term SOFR Loan or Term SOFR Alternative Rate Loan.  “Solvent” means, with respect to any Person on any date, that on such date (a) the fair value of the assets of such Person, at a fair valuation is greater than the debts and liabilities, subordinated, contingent or otherwise, of such Person; (b) the present fair saleable value of the assets of such Person is greater than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) such Person will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; (d) such Person does not have unreasonably small capital with which to conduct the businesses in which it is engaged as such businesses are now conducted; and (e) such Person does not intend to, and does not believe that it will incur debts or liabilities beyond its ability to pay such debts and liabilities as they mature, taking into account the timing of and amounts of cash to be received by it and the timing of the amounts of cash to be payable on or in respect of its indebtedness. “Special Purpose Securitization Subsidiary” means a direct or indirect Subsidiary of the Company established in connection with a Canadian Receivables or Securitization Transaction, and which is organized in a manner (as determined by the Company in good faith) intended to reduce the likelihood that it would be substantively consolidated with the Company or any Subsidiary thereof in the event the Company or any such Subsidiary becomes subject to a proceeding under the U.S. Bankruptcy Code (or other insolvency law). “Specified Representations” means the representations and warranties set forth in Section 10.1 (solely with respect to the Company), Section 10.2 (solely with respect to the Company), Section 10.11, Section 10.19, Section 10.20 (solely with respect to the Company), Section 10.24, and Section 10.25. “Stated Rate” has the meaning set forth in Section 6.11. “Stockholders’ Equity” means, as of any date of determination, the consolidated stockholders’ equity of the Company determined in accordance with GAAP. “Subordinated Debt” means unsecured indebtedness of a Borrower which is subordinated to the payment of the Obligations by an agreement acceptable to the Agent and 44 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Required Lenders and that has subordination terms, covenants, pricing and other terms that have been approved in writing by the Required Lenders. “Subsidiary” of a Person means (i) any corporation Controlled by such Person or more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned, directly or indirectly, by such Person or by one or more of such Person’s Subsidiaries or by such Person and one or more of its Subsidiaries and (ii) any partnership, limited liability company, association, joint venture or other business organization Controlled by such Person or more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned.  Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of the Company. “Swap” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, fixed-price physical delivery contracts, whether or not exchange traded, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, including any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement or any other master agreement, including any such obligations or liabilities under any such master agreement. “Swap Obligation” means, with respect to any Person, any and all obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swaps, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap. “Swap Termination Value” means in respect of any one or more Swaps, after taking into account the effect of any legally enforceable netting agreement relating to such Swaps, (a) for any date after the date such Swaps have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) prior to such date the Net Mark-to-Market Exposure with respect thereto. “Swing Line Lender” means U.S. Bank. “Swing Line Loan” means a New Vehicle Swing Line Loan, Used Vehicle Swing Line Loan, Service Loaner Vehicle Swing Line Loan or Revolving Swing Line Loan. 45 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Synthetic Lease” means any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes. “Tangible Net Worth” means, as of any date, an amount equal to (x) the amount of shareholders’ equity, minus (y) the amount of goodwill and other intangible assets, of Company and its Subsidiaries, in each case determined as of such date on a consolidated basis in accordance with GAAP consistently applied. “Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, fees, assessments, charges or withholdings, and any and all liabilities with respect to the foregoing, including interest, additions to tax and penalties applicable thereto. “Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body. the rate per annum determined by the Agent as the forward-looking term rate based on SOFR. “Term SOFR Notice” means a notification by the Agent to the Lenders and the Company of the occurrence of a Term SOFR Transition Event. “Term SOFR Transition Event” means the determination by the Agent at any time, in its sole discretion, that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Agent, and (c) a Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred resulting in a Benchmark Replacement in accordance with Section 7.3.1 that is not “Term SOFR Adjustment” means a percentage equal to 0.10% per annum. “Term SOFR Administrator” means CME Group Benchmark Administration Ltd. (or a successor administrator of Term SOFR selected by the Agent in its reasonable discretion). “Term SOFR Administrator’s Website” means https://www.cmegroup.com/market-data/cme-group-benchmark-administration/term-sofr.html, or any successor source for Term SOFR identified as such by the Term SOFR Administrator from time to time. “Term SOFR Alternative Rate” means the greater of (a) the Floor, and (b) the sum of (i) the one-month forward-looking term rate based on SOFR quoted by the Agent from the Term SOFR Administrator’s Website (or other commercially available source providing such quotations as may be selected by the Agent from time to time), which shall be that one-month Term SOFR rate in effect two Business Days prior to the Rate Adjustment Date; provided that if the one-month forward-looking term rate based on SOFR is not published on such Business Day due to a holiday or other circumstance that the Agent deems in its sole discretion to be temporary, the one-month forward-looking term rate based on SOFR shall be the one-month 46 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

forward-looking term rate based on SOFR last published prior to such Business Day plus (ii) the Term SOFR Adjustment. “Term SOFR Alternative Rate Loan” means any Loan bearing interest at a rate based on the Term SOFR Alternative Rate. “Term SOFR Base Rate” means, for the relevant Interest Period the Term SOFR rate quoted by the Agent from the Term SOFR Administrator’s Website or the applicable Bloomberg screen (or other commercially available source providing such quotations as may be selected by the Agent from time to time) (the “Screen”) for such Interest Period, which shall be the Term SOFR rate published two Business Days before the first day of such Interest Period (such Business Day, the “Determination Date”). If as of 5:00 p.m. (New York time) on any Determination Date, the Term SOFR rate is not published on the Term SOFR Administrator’s Website or the Screen, then the rate used will be that as published by the Term SOFR Administrator or on the Screen for the first preceding Business Day for which such rate was published on the Term SOFR Administrator’s Website or the Screen so long as such first preceding Business Day is not more than three (3) Business Days prior to such Determination Date. “Term SOFR Loan” means any Loan bearing interest at a rate based on Adjusted Term SOFR. “Terminating Borrower” has the meaning set forth in Section 13.1.1(b). “Termination Date” means (a) April 29, 2026, (b) if maturity is extended pursuant to Section 6.18, such extended termination date as determined pursuant to such Section, provided that the “Termination Date” with respect to any Non-Extending Lender (including with respect to the payment of Obligations owing to such Lender) shall be the latest date that such Lender has consented to as its Termination Date pursuant to Section 6.18 (or, if such Lender has not consented to any such extension, the original Termination Date as in effect on the Closing Date); provided further, however, that, in each case, if such date is not a Business Day, the respective Termination Date shall be the next preceding Business Day, or (c) any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.  “Title Documents” means all manufacturer’s certificates of origin, manufacturers’ statements of origin, certificates of title, certificates of ownership and any other documents evidencing ownership of a motor vehicle or the transfer of ownership of a motor vehicle from a manufacturer or another dealer to a Dealership, and all warehouse receipts, bills of lading and other negotiable documents of title. “Title Report” has the meaning set forth in Section 9.4.2. “Trade-in Lien” means, with respect to a Used Vehicle that a customer traded in to the Company or any Subsidiary thereof, any security interest in such Used Vehicle outstanding at the time such Used Vehicle was traded, that secures any indebtedness or obligation to any 47 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Person incurred by such customer, including but not limited to amounts owing to any holder of any lien or security interest in a Used Vehicle at the time it is traded in to any Dealership. “U.S. Bank” means U.S. Bank National Association, a national banking association, in its individual capacity, and its successors. “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. “Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment. “Undisclosed Administration” means in relation to a Lender the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender is subject to home jurisdiction supervision if Applicable Law requires that such appointment is not to be publicly disclosed. “UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms. “UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution. “Used Vehicle” means a Vehicle which is held by a Dealership for sale in the ordinary course of business and which is not a New Vehicle or Service Loaner Vehicle. “Used Vehicle Borrowing Base” means, as of any date of determination, the amount equal to (a) 85% multiplied by (b) the amount determined, without duplication, as follows: (a) the aggregate net book value of the Used Vehicle inventory of the Company and its Subsidiaries; minus (b) the aggregate net book value of such Used Vehicles in which the Agent does not have a perfected, first-priority security interest (including (i) Used Vehicles owned by any Silo Subsidiary and (ii) Used Vehicles owned by any Dual Subsidiary with respect to which the Agent does not have a perfected, first-priority security interest (other than Used Vehicles subject to Trade-in Liens)); minus 48 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(c) the aggregate outstanding principal amount of indebtedness secured by Trade-in Liens; minus (d) the aggregate net book value of such Used Vehicles that are not otherwise Eligible Vehicles. Notwithstanding the foregoing, in no event shall the aggregate net book value of the Eligible Vehicles consisting of motorcycles included in the Service Loaner Vehicle Borrowing Base, Used Vehicle Borrowing Base and the Revolving Loan Borrowing Base exceed $25,000,000. “Used Vehicle Borrowing Base Certificate” means a certificate substantially in the form attached as Exhibit B-1, or in such other form as is acceptable to the Agent.  “Used Vehicle Floorplan Advance” means a borrowing consisting of the Used Vehicle Floorplan Loans to be made by the Lenders on any date. “Used Vehicle Floorplan Borrower” means the Company, in its capacity as an obligor on the Used Vehicle Floorplan Obligations which relate to the credit facilities described in Sections 3.1 and 3.2. “Used Vehicle Floorplan Borrowing Rate” means the sum of (a) the Eurocurrency RateAdjusted Daily Simple SOFR, Adjusted Term SOFR or the Term SOFR Alternative Rate, as designated by the Company from time to time, plus (b) the Used Vehicle Floorplan Margin. “Used Vehicle Floorplan Commitment” means for each Lender, the obligation of such Lender to make Used Vehicle Floorplan Loans to the Used Vehicle Floorplan Borrower and to participate in Used Vehicle Swing Line Loans in an aggregate amount not exceeding the amount set forth on Schedule 1, as such amount may be modified as a result of any assignment or as otherwise modified from time to time pursuant to Section 6.17 or the other provisions hereof.  “Used Vehicle Floorplan Commitment Fee” has the meaning set forth in Section 3.1.7. “Used Vehicle Floorplan Commitment Fee Rate” has the meaning set forth in the Pricing Schedule. “Used Vehicle Floorplan DDA” has the meaning set forth in Section 3.2.7(b). “Used Vehicle Floorplan Loan” has the meaning set forth in Section 3.1.1. “Used Vehicle Floorplan Margin” has the meaning set forth in the Pricing Schedule.  “Used Vehicle Floorplan Obligations” means all present and future Used Vehicle Floorplan Loans, Used Vehicle Swing Line Loans, and other debts, liabilities, obligations, reimbursements, indemnities, covenants, warranties, duties and obligations relating thereto of the Used Vehicle Floorplan Borrower to the Agent and the Lenders under this Agreement, and the other Loan Documents, whether now or hereafter existing or incurred, whether liquidated or 49 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

unliquidated, whether absolute or contingent, and including without limitation principal, interest, fees, Attorney Costs, expenses and charges relating to any of the foregoing. “Used Vehicle Sweep Advance” has the meaning set forth in Section 3.2.7(a). “Used Vehicle Swing Line Commitment” (which is a sublimit of the Aggregate Used Vehicle Floorplan Loan Commitment) means an amount equal to $40,000,000.0030,000,000.00. “Used Vehicle Swing Line Loan” has the meaning set forth in Section 3.2.1. “Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date” means the twentieth day of each month, or if such day is not a Business Day, the next Business Day. “Value” means, with respect to any Real Property, the fair market value of the applicable real property as determined by the Agent based upon appraisals or other evaluations acceptable to the Agent and in compliance with all regulatory requirements. “Vehicle” means an automobile, truck, van, motorcycle, or other motor vehicle. “Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom,  any powers of the applicable Resolution Authority  under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution  or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers. 1.2 Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time. 1.3 Other Interpretive Provisions. 1.3.1 Unless otherwise specified, the words “herein,” “hereof,” “hereto,” “hereunder” and similar terms refer to this Agreement as a whole and not to any particular provision of this Agreement and subsection, Section, and exhibit references are to this Agreement. 1.3.2 The word “or” shall not be exclusive; the singular includes the plural and the plural includes the singular; the masculine, the feminine and neuter gender, each include the 50 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

masculine, feminine and neuter gender; and the word “including” is not limiting and means “including without limitation.” 1.3.3 References to any Loan Document shall mean such Loan Document as amended, modified, supplemented or extended from time to time and any number of substitutions, renewals, restatements, consolidations, and replacements thereof or therefor. 1.3.4 References to governmental laws, statutes, ordinances, rules and regulations shall be construed as including all amendments, consolidations and replacements thereof or therefor. 1.3.5 Headings in this Agreement and each of the other Loan Documents are for convenience of reference only and are not part of the substance hereof or thereof. 1.3.6 Terms used herein without definition which are defined in the Uniform Commercial Code shall have the meanings given to them in such Uniform Commercial Code. 1.3.7 Except as provided to the contrary in this Agreement or any other Loan Documents, all accounting terms used in this Agreement and the other Loan Documents shall be interpreted and all accounting determinations shall be made in accordance with GAAP, in a manner consistent with that used in preparing the financial statements referred to in Section 11.2, except that any calculation or determination which is to be made on a consolidated basis shall be made for the Company and all of its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries), including those Subsidiaries, if any, which are unconsolidated on the Company’s audited financial statements; provided, however that, notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (a) any election under Accounting Standards Codification Section 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any indebtedness or other liabilities of the Company or any of its Subsidiaries at “fair value,” as defined therein, or (b) any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Codification Subtopic 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.  If at any time any change in GAAP would affect the computation of any financial covenant or requirement set forth in any Loan Document, and the Company, the Agent or the Required Lenders shall so request, the Agent, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrowers shall provide to the Agent and the Lenders reconciliation statements showing the difference in such calculation, together with the delivery of the financial statements and other documents required under this Agreement or as reasonably requested by the Agent. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, the determination of whether a lease is to be treated an operating lease or a capital lease 51 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

shall be made without giving effect to any change in accounting for leases pursuant to GAAP resulting from the implementation of FASB ASC 842 (Leases). 1.4 LIBOR NotificationRates. The interest rate on EurocurrencySOFR Loans is determined by reference to SOFR or the EurocurrencyTerm SOFR Base Rate, which is derived from LIBOR. Section 7.3.1(b) provides a mechanism for (a) determining an alternative rate of interest if LIBOR is no longer available or in the other circumstances set forth in Section 7.3.1(b), and (b) modifying this Agreement to give effect to such alternative rate of interestSOFR. The Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, (a) the continuation of, administration of, submission of, calculation of or any other matter related to LIBOR or otherSOFR, the Term SOFR Base Rate, or any component definition thereof or rates referred to in the definition of Eurocurrency Base Ratethereof, or with respect to any alternative or, successor or replacement rate thereto, or replacement rate thereof (including any Benchmark Replacement), including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate (including any Benchmark Replacement), as it may or may not be adjusted pursuant to Section 7.3.17.3(b), will havebe similar to, or produce the same value as, or be economically equivalent toor economic equivalence of, or have the same volume or liquidity as, SOFR, the Term SOFR Base Rate or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Benchmark Replacement Conforming Changes.  The Agent and its Affiliates or other related entities may engage in transactions that affect the calculation of SOFR or the Term SOFR Base Rate, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto and such transactions may be adverse to the Company.  The Agent may select information sources or services in its reasonable discretion to ascertain SOFR, the EurocurrencyTerm SOFR Base Rate, or any other Benchmark, any component definition thereof or rates referred to in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Company, 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. 1.5 Limited Condition Acquisition. In the event that the Company notifies the Agent in writing that any proposed Acquisition is a Limited Condition Acquisition and that the Company wishes to test the conditions to such Acquisition and the Indebtedness that is to be used to finance such Acquisition in accordance with this Section 1.5, then, so long as agreed to by the Agent and the lenders providing such Indebtedness, the following provisions shall apply: (a) any condition to such Limited Condition Acquisition or such Indebtedness that requires that no Default or Event of Default shall have occurred and be continuing at the time of such Limited Condition Acquisition or the incurrence of such Indebtedness, shall be satisfied if (i) no Default or Event of Default shall have occurred and be continuing at the time of the execution of the definitive purchase agreement, merger agreement or other acquisition agreement governing such Limited Condition Acquisition (the “LCA Test Date”) and (ii) no 52 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Event of Default under any of Section 14.1.1, 14.1.8 or 14.1.9 shall have occurred and be continuing both immediately before and immediately after giving effect to such Limited Condition Acquisition and any Indebtedness incurred in connection therewith (including any such additional Indebtedness); (b) any condition to such Limited Condition Acquisition or such Indebtedness that the representations and warranties in this Agreement and the other Loan Documents shall be true and correct at the time of consummation of such Limited Condition Acquisition or the incurrence of such Indebtedness shall be deemed satisfied if (i) all representations and warranties in this Agreement and the other Loan Documents are true and correct in all material respects (except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects) as of the LCA Test Date, or if such representation speaks as of an earlier date, as of such earlier date and (ii)  as of the date of consummation of such Limited Condition Acquisition, (A) the representations and warranties under the relevant definitive agreement governing such Limited Condition Acquisition as are material to the lenders providing such Indebtedness shall be true and correct, but only to the extent that the Company or its applicable Subsidiary has the right to terminate its obligations under such agreement or otherwise decline to close such Limited Condition Acquisition as a result of a breach of such representations and warranties or the failure of those representations and warranties to be true and correct and (B) the Specified Representations shall be true and correct in all material respects (except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects); (c) any financial ratio test or condition to be tested in connection with such Limited Condition Acquisition and the availability of such Indebtedness will be tested as of the LCA Test Date, in each case, after giving effect to the relevant Limited Condition Acquisition and related incurrence of Indebtedness, on a Pro Forma Basis where applicable, and, for the avoidance of doubt, (i) such ratios and baskets shall not be tested at the time of consummation of such Limited Condition Acquisition and (ii) if any of such ratios are exceeded or conditions are not met following the LCA Test Date, but prior to the closing of such Limited Condition Acquisition, as a result of fluctuations in such ratio or amount (including due to fluctuations in EBITDAR of the Company or the Person subject to such Limited Condition Acquisition), at or prior to the consummation of the relevant transaction or action, such ratios will not be deemed to have been exceeded and such conditions will not be deemed unmet as a result of such fluctuations solely for purposes of determining whether the relevant transaction or action is permitted to be consummated or taken; (d) except as provided in the next sentence, in connection with any subsequent calculation of any ratio or basket on or following the relevant LCA Test Date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated and the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition, any such ratio or basket shall be calculated assuming such Limited Condition Acquisition and other transactions in connection therewith (including the incurrence or assumption of Indebtedness) have not been consummated. Notwithstanding the foregoing, any calculation of a ratio in connection with determining the Applicable Margin and determining whether or not the Company is in compliance with the 53 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

financial covenants set forth in Section 11.1 shall, in each case be calculated assuming such Limited Condition Acquisition and other transactions in connection therewith (including the incurrence or assumption of Indebtedness) have not been consummated. The foregoing provisions shall apply with similar effect during the pendency of multiple Limited Condition Acquisitions such that each of the possible scenarios is separately tested. ARTICLE 2 NEW VEHICLE FLOORPLAN LINE OF CREDIT 2.1 New Vehicle Floorplan Loans. 2.1.1 New Vehicle Floorplan Loan Commitment.  Subject to the terms and conditions of this Agreement, each Lender severally and not jointly agrees to make loans (each a “New Vehicle Floorplan Loan” and collectively, the “New Vehicle Floorplan Loans”) to the New Vehicle Floorplan Borrowers on a revolving credit basis during the period from the Closing Date to but not including the Termination Date; provided that (a) the aggregate outstanding principal balance of the New Vehicle Floorplan Loans made by each Lender, plus the outstanding principal balance of such Lender’s participating interest in the New Vehicle Swing Line Loans, shall not at any time exceed an amount equal to such Lender’s New Vehicle Floorplan Commitment; (b) the outstanding principal balance of all New Vehicle Floorplan Loans shall not at any time exceed, in the aggregate, as to all Lenders, the Aggregate New Vehicle Floorplan Commitment, and (c) except as set forth in Section 2.2.7(b), the outstanding principal balance of all New Vehicle Floorplan Loans, plus the outstanding principal balance of all New Vehicle Swing Line Loans, shall not at any time exceed, in the aggregate, as to all Lenders, the Aggregate New Vehicle Floorplan Commitment.  Subject to the terms and conditions hereof, the New Vehicle Floorplan Borrowers may borrow, prepay and reborrow New Vehicle Floorplan Loans. 2.1.2 Purpose of New Vehicle Floorplan Loans.  The New Vehicle Floorplan Borrowers shall use the proceeds of the New Vehicle Floorplan Loans to finance Eligible New Vehicles owned by the New Vehicle Floorplan Dealerships (including to refinance Former Lender Loans) and to refinance New Vehicle Swing Line Loans. 2.1.3 Requests for New Vehicle Floorplan Loans.  Subject to Section 2.2.6, whenever the New Vehicle Floorplan Borrowers wish to obtain a New Vehicle Floorplan Loan Advance, the Company shall give Agent irrevocable notice thereof no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of the requested borrowing.  Such notice shall specify the requested borrowing date (which must be a Business Day), the amount of the New Vehicle Floorplan Loan Advance, and include any other information and documentation reasonably requested by the Agent, including, but not limited to, the make, model and vehicle identification number of each New Vehicle to be financed thereby.  The Agent will promptly notify each Lender of its receipt of any request for a New Vehicle Floorplan Loan Advance and of the amount of its Pro Rata Share of such New Vehicle Floorplan Loan Advance. 2.1.4 Funding of New Vehicle Floorplan Loans.  If the Agent notifies the Lenders of a request for a New Vehicle Floorplan Loan Advance by 1:00 p.m. (Pacific Time) on 54 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

any Business Day, each Lender will deliver its Pro Rata Share of such New Vehicle Floorplan Loan Advance to the Agent by 11:00 a.m. (Pacific Time) on the Business Day after such notification. 2.1.5 New Vehicle Floorplan Payments. (a) Interest Payments.  Interest on the unpaid principal balance of the New Vehicle Floorplan Loans shall be paid monthly by the New Vehicle Floorplan Borrowers in an amount equal to all interest accrued during the prior calendar month.  Such interest payments shall be made on each New Vehicle Monthly Payment Date commencing with the first such date to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due and payable in full on the Termination Date. (b) Voluntary Principal Payments.  The New Vehicle Floorplan Borrowers may make voluntary repayments of all or a portion of the outstanding principal balance of the New Vehicle Floorplan Loans if the Company gives Agent written or telephonic notice of such voluntary repayment no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of such repayment; provided that each such voluntary principal repayment shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount unless the New Vehicle Floorplan Loans are being repaid in full.  Such notice shall specify the anticipated date of the voluntary repayment and the principal amount of the New Vehicle Floorplan Loans that will be repaid on such date.  Any voluntary repayment of the New Vehicle Floorplan Loans that is received by the Agent without such notice shall be deemed to have been received by the Agent on the Business Day after such payment is actually received by the Agent and interest shall accrue on the amounts so repaid through the date of such deemed receipt. (c) Principal Payment at Maturity.  The entire outstanding principal balance of the New Vehicle Floorplan Loans plus all interest accrued thereon shall be due and payable in full by the Floorplan Borrowers on the Termination Date. (d) Principal Payment Upon Dual Subsidiary Financing Commencement Date. If the Company terminates the designation of a Subsidiary as a “New Vehicle Floorplan Borrower” with respect to any Removed Franchise in accordance with Section 6.19, then the New Vehicle Floorplan Borrowers (jointly and severally) shall repay each New Vehicle Floorplan Loan and each New Vehicle Swing Line Loan with respect to any New Vehicle that is subsequently financed by Permitted Dual Subsidiary Indebtedness at such Removed Franchise immediately upon the Dual Subsidiary Financing Commencement Date. 2.1.6 Voluntary Reduction or Termination of Commitment.  The New Vehicle Floorplan Borrowers may from time to time on at least ten (10) Business Day’s prior written notice by the Company to the Agent (which shall promptly advise each Lender thereof) permanently reduce the Aggregate New Vehicle Floorplan Commitment to an amount not less than the then outstanding principal balance of the New Vehicle Floorplan Loans and New Vehicle Swing Line Loans (which, for purposes of this determination, shall not be deemed to be reduced by amounts in PR Accounts).  Concurrently with any reduction of the Aggregate New Vehicle Floorplan Commitment to zero, (a) no further New Vehicle Floorplan Loans or New 55 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Vehicle Swing Line Loans will be made, (b) New Vehicle Floorplan Borrowers shall pay all principal and interest on the New Vehicle Floorplan Loans and New Vehicle Swing Line Loans and all fees and other amounts owing to the Agent and the Lenders, and (c) the New Vehicle Floorplan Borrowers shall deliver to the Agent funds in an amount which the Agent estimates it or the Swing Line Lender may be required to pay pursuant to Payment Commitments which may be presented after the Termination Date, such collateral to be held in the Payment Commitment Collateral Account.  All reductions of the Aggregate New Vehicle Floorplan Commitment shall reduce the New Vehicle Floorplan Commitments pro rata among the Lenders according to their respective Pro Rata Shares; and except as otherwise set forth in the proviso to this Section 2.1.6, shall reduce the New Vehicle Swing Line Commitment in proportion to the reduction of the Aggregate New Vehicle Floorplan Commitment; provided, however, that (unless the Aggregate New Vehicle Floorplan Commitment is reduced to less than such amount), the New Vehicle Swing Line Commitment shall not be reduced. 2.1.7 New Vehicle Floorplan Commitment Fee.  The New Vehicle Floorplan Borrowers agree to pay to the Agent, for the account of the Lenders, a commitment fee (the “New Vehicle Floorplan Commitment Fee”) calculated at a per annum rate equal to the New Vehicle Floorplan Commitment Fee Rate on the average daily amount by which the Aggregate New Vehicle Floorplan Commitment exceeds the sum of (a) the actual aggregate outstanding principal balance of the New Vehicle Swing Line Loans on each day (it being understood that any portion of the outstanding principal balance of the New Vehicle Swing Line Loans ceases to be outstanding under the New Vehicle Swing Line Loans and commences being a portion of the outstanding principal balance under the New Vehicle Floorplan Loans on the date that the New Vehicle Floorplan Loans are funded to repay such portion of the outstanding principal balance of the New Vehicle Swing Line Loans); plus (b) the actual aggregate outstanding principal balance of the New Vehicle Floorplan Loans on each day; provided that, if the aggregate amount of the New Vehicle Floorplan Commitment Fee payable for any period to the Lenders other than the Swing Line Lender (as set forth in the third sentence of this paragraph) exceeds the amount calculated under this sentence, then the New Vehicle Floorplan Borrowers agree to pay to the Agent, for the account of such Lenders, such additional amounts so that each Lender other than the Swing Line Lender receives the full amount of New Vehicle Floorplan Commitment Fee described in the third sentence of this paragraph.  The accrued New Vehicle Floorplan Commitment Fee shall be due and payable in arrears on each Quarterly Payment Date hereafter and on the Termination Date for the three month period or other time period ending on the last day of the preceding fiscal quarter or on the Termination Date.  The New Vehicle Floorplan Commitment Fee payable to each Lender other than the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate New Vehicle Floorplan Commitment exceeds the actual aggregate outstanding principal balance of the New Vehicle Floorplan Loans on each day.  The New Vehicle Floorplan Commitment Fee payable to the Lender which is the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate New Vehicle Floorplan Commitment exceeds the actual aggregate outstanding principal balance of the New Vehicle Floorplan Loans on each day and subtracting from that amount the average daily outstanding principal balance of the New Vehicle Swing Line Loans; provided, however, that notwithstanding any contrary provision of Section 2.6, solely for purposes of calculating the amount payable to Swing Line Lender, the 56 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

principal balance of the New Vehicle Swing Line Loans shall be deemed to be reduced by the aggregate balance in the PR Accounts, but in no event shall be reduced to less than zero. 2.2 New Vehicle Swing Line Loans. 2.2.1 New Vehicle Swing Line Commitment.  Subject to the terms and conditions of this Agreement, the Swing Line Lender shall make loans (each, a “New Vehicle Swing Line Loan”) to the New Vehicle Floorplan Borrowers on a revolving credit basis during the period from the Closing Date to but not including the Termination Date; provided that, except as set forth in Section 2.2.7(b), (a) the aggregate outstanding principal balance of the New Vehicle Swing Line Loans shall not at any time exceed the New Vehicle Swing Line Commitment; and (b) the outstanding principal balance of all New Vehicle Floorplan Loans made by all Lenders plus the outstanding principal balance of all New Vehicle Swing Line Loans, shall not at any time exceed the Aggregate New Vehicle Floorplan Commitment.  Subject to the terms and conditions hereof, the New Vehicle Floorplan Borrowers may borrow, prepay and reborrow New Vehicle Swing Line Loans. 2.2.2 Purpose of New Vehicle Swing Line Loans.  The New Vehicle Floorplan Borrowers shall use the proceeds of the New Vehicle Swing Line Loans to finance Eligible New Vehicles (including to refinance Former Lender Loans). 2.2.3 Requests for New Vehicle Swing Line Loans.  Subject to Sections 2.2.7 and 2.6.2, whenever the New Vehicle Floorplan Borrowers wish to obtain a New Vehicle Swing Line Loan, the Company shall give Agent irrevocable notice thereof no later than 1:00 p.m. (Pacific Time) on the requested date of such New Vehicle Swing Line Loan unless Swing Line Lender agrees in each instance, in its sole discretion, to a shorter time period.  Such notice shall specify the requested borrowing date (which must be a Business Day) and the amount of the New Vehicle Swing Line Loan, and include any other information and documentation reasonably requested by the Agent, including, but not limited to, the make, model and vehicle identification number of each New Vehicle to be financed thereby. 2.2.4 New Vehicle Swing Line Loan Payments. (a) Interest Payments.  Interest on the unpaid principal balance of the New Vehicle Swing Line Loans shall be paid monthly by the New Vehicle Floorplan Borrowers in an amount equal to all interest accrued during the prior calendar month.  Such interest payments shall be made on each New Vehicle Monthly Payment Date commencing with the first such date to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due and payable in full on the Termination Date. (b) Principal Payments.  The entire outstanding principal balance of the New Vehicle Swing Line Loans plus all interest accrued thereon shall be due and payable in full by the New Vehicle Floorplan Borrowers on the Termination Date.  In addition, the principal balance of the New Vehicle Swing Line Loans shall be due and payable as required by Section 2.2.6. 2.2.5 Participation in New Vehicle Swing Line Loans.  Immediately upon the making of a New Vehicle Swing Line Loan by the Swing Line Lender, the Swing Line Lender 57 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

shall be deemed to have sold and transferred to each Lender and each Lender shall be deemed to have purchased and received from the Swing Line Lender, without any further action by any party, an undivided participating interest in each New Vehicle Swing Line Loan in an amount equal to such Lender’s Pro Rata Share; provided, however, that (a) no Lender shall be required to fund its participation in any New Vehicle Swing Line Loan except as set forth in Section 2.2.6(b), and (b) no Lender shall be entitled to share in any payments of principal or interest in respect of its participation except, with respect to any participation funded by such Lender, as set forth herein.  Such participation shall be subject to the terms and conditions of this Agreement. 2.2.6 Settlement of New Vehicle Swing Line Loans. (a) Refunding of Loans. (i) Upon the request of the Swing Line Lender, the Agent from time to time shall, on behalf of the New Vehicle Floorplan Borrowers (and each New Vehicle Floorplan Borrower hereby irrevocably authorizes the Agent to so act on its behalf) request each Lender (including Swing Line Lender in its capacity as a Lender) to make a New Vehicle Floorplan Loan Advance to the New Vehicle Floorplan Borrowers, in accordance with the provisions of this Section 2.2.6(a), which shall be applied to repay all or a portion of the outstanding principal balance of the New Vehicle Swing Line Loans (each such New Vehicle Floorplan Loan, a “Refunding New Vehicle Floorplan Loan”), in an amount equal to that Lender’s Pro Rata Share of all or a portion of the then outstanding principal balance of the New Vehicle Swing Line Loans. (ii) Without limiting the foregoing, each Lender agrees that the Agent may request the Lenders to make Refunding New Vehicle Floorplan Loans at any time if (A) a Default has occurred and is continuing, or (B) in the judgment of Swing Line Lender, taking into account the outstanding principal balance of the New Vehicle Swing Line Loans, the anticipated usage of the New Vehicle Swing Line Loans, such Refunding New Vehicle Floorplan Loans are reasonably necessary to ensure that the outstanding principal balance of the New Vehicle Swing Line Loans will not at any time exceed the New Vehicle Swing Line Commitment (it being understood that in order to attain such objective, Swing Line Lender may request refunding of the New Vehicle Swing Line Loans even though the principal balance of the New Vehicle Swing Line Loans at the time of such request is less than the New Vehicle Swing Line Commitment). (iii) If the Agent makes a request for funding under this Section 2.2.6(a) by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver the required amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  The proceeds of all Refunding New Vehicle Floorplan Loans shall be paid by the Agent to the Swing Line Lender in repayment of the outstanding principal balance of the applicable New Vehicle Swing Line Loans. (b) Funding of Participations.  In addition to the right of the Swing Line Lender to request refunding of the New Vehicle Swing Line Loans pursuant to Section 2.2.6(a), upon the request of the Swing Line Lender, the Agent may request each Lender (including Swing Line Lender in its capacity as a Lender) to fund its participation in the New 58 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Vehicle Swing Line Loans by paying to the Agent, for the account of the Swing Line Lender, its Pro Rata Share of the principal amount of the New Vehicle Swing Line Loans.  If the Agent makes such request by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver such amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  All participations funded by the Lenders under this Section 2.2.6(b) shall be treated as the funding of New Vehicle Floorplan Loans for purposes of the calculation of the New Vehicle Floorplan Commitment Fee.  If any payment paid to any Lender with respect to its participating interest in any New Vehicle Swing Line Loan is thereafter recovered from or must be returned or paid over by Swing Line Lender for any reason, such Lender will pay to the Agent for the account of the Swing Line Lender, such Lender’s Pro Rata Share of such amount and of any interest and other amounts paid or payable by the Swing Line Lender with respect to such amount.  The Agent agrees not to request any funding of the Lender’s participations in the New Vehicle Swing Line Loans under this Section 2.2.6(b) at any time that such participations may be legally repaid using advances of the New Vehicle Floorplan Loans under Section 2.2.6(a). (c) Payment to Swing Line Lender.  Notwithstanding any contrary provision of this Agreement (i) except as set forth in clause (ii) of this Section 2.2.6(c) all payments of principal and interest on the New Vehicle Swing Line Loans shall be paid by the Agent solely to the Swing Line Lender; and (ii) with respect to each participation in New Vehicle Swing Line Loans which is funded by any Lender, such Lender (including Swing Line Lender in its capacity as Lender) shall be entitled to receive its Pro Rata Share of payments of (A) principal on such New Vehicle Swing Line Loans and (B) interest on such New Vehicle Swing Line Loans only for the period following the date such participation is funded. (d) Obligations Unconditional.  The obligation of each Lender to make New Vehicle Floorplan Loans to repay New Vehicle Swing Line Loans pursuant to Section 2.2.6(a) or to fund its participation interests in New Vehicle Swing Line Loans pursuant to Section 2.2.6(b) shall be absolute and unconditional and shall not be affected by the occurrence of a Default or Event of Default, the fact that any one or more of the conditions in Article 9 is not satisfied, the termination of the availability of Loans, the fact that such New Vehicle Floorplan Loan is made after the Termination Date in compliance with the terms of a Payment Commitment or to refinance New Vehicle Swing Line Loans made prior to the Termination Date, any defense, setoff, counterclaim or claim for recoupment of any Lender against Agent or Swing Line Lender or any other circumstance, whether or not similar to the foregoing.  Notwithstanding the foregoing, the Lenders shall not be required to refinance New Vehicle Swing Line Loans pursuant to Section 2.2.6(a) or to fund their participation interests in Swing Line Loans pursuant to Section 2.2.6(b) (i) if after giving effect thereto, the outstanding principal balance of such Lender’s New Vehicle Floorplan Loans would exceed its New Vehicle Floorplan Commitment, or (ii) with respect to any portions of the outstanding principal balance of the New Vehicle Swing Line Loans that are funded by Swing Line Lender after Agent is deemed to have knowledge or notice of the occurrence of a Default or after the Termination Date. 2.2.7 Advances Pursuant to Payment Commitment. (a) In addition to New Vehicle Swing Line Loans made pursuant to Section 2.2.3, each New Vehicle Floorplan Borrower authorizes Agent and Swing Line Lender 59 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

to make payment directly to manufacturers or distributors of Vehicles in payment for New Vehicles purchased by any New Vehicle Floorplan Borrower, in accordance with the terms and conditions of the applicable Payment Commitment.  Each payment pursuant to a Payment Commitment shall constitute a New Vehicle Swing Line Loan hereunder in the amount of such payment.  The Agent, in its sole discretion, (i) may revise a Payment Commitment at any time, whether or not a Default has occurred, by giving written notice to the applicable manufacturer or distributor and the Company, and (ii) may terminate or suspend a Payment Commitment at any time, whether or not a Default has occurred, by giving written notice to the applicable manufacturer or distributor, and if no Default has occurred and is continuing, to the Company. Each New Vehicle Floorplan Borrower shall be and remain jointly and severally liable to Swing Line Lender for all payments made to a manufacturer or distributor pursuant to a Payment Commitment.  The Agent and the Lenders do not assume any responsibility for (and each New Vehicle Floorplan Borrower’s obligation to repay any Advance hereunder will not be affected or impaired in any way by) the correctness, validity, genuineness or sufficiency of any request for payment by a manufacturer or distributor under a Payment Commitment, any documents pertaining thereto or the existence, character, quantity, quality, condition, weight, value or delivery of any Vehicles purchased with the proceeds of any Advance.  In this regard, the Agent may conclusively presume and rely upon the validity and the appropriateness of any payment request by a manufacturer or distributor under a Payment Commitment and any and all documents or information related thereto.  Notwithstanding any contrary provision hereof, the Agent may take such action as is necessary to terminate any Payment Commitments up to ten (10) days prior to the Termination Date, so that no Payment Commitments shall become payable later than the Termination Date or, at the Agent’s discretion, up to ten (10) days prior thereto. (b) The parties acknowledge that, due to Payment Commitments with Vehicle manufacturers and distributors, New Vehicle Floorplan Dealerships may be required to purchase New Vehicles which may cause the outstanding principal balance of the New Vehicle Floorplan Loans and New Vehicle Swing Line Loans to exceed the Aggregate New Vehicle Floorplan Commitment and/or the outstanding principal balance of the New Vehicle Swing Line Loans to exceed the New Vehicle Swing Line Commitment.  The Swing Line Lender may, at its option, but without any obligation to do so, make a New Vehicle Swing Line Loan to fund the amount due under any Payment Commitment even if such New Vehicle Swing Line Loan would cause the outstanding principal balance of the New Vehicle Floorplan Loans and New Vehicle Swing Line Loans to exceed the Aggregate New Vehicle Floorplan Commitment and/or the outstanding principal balance of the New Vehicle Swing Line Loans to exceed the New Vehicle Swing Line Commitment.  The New Vehicle Floorplan Borrowers shall pay the amount of such excess to the Agent upon demand as set forth in Section 2.3.4. 2.3 Terms Applicable to New Vehicle Floorplan Loans and New Vehicle Swing Line Loans. 2.3.1 New Vehicle Loan Limits. (a) The aggregate outstanding principal balance of New Vehicle Floorplan Loans and New Vehicle Swing Line Loans shall not at any time exceed the Aggregate New Vehicle Floorplan Commitment. 60 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(b) New Vehicle Loans shall only be made to finance Eligible New Vehicles owned by a New Vehicle Floorplan Dealership.  The aggregate outstanding principal balance of the New Vehicle Loans made to finance Eligible New Vehicles (including Fleet Vehicles and Demos) owned by any New Vehicle Floorplan Dealership shall not at any time exceed the limit (“Dealership Loan Limit”) for such New Vehicle Floorplan Dealership which is agreed to between Agent and the Company from time to time or, if applicable, any manufacturer, distributor, dealership location or other sublimit set forth within such limit (“Dealership Sublimit”). (c) No more than 10 Demos owned by any New Vehicle Floorplan Dealership or dealership location of a New Vehicle Floorplan Dealership may be financed at any one time. (d) No New Vehicle Loan Advance to finance Eligible New Vehicles (including Fleet Vehicles and Demos) shall exceed an amount equal to 100% of the amount of the manufacturer’s or distributor’s invoice (including freight, advertising and holdbacks) for such Vehicles.  No New Vehicle Loan Advance to refinance Former Lender Loans shall exceed an amount equal to the amount calculated in accordance with the preceding sentence. 2.3.2 Changes to New Vehicle Floorplan Limits and New Vehicle Floorplan Dealerships.  The Agent and the Company may from time to time agree (without requiring the consent of any Lender or any other Borrower) to (a) increase or decrease the Dealership Loan Limit (or any Dealership Sublimit) for any New Vehicle Floorplan Dealership, (b) change the permitted manufacturers, distributors or brands listed for any New Vehicle Floorplan Dealership; and (c) add or delete New Vehicle Floorplan Dealerships and establish Dealership Loan Limits and permitted manufacturers, distributors and brands for additional New Vehicle Floorplan Dealerships. 2.3.3 Additional Required Payments.  In addition to payments required by Sections 2.1.5(a), 2.1.5(c), 2.2.4(a), 2.2.4(b), 2.2.6, and the other provisions hereof, New Vehicle Floorplan Borrowers shall also repay the New Vehicle Loans as follows (which payments do not require prior notice to the Agent or Lenders): (a) Sale of Vehicles.  (i) The New Vehicle Floorplan Borrowers shall pay to the Agent the entire Related Principal Portion for each financed New Vehicle (except Fleet Vehicles and Deemed Sales) within five Business Days following the date of sale or lease of such New Vehicle; and (ii) New Vehicle Floorplan Borrowers shall pay to the Agent the entire Related Principal Portion for each financed Fleet Vehicle by the earlier of (A) 3 Business Days following any New Vehicle Floorplan Dealership’s receipt of proceeds from the sale of such Fleet Vehicle, or (B) (1) 45 calendar days following the date of sale of any Fleet Vehicle sold to a governmental agency, or (2) 30 calendar days following the date of sale of any other Fleet Vehicle. (b) Unsold New Vehicles.  If any New Vehicle has not been previously sold, the New Vehicle Floorplan Borrowers shall pay the entire Related Principal Portion for such New Vehicle to the Agent on the first New Vehicle Monthly Payment Date which is at least one year following the New Vehicle Loan Advance Date for such New Vehicle 61 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(“Required Repayment Date”).  Notwithstanding the foregoing, the Related Principal Portion for unsold New Vehicles representing up to 5% of the outstanding principal balance of the New Vehicle Loans may remain unpaid following the Required Repayment Date; provided that the Related Principal Portion for each unsold New Vehicle must be repaid no later than the third New Vehicle Monthly Payment Date following the Required Repayment Date for such New Vehicle. (c) Deemed Sales.  If a Deemed Sale of a New Vehicle financed by the Lenders occurs, the New Vehicle Floorplan Borrowers shall pay to the Agent the Related Principal Portion for such Vehicle no later than 6 Business Days following the date of any Deemed Sale.  A “Deemed Sale” means any of the following: (i) A New Vehicle Floorplan Dealership disposes of a New Vehicle by trade with another dealer or other disposition, other than a sale in the ordinary course of such New Vehicle Floorplan Dealership’s business, regardless of whether any payment is due to be made by or to such New Vehicle Floorplan Dealership in respect of such trade or other disposition. (ii) The New Vehicle ceases to meet the criteria contained in the definition of “Eligible New Vehicle” in this Agreement. (iii) Agent reasonably determines that the fair market value of a New Vehicle has significantly declined, regardless of the reason. 2.3.4 Additional Payments.  The Agent and the Lenders shall have no obligation whatsoever, and they have no present intention, to make any New Vehicle Floorplan Loan or New Vehicle Swing Line Loan after the Termination Date or which would cause the principal amount outstanding under this Agreement to exceed any of the limitations stated in this Agreement.  The New Vehicle Floorplan Borrowers are and shall be and remain unconditionally jointly and severally liable to the Lenders for, and the New Vehicle Floorplan Borrowers hereby jointly and severally promise to pay to the Agent for the account of the Lenders the amount of all New Vehicle Floorplan Obligations hereunder, including without limitation New Vehicle Floorplan Loans and New Vehicle Swing Line Loans in excess of the Swing Line Commitment and/or the Aggregate New Vehicle Floorplan Commitment (whether funded pursuant to Payment Commitments or otherwise) and New Vehicle Floorplan Loans and New Vehicle Swing Line Loans made after the Termination Date.  The New Vehicle Floorplan Borrowers shall pay to the Agent: (a) upon demand, or if earlier immediately upon becoming aware of the overadvance, the amount of any New Vehicle Floorplan Loans and New Vehicle Swing Line Loans in excess of any limitation contained in this Agreement; and (b) upon demand, the amount of any New Vehicle Floorplan Loans and New Vehicle Swing Line Loans made after the Termination Date; together with interest on the principal amount of such New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, as set forth herein. 2.3.5 Payment Commitment Collateral Account.  At any time after the Termination Date or, if earlier, the date on which the availability of New Vehicle Floorplan Loans and New Vehicle Swing Line Loans is terminated, the New Vehicle Floorplan Borrowers shall deliver to the Agent funds in an amount equal to the amount which the Agent or Swing 62 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Line Lender estimates it may be required to pay to manufacturers and distributors pursuant to Payment Commitments which may be presented on or after such date.  Such funds shall be held in a non-interest bearing deposit account (“Payment Commitment Collateral Account”) as additional Collateral for the indebtedness of the New Vehicle Floorplan Borrowers to the Lenders.  Each New Vehicle Floorplan Borrower hereby grants to the Agent, for the benefit of the Lenders, a security interest in such funds and such account to secure all New Vehicle Floorplan Obligations. 2.4 New Vehicle Floorplan Borrowers. 2.4.1 Joint and Several Liability.  Each New Vehicle Floorplan Borrower shall be jointly and severally liable (each as a primary obligor and not merely as a surety or accommodation maker) for repayment of the New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, and payment and performance of all Obligations of a New Vehicle Floorplan Borrower and/or the New Vehicle Floorplan Borrowers to the Agent and the Lenders under this Agreement and the other Loan Documents.  Without limiting the foregoing, each New Vehicle Floorplan Borrower acknowledges and agrees that each of them is jointly and severally liable for all New Vehicle Floorplan Obligations, even if an invoice, billing or other request for payment of some or all of the New Vehicle Floorplan Obligations is addressed to, or stated to be payable by one or more, but less than all of the New Vehicle Floorplan Borrowers.  Each New Vehicle Floorplan Borrower jointly and severally promises to pay to the Agent, for the account of the Lenders (including Swing Line Lender), in accordance with the terms of this Agreement, and the other Loan Documents, the principal amount of the New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, plus interest thereon, plus all other New Vehicle Floorplan Obligations.  Each New Vehicle Floorplan Borrower shall be jointly and severally liable and responsible for all New Vehicle Floorplan Obligations and payment and performance of all terms, conditions, obligations and agreements applicable to a New Vehicle Floorplan Borrower or New Vehicle Floorplan Borrowers under the Loan Documents. 2.4.2 Maximum Liability.  Notwithstanding any contrary provision of this Agreement or the other Loan Documents, the liability of each New Vehicle Floorplan Borrower with respect to the New Vehicle Floorplan Obligations shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or fraudulent conveyance (or similar term) under any applicable federal or state law (including Section 548 of the Bankruptcy Code of the United States or any successor provision); provided, however that release or reduction of the liabilities of one New Vehicle Floorplan Borrower shall not release or reduce the liability of any other New Vehicle Floorplan Borrower for payment and performance of all New Vehicle Floorplan Obligations. 2.4.3 Appointment of Company.  Each Subsidiary that is or becomes a New Vehicle Floorplan Borrower hereby irrevocably appoints the Company to act on its behalf in its capacity as a New Vehicle Floorplan Borrower for all purposes relevant to this Agreement and the other Loan Documents.  Without limiting the foregoing, each New Vehicle Floorplan Borrower authorizes the Company, on its behalf, to give and receive notices, to request New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, to execute and deliver all documents, instruments, agreements, reports, and certificates required hereunder (including without limitation Borrower Joinder Agreements and Existing Subsidiary Joinder Agreements), 63 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

to make any election or decision which is required of the New Vehicle Floorplan Borrowers, and to receive and/or direct the receipt of the proceeds of any New Vehicle Floorplan Loans or New Vehicle Swing Line Loans.  Any acknowledgement, consent, direction, certification, agreement or other action which might otherwise be valid or effective only if given or taken by all New Vehicle Floorplan Borrowers, or by any one or more of the New Vehicle Floorplan Borrowers, shall be valid and effective if given or taken only by the Company, whether or not any other New Vehicle Floorplan Borrower also joins therein.  Any notice, demand, consent, acknowledgment, direction, certification or other communication delivered to the Company as a New Vehicle Floorplan Borrower in accordance with the terms of this Agreement and the other Loan Documents shall be deemed to have been delivered to the Company and each other New Vehicle Floorplan Borrower.  Each New Vehicle Floorplan Borrower other than the Company agrees that each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by the Company shall be deemed for all purposes to have been made by such New Vehicle Floorplan Borrower and shall be binding upon and enforceable against such New Vehicle Floorplan Borrower to the same extent as if the same had been made directly by such New Vehicle Floorplan Borrower.  Notwithstanding the foregoing, the Agent and the Lenders may at any time and from time to time require any one or more of the New Vehicle Floorplan Borrowers to join in or take any action which the Company is authorized to take alone. 2.4.4 Waivers. (a) Each New Vehicle Floorplan Borrower acknowledges that the New Vehicle Floorplan Loans and New Vehicle Swing Line Loans herein will or may be made for the benefit of the other New Vehicle Floorplan Borrowers as well as such New Vehicle Floorplan Borrower and, in full recognition of that fact, each New Vehicle Floorplan Borrower consents and agrees that the Agent and the Lenders may, at any time and from time to time, without notice or demand, and without affecting the enforceability of this Agreement and the other Loan Documents, or the liability of any New Vehicle Floorplan Borrower hereunder or thereunder: (i) supplement, modify, amend, extend, renew, accelerate or otherwise change the time for payment or the terms of the New Vehicle Floorplan Obligations or any part thereof, including any increase or decrease of the rates of interest thereon; (ii) supplement, modify, amend or waive, or enter into or give any agreement, approval or consent with respect to, the New Vehicle Floorplan Obligations or any part thereof, or any of the Loan Documents or any additional security or guaranties, or any condition, covenant, default, remedy, right, representation or term thereof or thereunder; (iii) accept new or additional instruments, documents or agreements in exchange for or relative to any of the Loan Documents or the New Vehicle Floorplan Obligations or any part thereof; (iv) accept partial payments on the New Vehicle Floorplan Obligations; (v) receive and hold additional security or guaranties for the New Vehicle Floorplan Obligations or any part thereof; (vi) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer and/or enforce any security or guaranties, and apply any security and direct the order or manner of sale thereof as the Agent in its sole and absolute discretion may determine; (vii) release any Person from any personal liability with respect to the New Vehicle Floorplan Obligations or any part thereof; (viii) settle, release on terms satisfactory to the Agent or by operation of Applicable Law or otherwise liquidate or enforce any New Vehicle Floorplan Obligations and any security or guaranty in any manner; (ix) consent to the transfer of any security and bid and purchase at any sale; and/or (x) 64 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

consent to the merger, change or any other restructuring or termination of the corporate or other existence of any New Vehicle Floorplan Borrower or any other Person, and correspondingly restructure the New Vehicle Floorplan Obligations, and any such merger, change, restructuring or termination shall not affect the liability of any New Vehicle Floorplan Borrower hereunder, or under any other Loan Document to which any New Vehicle Floorplan Borrower is a party, or affect the enforceability hereof or thereof with respect to all or any part of the New Vehicle Floorplan Obligations. (b) The Agent may enforce this Agreement and the other Loan Documents independently as to each New Vehicle Floorplan Borrower and independently of any other remedy or security the Agent or any Lender at any time may have or hold in connection with the New Vehicle Floorplan Obligations, and it shall not be necessary for the Agent to marshal assets in favor of any New Vehicle Floorplan Borrower or any other Person or to proceed upon or against and/or exhaust any other security or remedy before proceeding against any New Vehicle Floorplan Borrower.  Each New Vehicle Floorplan Borrower expressly waives any right to require the Agent to marshal assets in favor of any New Vehicle Floorplan Borrower or any other Person or to proceed against any other New Vehicle Floorplan Borrower or any Collateral provided by any other New Vehicle Floorplan Borrower, and agrees that the Agent may proceed against New Vehicle Floorplan Borrowers and/or the Collateral in such order as it shall determine in its sole and absolute discretion.  To the extent permitted by Applicable Law, the Agent and the Lenders may file a separate action or actions against any New Vehicle Floorplan Borrower, whether action is brought or prosecuted with respect against any other Person, or whether any other Person is joined in any such action or actions.  Each New Vehicle Floorplan Borrower agrees that the Agent, the Lenders and each New Vehicle Floorplan Borrower and Affiliate of any New Vehicle Floorplan Borrower may deal with each other in connection with the New Vehicle Floorplan Obligations or otherwise, or alter any contracts or agreements now or hereafter existing between any of them, in any manner whatsoever, all without in any way altering or affecting the enforceability of this Agreement and the other Loan Documents or the liability of any New Vehicle Floorplan Borrower.  Each New Vehicle Floorplan Borrower shall at all times remain liable for the full amount of the New Vehicle Floorplan Obligations even though the New Vehicle Floorplan Obligations, including any part thereof or any other security or guaranty therefor, may be or hereafter may become invalid or otherwise unenforceable as against any other New Vehicle Floorplan Borrower, or any one or more of them or any other Person and whether or not any other New Vehicle Floorplan Borrower or any other Person shall have any personal liability with respect thereto.  To the fullest extent permitted by Applicable Law, each New Vehicle Floorplan Borrower expressly waives any and all defenses now or hereafter arising or asserted by reason of (i) any disability or other defense of any other New Vehicle Floorplan Borrower or any other Person with respect to the New Vehicle Floorplan Obligations, (ii) the unenforceability or invalidity of any security or guaranty for the New Vehicle Floorplan Obligations or the lack of perfection or continuing perfection or failure of priority of any security for the New Vehicle Floorplan Obligations, (iii) the cessation from any cause whatsoever of the liability of any other New Vehicle Floorplan Borrower or any other Person (other than by reason of the full payment and performance of all New Vehicle Floorplan Obligations), (iv) any failure of the Agent to marshal assets in favor of any New Vehicle Floorplan Borrower or any other Person, (v) except as otherwise provided in this Agreement, or in the other Loan Documents, any failure of the Agent to give notice of sale or other disposition of Collateral to any New Vehicle Floorplan Borrower or any other Person or any defect in any 65 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

notice that may be given in connection with any sale or disposition of Collateral, (vi) any act or omission of the Agent or any Lender or others that directly or indirectly results in or aids the discharge or release of any other New Vehicle Floorplan Borrower or any other Person or the New Vehicle Floorplan Obligations or any security or guaranty therefor by operation of Applicable Law or otherwise, (vii) any Applicable Law which provides that the obligation of a surety or guarantor must neither be larger in amount nor in other respects more burdensome than that of the principal or which reduces a surety’s or guarantor’s obligation in proportion to the principal obligation, (viii) any failure of the Agent or any Lender to file or enforce a claim in any bankruptcy or other proceeding with respect to any Person, (ix) any election made by the Agent or any Lender in any bankruptcy proceeding of any Person, (x) any extension of credit or the grant of any security interest under any provision of the United States Bankruptcy Code, (xi) any use of cash collateral under the United States Bankruptcy Code, (xii) any agreement or stipulation with respect to the provision of adequate protection in any bankruptcy proceeding of any Person, (xiii) the avoidance of any security in favor of the Agent or the Lenders for any reason, (xiv) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced by or against any Person, including any discharge of, or bar or stay against collecting, all or any of the New Vehicle Floorplan Obligations (or any interest thereon) in or as a result of any such proceeding, (xv) to the extent permitted, the benefits of any form of one-action rule under any Applicable Law, or (xvi) any action taken by the Agent or any Lender that is authorized by this Agreement or any provision of any other Loan Document.  Each New Vehicle Floorplan Borrower expressly waives any right to enforce any remedy that the Agent or any Lender now has or hereafter may have against any other Person and waives the benefit of, or any right to participate in, any Collateral now or hereafter held by the Agent or any Lender.  Each New Vehicle Floorplan Borrower waives all rights and defenses arising out of an election of remedies by the Agent or any Lender, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for the New Vehicle Floorplan Obligations has destroyed such New Vehicle Floorplan Borrower’s rights of subrogation and reimbursement against the principal. 2.4.5 Condition of the New Vehicle Floorplan Borrowers.  Each New Vehicle Floorplan Borrower represents and warrants to the Agent and the Lenders that such New Vehicle Floorplan Borrower has established adequate means of obtaining from the other New Vehicle Floorplan Borrowers, on a continuing basis, financial and other information pertaining to the businesses, operations and condition (financial and otherwise) of the New Vehicle Floorplan Borrowers and their properties, and each New Vehicle Floorplan Borrower now is and hereafter will be completely familiar with the businesses, operations and condition (financial and otherwise) of the other New Vehicle Floorplan Borrowers and their properties.  Each New Vehicle Floorplan Borrower hereby expressly waives and relinquishes any duty on the part of the Agent and the Lenders (should any such duty exist) to disclose to such New Vehicle Floorplan Borrower any matter, fact or thing related to the businesses, operations or condition (financial or otherwise) of any other New Vehicle Floorplan Borrower or its properties, whether now known or hereafter known by the Agent or any Lender during the life of this Agreement. With respect to any of the New Vehicle Floorplan Obligations, the Agent and the Lenders need not inquire into the powers of any New Vehicle Floorplan Borrower or the officers or employees acting or purporting to act on its behalf, and each New Vehicle Floorplan Borrower shall be 66 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

liable for all New Vehicle Floorplan Obligations made or created in good faith reliance upon the professed exercise of such powers. 2.4.6 Liens on Real Property.  In the event that all or any part of the New Vehicle Floorplan Obligations at any time are secured by any one or more deeds of trust or mortgages or other instruments creating or granting Liens on any interests in real property, each New Vehicle Floorplan Borrower authorizes the Agent, upon the occurrence of and during the continuance of any Event of Default, at its sole option, without notice or demand and without affecting any New Vehicle Floorplan Obligations of any New Vehicle Floorplan Borrower, the enforceability of this Agreement, or the validity or enforceability of any security interests of the Agent on any Collateral, to foreclose any or all of such deeds of trust or mortgages or other instruments by judicial or nonjudicial sale.  Each New Vehicle Floorplan Borrower expressly waives any defenses to the enforcement of any security interests created by any Collateral Documents or to the recovery by the Agent or any Lender against any New Vehicle Floorplan Borrower or any guarantor or any other Person liable therefor of any deficiency after a judicial or nonjudicial foreclosure or sale, even though such a foreclosure or sale may impair the subrogation rights of such New Vehicle Floorplan Borrower and may preclude such New Vehicle Floorplan Borrower from obtaining reimbursement or contribution from any other Person.  Each New Vehicle Floorplan Borrower expressly waives any right to receive notice of any judicial or nonjudicial foreclosure or sale of any real property or interest therein which is owned by another New Vehicle Floorplan Borrower or any other Person and is subject to any such deeds of trust or mortgages or other instruments and any New Vehicle Floorplan Borrower’s failure to receive any such notice shall not impair or affect such New Vehicle Floorplan Borrower’s obligations hereunder or the enforceability of this Agreement and the other Loan Documents. 2.4.7 Waiver of Rights of Subrogation.  Notwithstanding anything to the contrary elsewhere contained herein or in any other Loan Document to which any New Vehicle Floorplan Borrower is a party, each New Vehicle Floorplan Borrower hereby waives with respect to each other New Vehicle Floorplan Borrower and its successors and assigns (including any surety), any and all rights at law or in equity to subrogation, to reimbursement, to indemnity, to exoneration, to contribution, to setoff or to any other rights that could accrue to a surety against a principal, to a guarantor against a maker or obligor, to an accommodation party against the party accommodated, or to a holder or transferee against a maker which any New Vehicle Floorplan Borrower may have or hereafter acquire against any other New Vehicle Floorplan Borrower in connection with or as a result of such New Vehicle Floorplan Borrowers’ execution, delivery and/or performance of this Agreement or any other Loan Document to which any New Vehicle Floorplan Borrower is a party, in each case, until the full and final payment of the New Vehicle Floorplan Obligations and termination of the Commitments under this Agreement.  Until the full and final payment of the New Vehicle Floorplan Obligations and the termination of the Commitments under this Agreement, each New Vehicle Floorplan Borrower agrees that it shall not have or assert any such rights against any other New Vehicle Floorplan Borrower or its successors and assigns (including any surety) which is directly or indirectly a creditor of any other New Vehicle Floorplan Borrower or any surety for any other New Vehicle Floorplan Borrower, either directly or as an attempted setoff to any action commenced against any New Vehicle Floorplan Borrower by any other New Vehicle Floorplan Borrower (as a borrower or in any other capacity).  Each 67 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

New Vehicle Floorplan Borrower hereby acknowledges and agrees that this waiver is intended to benefit the Agent and the Lenders and shall not limit or otherwise affect its liability hereunder, under any other Loan Document to which any New Vehicle Floorplan Borrower is a party, or the enforceability hereof or thereof. 2.4.8 Waiver of Discharge.  Without limiting the generality of the foregoing, to the fullest extent permitted by Applicable Law, each New Vehicle Floorplan Borrower hereby waives discharge based upon all defenses based on suretyship or impairment of collateral. 2.4.9 Understandings with Respect to Waivers and Consents.  Each New Vehicle Floorplan Borrower warrants and agrees that each of the waivers and consents set forth herein are made after consultation with legal counsel and with full knowledge of their significance and consequences, with the understanding that events giving rise to any defense or right waived may diminish, destroy or otherwise adversely affect rights which such New Vehicle Floorplan Borrowers otherwise may have against the other New Vehicle Floorplan Borrowers, the Agent, any Lender, or against Collateral, and that, under the circumstances, the waivers and consents herein given are reasonable.  If any of the waivers or consents herein is determined to be contrary to any Applicable Law or public policy, such waivers and consents shall be effective to the maximum extent permitted by Applicable Law. 2.4.10 Mutual Benefit.  Each New Vehicle Floorplan Borrower agrees that the credit accommodations to be extended by the Lenders under this Agreement and the other Loan Documents are of benefit to each of them, that each New Vehicle Floorplan Borrower is a direct and indirect beneficiary of the value given thereunder, and each extension of credit under this Agreement, and the other Loan Documents will be of substantial benefit to each New Vehicle Floorplan Borrower. 2.5 Addition of New Vehicle Floorplan Dealerships.   (a)  If, on or after the Closing Date, any new Dealership (other than a Canadian Dealership, Dual Subsidiary or Silo Subsidiary) is established or any existing Dealership (other than a Canadian Dealership, Dual Subsidiary or Silo Subsidiary) requires financing for its New Vehicles, the Company shall deliver to the Agent a written notice specifying the name of the additional New Vehicle Floorplan Dealership, the proposed Dealership Loan Limit for such Dealership, the applicable manufacturers to be financed for such Dealership and any other information requested by the Agent. Upon approval by the Agent, establishment of a Dealership Loan Limit and, if applicable, Dealership Loan Sublimit(s), and satisfaction of the requirements in Section 9.3, such Dealership shall become a New Vehicle Floorplan Dealership and entitled to finance Eligible New Vehicles hereunder. For purposes of clarification, no Dealership (other than a Canadian Dealership, Dual Subsidiary, Silo Subsidiary or a Dealership that is financing its New Vehicles with the proceeds of Indebtedness permitted under Sections 13.10(o) or (s)) shall incur any indebtedness to finance New Vehicles, except for New Vehicle Floorplan Loans under this Agreement, without the consent of the Agent and the Lenders. (b) If any new Canadian Dealership is established or any existing Canadian Dealership requires financing for its New Vehicles, the Company may deliver to the Agent a written notice specifying the name of the additional New Vehicle Floorplan Dealership, the proposed Dealership Loan Limit for such Dealership, the applicable manufacturers to be financed for such 68 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Dealership and any other information requested by the Agent.  Upon approval by all Lenders, establishment of a Dealership Loan Limit and, if applicable, Dealership Loan Sublimit(s), and satisfaction of the requirements in Section 9.3, such Canadian Dealership shall become a New Vehicle Floorplan Dealership and entitled to finance Eligible New Vehicles hereunder. 2.6. PR Account.  In addition to any payments otherwise required by this Agreement, the New Vehicle Floorplan Borrowers may reduce the outstanding principal balance of the New Vehicle Floorplan Loans by means of one or more flooring line principal reduction accounts (each, a “PR Account”).  At the Company’s request, the Agent will establish a PR Account for a New Vehicle Floorplan Borrower (each New Vehicle Floorplan Borrower having a PR Account, a “PR Account Borrower”) for the sole purpose of recording voluntary reductions in principal. A PR Account is not a deposit account, and PR Account Borrowers shall have no right or interest in any balance in such account, except as expressly provided in this Section 2.6.  Each PR Account is subject to the following provisions. 2.6.1 PR Account Payments.  A PR Account Borrower, at its discretion, may make payments to a PR Account (each, a “PR Account Payment”) at any time, subject to the provisions of subsections 2.6.3 and 2.6.7 of this Section 2.6 and further subject to the following conditions: (a) All payments into a PR Account must be made as transfers of collected funds from a deposit account of a PR Account Borrower with the Agent. (b) Payments into a PR Account must be in amounts of at least $1,000,000.00. (c) The balance in a PR Account may not at any time exceed the aggregate outstanding principal balance of the New Vehicle Floorplan Loans. If the amount in a PR Account exceeds the maximum amount permitted hereunder, the Agent is authorized to make a PR Account Advance (defined below) in the amount of any such excess and deposit such amount in a deposit account of the applicable PR Account Borrower with the Agent. Notwithstanding the foregoing, any PR Accounts in existence on or prior to the Closing Date may be consolidated into a single PR Account in the name of the Company on behalf of each PR Account Borrower. 2.6.2 PR Account Advances.  The New Vehicle Floorplan Borrowers may re-borrow any balance in a PR Account as a New Vehicle Floorplan Loan (a “PR Account Advance”) at any time during the term of this Agreement, subject to the provisions of subsections 2.6.3 and 2.6.6 of this Section 2.6 and further subject to the following conditions: (a) No Event of Default shall have occurred and be continuing under this Agreement. (b) PR Account Advances must be in amounts of at least $1,000,000.00, except the Company (on behalf of a PR Account Borrower) may request a PR Account Advance in the amount of the remaining balance in a PR Account if the remaining 69 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

balance is less than $1,000,000.00; provided, however, that PR Account Advances made by the Agent pursuant to subsections 2.6.1 and 2.6.7 of this Section 2.6 shall not be so limited. 2.6.3 Requests for PR Account Payments and Advances.  Whenever a PR Account Borrower wishes to make a PR Account Payment or obtain a PR Account Advance, the Company shall give Agent irrevocable notice thereof no later than 11:00 a.m. (Pacific time) at least one Business Day prior to the date of the requested PR Account Payment or PR Account Advance.  Such notice shall specify the amount of, and requested date of, the requested PR Account Payment or PR Account Advance and include any other information requested by the Agent. 2.6.4 Limitation on Transactions in PR Account.  The total number of payments to and advances from a PR Account shall not exceed 6 transactions per calendar month in the aggregate. 2.6.5 Application of PR Account Balance.  The balance in all PR Accounts shall be applied to reduce the outstanding principal balance of the New Vehicle Floorplan Loans for the purpose of computation of interest only, and shall in no way limit or modify the principal payment requirements set forth elsewhere in this Agreement.  Notwithstanding any other provision in this Section 2.6, except as set forth in the last sentence of Section 2.1.7 with respect to the New Vehicle Floorplan Commitment Fee payable to Swing Line Lender, the balance in a PR Account may not be used to reduce any principal amount outstanding for purposes of determining any remaining availability under the lines of credit established by Sections 2.1 or 2.2 of this Agreement or any of the other limitations stated in this Agreement. 2.6.6 Record of PR Account.  All payments into a PR Account and all PR Account Advances shall be recorded on the Agent’s books. 2.6.7 Termination of PR Accounts.  The Agent and the Company on behalf of the New Vehicle Floorplan Borrowers, may mutually agree to terminate this Section 2.6 at such time as is agreed upon between them.  In addition, the Agent may terminate this Section 2.6: (a) without prior notice upon the occurrence (or at any time during the continuation) of an Event of Default or (b) upon 30 days’ notice to the Company if the reason for the termination is that the Agent has decided not to offer PR Accounts to its customers generally or that the Agent is prohibited or restricted by law or regulation from offering PR Accounts.  Provided that no Event of Default exists, upon termination of this Section 2.6, the Agent shall make a PR Account Advance in an amount equal to the balance in each PR Account and deposit such amount in a deposit account of the applicable New Vehicle Floorplan Borrower with the Agent.  If an Event of Default has occurred and is continuing, then upon termination of this Section 2.6, PR Account Borrowers shall have no further right to receive any PR Account Advances and the Agent may apply the balance in any PR Account to the Obligations in accordance with the provisions of this Agreement. ARTICLE 3 USED VEHICLE FLOORPLAN AND SERVICE LOANER VEHICLE FLOORPLAN LINE OF CREDIT 70 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

3.1 Used Vehicle Floorplan Loans. 3.1.1 Used Vehicle Floorplan Commitment.  Subject to the terms and conditions of this Agreement, each Lender severally and not jointly agrees to make loans (each a “Used Vehicle Floorplan Loan”) to the Used Vehicle Floorplan Borrower on a revolving credit basis during the period from the Closing Date to but not including the Termination Date; provided that (a) the aggregate outstanding principal balance of the Used Vehicle Floorplan Loans made by each Lender, plus the outstanding principal balance of such Lender’s participating interest in the Used Vehicle Swing Line Loans shall not at any time exceed an amount equal to such Lender’s Used Vehicle Floorplan Commitment; (b) the outstanding principal balance of all Used Vehicle Floorplan Loans shall not at any time exceed, in the aggregate, as to all Lenders, the Maximum Used Vehicle Floorplan Amount, and (c) the outstanding principal balance of all Used Vehicle Floorplan Loans, plus the outstanding principal balance of all Used Vehicle Swing Line Loans, shall not at any time exceed, in the aggregate, as to all Lenders, the Maximum Used Vehicle Floorplan Amount.  Subject to the terms and conditions hereof, Borrower may borrow, prepay and reborrow Used Vehicle Floorplan Loans. 3.1.2 Purpose of Used Vehicle Floorplan Loans.  The Used Vehicle Floorplan Borrower shall use the proceeds of the Used Vehicle Floorplan Loans to finance Used Vehicles owned by a Dealership and to refinance Used Vehicle Swing Line Loans. Used Vehicle Floorplan Loans to any Canadian Dealership, or to any Dealership or Subsidiary that is located in or does financing of Used Vehicles in Canada, must be approved in advance by all Lenders. 3.1.3 Requests for Used Vehicle Floorplan Loans.  Whenever the Used Vehicle Floorplan Borrower wishes to obtain a Used Vehicle Floorplan Advance, it shall give Agent irrevocable notice thereof no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of the requested borrowing.  Such notice shall specify the requested borrowing date (which must be a Business Day), the amount of the Used Vehicle Floorplan Loan Advance, and include any other information and documentation reasonably requested by the Agent.  The Agent will promptly notify each Lender of its receipt of any request for a Used Vehicle Floorplan Advance and of the amount of its Pro Rata Share of such Used Vehicle Floorplan Advance.  Each Used Vehicle Floorplan Advance shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount. 3.1.4 Funding of Used Vehicle Floorplan Loans.  If the Agent notifies the Lenders of a request for a Used Vehicle Floorplan Advance by 1:00 p.m. (Pacific Time) on any Business Day, each Lender will deliver its Pro Rata Share of such Used Vehicle Floorplan Advance to the Agent by 11:00 a.m. (Pacific Time) on the Business Day after such notification. 3.1.5 Used Vehicle Floorplan Payments. (a) Interest Payments.  Interest on the unpaid principal balance of the Used Vehicle Floorplan Loans shall be paid monthly by the Used Vehicle Floorplan Borrower in an amount equal to all interest accrued during the prior calendar month.  Such interest payments shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date commencing with the first such date to occur following the Closing Date and continuing 71 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

thereafter.  All accrued interest outstanding on the Termination Date shall be due and payable in full on the Termination Date. (b) Voluntary Principal Payments.  The Used Vehicle Floorplan Borrower may make voluntary repayments of all or a portion of the outstanding principal balance of the Used Vehicle Floorplan Loans if the Used Vehicle Floorplan Borrower gives Agent written or telephonic notice of such voluntary repayment no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of such repayment; provided that each such voluntary principal repayment shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount unless the Used Vehicle Floorplan Loans are being repaid in full.  Such notice shall specify the anticipated date of the voluntary repayment and the principal amount of the Used Vehicle Floorplan Loans that will be repaid on such date.  Any voluntary repayment of the Used Vehicle Floorplan Loans that is received by the Agent without such notice shall be deemed to have been received by the Agent on the Business Day after such payment is actually received by the Agent and interest shall accrue on the amounts so repaid through the date of such deemed receipt. (c) Principal Payment at Maturity.  The entire outstanding principal balance of the Used Vehicle Floorplan Loans plus all interest accrued thereon shall be due and payable in full by the Used Vehicle Floorplan Borrower on the Termination Date. (d) Principal Payment Upon Dual Subsidiary Financing Commencement Date. If the Company designates a Subsidiary as a Dual Subsidiary in accordance with Section 6.19, then the Used Vehicle Floorplan Borrower shall repay each Used Vehicle Floorplan Loan and each Used Vehicle Swing Line Loan with respect to any Used Vehicle that is subsequently financed by Permitted Dual Subsidiary Indebtedness immediately upon the Dual Subsidiary Financing Commencement Date. 3.1.6 Voluntary Reduction or Termination of Commitment.  The Used Vehicle Floorplan Borrower may from time to time on at least ten (10) Business Day’s prior written notice to the Agent (which shall promptly advise each Lender thereof) permanently reduce the Aggregate Used Vehicle Floorplan Commitment to an amount not less than the then outstanding principal balance of the Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans.  Concurrently with any reduction of the Aggregate Used Vehicle Floorplan Commitment to zero, (a) no further Used Vehicle Floorplan Loans or Used Vehicle Swing Line Loans will be made, and (b) the Used Vehicle Floorplan Borrower shall pay all principal and interest on the Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans and all fees and other amounts owing to the Agent and the Lenders.  All reductions of the Aggregate Used Vehicle Floorplan Commitment shall reduce the Used Vehicle Floorplan Commitments pro rata among the Lenders according to their respective Pro Rata Shares; and except as otherwise set forth in the proviso to this Section 3.1.6, shall reduce the Used Vehicle Swing Line Commitment in proportion to the reduction of the Aggregate Used Vehicle Floorplan Commitment; provided, however, that (unless the Aggregate Used Vehicle Floorplan Commitment is reduced to less than such amount), the Used Vehicle Swing Line Commitment shall not be reduced. 3.1.7 Used Vehicle Floorplan Commitment Fee.  The Used Vehicle Floorplan Borrower agrees to pay to the Agent, for the account of the Lenders, a commitment fee (the 72 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Used Vehicle Floorplan Commitment Fee”) calculated at a per annum rate equal to the Used Vehicle Floorplan Commitment Fee Rate on the average daily amount by which the Aggregate Used Vehicle Floorplan Commitment exceeds the sum of (a) the actual aggregate outstanding principal balance of the Used Vehicle Swing Line Loans on each day (it being understood that any portion of the outstanding principal balance of the Used Vehicle Swing Line Loans ceases to be outstanding under the Used Vehicle Swing Line Loans and commences being a portion of the outstanding principal balance under the Used Vehicle Floorplan Loans on the date that the Used Vehicle Floorplan Loans are funded to repay such portion of the outstanding principal balance of the Used Vehicle Swing Line Loans); plus (b) the actual aggregate outstanding principal balance of the Used Vehicle Floorplan Loans on each day; provided that, if the aggregate amount of the Used Vehicle Floorplan Commitment Fee payable for any period to the Lenders other than the Swing Line Lender (as set forth in the third sentence of this paragraph) exceeds the amount calculated under this sentence, then the Used Vehicle Floorplan Borrower agrees to pay to the Agent, for the account of such Lenders, such additional amounts so that each Lender other than the Swing Line Lender receives the full amount of Used Vehicle Floorplan Commitment Fee described in the third sentence of this paragraph.  The accrued Used Vehicle Floorplan Commitment Fee shall be due and payable in arrears on each Quarterly Payment Date hereafter and on the Termination Date for the three month period or other time period ending on the last day of the preceding fiscal quarter or on the Termination Date.  The Used Vehicle Floorplan Commitment Fee payable to each Lender other than the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate Used Vehicle Floorplan Commitment exceeds the actual aggregate outstanding principal balance of the Used Vehicle Floorplan Loans on each day.  The Used Vehicle Floorplan Commitment Fee payable to the Lender which is the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate Used Vehicle Floorplan Commitment exceeds the actual aggregate outstanding principal balance of the Used Vehicle Floorplan Loans on each day and subtracting from that amount the average daily outstanding principal balance of the Used Vehicle Swing Line Loans. 3.1.8 Additional Payments.  The Lenders shall have no obligation whatsoever, and they have no present intention, to make any Used Vehicle Floorplan Loan or Used Vehicle Swing Line Loan after the Termination Date or which would cause the principal amount outstanding under this Agreement to exceed any of the limitations stated in this Agreement. Notwithstanding the foregoing, the Used Vehicle Floorplan Borrower is and shall be and remain unconditionally liable to the Lenders for, and the Used Vehicle Floorplan Borrower hereby promises to pay to the Agent for the account of the Lenders the amount of all Used Vehicle Floorplan Loans, Used Vehicle Swing Line Loans, and other Used Vehicle Floorplan Obligations hereunder, including without limitation Loans in excess of the limitations set forth herein and Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans made after the Termination Date.  The Used Vehicle Floorplan Borrower shall pay to the Agent: (a) upon demand, or if earlier immediately upon becoming aware of the overadvance, the amount of any Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans in excess of any limitation contained in this Agreement; and (b) upon demand, the amount of any Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans made after the Termination Date; together with 73 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

interest on the principal amount of such Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans, as set forth herein. 3.2 Used Vehicle Swing Line Loans. 3.2.1 Used Vehicle Swing Line Commitment.  Subject to the terms and conditions of this Agreement, the Swing Line Lender shall make loans (each, a “Used Vehicle Swing Line Loan”) to the Used Vehicle Floorplan Borrower on a revolving credit basis during the period from the Closing Date to but not including the Termination Date; provided that (a) the aggregate outstanding principal balance of the Used Vehicle Swing Line Loans shall not at any time exceed the Used Vehicle Swing Line Commitment; and (b) the outstanding principal balance of all Used Vehicle Floorplan Loans made by all Lenders plus the outstanding principal balance of all Used Vehicle Swing Line Loans, shall not at any time exceed the Maximum Used Vehicle Floorplan Amount.  Subject to the terms and conditions hereof, the Used Vehicle Floorplan Borrower may borrow, prepay and reborrow Used Vehicle Swing Line Loans. 3.2.2 Purpose of Used Vehicle Swing Line Loans.  The Used Vehicle Floorplan Borrower shall use the proceeds of Used Vehicle Swing Line Loans for purposes permitted by Section 3.1.2 and to fund Used Vehicle Sweep Advances pursuant to Section 3.2.7. 3.2.3 Requests for Used Vehicle Swing Line Loans.  Except as set forth in Section 3.2.7, whenever the Used Vehicle Floorplan Loan Borrower wishes to obtain a Used Vehicle Swing Line Loan, the Used Vehicle Floorplan Borrower shall give Agent irrevocable notice thereof no later than 1:00 p.m. (Pacific Time) on the requested date of such Used Vehicle Swing Line Loan, unless Swing Line Lender agrees in each instance, in its sole discretion, to a shorter time period.  Such notice shall specify the requested borrowing date (which must be a Business Day) and the amount of the Used Vehicle Swing Line Loan and include any other documentation and information reasonably requested by the Agent. 3.2.4 Used Vehicle Swing Line Loan Payments. (a) Interest Payments.  Interest on the unpaid principal balance of the Used Vehicle Swing Line Loans shall be paid monthly by the Used Vehicle Floorplan Borrower in an amount equal to all interest accrued during the prior calendar month.  Such interest payments shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date commencing with the first such date to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due and payable in full on the Termination Date. (b) Principal Payments.  The entire outstanding principal balance of the Used Vehicle Swing Line Loans plus all interest accrued thereon shall be due and payable in full by the Used Vehicle Floorplan Borrower on the Termination Date.  In addition, the principal balance of the Used Vehicle Swing Line Loans shall be due and payable as required by Section 3.2.6. 3.2.5 Participation in Used Vehicle Swing Line Loans.  Immediately upon the making of a Used Vehicle Swing Line Loan by the Swing Line Lender, the Swing Line Lender shall be deemed to have sold and transferred to each Lender and each Lender shall be deemed to 74 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

have purchased and received from the Swing Line Lender, without any further action by any party, an undivided participating interest in each Used Vehicle Swing Line Loan in an amount equal to such Lender’s Pro Rata Share; provided, however, that (a) no Lender shall be required to fund its participation in any Used Vehicle Swing Line Loan except as set forth in Section 3.2.6(b), and (b) no Lender shall be entitled to share in any payments of principal or interest in respect of its participation except, with respect to any participation funded by such Lender, as set forth herein.  Such participation shall be subject to the terms and conditions of this Agreement. 3.2.6 Settlement of Used Vehicle Swing Line Loans. (a) Refunding of Loans. (i) Upon the request of the Swing Line Lender, the Agent from time to time shall, on behalf of the Used Vehicle Floorplan Borrower (and the Used Vehicle Floorplan Borrower hereby irrevocably authorizes the Agent to so act on its behalf) request each Lender (including Swing Line Lender in its capacity as a Lender) to make a Used Vehicle Floorplan Loan to the Used Vehicle Floorplan Borrower, in accordance with the provisions of this Section 3.2.6(a), which shall be applied to repay all or a portion of the outstanding principal balance of the Used Vehicle Swing Line Loans (each such Used Vehicle Floorplan Loan, a “Refunding Used Vehicle Floorplan Loan”), in an amount equal to that Lender’s Pro Rata Share of all or a portion of the then outstanding principal balance of the Used Vehicle Swing Line Loans. (ii) Without limiting the foregoing, each Lender agrees that the Agent may request the Lenders to make Refunding Used Vehicle Floorplan Loans at any time if (A) a Default has occurred and is continuing, or (B) in the judgment of Swing Line Lender, taking into account the outstanding principal balance of the Used Vehicle Swing Line Loans and the anticipated usage of the Used Vehicle Swing Line Loans, and the operation of the Credit Sweep pursuant to Section 3.2.7, such Refunding Used Vehicle Floorplan Loans are reasonably necessary to ensure that the outstanding principal balance of the Used Vehicle Swing Line Loans will not at any time exceed the Used Vehicle Swing Line Commitment or such lesser amount as is permitted to be outstanding on the Used Vehicle Swing Line Loans at such time (it being understood that in order to attain such objective, Swing Line Lender may request refunding of the Used Vehicle Swing Line Loans even though the principal balance of the Used Vehicle Swing Line Loans at the time of such request is less than the Used Vehicle Swing Line Commitment or the amount permitted to be outstanding on the Used Vehicle Swing Line Loans). (iii) If the Agent makes a request for funding under this Section 3.2.7(a) by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver the required amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  The proceeds of all Refunding Used Vehicle Floorplan Loans shall be paid by the Agent to the Swing Line Lender in repayment of the outstanding principal balance of the applicable Used Vehicle Swing Line Loans. (b) Funding of Participations.  In addition to the right of the Swing Line Lender to request refunding of the Used Vehicle Swing Line Loans pursuant to Section 75 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

3.2.6(a), upon the request of the Swing Line Lender, the Agent may request each Lender (including Swing Line Lender in its capacity as a Lender) to fund its participation in the Used Vehicle Swing Line Loans by paying to the Agent, for the account of the Swing Line Lender, its Pro Rata Share of the principal amount of the Used Vehicle Swing Line Loans.  If the Agent makes such request by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver such amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  All participations funded by the Lenders under this Section 3.2.6(b) shall be treated as the funding of the Revolving Loans for purposes of the calculation of the Used Vehicle Floorplan Commitment Fee.  If any payment paid to any Lender with respect to its participating interest in any Used Vehicle Swing Line Loan is thereafter recovered from or must be returned or paid over by Swing Line Lender for any reason, such Lender will pay to the Agent for the account of the Swing Line Lender, such Lender’s Pro Rata Share of such amount and of any interest and other amounts paid or payable by the Swing Line Lender with respect to such amount.  The Agent agrees not to request any funding of the Lender’s participations in the Used Vehicle Swing Line Loans under this Section 3.2.6(b) at any time that such participations may be legally repaid using advances of Used Vehicle Floorplan Loans under Section 3.2.6(a). (c) Payment to Swing Line Lender.  Notwithstanding any contrary provision of this Agreement (i) except as set forth in clause (ii) of this Section 3.2.6(c) all payments of principal and interest on the Used Vehicle Swing Line Loans shall be paid by the Agent solely to the Swing Line Lender; and (ii) with respect to each participation in Used Vehicle Swing Line Loans which is funded by any Lender, such Lender (including Swing Line Lender in its capacity as Lender) shall be entitled to receive its Pro Rata Share of payments of (A) principal on such Used Vehicle Swing Line Loans and (B) interest on such Used Vehicle Swing Line Loans only for the period following the date such participation is funded. (d) Obligations Unconditional.  The obligation of each Lender to make Used Vehicle Floorplan Loans to repay Used Vehicle Swing Line Loans pursuant to Section 3.2.6(a) or to fund its participation interests in Used Vehicle Swing Line Loans pursuant to Section 3.2.6(b) shall be absolute and unconditional and shall not be affected by the occurrence of a Default or Event of Default, the fact that any one or more of the conditions in Article 9 is not satisfied, the termination of the availability of Loans, the fact that such Used Vehicle Floorplan Loan is made after the Termination Date to refinance Used Vehicle Swing Line Loans made prior to the Termination Date, any defense, setoff, counterclaim or claim for recoupment of any Lender against Agent or Swing Line Lender or any other circumstance, whether or not similar to the foregoing.  Notwithstanding the foregoing, the Lenders shall not be required to repay Used Vehicle Swing Line Loans pursuant to Section 3.2.6(a) or to fund their participation interests in Used Vehicle Swing Line Loans pursuant to Section 3.2.6(b) with respect to any portions of the outstanding principal balance of the Used Vehicle Swing Line Loans that are funded by Swing Line Lender after Agent is deemed to have knowledge or notice of the occurrence of a Default or after the Termination Date. 3.2.7 Credit Sweep. (a) Notwithstanding the provisions of Section 3.2.3, in addition to Used Vehicle Swing Line Loans requested pursuant to Section 3.2.3, the Used Vehicle Floorplan Borrower may also obtain and repay Used Vehicle Swing Ling Loans in accordance with the 76 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

provisions of this Section 3.2.7 (each, a “Used Vehicle Sweep Advance”).  Used Vehicle Sweep Advances shall be Used Vehicle Swing Line Loans. (b) Funds may be transferred between one or more deposit accounts maintained by the Used Vehicle Floorplan Borrower with the Agent (each, a “Used Vehicle Floorplan DDA”) and the Swing Line Loans.  Collected funds in the Used Vehicle Floorplan DDA may be transferred to the Used Vehicle Swing Line Loans to reduce the outstanding principal balance thereof and Used Vehicle Sweep Advances may be made to maintain an agreed upon collected balance in the Used Vehicle Floorplan DDA. (c) All Used Vehicle Sweep Advances shall be deemed to have been requested by the Used Vehicle Floorplan Borrower and shall be subject to the terms and conditions of this Agreement and the other Loan Documents, and shall also be subject to the Agent’s deposit account, treasury management and other agreements with the Used Vehicle Floorplan Borrower; provided, however, that if there is any conflict between the terms of such agreements and the Loan Documents, the terms of the Loan Documents shall control. (d) The Used Vehicle Floorplan Borrower may terminate this service by written notice executed by the Used Vehicle Floorplan Borrower and delivered to the Agent. The Agent may change the terms or discontinue this service at any time upon written notice to the Used Vehicle Floorplan Borrower. (e) The Used Vehicle Floorplan Borrower shall pay such fees for this sweep service as may be disclosed to the Used Vehicle Floorplan Borrower by the Agent.  Such fees shall be for the sole account of the Agent. 3.3 Service Loaner Vehicle Floorplan Loans. 3.3.1 Service Loaner Vehicle Floorplan Commitment.  Subject to the terms and conditions of this Agreement, each Lender severally and not jointly agrees to make loans (each a “Service Loaner Vehicle Floorplan Loan”) to the Service Loaner Vehicle Floorplan Borrower on a revolving credit basis during the period from the Closing Date to but not including the Termination Date; provided that (a) the aggregate outstanding principal balance of the Service Loaner Vehicle Floorplan Loans made by each Lender, plus the outstanding principal balance of such Lender’s participating interest in the Service Loaner Vehicle Swing Line Loans shall not at any time exceed an amount equal to such Lender’s Service Loaner Vehicle Floorplan Commitment; (b) the outstanding principal balance of all Service Loaner Vehicle Floorplan Loans shall not at any time exceed, in the aggregate, as to all Lenders, the Maximum Service Loaner Vehicle Floorplan Amount, and (c) the outstanding principal balance of all Service Loaner Vehicle Floorplan Loans, plus the outstanding principal balance of all Service Loaner Vehicle Swing Line Loans, shall not at any time exceed, in the aggregate, as to all Lenders, the Maximum Service Loaner Vehicle Floorplan Amount.  Subject to the terms and conditions hereof, Borrower may borrow, prepay and reborrow Service Loaner Vehicle Floorplan Loans. 3.3.2 Purpose of Service Loaner Vehicle Floorplan Loans.  The Service Loaner Vehicle Floorplan Borrower shall use the proceeds of the Service Loaner Vehicle 77 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Floorplan Loans to finance Service Loaner Vehicles owned by a Dealership and to refinance Service Loaner Vehicle Swing Line Loans. 3.3.3 Requests for Service Loaner Vehicle Floorplan Loans.  Whenever the Service Loaner Vehicle Floorplan Borrower wishes to obtain a Service Loaner Vehicle Floorplan Advance, it shall give Agent irrevocable notice thereof no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of the requested borrowing.  Such notice shall specify the requested borrowing date (which must be a Business Day), the amount of the Service Loaner Vehicle Floorplan Loan Advance, and include any other information and documentation reasonably requested by the Agent.  The Agent will promptly notify each Lender of its receipt of any request for a Service Loaner Vehicle Floorplan Advance and of the amount of its Pro Rata Share of such Service Loaner Vehicle Floorplan Advance.  Each Service Loaner Vehicle Floorplan Advance shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount. 3.3.4 Funding of Service Loaner Vehicle Floorplan Loans.  If the Agent notifies the Lenders of a request for a Service Loaner Vehicle Floorplan Advance by 1:00 p.m. (Pacific Time) on any Business Day, each Lender will deliver its Pro Rata Share of such Service Loaner Vehicle Floorplan Advance to the Agent by 11:00 a.m. (Pacific Time) on the Business Day after such notification. 3.3.5 Service Loaner Vehicle Floorplan Payments. (a) Interest Payments.  Interest on the unpaid principal balance of the Service Loaner Vehicle Floorplan Loans shall be paid monthly by the Service Loaner Vehicle Floorplan Borrower in an amount equal to all interest accrued during the prior calendar month. Such interest payments shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date commencing with the first such date to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due and payable in full on the Termination Date. (b) Voluntary Principal Payments.  The Service Loaner Vehicle Floorplan Borrower may make voluntary repayments of all or a portion of the outstanding principal balance of the Service Loaner Vehicle Floorplan Loans if the Service Loaner Vehicle Floorplan Borrower gives Agent written or telephonic notice of such voluntary repayment no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of such repayment; provided that each such voluntary principal repayment shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount unless the Service Loaner Vehicle Floorplan Loans are being repaid in full.  Such notice shall specify the anticipated date of the voluntary repayment and the principal amount of the Service Loaner Vehicle Floorplan Loans that will be repaid on such date.  Any voluntary repayment of the Service Loaner Vehicle Floorplan Loans that is received by the Agent without such notice shall be deemed to have been received by the Agent on the Business Day after such payment is actually received by the Agent and interest shall accrue on the amounts so repaid through the date of such deemed receipt. 78 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(c) Principal Payment at Maturity.  The entire outstanding principal balance of the Service Loaner Vehicle Floorplan Loans plus all interest accrued thereon shall be due and payable in full by the Service Loaner Vehicle Floorplan Borrower on the Termination Date. (d) Principal Payment Upon Dual Subsidiary. Financing Commencement Date.  If the Company designates a Subsidiary as a Dual Subsidiary in accordance with Section 6.19, then the Service Loaner Vehicle Floorplan Borrower shall repay each Service Loaner Vehicle Floorplan Loan and each Service Loaner Vehicle Swing Line Loan with respect to any Service Loaner Vehicle that is subsequently financed by Permitted Dual Subsidiary Indebtedness immediately upon the Dual Subsidiary Financing Commencement Date. 3.3.6 Voluntary Reduction or Termination of Commitment.  The Service Loaner Vehicle Floorplan Borrower may from time to time on at least ten (10) Business Day’s prior written notice to the Agent (which shall promptly advise each Lender thereof) permanently reduce the Aggregate Service Loaner Vehicle Floorplan Commitment to an amount not less than the then outstanding principal balance of the Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans.  Concurrently with any reduction of the Aggregate Service Loaner Vehicle Floorplan Commitment to zero, (a) no further Service Loaner Vehicle Floorplan Loans or Service Loaner Vehicle Swing Line Loans will be made, and (b) the Service Loaner Vehicle Floorplan Borrower shall pay all principal and interest on the Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans and all fees and other amounts owing to the Agent and the Lenders.  All reductions of the Aggregate Service Loaner Vehicle Floorplan Commitment shall reduce the Service Loaner Vehicle Floorplan Commitments pro rata among the Lenders according to their respective Pro Rata Shares; and except as otherwise set forth in the proviso to this Section 3.3.6, shall reduce the Service Loaner Vehicle Swing Line Commitment in proportion to the reduction of the Aggregate Service Loaner Vehicle Floorplan Commitment; provided, however, that (unless the Aggregate Service Loaner Vehicle Floorplan Commitment is reduced to less than such amount), the Service Loaner Vehicle Swing Line Commitment shall not be reduced. 3.3.7 Service Loaner Vehicle Floorplan Commitment Fee.  The Service Loaner Vehicle Floorplan Borrower agrees to pay to the Agent, for the account of the Lenders, a commitment fee (the “Service Loaner Vehicle Floorplan Commitment Fee”) calculated at a per annum rate equal to the Service Loaner Vehicle Floorplan Commitment Fee Rate on the average daily amount by which the Aggregate Service Loaner Vehicle Floorplan Commitment exceeds the sum of (a) the actual aggregate outstanding principal balance of the Service Loaner Vehicle Swing Line Loans on each day (it being understood that any portion of the outstanding principal balance of the Service Loaner Vehicle Swing Line Loans ceases to be outstanding under the Service Loaner Vehicle Swing Line Loans and commences being a portion of the outstanding principal balance under the Service Loaner Vehicle Floorplan Loans on the date that the Service Loaner Vehicle Floorplan Loans are funded to repay such portion of the outstanding principal balance of the Service Loaner Vehicle Swing Line Loans); plus (b) the actual aggregate outstanding principal balance of the Service Loaner Vehicle Floorplan Loans on each day; provided that, if the aggregate amount of the Service Loaner Vehicle Floorplan Commitment Fee payable for any period to the Lenders other than the Swing Line Lender (as set forth in the third sentence of this paragraph) exceeds the amount calculated under this sentence, then the Service 79 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Loaner Vehicle Floorplan Borrower agrees to pay to the Agent, for the account of such Lenders, such additional amounts so that each Lender other than the Swing Line Lender receives the full amount of the Service Loaner Vehicle Floorplan Commitment Fee described in the third sentence of this paragraph.  The accrued Service Loaner Vehicle Floorplan Commitment Fee shall be due and payable in arrears on each Quarterly Payment Date hereafter and on the Termination Date for the three month period or other time period ending on the last day of the preceding fiscal quarter or on the Termination Date.  The Service Loaner Vehicle Floorplan Commitment Fee payable to each Lender other than the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate Service Loaner Vehicle Floorplan Commitment exceeds the actual aggregate outstanding principal balance of the Service Loaner Vehicle Floorplan Loans on each day.  The Service Loaner Vehicle Floorplan Commitment Fee payable to the Lender which is the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate Service Loaner Vehicle Floorplan Commitment exceeds the actual aggregate outstanding principal balance of the Service Loaner Vehicle Floorplan Loans on each day and subtracting from that amount the average daily outstanding principal balance of the Service Loaner Vehicle Swing Line Loans. 3.3.8 Additional Payments.  The Lenders shall have no obligation whatsoever, and they have no present intention, to make any Service Loaner Vehicle Floorplan Loan or Service Loaner Vehicle Swing Line Loan after the Termination Date or which would cause the principal amount outstanding under this Agreement to exceed any of the limitations stated in this Agreement.  Notwithstanding the foregoing, the Service Loaner Vehicle Floorplan Borrower is and shall be and remain unconditionally liable to the Lenders for, and the Service Loaner Vehicle Floorplan Borrower hereby promises to pay to the Agent for the account of the Lenders the amount of all Service Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line Loans, and other Service Loaner Vehicle Floorplan Obligations hereunder, including without limitation Loans in excess of the limitations set forth herein and Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans made after the Termination Date.  The Service Loaner Vehicle Floorplan Borrower shall pay to the Agent: (a) upon demand, or if earlier immediately upon becoming aware of the overadvance, the amount of any Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans in excess of any limitation contained in this Agreement; and (b) upon demand, the amount of any Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans made after the Termination Date; together with interest on the principal amount of such Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans, as set forth herein. 3.4 Service Loaner Vehicle Swing Line Loans. 3.4.1 Service Loaner Vehicle Swing Line Commitment.  Subject to the terms and conditions of this Agreement, the Swing Line Lender shall make loans (each, a “Service Loaner Vehicle Swing Line Loan”) to the Service Loaner Vehicle Floorplan Borrower on a revolving credit basis during the period from the Closing Date to but not including the Termination Date; provided that (a) the aggregate outstanding principal balance of the Service Loaner Vehicle Swing Line Loans shall not at any time exceed the Service Loaner Vehicle Swing Line Commitment; and (b) the outstanding principal balance of all Service Loaner Vehicle Floorplan Loans made by all Lenders plus the outstanding 80 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

principal balance of all Service Loaner Vehicle Swing Line Loans, shall not at any time exceed the Maximum Service Loaner Vehicle Floorplan Amount.  Subject to the terms and conditions hereof, the Service Loaner Vehicle Floorplan Borrower may borrow, prepay and reborrow Service Loaner Vehicle Swing Line Loans. 3.4.2 Purpose of Service Loaner Vehicle Swing Line Loans.  The Service Loaner Vehicle Floorplan Borrower shall use the proceeds of Service Loaner Vehicle Swing Line Loans for purposes permitted by Section 3.3.2 and to fund Service Loaner Vehicle Sweep Advances pursuant to Section 3.4.7. 3.4.3 Requests for Service Loaner Vehicle Swing Line Loans.  Except as set forth in Section 3.4.7, whenever the Service Loaner Vehicle Floorplan Loan Borrower wishes to obtain a Service Loaner Vehicle Swing Line Loan, the Service Loaner Vehicle Floorplan Borrower shall give Agent irrevocable notice thereof no later than 1:00 p.m. (Pacific Time) on the requested date of such Service Loaner Vehicle Swing Line Loan, unless Swing Line Lender agrees in each instance, in its sole discretion, to a shorter time period.  Such notice shall specify the requested borrowing date (which must be a Business Day) and the amount of the Service Loaner Vehicle Swing Line Loan and include any other documentation and information reasonably requested by the Agent. 3.4.4 Service Loaner Vehicle Swing Line Loan Payments. (a) Interest Payments.  Interest on the unpaid principal balance of the Service Loaner Vehicle Swing Line Loans shall be paid monthly by the Service Loaner Vehicle Floorplan Borrower in an amount equal to all interest accrued during the prior calendar month. Such interest payments shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date commencing with the first such date to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due and payable in full on the Termination Date. (b) Principal Payments.  The entire outstanding principal balance of the Service Loaner Vehicle Swing Line Loans plus all interest accrued thereon shall be due and payable in full by the Service Loaner Vehicle Floorplan Borrower on the Termination Date.  In addition, the principal balance of the Service Loaner Vehicle Swing Line Loans shall be due and payable as required by Section 3.4.6. 3.4.5 Participation in Service Loaner Vehicle Swing Line Loans. Immediately upon the making of a Service Loaner Vehicle Swing Line Loan by the Swing Line Lender, the Swing Line Lender shall be deemed to have sold and transferred to each Lender and each Lender shall be deemed to have purchased and received from the Swing Line Lender, without any further action by any party, an undivided participating interest in each Service Loaner Vehicle Swing Line Loan in an amount equal to such Lender’s Pro Rata Share; provided, however, that (a) no Lender shall be required to fund its participation in any Service Loaner Vehicle Swing Line Loan except as set forth in Section 3.4.6(b), and (b) no Lender shall be entitled to share in any payments of principal or interest in respect of its participation except, 81 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

with respect to any participation funded by such Lender, as set forth herein.  Such participation shall be subject to the terms and conditions of this Agreement. 3.4.6 Settlement of Service Loaner Vehicle Swing Line Loans. (a) Refunding of Loans. (i) Upon the request of the Swing Line Lender, the Agent from time to time shall, on behalf of the Service Loaner Vehicle Floorplan Borrower (and the Service Loaner Vehicle Floorplan Borrower hereby irrevocably authorizes the Agent to so act on its behalf) request each Lender (including Swing Line Lender in its capacity as a Lender) to make a Service Loaner Vehicle Floorplan Loan to the Service Loaner Vehicle Floorplan Borrower, in accordance with the provisions of this Section 3.4.6(a), which shall be applied to repay all or a portion of the outstanding principal balance of the Service Loaner Vehicle Swing Line Loans (each such Service Loaner Vehicle Floorplan Loan, a “Refunding Service Loaner Vehicle Floorplan Loan”), in an amount equal to that Lender’s Pro Rata Share of all or a portion of the then outstanding principal balance of the Service Loaner Vehicle Swing Line Loans. (ii) Without limiting the foregoing, each Lender agrees that the Agent may request the Lenders to make Refunding Service Loaner Vehicle Floorplan Loans at any time if (A) a Default has occurred and is continuing, or (B) in the judgment of Swing Line Lender, taking into account the outstanding principal balance of the Service Loaner Vehicle Swing Line Loans and the anticipated usage of the Service Loaner Vehicle Swing Line Loans, and the operation of the Credit Sweep pursuant to Section 3.4.7, such Refunding Service Loaner Vehicle Floorplan Loans are reasonably necessary to ensure that the outstanding principal balance of the Service Loaner Vehicle Swing Line Loans will not at any time exceed the Service Loaner Vehicle Swing Line Commitment or such lesser amount as is permitted to be outstanding on the Service Loaner Vehicle Swing Line Loans at such time (it being understood that in order to attain such objective, Swing Line Lender may request refunding of the Service Loaner Vehicle Swing Line Loans even though the principal balance of the Service Loaner Vehicle Swing Line Loans at the time of such request is less than the Service Loaner Vehicle Swing Line Commitment or the amount permitted to be outstanding on the Service Loaner Vehicle Swing Line Loans). (iii) If the Agent makes a request for funding under this Section 3.4.7(a) by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver the required amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  The proceeds of all Refunding Service Loaner Vehicle Floorplan Loans shall be paid by the Agent to the Swing Line Lender in repayment of the outstanding principal balance of the applicable Service Loaner Vehicle Swing Line Loans. (b) Funding of Participations.  In addition to the right of the Swing Line Lender to request refunding of the Service Loaner Vehicle Swing Line Loans pursuant to Section 3.4.6(a), upon the request of the Swing Line Lender, the Agent may request each Lender (including Swing Line Lender in its capacity as a Lender) to fund its participation in the Service Loaner Vehicle Swing Line Loans by paying to the Agent, for the account of the Swing Line Lender, its Pro Rata Share of the principal amount of the Service Loaner Vehicle Swing Line 82 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Loans.  If the Agent makes such request by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver such amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  All participations funded by the Lenders under this Section 3.4.6(b) shall be treated as the funding of the Revolving Loans for purposes of the calculation of the Service Loaner Vehicle Floorplan Commitment Fee.  If any payment paid to any Lender with respect to its participating interest in any Service Loaner Vehicle Swing Line Loan is thereafter recovered from or must be returned or paid over by Swing Line Lender for any reason, such Lender will pay to the Agent for the account of the Swing Line Lender, such Lender’s Pro Rata Share of such amount and of any interest and other amounts paid or payable by the Swing Line Lender with respect to such amount.  The Agent agrees not to request any funding of the Lender’s participations in the Service Loaner Vehicle Swing Line Loans under this Section 3.4.6(b) at any time that such participations may be legally repaid using advances of Service Loaner Vehicle Floorplan Loans under Section 3.4.6(a). (c) Payment to Swing Line Lender.  Notwithstanding any contrary provision of this Agreement (i) except as set forth in clause (ii) of this Section 3.4.6(c) all payments of principal and interest on the Service Loaner Vehicle Swing Line Loans shall be paid by the Agent solely to the Swing Line Lender; and (ii) with respect to each participation in Service Loaner Vehicle Swing Line Loans which is funded by any Lender, such Lender (including Swing Line Lender in its capacity as Lender) shall be entitled to receive its Pro Rata Share of payments of (A) principal on such Service Loaner Vehicle Swing Line Loans and (B) interest on such Service Loaner Vehicle Swing Line Loans only for the period following the date such participation is funded. (d) Obligations Unconditional.  The obligation of each Lender to make Service Loaner Vehicle Floorplan Loans to repay Service Loaner Vehicle Swing Line Loans pursuant to Section 3.4.6(a) or to fund its participation interests in Service Loaner Vehicle Swing Line Loans pursuant to Section 3.4.6(b) shall be absolute and unconditional and shall not be affected by the occurrence of a Default or Event of Default, the fact that any one or more of the conditions in Article 9 is not satisfied, the termination of the availability of Loans, the fact that such Service Loaner Vehicle Floorplan Loan is made after the Termination Date to refinance Service Loaner Vehicle Swing Line Loans made prior to the Termination Date, any defense, setoff, counterclaim or claim for recoupment of any Lender against Agent or Swing Line Lender or any other circumstance, whether or not similar to the foregoing. Notwithstanding the foregoing, the Lenders shall not be required to repay Service Loaner Vehicle Swing Line Loans pursuant to Section 3.4.6(a) or to fund their participation interests in Service Loaner Vehicle Swing Line Loans pursuant to Section 3.4.6(b) with respect to any portions of the outstanding principal balance of the Service Loaner Vehicle Swing Line Loans that are funded by Swing Line Lender after Agent is deemed to have knowledge or notice of the occurrence of a Default or after the Termination Date. 3.4.7 Credit Sweep. (a) Notwithstanding the provisions of Section 3.4.3, in addition to Service Loaner Vehicle Swing Line Loans requested pursuant to Section 3.4.3, the Service Loaner Vehicle Floorplan Borrower may also obtain and repay Service Loaner Vehicle Swing Ling Loans in accordance with the provisions of this Section 3.4.7 (each, a “Service Loaner 83 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Vehicle Sweep Advance”).  Service Loaner Vehicle Sweep Advances shall be Service Loaner Vehicle Swing Line Loans. (b) Funds may be transferred between one or more deposit accounts maintained by the Service Loaner Vehicle Floorplan Borrower with the Agent (each, a “Service Loaner Vehicle Floorplan DDA”) and the Swing Line Loans.  Collected funds in the Service Loaner Vehicle Floorplan DDA may be transferred to the Service Loaner Vehicle Swing Line Loans to reduce the outstanding principal balance thereof and Service Loaner Vehicle Sweep Advances may be made to maintain an agreed upon collected balance in the Service Loaner Vehicle Floorplan DDA. (c) All Service Loaner Vehicle Sweep Advances shall be deemed to have been requested by the Service Loaner Vehicle Floorplan Borrower and shall be subject to the terms and conditions of this Agreement and the other Loan Documents, and shall also be subject to the Agent’s deposit account, treasury management and other agreements with the Service Loaner Vehicle Floorplan Borrower; provided, however, that if there is any conflict between the terms of such agreements and the Loan Documents, the terms of the Loan Documents shall control. (d) The Service Loaner Vehicle Floorplan Borrower may terminate this service by written notice executed by the Service Loaner Vehicle Floorplan Borrower and delivered to the Agent.  The Agent may change the terms or discontinue this service at any time upon written notice to the Service Loaner Vehicle Floorplan Borrower. (e) The Service Loaner Vehicle Floorplan Borrower shall pay such fees for this sweep service as may be disclosed to the Service Loaner Vehicle Floorplan Borrower by the Agent.  Such fees shall be for the sole account of the Agent. ARTICLE 4 REVOLVING LINE OF CREDIT 4.1 Revolving Loans. 4.1.1 Revolving Loan Commitment.  Subject to the terms and conditions of this Agreement, each Lender severally and not jointly agrees to make loans (each a “Revolving Loan”) to the Revolving Loan Borrower on a revolving credit basis during the period from the Closing Date to but not including the Termination Date; provided that (a) the aggregate outstanding principal balance of the Revolving Loans made by each Lender, plus the outstanding principal balance of such Lender’s participating interest in the Revolving Swing Line Loans and Letters of Credit shall not at any time exceed an amount equal to such Lender’s Revolving Loan Commitment; (b) the outstanding principal balance of all Revolving Loans shall not at any time exceed, in the aggregate, as to all Lenders, the Maximum Revolving Loan Amount, and (c) the outstanding principal balance of all Revolving Loans, plus the outstanding principal balance of all Revolving Swing Line Loans, plus the LC Obligations shall not at any time exceed, in the 84 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

aggregate, as to all Lenders, the Maximum Revolving Loan Amount.  Subject to the terms and conditions hereof, Borrower may borrow, prepay and reborrow Revolving Loans. 4.1.2 Purpose of Revolving Loans.  The Revolving Loan Borrower shall use the proceeds of the Revolving Loans, for Permitted Acquisitions, capital expenditures, its general corporate purposes and to refinance Revolving Swing Line Loans. 4.1.3 Requests for Revolving Loans.  Whenever the Revolving Loan Borrower wishes to obtain a Revolving Loan Advance, it shall give Agent irrevocable notice thereof no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of the requested borrowing.  Such notice shall specify the requested borrowing date (which must be a Business Day), the amount of the Revolving Loan Advance, and include any other information and documentation reasonably requested by the Agent.  The Agent will promptly notify each Lender of its receipt of any request for a Revolving Loan Advance and of the amount of its Pro Rata Share of such Revolving Loan Advance.  Each Revolving Loan Advance shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount. 4.1.4 Funding of Revolving Loans.  If the Agent notifies the Lenders of a request for a Revolving Loan Advance by 1:00 p.m. (Pacific Time) on any Business Day, each Lender will deliver its Pro Rata Share of such Revolving Loan Advance to the Agent by 11:00 a.m. (Pacific Time) on the Business Day after such notification. 4.1.5 Revolving Loan Payments. (a) Interest Payments.  Interest on the unpaid principal balance of the Revolving Loans shall be paid monthly by the Revolving Loan Borrower in an amount equal to all interest accrued during the prior calendar month.  Such interest payments shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date commencing with the first such date to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due and payable in full on the Termination Date. (b) Voluntary Principal Payments.  The Revolving Loan Borrower may make voluntary repayments of all or a portion of the outstanding principal balance of the Revolving Loans if the Revolving Loan Borrower gives Agent written or telephonic notice of such voluntary repayment no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of such repayment; provided that each such voluntary principal repayment shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount unless the Revolving Loans are being repaid in full.  Such notice shall specify the anticipated date of the voluntary repayment and the principal amount of the Revolving Loans that will be repaid on such date.  Any voluntary repayment of the Revolving Loans that is received by the Agent without such notice shall be deemed to have been received by the Agent on the Business Day after such payment is actually received by the Agent and interest shall accrue on the amounts so repaid through the date of such deemed receipt. 85 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(c) Principal Payment at Maturity.  The entire outstanding principal balance of the Revolving Loans plus all interest accrued thereon shall be due and payable in full by the Revolving Loan Borrower on the Termination Date. 4.1.6 Voluntary Reduction or Termination of Commitment.  The Revolving Loan Borrower may from time to time on at least ten (10) Business Day’s prior written notice to the Agent (which shall promptly advise each Lender thereof) permanently reduce the Aggregate Revolving Loan Commitment to an amount not less than the then outstanding principal balance of the Revolving Loans and Revolving Swing Line Loans plus the LC Obligations. Concurrently with any reduction of the Aggregate Revolving Loan Commitment to zero, (a) no further Revolving Loans or Revolving Swing Line Loans will be made and no further Letters of Credit will be issued, (b) the Revolving Loan Borrower shall pay all principal and interest on the Revolving Loans and Revolving Swing Line Loans and all fees and other amounts owing to the Agent and the Lenders, and (c) the Revolving Loan Borrower shall grant to the Agent a security interest in cash collateral to be held in the LC Collateral Account in an amount equal to the LC Obligations at such time.  All reductions of the Aggregate Revolving Loan Commitment shall reduce the Revolving Loan Commitments pro rata among the Lenders according to their respective Pro Rata Shares; and except as otherwise set forth in the proviso to this Section 4.1.6, shall reduce the Revolving Swing Line Commitment in proportion to the reduction of the Aggregate Revolving Loan Commitment; provided, however, that (unless the Aggregate Revolving Loan Commitment is reduced to less than such amount), the Revolving Swing Line Commitment shall not be reduced. 4.1.7 Revolving Loan Commitment Fee.  The Revolving Loan Borrower agrees to pay to the Agent, for the account of the Lenders, a commitment fee (the “Revolving Loan Commitment Fee”) calculated at a per annum rate equal to the Revolving Loan Commitment Fee Rate on the average daily amount by which the Aggregate Revolving Loan Commitment exceeds the sum of (a) the actual aggregate outstanding principal balance of the Revolving Swing Line Loans on each day (it being understood that any portion of the outstanding principal balance of the Revolving Swing Line Loans ceases to be outstanding under the Revolving Swing Line Loans and commences being a portion of the outstanding principal balance under the Revolving Loans on the date that the Revolving Loans are funded to repay such portion of the outstanding principal balance of the Revolving Swing Line Loans); plus (b) the actual aggregate outstanding principal balance of the Revolving Loans plus the LC Obligations on each day; provided that, if the aggregate amount of the Revolving Loan Commitment Fee payable for any period to the Lenders other than the Swing Line Lender (as set forth in the third sentence of this paragraph) exceeds the amount calculated under this sentence, then the Revolving Loan Borrower agrees to pay to the Agent, for the account of such Lenders, such additional amounts so that each Lender other than the Swing Line Lender receives the full amount of Revolving Loan Commitment Fee described in the third sentence of this paragraph. The accrued Revolving Loan Commitment Fee shall be due and payable in arrears on each Quarterly Payment Date hereafter and on the Termination Date for the three month period or other time period ending on the last day of the preceding fiscal quarter or on the Termination Date.  The Revolving Loan Commitment Fee payable to each Lender other than the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate Revolving Loan Commitment exceeds the actual aggregate outstanding principal balance of the Revolving Loans plus the LC Obligations 86 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

on each day.  The Revolving Loan Commitment Fee payable to the Lender which is the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate Revolving Loan Commitment exceeds the actual aggregate outstanding principal balance of the Revolving Loans plus the LC Obligations on each day and subtracting from that amount the average daily outstanding principal balance of the Revolving Swing Line Loans. 4.1.8 Additional Payments.  The Lenders shall have no obligation whatsoever, and they have no present intention, to make any Revolving Loan or Revolving Swing Line Loan after the Termination Date or which would cause the principal amount outstanding under this Agreement to exceed any of the limitations stated in this Agreement.  Notwithstanding the foregoing, the Revolving Loan Borrower is and shall be and remain unconditionally liable to the Lenders for, and the Revolving Loan Borrower hereby promises to pay to the Agent for the account of the Lenders the amount of all Revolving Loans, Revolving Swing Line Loans, LC Obligations and other Revolving Loan Obligations hereunder, including without limitation Loans in excess of the limitations set forth herein and Revolving Loans and Revolving Swing Line Loans made after the Termination Date.  The Revolving Loan Borrower shall pay to the Agent: (a) upon demand, or if earlier immediately upon becoming aware of the overadvance, the amount of any Revolving Loans and Revolving Swing Line Loans and LC Obligations in excess of any limitation contained in this Agreement; and (b) upon demand, the amount of any Revolving Loans and Revolving Swing Line Loans made after the Termination Date; together with interest on the principal amount of such Revolving Loans and Revolving Swing Line Loans and LC Obligations, as set forth herein. 4.1.9 Reserve Amount. (a) In addition to any other limitations set forth in this Article 4, in the event that on any day the outstanding principal balance of all New Vehicle Floorplan Loans, plus New Vehicle Swing Line Loans, plus requests for New Vehicle Floorplan Loans and New Vehicle Swing Line Loans exceeds ninety-five percent (95%) of the Aggregate New Vehicle Floorplan Loan Commitment as of such date, then until the next Business Day on which such condition no longer exists (i) a portion of the Aggregate Revolving Loan Commitment (the “Reserve Amount”) in an amount equal to the lesser of (A) Fifteen Million Dollars ($15,000,000.00) or (B) an amount equal to the Maximum Revolving Loan Amount as of any date, minus the sum of the outstanding principal balance of the Revolving Loans, Revolving Swing Lines Loans and LC Obligations as of such date, shall be reserved and, except as set forth in Section 4.1.9 (b) shall no longer be available for funding Revolving Loans or Revolving Swing Line Loans or for issuance of Letters of Credit, and (ii) the Maximum Revolving Loan Amount shall be reduced by the amount of the Reserve Amount. (b) (i) Notwithstanding any contrary provision in Section 4.1.9(a), the Reserve Amount may be used to fund Revolving Loans and Revolving Swing Line Loans which are used to repay New Vehicle Swing Line Loans or New Vehicle Floorplan Loans, so long as after giving effect to such Loans, the outstanding principal balance of the Revolving Loans, Revolving Swing Line Loans and LC Obligations does not exceed the Maximum Revolving Loan Amount (calculated without giving effect to reduction by the Reserve Amount); and (ii) if, after giving effect to any payment described in Section 4.1.9(b)(i), the circumstances giving rise 87 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

to the requirement for a Reserve Amount are still in effect, then the requirements and limitations in Section 4.1.9(a) shall continue in effect, including without limitation the requirement to maintain the Reserve Amount and the restrictions on borrowing set forth therein. 4.2 Revolving Swing Line Loans. 4.2.1 Revolving Swing Line Commitment.  Subject to the terms and conditions of this Agreement, the Swing Line Lender shall make loans (each, a “Revolving Swing Line Loan”) to the Revolving Loan Borrower on a revolving credit basis during the period from the Closing Date to but not including the Termination Date; provided that (a) the aggregate outstanding principal balance of the Revolving Swing Line Loans shall not at any time exceed the Revolving Swing Line Commitment; and (b) the outstanding principal balance of all Revolving Loans made by all Lenders plus the outstanding principal balance of all Revolving Swing Line Loans, plus the LC Obligations, shall not at any time exceed the Maximum Revolving Loan Amount.  Subject to the terms and conditions hereof, the Revolving Loan Borrower may borrow, prepay and reborrow Revolving Swing Line Loans. 4.2.2 Purpose of Revolving Swing Line Loans.  The Revolving Loan Borrower shall use the proceeds of Revolving Swing Line Loans for purposes permitted by Section 4.1.2. 4.2.3 Requests for Revolving Swing Line Loans.  Whenever the Revolving Loan Borrower wishes to obtain a Revolving Swing Line Loan, the Revolving Loan Borrower shall give Agent irrevocable notice thereof no later than 1:00 p.m. (Pacific Time) on the requested date of such Revolving Swing Line Loan, unless Swing Line Lender agrees in each instance, in its sole discretion, to a shorter time period.  Such notice shall specify the requested borrowing date (which must be a Business Day) and the amount of the Revolving Swing Line Loan and include any other documentation and information reasonably requested by the Agent. 4.2.4 Revolving Swing Line Loan Payments. (a) Interest Payments.  Interest on the unpaid principal balance of the Revolving Swing Line Loans shall be paid monthly by the Revolving Loan Borrower in an amount equal to all interest accrued during the prior calendar month.  Such interest payments shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date commencing with the first such date to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due and payable in full on the Termination Date. (b) Principal Payments.  The entire outstanding principal balance of the Revolving Swing Line Loans plus all interest accrued thereon shall be due and payable in full by the Revolving Loan Borrower on the Termination Date.  In addition, the principal balance of the Revolving Swing Line Loans shall be due and payable as required by Section 4.2.6. 4.2.5 Participation in Revolving Swing Line Loans.  Immediately upon the making of a Revolving Swing Line Loan by the Swing Line Lender, the Swing Line Lender shall be deemed to have sold and transferred to each Lender and each Lender shall be deemed to have purchased and received from the Swing Line Lender, without any further action by any party, an 88 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

undivided participating interest in each Revolving Swing Line Loan in an amount equal to such Lender’s Pro Rata Share; provided, however, that (a) no Lender shall be required to fund its participation in any Revolving Swing Line Loan except as set forth in Section 4.2.6(b), and (b) no Lender shall be entitled to share in any payments of principal or interest in respect of its participation except, with respect to any participation funded by such Lender, as set forth herein. Such participation shall be subject to the terms and conditions of this Agreement. 4.2.6 Settlement of Revolving Swing Line Loans. (a) Refunding of Loans. (i) Upon the request of the Swing Line Lender, the Agent from time to time shall, on behalf of the Revolving Loan Borrower (and the Revolving Loan Borrower hereby irrevocably authorizes the Agent to so act on its behalf) request that each Lender (including Swing Line Lender in its capacity as a Lender) make a Revolving Loan to the Revolving Loan Borrower, in accordance with the provisions of this Section 4.2.6(a), which shall be applied to repay all or a portion of the outstanding principal balance of the Revolving Swing Line Loans (each such Revolving Loan, a “Refunding Revolving Loan”), in an amount equal to that Lender’s Pro Rata Share of all or a portion of the then outstanding principal balance of the Revolving Swing Line Loans. (ii) Without limiting the foregoing, each Lender agrees that the Agent may request the Lenders to make Refunding Revolving Loans at any time if (A) a Default has occurred and is continuing, or (B) in the judgment of Swing Line Lender, taking into account the outstanding principal balance of the Revolving Swing Line Loans, and the anticipated usage of the Revolving Swing Line Loans, such Refunding Revolving Loans are reasonably necessary to ensure that the outstanding principal balance of the Revolving Swing Line Loans will not at any time exceed the Revolving Swing Line Commitment or such lesser amount as is permitted to be outstanding on the Revolving Swing Line Loans at such time (it being understood that in order to attain such objective, Swing Line Lender may request refunding of the Revolving Swing Line Loans even though the principal balance of the Revolving Swing Line Loans at the time of such request is less than the Revolving Swing Line Commitment or the amount permitted to be outstanding on the Revolving Swing Line Loans). (iii) If the Agent makes a request for funding under this Section 4.2.6(a) by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver the required amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  The proceeds of all Refunding Revolving Loans shall be paid by the Agent to the Swing Line Lender in repayment of the outstanding principal balance of the applicable Revolving Swing Line Loans. (b) Funding of Participations.  In addition to the right of the Swing Line Lender to request refunding of the Revolving Swing Line Loans pursuant to Section 4.2.6(a), upon the request of the Swing Line Lender, the Agent may request each Lender (including Swing Line Lender in its capacity as a Lender) to fund its participation in the Revolving Swing Line Loans by paying to the Agent, for the account of the Swing Line Lender, its Pro Rata Share of the principal amount of the Revolving Swing Line Loans.  If the Agent 89 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

makes such request by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver such amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  All participations funded by the Lenders under this Section 4.2.6(b) shall be treated as the funding of the Revolving Loans for purposes of the calculation of the Revolving Loan Commitment Fee.  If any payment paid to any Lender with respect to its participating interest in any Revolving Swing Line Loan is thereafter recovered from or must be returned or paid over by Swing Line Lender for any reason, such Lender will pay to the Agent for the account of the Swing Line Lender, such Lender’s Pro Rata Share of such amount and of any interest and other amounts paid or payable by the Swing Line Lender with respect to such amount.  The Agent agrees not to request any funding of the Lender’s participations in the Revolving Swing Line Loans under this Section 4.2.6(b) at any time that such participations may be legally repaid using advances of the Revolving Loan under Section 4.2.6(a). (c) Payment to Swing Line Lender.  Notwithstanding any contrary provision of this Agreement (i) except as set forth in clause (ii) of this Section 4.2.6(c) all payments of principal and interest on the Revolving Swing Line Loans shall be paid by the Agent solely to the Swing Line Lender; and (ii) with respect to each participation in Revolving Swing Line Loans which is funded by any Lender, such Lender (including Swing Line Lender in its capacity as Lender) shall be entitled to receive its Pro Rata Share of payments of (A) principal on such Revolving Swing Line Loans and (B) interest on such Revolving Swing Line Loans only for the period following the date such participation is funded. (d) Obligations Unconditional.  The obligation of each Lender to make Revolving Loans to repay Revolving Swing Line Loans pursuant to Section 4.2.6(a) or to fund its participation interests in Revolving Swing Line Loans pursuant to Section 4.2.6(b) shall be absolute and unconditional and shall not be affected by the occurrence of a Default or Event of Default, the fact that any one or more of the conditions in Article 9 is not satisfied, the termination of the availability of Loans, the fact that such Revolving Loan is made after the Termination Date to refinance Revolving Swing Line Loans made prior to the Termination Date, any defense, setoff, counterclaim or claim for recoupment of any Lender against Agent or Swing Line Lender or any other circumstance, whether or not similar to the foregoing. Notwithstanding the foregoing, the Lenders shall not be required to repay Revolving Swing Line Loans pursuant to Section 4.2.6(a) or to fund their participation interests in Revolving Swing Line Loans pursuant to Section 4.2.6(b) with respect to any portions of the outstanding principal balance of the Revolving Swing Line Loans that are funded by Swing Line Lender after Agent is deemed to have knowledge or notice of the occurrence of a Default or after the Termination Date. ARTICLE 5 LETTERS OF CREDIT 5.1 Letter of Credit Commitment.  Subject to and upon the terms and conditions of this Agreement, LC Issuer may from time to time during the period from the Closing Date to the date which is 30 days prior to the Termination Date issue and renew, extend and amend (“Modify” and such action, a “Modification”) one or more standby letters of credit for the account of the Revolving Loan Borrower or a Subsidiary acceptable to LC Issuer, (so long as the Revolving Loan Borrower is the applicant on and liable for repayment of such Letter of Credit 90 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

under the applicable LC Agreement); provided that (a) the LC Obligations shall not exceed at any time the Letter of Credit Commitment; and (b) the outstanding principal balance of all Revolving Loans made by all Lenders, plus the outstanding principal balance of all Revolving Swing Line Loans, plus the LC Obligations shall not at any time exceed the Maximum Revolving Loan Amount. 5.2 Existing Letters of Credit.  LC Issuer has previously issued certain letters of credit for the account of the Revolving Loan Borrower or a Subsidiary under the Existing Loan Agreement (“Existing Letters of Credit”).  Each of the Existing Letters of Credit shall be a Letter of Credit under and shall be subject to the terms and conditions of this Agreement. 5.3 LC Agreements.  From time to time as required by LC Issuer, the Revolving Loan Borrower shall execute and deliver to LC Issuer a letter of credit reimbursement agreement or an amendment to existing agreements executed by the Revolving Loan Borrower (each, an “LC Agreement”) in a form acceptable to LC Issuer.  Whenever the Revolving Loan Borrower wishes to request the issuance of a Letter of Credit, the Revolving Loan Borrower shall execute and deliver to LC Issuer an application therefor in LC Issuer’s standard form appropriately completed with all required information (an “LC Application”) and such other documents and information as LC Issuer reasonably requires.  Each Letter of Credit shall be subject to all terms and conditions of this Agreement and of the applicable LC Application and LC Agreement.  In the event of any express conflict between the terms of this Agreement and of the applicable LC Agreement, the terms of this Agreement shall control. 5.4 Expiry Date.  No Letter of Credit shall be issued later than 30 days prior to the Termination Date.  Each Letter of Credit shall have an expiration date no later than the earlier of (a) two years after the issuance date (or date of extension or renewal, if applicable); or (b) the Termination Date.  Drafts drawn under a Letter of Credit may be sight drafts or time drafts; provided, however, that no draft shall have a maturity date later than the Termination Date.  If there are any Letters of Credit outstanding on the Termination Date, the Agent may require the Revolving Loan Borrower to deliver to the Agent funds in an amount equal to the LC Obligations.  The Revolving Loan Borrower immediately shall deliver to the Agent all such funds required by the Agent and the Agent shall hold such funds in the LC Collateral Account as collateral for the Obligations and Permitted Swap Obligations. 5.5 Requests for Letters of Credit.  Each LC Application or request for a Modification shall be submitted to the LC Issuer, with a copy to the Agent, at least five Business Days prior to the proposed date of issuance or Modification (unless the LC Issuer, in any instance, in its sole discretion, agrees to a shorter time period).  The Agent shall promptly notify the LC Issuer whether such LC Application, and the issuance of a Letter of Credit pursuant thereto, conform to the requirements of this Agreement.  Upon issuance or Modification of a Letter of Credit, the LC Issuer shall promptly notify the Agent, and the Agent shall promptly notify the Lenders, of the amount and terms thereof.  The LC Issuer shall have no independent duty to ascertain whether the conditions set forth in Article 9 have been satisfied; provided, however, that the LC Issuer shall not issue a Letter of Credit if, on or before the proposed date of issuance, the LC Issuer has received notice from the Agent or Required Lenders that any such condition has not been satisfied or waived.  In the event of any conflict between the terms of this 91 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Agreement and the terms of any LC Application or LC Agreement, the terms of this Agreement shall control. 5.6 Participation in Letters of Credit.  Upon the issuance of a Letter of Credit in accordance with this Agreement (or on the Closing Date with respect to Existing Letters of Credit), each Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit and the related LC Obligations from the LC Issuer in an amount equal to its Pro Rata Share of the related LC Obligations.  Without limiting the scope and nature of each Lender’s participation in any Letter of Credit, to the extent that the LC Issuer is not reimbursed by the Revolving Loan Borrower (and funds are not available in the LC Collateral Account) for any payment made by the LC Issuer under any Existing Letter of Credit or any other Letter of Credit issued in accordance with the terms hereof, or if any reimbursement received by LC Issuer is rescinded or must be returned, each Lender shall reimburse Agent, for the benefit of the LC Issuer, an amount equal to its Pro Rata Share of such reimbursement amount as set forth below. To obtain funding by the Lenders of any reimbursement amount, the Agent shall request, before 1:00 p.m. (Pacific Time) on a Business Day, each Lender (including the LC Issuer in its capacity as a Lender) to fund an amount equal to each Lender’s Pro Rata Share of the reimbursement amount.  The Lenders shall fund to the Agent the amounts so requested no later than 11:00 a.m. (Pacific Time) on the Business Day after the date that such request is delivered to the Lenders and all amounts so funded shall be paid by the Agent to the LC Issuer in satisfaction of each Lender’s participation obligations.  The obligation of each Lender to so reimburse Agent, on behalf of the LC Issuer, shall be absolute and unconditional and shall not be affected by the occurrence of a Default or Event of Default, the termination of the availability of Letters of Credit, the fact that any one or more of the conditions in Article 9 is not satisfied, the fact that reimbursement is requested after the Termination Date, any defense, setoff, counterclaim or claim for recoupment against Agent or LC Issuer, or any other circumstance, whether or not similar to the foregoing.  Any such reimbursement shall not relieve or otherwise impair the obligation of the Revolving Loan Borrower to reimburse the LC Issuer for the amount of any payment made by the LC Issuer under any Letter of Credit, together with interest as provided herein. 5.7 Payments.  The Revolving Loan Borrower agrees to pay to the LC Issuer, on the date any payment is made by the LC Issuer, an amount equal to any payment made by the LC Issuer with respect to each Letter of Credit, together with interest on such amount from the date of any payment made by the LC Issuer at the Revolving Loan Borrowing Rate for the first three days and thereafter at the Default Rate applicable to Revolving Loans.  The principal amount of any such payment shall be used to reimburse the LC Issuer for the payment made by it under the Letter of Credit and, to the extent that the Lenders have not reimbursed the Agent pursuant to Section 5.6, the interest amount of any such payment shall be solely for the account of the LC Issuer.  Each Lender that has reimbursed the Agent pursuant to Section 5.6 for its Pro Rata Share of any payment made by the LC Issuer under a Letter of Credit shall thereupon acquire a pro rata participation, to the extent of such reimbursement, in the claim of the LC Issuer against the Revolving Loan Borrower for reimbursement of principal and interest under this Section 5.7 and shall share, in accordance with that pro rata participation, in any principal payment made by the Revolving Loan Borrower with respect to such claim and in any interest payment made by the Revolving Loan Borrower (but only with respect to periods subsequent to the date such Lender reimbursed the Agent) with respect to such claim.  The LC Issuer shall promptly make available 92 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

to the Agent, in immediately available funds, any amounts due to the Lenders under this Section 5.7.  The LC Issuer shall notify the Revolving Loan Borrower and the Agent whenever any demand for payment is made under any Letter of Credit by the beneficiary thereof. 5.8 Terms Satisfactory to LC Issuer.  Notwithstanding any contrary provision of this Agreement, any LC Agreement, LC Application, or any other Loan Document, all terms and conditions of each Letter of Credit must be acceptable to LC Issuer in its sole discretion and each Letter of Credit must conform to all requirements of the LC Issuer. 5.9 Obligations Absolute.  The obligation of the Revolving Loan Borrower to pay to the LC Issuer the amount of any payment made by the LC Issuer under any Letter of Credit shall be absolute, unconditional, and irrevocable.  Without limiting the foregoing, the Revolving Loan Borrower’s obligation shall not be affected by any of the following circumstances, except in the event of LC Issuer’s gross negligence or intentional misconduct: (a) any lack of validity or enforceability of the Letter of Credit, this Agreement, the other Loan Documents, or any other agreement or instrument relating thereto; (b) the existence of any claim, setoff, defense, or other rights which any Loan Party may have at any time against the LC Issuer, any beneficiary of the Letter of Credit (or any Persons for whom any such beneficiary may be acting) or any other Person, whether in connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions; (c) any draft, demand, statement, or any other document presented under the Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; (d) the solvency or financial responsibility of any party issuing any documents in connection with a Letter of Credit; (e)  any failure or delay in notice of shipments or arrival of any property; (f) any error, omission, interruption, delay, or loss in the transmission or delivery of any draft, message, notice, advice, or other communication relating to a Letter of Credit or any delay or interruption in any such message; (g) any error, neglect or default of any correspondent of the LC Issuer in connection with a Letter of Credit; (h) any error in interpretation of technical terms or any consequence arising from circumstances beyond the control of the LC Issuer; (i) any other circumstance whatsoever, whether or not similar to any of the foregoing that might constitute a legal or equitable discharge of, or provide a right of setoff against, the Obligations of the Revolving Loan Borrower. 93 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

5.10 Letter of Credit Fees. 5.10.1 The Revolving Loan Borrower agrees to pay to the Agent, for the account of the Lenders ratably in accordance with their Pro Rata Shares, on the date any Letter of Credit is issued, renewed or extended, with respect to each Letter of Credit, a letter of credit fee at a per annum rate equal to the LC Fee Percentage times the daily maximum amount available to be drawn under such Letter of Credit (“LC Fee”).  The LC Fee on Letters of Credit shall be (i) computed on a quarterly basis in arrears and (ii) due and payable on the first (1st) day of each April, July, October and January, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit expiration date and thereafter on demand; provided, further, that if any payment to be made by the Borrower under this Section 5.10.1 shall come due on a day other than a Business Day, such payment shall be due on the next succeeding Business Day.  All fees paid under this Section 5.10.1 are non-refundable, even if the Letter of Credit for which they are paid is terminated or amended before its anticipated expiration or extended expiration date. 5.10.2 The Revolving Loan Borrower agrees to pay to LC Issuer, for its sole account on demand, (a) the fees agreed to between them as set forth in any fee letter or as otherwise agreed from time to time, and (b) with respect to each Letter of Credit and each draft drawn thereunder, LC Issuer’s customary fees and charges, including processing, drawing, transfer, amendment, negotiation, acceptance, and other fees and all out-of-pocket expenses incurred by the LC Issuer in accordance with the issuance, Modification, administration or payment of any Letter of Credit. 5.11 LC Collateral Account.  The Revolving Loan Borrower will, upon the request of the Agent or Required Lenders and until the final expiration date of any Letter of Credit and thereafter as long as any amount is payable to the LC Issuer or the Lenders in respect of any Letter of Credit, maintain a special collateral account pursuant to arrangements satisfactory to the Agent (the “LC Collateral Account”), in the name of the Revolving Loan Borrower but under the sole dominion and control of the Agent, for the benefit of the Lenders and in which the Revolving Loan Borrower shall have no interest.  The Revolving Loan Borrower hereby pledges, assigns and grants to the Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a security interest in all of the Revolving Loan Borrower’s right, title and interest in and to all funds which may from time to time be on deposit in the LC Collateral Account to secure the prompt and complete payment and performance of the Obligations and Permitted Swap Obligations.  The Agent will invest any funds on deposit from time to time in the LC Collateral Account in certificates of deposit of the Agent having a maturity not exceeding 30 days.  Nothing in this Section shall either obligate the Agent to require the Revolving Loan Borrower to deposit any funds in the LC Collateral Account or limit the right of the Agent to release any funds held in the LC Collateral Account. 5.12 Borrower Indemnification.  The Revolving Loan Borrower hereby agrees to indemnify and hold harmless each Lender, the LC Issuer and the Agent, and their respective parent corporations, affiliates, subsidiaries, successors, assigns, officers, directors, employees, agents, attorneys and advisors (the “Indemnified Persons”) from and against any and all claims, losses, liabilities, demands, damages, actions, causes of action, penalties, costs and expenses (including Attorney Costs), defenses, counterclaims, setoffs and claims for recoupment 94 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(collectively, “Claims”) which such Lender, the LC Issuer or the Agent may incur (or which may be claimed against such Lender, the LC Issuer or the Agent by any Person whatsoever) by reason of or in connection with the issuance, execution and delivery or transfer of or payment or failure to pay under any Letter of Credit or any actual or proposed use of any Letter of Credit, including, without limitation, any claims, damages, losses, liabilities, costs or expenses which the LC Issuer may incur by reason of or in connection with (a) the failure of any other Lender to fulfill or comply with its obligations to the LC Issuer hereunder (but nothing herein contained shall affect any rights the Revolving Loan Borrower may have against any Defaulting Lender) or (b) by reason of or on account of the LC Issuer issuing any Letter of Credit which specifies that the term “Beneficiary” included therein includes any successor by operation of law of the named Beneficiary, but which Letter of Credit does not require that any drawing by any such successor Beneficiary be accompanied by a copy of a legal document, satisfactory to the LC Issuer, evidencing the appointment of such successor Beneficiary; provided that the Revolving Loan Borrower shall not be required to indemnify any Lender, the LC Issuer or the Agent for any Claim to the extent, but only to the extent, caused by (y) the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (z) the LC Issuer’s failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of such Letter of Credit.  Nothing in this Section 5.12 is intended to limit the obligations of the Revolving Loan Borrower under any other provision of this Agreement. Without limiting the provisions of Section 7.4, this Section 5.12 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. 5.13 Lenders’ Indemnification.  Each Lender shall, ratably in accordance with its Pro Rata Share, indemnify the LC Issuer, its affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Revolving Loan Borrower) against any Claims (except such as result from the LC Issuer’s gross negligence or willful misconduct or the LC Issuer’s failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of the Letter of Credit) that such indemnitees may suffer or incur in connection with this Article 5 or any action taken or omitted by such indemnitees hereunder. ARTICLE 6 CERTAIN ADDITIONAL PROVISIONS 6.1 Interest. 6.1.1 Interest Rate.  Unless the Default Rate or the rate set forth in Section 7.3 is applicable, (a) New Vehicle Floorplan Loans and New Vehicle Swing Line Loans shall bear interest at a variable rate per annum equal to the New Vehicle Floorplan Borrowing Rate, (b) Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans shall bear interest at a variable rate per annum equal to the Used Vehicle Floorplan Borrowing Rate; (c) Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans shall bear interest at a variable rate per annum equal to the Service Loaner Vehicle Floorplan Borrowing Rate and (d) Revolving Loans and Revolving Swing Line Loans shall bear interest at a variable rate per annum equal to the Revolving Loan Borrowing Rate, in each case adjusted without notice on the 95 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

date of each change in the EurocurrencyAdjusted Daily Simple SOFR, Adjusted Term SOFR or the Term SOFR Alternative Rate, as applicable. 6.1.2 Rates Applicable After Event of Default.  During the continuance of an Event of Default the Required Lenders may, at their option, by notice to the Company, declare that (a) the Loans shall bear interest at a rate per annum equal to the interest rate which would otherwise be in effect from time to time pursuant to Section 6.1.1, plus 2% per annum (each, a “Default Rate”), and (b) the LC Fee shall be increased by 2% per annum, provided that, during the continuance of an Event of Default under Section 14.1.8, the interest rate set forth in clause (a) above and the increase in the LC Fee set forth in clause (b) above shall automatically be applicable to all Loans, Letters of Credit, and Credit Extensions without any election or action on the part of the Agent or any Lender.  After an Event of Default has been cured or waived, the interest rate applicable to the Loans and the LC Fee shall revert to the rates applicable prior to the occurrence of an Event of Default. 6.1.3 Determination of Rate.  Notwithstanding any provision of this Agreement to the contrary, each Lender shall be entitled to fund and maintain its funding of all or any part of the Loans in any manner it elects; it being understood, however, that with respect to Eurocurrency Loans, all determinations hereunder shall be made as if each Lender had actually funded and maintained such Loans through the purchase of deposits in the London interbank eurodollar market. 6.2 Evidence of Debt.  The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Agent in the ordinary course of business.  The accounts or records maintained by the Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the New Vehicle Floorplan Borrowers, Used Vehicle Floorplan Borrower, Service Loaner Vehicle Floorplan Borrower and Revolving Loan Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Agent in respect of such matters, the accounts and records of the Agent shall control in the absence of manifest error. 6.3 Borrowing Procedure. 6.3.1 Requests for Loans.  Whenever the New Vehicle Floorplan Borrowers, the Used Vehicle Floorplan Borrower, Service Loaner Vehicle Floorplan Borrower or the Revolving Loan Borrower, as applicable, wishes to request a Loan, the Company shall give Agent irrevocable notice thereof within the time required by this Agreement.  The Company (on behalf of the applicable Borrower or Borrowers) may request a Loan in writing or by telephone (or with respect to Used Vehicle Sweep Advances, as set forth in Section 3.2.7 and Service Loaner Vehicle Sweep Advances, as set forth in Section 3.4.7) for deposit into the Company’s deposit account(s) with the Agent.  Requests for Loans to be deposited or forwarded elsewhere shall be in writing in such form and containing such additional information as the Agent may reasonably require in order to confirm the request and transmit funds.  Each Borrower hereby authorizes Lenders and the Agent to make Advances and to transfer funds based on telephonic 96 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

notices made by any Person which the Agent or any Lender in good faith believes to be acting on behalf of the Company, it being understood that the foregoing authorization is specifically intended to allow requests for Advances to be given telephonically.  The Company agrees to deliver promptly to the Agent a written confirmation (which may include e-mail) of each telephonic notice.  If the written confirmation differs in any material respect from the action taken by the Agent and the Lenders, the records of the Agent and the Lenders shall govern absent manifest error. 6.3.2 Lending Installations.  Each Lender may book its Advances and its participation in any LC Obligations and Swing Line Loans and the LC Issuer may book the Letters of Credit at any Lending Installation selected by such Lender or the LC Issuer, as the case may be, and may change its Lending Installation from time to time.  All terms of this Agreement shall apply to any such Lending Installation and the Loans, Letters of Credit, and participations in LC Obligations and Swing Line Loans shall be deemed held by each Lender or the LC Issuer, as the case may be, for the benefit of any such Lending Installation.  Each Lender and the LC Issuer may, by written notice to the Agent and the Company, designate replacement or additional Lending Installations through which Loans will be made by it or Letters of Credit will be issued by it and for whose account Loan payments or payments with respect to Letters of Credit are to be made. 6.4 Obligations Several.  The failure of any Lender to make any Loan shall not relieve any other Lender of its obligation to make its Loan on any date, but no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender. 6.5 Non-Receipt of Funds by the Agent.  Unless the Company (on behalf of any Borrower or Borrowers) or a Lender, as the case may be, notifies Agent prior to the date on which Lender or a Borrower or Borrowers is scheduled to make payment to the Agent of (a) in the case of a Lender, the proceeds of a Loan or participation or (b) in the case of a Borrower or Borrowers, a payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not intend to make such payment, the Agent may assume that such payment has been made.  The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption.  If such Lender or Borrower or Borrowers, as the case may be, has not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date Agent recovers such amount at a rate per annum equal to (y) in the case of payment by a Lender, the Federal Funds Effective Rate for such day for the first three days and, thereafter, the interest rate applicable to the relevant Loan or (z) in the case of payment by a Borrower or Borrowers, the interest rate applicable to the relevant Loan or Reimbursement Obligations. 6.6 Authorization.  Any Loan made to any one or more of the Borrowers shall be conclusively presumed to have been made to or for the benefit of such Borrower or Borrowers when the proceeds of such Loan (a) are deposited to the credit of a Borrower in an account of a Borrower with the Agent, or (b) are transmitted to any other bank with directions to credit the same to the account of any Borrower at such bank, regardless of whether Persons other than 97 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

those authorized to make requests for Loans have authority to draw against any such account. Each Borrower acknowledges that the Agent cannot effectively determine whether a particular request for a Loan is valid, authorized, or authentic.  Therefore, each Borrower assumes all risk of the validity, authenticity, and authorization of such requests, whether or not the individual making such requests has authority to request Loans.  The Agent shall be entitled to act on the instructions of anyone identifying himself or herself as authorized to request Loans and each Borrower shall be bound thereby in the same manner as if the Person were actually so authorized.  The Agent is authorized to credit any account of (w) any New Vehicle Floorplan Borrower with the Agent (or any account any New Vehicle Floorplan Borrower designates in writing) for Loans made to the New Vehicle Floorplan Borrowers, (x) the Used Vehicle Floorplan Borrower with the Agent (or any account the Used Vehicle Floorplan Borrower designates in writing) for loans made to the Used Vehicle Floorplan Borrower, (y) the Service Loaner Vehicle Floorplan Borrower with the Agent (or any account the Service Loaner Vehicle Floorplan Borrower designates in writing) for loans made to the Service Loaner Vehicle Floorplan Borrower, and (z) the Revolving Loan Borrower with the Agent (or any account the Revolving Loan Borrower designates in writing) for loans made to the Revolving Loan Borrower.  A Borrower’s failure to confirm any telephonic request or otherwise comply with the provisions of this Section 6.6 shall not in any manner affect the obligation of the applicable Borrower or Borrowers to repay such Loans in accordance with the terms of this Agreement. Each Borrower agrees not to hold Agent or the Lenders liable for any errors or misunderstanding in complying with any written or oral directions for Loans; and each Borrower agrees to indemnify and hold Agent and the Lenders and the other Indemnified Persons harmless from any and all Claims which may arise or be created by the acceptance of instructions (telephonic or otherwise) for making Loans by wire transfer or otherwise, or for application of payments, other than as a result of the Agent’s gross negligence or willful misconduct. 6.7 Interest and Fee Basis.  All interest rates and fees referred to herein shall be calculated for actual days elapsed on the basis of a 360-day year.  Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to noon (Pacific Time) at the place of payment.  If any payment of principal of or interest shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in computing interest on such payment. 6.8 Method of Payment.  All payments of the Obligations hereunder shall be made, without setoff, deduction, or counterclaim, in immediately available funds to the Agent at the Agent’s address specified for notice herein, or at any other Lending Installation of the Agent specified in writing by the Agent to the Company, by noon (Pacific Time) on the date when due and shall (except (a) with respect to repayments of Swing Line Loans, (b) in the case of Reimbursement Obligations for which the LC Issuer has not been fully indemnified by the Lenders, or (c) as otherwise specifically required hereunder) be applied ratably by the Agent among the Lenders, in accordance with their Pro Rata Shares.  Each payment delivered to the Agent for the account of any Lender shall be delivered promptly by the Agent to such Lender in the same type of funds that the Agent received at its address specified for notice herein, or at any Lending Installation specified in a notice received by the Agent from such Lender.  Each reference to the Agent in this Section shall also be deemed to refer, and shall apply equally, to 98 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

the LC Issuer, in the case of payments required to be made by the Revolving Loan Borrower to the LC Issuer. 6.9 Payment by Automatic Debit.  Each Borrower hereby authorizes Agent to automatically deduct the amount of all principal and interest payments, Reimbursement Obligations and fees from one or more deposit accounts of the Company with the Agent specified in a writing provided by the Company to the Agent.  Each Borrower will pay all the fees on the account which result from the automatic deductions, including any overdraft and non-sufficient funds charges.  If for any reason Agent does not charge the account for a payment, or if an automatic payment is reversed, the payment is still due.  The Company may change any account number by notifying Agent of the new account number. 6.10 Late Charges.  Subject to any limitations imposed by Applicable Law, if any payment of principal or interest on the Loans, the LC Obligations, or other Obligations is fifteen (15) days or more past due, the New Vehicle Floorplan Borrowers, Used Vehicle Floorplan Borrower, Service Loaner Vehicle Floorplan Borrower, or the Revolving Loan Borrower, as applicable, shall pay to the Agent on demand, for the account of the Lenders, a late charge of five percent of the delinquent payment.  Each party hereto agrees that it would be difficult or costly to determine the actual costs incurred by any Lender by reason of late payment. Therefore, the parties agree that this late charge represents a fair and reasonable estimate of the costs incurred by each Lender and is reasonable under the circumstances existing as of the date hereof.  Collection of the late payment fee shall not be deemed to be a waiver of any Default hereunder. 6.11 Limitation of Interest.  Borrowers, the Agent and Lenders intend to strictly comply with all Applicable Laws, including applicable usury laws.  Accordingly, the provisions of this Section shall govern and control over every other provision of this Agreement or any other Loan Document which conflicts or is inconsistent with this Section, even if such provision declares that it controls.  As used in this Section, the term “interest” includes the aggregate of all charges, fees, benefits or other compensation which constitute interest under Applicable Law, provided that, to the maximum extent permitted by Applicable Law, (a) any non-principal payment shall be characterized as an expense or as compensation for something other than the use, forbearance or detention of money and not as interest, and (b) all interest at any time contracted for, reserved, charged or received shall be amortized, prorated, allocated and spread, in equal parts during the full term of the Obligations.  In no event shall any Borrower or any other Person be obligated to pay, or any Lender have any right or privilege to reserve, receive or retain, (y) any interest in excess of the maximum amount of nonusurious interest permitted under the Applicable Laws (if any) of the United States or of any applicable state, or (z) total interest in excess of the amount which such Lender could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of the Obligations at the Highest Lawful Rate.  On each day, if any, that the interest rate (the “Stated Rate”) called for under this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of interest accrued equals the total amount of interest which would have accrued if there were no such ceiling rate as is imposed by this sentence.  Thereafter, interest shall accrue at the Stated Rate unless and until 99 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

the Stated Rate again exceeds the Highest Lawful Rate when the provisions of the immediately preceding sentence shall again automatically operate to limit the interest accrual rate.  The daily interest rates to be used in calculating interest at the Highest Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of days in the calendar year for which such calculation is being made.  None of the terms and provisions contained in this Agreement or in any other Loan Document which directly or indirectly relate to interest shall ever be construed without reference to this Section, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the Highest Lawful Rate.  If the term of any Obligation is shortened by reason of acceleration of maturity as a result of any Event of Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason any Lender at any time, including but not limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to such Lender, it shall be credited against the then-outstanding principal balance of the obligations of the applicable Borrower or Borrowers to such Lender, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be promptly refunded to its payor. 6.12 Increase Option. 6.12.1 The Company may from time to time request an increase in the Aggregate New Vehicle Floorplan Commitment, in minimum increments of $50,000,000.00 or such lower amount as is agreed to between the Company and the Agent, so long as, after giving effect thereto, (a) the aggregate amount of all such increases requested after the Closing Date does not exceed $500,000,000.00750,000,000.00, and (b) the Aggregate Commitment does not exceed $4,250,000,000.004,500,000,000.00. 6.12.2 The Company may arrange for any such increase to be provided by one or more Lenders (each Lender so agreeing to an increase in its Commitment, an “Increasing Lender”), or by one or more new banks, financial institutions (each such new bank, financial institution or other entity, an “Additional Lender”), which Lender or Lenders shall increase their existing Commitments, or extend Commitments, as the case may be; provided that (a) each Additional Lender and each Increasing Lender and the amount of the increase of each Additional Lender and Increasing Lender shall be subject to the reasonable approval of the Company, the Agent and the LC Issuer, (b) (i) in the case of an Increasing Lender, the Agent, Borrowers and such Increasing Lender shall execute an Increasing Lender Agreement substantially in the form of Exhibit N hereto, and (ii) in the case of an Additional Lender, the Agent, Borrowers and such Additional Lender shall execute an Additional Lender Agreement substantially in the form of Exhibit M hereto, and (c) the applicable Borrower or Borrowers, Increasing Lender, Additional Lender and any other Loan Party shall each deliver to the Agent such other documents or amendments to existing Loan Documents as the Agent reasonably deems necessary. 6.12.3 No consent of any Lender (other than the Lenders participating in the increase) shall be required for any increase pursuant to this Section 6.12.  Increases and new 100 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Commitments created pursuant to this Section 6.12 shall become effective on the date agreed by the Company, the Agent and the relevant Increasing Lenders or Additional Lenders, and the Agent shall notify each Lender thereof.  Notwithstanding the foregoing, no increase in the Aggregate New Vehicle Floorplan Commitment (or in the Commitment of any Lender) shall become effective unless (a) on the proposed effective date of such increase, (i) no Default has occurred and is continuing or will exist after giving effect to the increase and any Credit Extensions to be made on the effective date, (ii) all representations and warranties in this Agreement are true and correct in all material respects as of the effective date, (iii) the Company and its Subsidiaries will be in compliance (on a Pro Forma Basis reasonably acceptable to the Agent) with the financial covenants in Section 11.1 after giving effect to the increase, and (iv) Agent has received a certificate with respect to the matters set forth in the foregoing clauses (a)(i) (ii) and (iii) dated the effective date and executed by the Company’s chief financial officer or other officer acceptable to the Agent, together with such supporting documentation as the Agent requires; and (b) the Agent has received such documents as it requires to evidence the power and authority of the Borrowers to borrow and the Guarantors to guaranty hereunder after giving effect to such increase. 6.12.4 On the effective date of any increase in the Aggregate New Vehicle Floorplan Commitment, (a) each relevant Increasing Lender and Additional Lender shall make available to the Agent such amounts in immediately available funds as the Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding New Vehicle Floorplan Loans of all the Lenders to equal its applicable Pro Rata Share of such outstanding Loans, and (b) the Borrowers shall make such other payments and adjustments as the Agent reasonably deems necessary in connection with the changes in the Commitments and Pro Rata Shares of the Lenders. 6.13 Authorization.  Each Borrower authorizes Agent and the Lenders (a) to furnish information about the Loans to each manufacturer or distributor of Vehicles, and (b) to advise each such manufacturer or distributor of any change or termination which may occur with respect to the Obligations. 6.14 Defaulting Lenders. 6.14.1 Defaulting Lender Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law: (a) Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders. (b) Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article 14 or otherwise) or received by the Agent from a Defaulting Lender pursuant to Section 17.8 shall be applied at such time or 101 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

times as may be determined by the Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the LC Issuer and Swing Line Lender hereunder; third, to Cash Collateralize the LC Issuer’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 6.14.4; fourth, as the Company may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Agent; fifth, if so determined by the Agent and the Company, to be held in a deposit account (including the LC Collateral Account) and released pro rata in order to (i) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (ii) Cash Collateralize the LC Issuer’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 6.14.4; sixth, to the payment of any amounts owing to the Lenders, the LC Issuer or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the LC Issuer or Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to any Borrower as a result of any judgment of a court of competent jurisdiction obtained by such Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; eighth, if so determined by the Agent, distributed to the Lenders other than the Defaulting Lender until the ratio of the Outstanding Credit Exposure of such Lenders to the Aggregate Outstanding Credit Exposure equals such ratio immediately prior to the Defaulting Lender’s failure to fund any portion of any Loans or participations in Letters of Credit or Swing Line Loans; and ninth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (i) such payment is a payment of the principal amount of any Loans or Letters of Credit issuances in respect of which such Defaulting Lender has not fully funded its appropriate share, and (ii) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Sections 9.2 and 9.3 were satisfied or waived, such payment shall be applied solely to pay the Credit Extensions and funded participations of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Credit Extensions or funded participations of such Defaulting Lender until such time as all Loans and funded and unfunded participations in LC Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to Section 6.14.1(d).  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 6.14.1(b) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto. (c) Certain Fees. (i) No Defaulting Lender shall be entitled to receive any New Vehicle Floorplan Commitment Fee, Used Vehicle Floorplan Commitment Fee, Service Loaner Vehicle Floorplan Commitment Fee, Revolving Loan Commitment Fee or Per Annum Fee for any period during which that Lender is a Defaulting Lender (and no Borrower shall be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender). 102 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(ii) Each Defaulting Lender shall be entitled to receive LC Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its ratable share of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 6.14.4. (iii) With respect to any New Vehicle Floorplan Commitment Fee, Used Vehicle Floorplan Commitment Fee, Service Loaner Vehicle Floorplan Commitment Fee, Revolving Loan Commitment Fee or LC Fee not required to be paid to any Defaulting Lender pursuant to clause (c)(i) or (ii) above, the applicable Borrower or Borrowers shall (X) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in LC Obligations or Swing Line Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (d) below, (Y) pay to the LC Issuer and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to the LC Issuer’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and (Z) not be required to pay the remaining amount of any such fee. (d) Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in LC Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Pro Rata Shares (calculated without regard to such Defaulting Lender’s interest as provided in the definition of Pro Rata Share) but only to the extent that (i) the conditions set forth in Sections 9.2 and 9.3 are satisfied at the time of such reallocation (and, unless the Company shall have otherwise notified the Agent at such time, each Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (ii) such reallocation does not cause the aggregate Outstanding Credit Exposure, Outstanding New Vehicle Floorplan Exposure, Outstanding Used Vehicle Floorplan Exposure, Outstanding Service Loaner Vehicle Floorplan Exposure or Outstanding Revolving Loan Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s applicable Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation. (e) Cash Collateral, Repayment of Swing Line Loans.  If the reallocation described in clause (d) above cannot, or can only partially, be effected, the applicable Borrowers shall, without prejudice to any right or remedy available to it hereunder or under law, (i) first, prepay Swing Line Loans in an amount equal to the Swing Line Lender’s Fronting Exposure and (ii) second, Cash Collateralize the LC Issuer’s Fronting Exposure in accordance with the procedures set forth in Section 6.14.4. 6.14.2 Defaulting Lender Cure.  If the Borrower, the Agent, the Swing Line Lender and the LC Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Agent may 103 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to Section 6.14.1(d)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of any Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. 6.14.3 New Swing Line Loans/Letters of Credit.  So long as any Lender is a Defaulting Lender, (a) the Swing Line Lender shall not be required to fund any Swing Line Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swing Line Loan and (b) the LC Issuer shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto. 6.14.4 Cash Collateral.  At any time that there shall exist a Defaulting Lender, within one (1) Business Day following the written request of the Agent or the LC Issuer (with a copy to the Agent) the Revolving Loan Borrower shall Cash Collateralize the LC Issuer’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 6.14.1(d) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount. (a) Grant of Security Interest.  The Revolving Loan Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Agent, for the benefit of the LC Issuer, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of LC Obligations, to be applied pursuant to clause (b) below.  If at any time the Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Agent and the LC Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Revolving Loan Borrower will, promptly upon demand by the Agent, pay or provide to the Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender). (b) Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 6.14 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of LC Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein. (c) Termination of Requirement.  Cash Collateral (or the appropriate portion thereof) provided to reduce the LC Issuer’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 6.14.4 following (i) the 104 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Agent and the LC Issuer that there exists excess Cash Collateral; provided that, subject to this Section 6.14 the Person providing Cash Collateral and the LC Issuer may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations and provided further, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents. 6.15 Replacement of Lender.  If Borrowers are required pursuant to Section 7.1, 7.2 or 7.4 to make any additional payment to any Lender or if any Lender’s obligation to make Advances based on the Eurocurrency BaseAdjusted Daily Simple SOFR, Adjusted Term SOFR or the Term SOFR Alternative Rate is suspended pursuant to Section 7.3 or if any Lender defaults in its obligation to make a Loan, reimburse the LC Issuer pursuant to Section 5.6 or the Swing Line Lender pursuant to Section 2.2.6, 3.2.6, or 4.2.6 or otherwise becomes a Defaulting Lender (any Lender so affected an “Affected Lender”), the Company may elect, if such amounts continue to be charged or such suspension is still effective, to replace such Affected Lender as a Lender party to this Agreement, provided that no Default or Event of Default shall have occurred and be continuing at the time of such replacement, and provided further that, concurrently with such replacement, (a) another bank or other entity which is reasonably satisfactory to the Company and the Agent shall agree, as of such date, to purchase for cash and to pay the Affected Lender on such date 100% of the outstanding principal amount of the Loans and other Obligations due to the Affected Lender pursuant to an Assignment Agreement and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be terminated as of such date and to comply with the requirements of Section 17.4 applicable to assignments, and (b) the Borrowers shall pay to such Affected Lender in same day funds on the day of such replacement all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Affected Lender under Sections 7.1, 7.2 and 7.4. 6.16 Per Annum Fee.  The Borrowers agree to pay to the Agent, for the account of each Lender, a fee (“Per Annum Fee”), calculated for each Lender at a per annum rate equal to the rate set forth in the fee letter between such Lender and Borrowers, on the Aggregate Lender Commitment of such Lender as of the last day of each fiscal quarter.  The Per Annum Fee shall be due and payable in arrears on each Quarterly Payment Date hereafter and on the Termination Date for the three month period or other time period ending on the last day of the preceding fiscal quarter or on the Termination Date. 6.17 Reallocation of Commitments. 6.17.1 Subject to the provisions of this Section 6.17 and so long as no Event of Default has occurred and is continuing or will exist after giving effect thereto, Borrowers may from time to time request a reallocation of all or part of any unused portion of (a) the Aggregate New Vehicle Floorplan Commitment to the Aggregate Used Vehicle Floorplan Commitment, the Aggregate Revolving Loan Commitment and/or the Aggregate Service Loaner Vehicle Floorplan Commitment, (b) the Aggregate Used Vehicle Floorplan Commitment to the Aggregate New Vehicle Floorplan Commitment, the Aggregate Revolving Loan Commitment and/or the 105 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Aggregate Service Loaner Vehicle Floorplan Commitment, (c) the Aggregate Revolving Loan Commitment to the Aggregate New Vehicle Floorplan Commitment, the Aggregate Used Vehicle Floorplan Commitment and/or the Aggregate Service Loaner Vehicle Floorplan Commitment or, (d) the Aggregate Service Loaner Vehicle Floorplan Commitment to the Aggregate Used Vehicle Floorplan Commitment, the Aggregate New Vehicle Floorplan Commitment and/or the Aggregate Revolving Loan Commitment, (e) the Revolving Swing Line Commitment to the Used Vehicle Swing Line Commitment and/or the Service Loaner Vehicle Floorplan Swing Line Commitment, (f) the Used Vehicle Swing Line Commitment to the Revolving Swing Line Commitment and/or the Service Loaner Vehicle Floorplan Swing Line Commitment or (g) the Service Loaner Vehicle Floorplan Swing Line Commitment to the Used Vehicle Swing Line Commitment and/or the Revolving Swing Line Commitment (each a “Reallocation”). 6.17.2 Borrowers may request a Reallocation no more frequently than oncetwice in any calendar month.  If Borrowers wish to request a Reallocation, the Company shall give the Agent irrevocable written notice thereof substantially in the form attached hereto as Exhibit O, or in such other form as is acceptable to the Agent (a “Reallocation Request”), no later than 11:00 a.m. (Pacific Time) at least two Business Days prior to the requested effective date of the Reallocation.  The Agent will promptly notify the Company and the Lenders of the effective date of any Reallocation, and the amount of the new Commitments for each Lender. 6.17.3 Following any Reallocation, (a) the Aggregate Commitment shall not change; (b) the Aggregate New Vehicle Floorplan Commitment shall not be less than the then outstanding principal balance of the New Vehicle Floorplan Loans and the New Vehicle Swing Line Loans (which, for purposes of this determination, shall not be deemed to be reduced by amounts in the PR Accounts); (c) the Aggregate Used Vehicle Floorplan Commitment (i) shall not be more than 20.00% of the amount of the Aggregate Commitment at the time of such Reallocation and (ii) shall not be less than the then outstanding principal balance of the Used Vehicle Floorplan Loans and the Used Vehicle Swing Line Loans; (d) the Aggregate Revolving Loan Commitment (i) shall not be more than 20.0040.00% of the amount of the Aggregate Commitment at the time of such Reallocation and (ii) shall not be less than the then outstanding principal balance of the Revolving Loans and Revolving Swing Line Loans plus the LC Obligations and any Reserve Amount; and (e) the Aggregate Service Loaner Vehicle Floorplan Commitment (i) shall not be more than 3.00% of the amount of the Aggregate Commitment at the time of such Reallocation and (ii) shall not be less than the then outstanding principal balance of the Service Loaner Vehicle Floorplan Loans and the Service Loaner Vehicle Swing Line Loans. 6.17.4 All Reallocations shall be made pro rata among the Lenders according to their respective Pro Rata Shares of the Aggregate New Vehicle Floorplan Commitment, Aggregate Used Vehicle Floorplan Commitment, Aggregate Revolving Loan Commitment and/or, Aggregate Service Loaner Vehicle Floorplan Commitment, Revolving Swing Line Commitment, Used Vehicle Swing Line Commitment and/or Service Loaner Vehicle Floorplan Swing Line Commitment so that after giving effect to any Reallocation, there is no change in the Pro Rata Shares of the Lenders. 106 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

6.17.5 In connection with a Reallocation (a) the New Vehicle Swing Line Commitment, Used Vehicle Swing Line Commitment, Service Loaner Vehicle Swing Line Commitment, Revolving Swing Line Commitment and LC Commitment shall not be increased, (b) the New Vehicle Swing Line Commitment shall not be reduced, (c) the Used Vehicle Swing Line Commitment shall not be reduced unless the Aggregate Used Vehicle Floorplan Commitment is reduced to less than the amount of the Used Vehicle Swing Line Commitment, (d) the Revolving Swing Line Commitment and the Letter of Credit Commitment shall not be reduced unless the Aggregate Revolving Loan Commitment is reduced to less than the amount of the Revolving Swing Line Commitment and Letter of Credit Commitment, and (e) the Service Loaner Vehicle Swing Line Commitment shall not be reduced unless the Aggregate Service Loaner Vehicle Floorplan Commitment is reduced to less than the amount of the Service Loaner Vehicle Swing Line Commitment[reserved]. 6.17.6 Following any Reallocation, the Aggregate New Vehicle Floorplan Commitment, Aggregate Used Vehicle Floorplan Commitment, Aggregate Revolving Loan Commitment and Aggregate Service Loaner Vehicle Floorplan Commitment and the Pro Rata Shares and New Vehicle Floorplan Commitment, Used Vehicle Floorplan Commitment, Revolving Loan Commitment and, Service Loaner Vehicle Floorplan Commitment, Revolving Swing Line Commitment, Used Vehicle Swing Line Commitment and Service Loaner Vehicle Floorplan Swing Line Commitment of each Lender shall be noted in the Agent’s records, which records will be conclusive evidence thereof, absent manifest error; provided, however, that any failure by the Agent to record such information shall not affect or limit the obligations of the Borrowers hereunder. 6.18 Extension of Commitments. 6.18.1 Requests for Extension. The Company may, no more than one time per Loan Year, by notice to the Agent (who shall promptly notify the Lenders) not earlier than sixty (60) days and not later than thirty-five (35) days prior to the Anniversary Date in such Loan Year, request that each Lender extend such Lender’s Termination Date for an additional Loan Year from the existing Termination Date. 6.18.2 Lender Elections to Extend. Each Lender, acting in its sole and individual discretion, shall, by notice to the Agent given not later than the date (the “Notice Date”) that is thirty (30) days prior to the Anniversary Date in such Loan Year, advise Agent whether or not such Lender agrees to such extension and each Lender that determines not to so extend its Termination Date (a “Non-Extending Lender”) shall notify the Agent of such fact promptly after such determination (but in any event no later than the Notice Date) and any Lender that does not so advise Agent on or before the Notice Date shall be deemed to be a Non-Extending Lender. The election of any Lender to agree to such extension shall not obligate any other Lender to so agree. Furthermore, the election of any Non-Extending Lender not to extend initially shall not prohibit such Lender from extending for an additional Loan Year at subsequent request of the Company, so long as (i) the Company has not prepaid all Loans outstanding of such Non-Extending Lender by such date and (ii) such Lender’s Termination Date shall be modified to the Termination Date of all other Extending Lenders at such time. Once a Lender extends its Termination Date in 107 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

accordance with this Section it shall no longer be deemed a Non-Extending Lender for all purposes of this Agreement. 6.18.3 Notification by the Agent. The Agent shall notify the Company of each Lender’s determination under this Section no later than the date fifteen (15) days prior to the Anniversary Date in such Loan Year (or, if such date is not a Business Day, on the next preceding Business Day). 6.18.4 Additional Commitment Lenders. The Company shall have the right to replace each Non-Extending Lender with, and add as “Lenders” under this Agreement in place thereof, one or more Eligible Assignees (each, an “Additional Commitment Lender”) as provided in Section 6.15; provided that each of such Additional Commitment Lenders shall enter into an Assignment Agreement pursuant to which such Additional Commitment Lender shall, effective as of the Anniversary Date in such Loan Year, undertake a Commitment (and, if any such Additional Commitment Lender is already a Lender, its Commitment shall be in addition to such Lender’s Commitment hereunder on such date). 6.18.5 Minimum Extension Requirement. If (and only if) the total of the Commitments of the Lenders that have agreed so to extend their Termination Date (each, an “Extending Lender”) and the additional Commitments of the Additional Commitment Lenders shall be more than 80% of the Aggregate Commitment in effect immediately prior to the Anniversary Date in such Loan Year, then, effective as of the Anniversary Date in such Loan Year, the Termination Date of each Extending Lender and of each Additional Commitment Lender shall be extended to the date falling one year after the existing Termination Date (except that, if such date is not a Business Day, such Termination Date as so extended shall be the next preceding Business Day) and each Additional Commitment Lender shall thereupon become a “Lender” for all purposes of this Agreement. 6.18.6 Conditions to Effectiveness of Extensions. As a condition precedent to such extension, the Company shall deliver to the Agent a certificate of each Loan Party dated as of the Anniversary Date in such Loan Year (in sufficient copies for each Extending Lender and each Additional Commitment Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such extension and (ii) in the case of the Company, certifying that, before and after giving effect to such extension, (A) the representations and warranties contained in Article X and the other Loan Documents are true and correct on and as of the Anniversary Date in such Loan Year, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 6.18, the representations and warranties contained in Section 10.4 shall be deemed to refer to the most recent statements furnished pursuant to Section 11.1, and (B) no Default exists or would result therefrom. In addition, on the Termination Date of each Non-Extending Lender, the Company shall prepay any Loans outstanding on such date (and pay any additional amounts required pursuant to Section 7.5) to the extent necessary to keep outstanding Loans ratable of the respective Lenders effective as of such date. 108 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

6.18.7 Amendment; Sharing of Payments. In connection with any extension of the Termination Date, the Company, and each Extending Lender may make such amendments to this Agreement as the Agent determines to be reasonably necessary to evidence the extension. This Section 6.18 shall supersede any provisions in Section 17.9 to the contrary. 6.19 Designation of Dual Subsidiaries. The Company may designate any Subsidiary as a “Dual Subsidiary” in order to finance (x) new Vehicles only or (y) new Vehicles and used and/or service loaner Vehicles through Permitted Dual Subsidiary Indebtedness so long as: (a) with respect to any Dualsuch Subsidiary that will finance new Vehicles through Permitted Dual Subsidiary Indebtednessis (i) a New Vehicle Floorplan Borrower, the Company shall terminate the designation of such Subsidiary as a “New Vehicle Floorplan Borrower” with respect to each franchise (any such franchise, a “Removed Franchise”) that will obtain financing for new Vehicles through Permitted Dual Subsidiary Indebtedness or (ii) a Silo Subsidiary, the Company shall terminate the designation of such Subsidiary as a Silo Subsidiary; (b) the Company hasshall have (xw) delivered notice ofdesignated such requestSubsidiary as a Dual Subsidiary to the Agent in writing, (yx) executedcaused such Subsidiary to execute and delivereddeliver acknowledgements (in form and substance reasonably acceptable to the Agent) of such Dual Subsidiary’s continuing Obligations (or, with respect to any such Subsidiary that is a Silo Subsidiary immediately prior to such designation, such Silo Subsidiary’s new Obligations) under the Loan Documents (including pursuant to the Guaranty and any other Collateral Documents) as requested by the Agent and, (zy) prepaid all outstanding Loans with respect to such redesignationdesignation as required by Section 2.1.5(d), Section 3.1.5(d), Section 3.3.5(d)  and (z) otherwise complied with Section 13.16; (c) such Subsidiary otherwise qualifies as a “Dual Subsidiary” entitled to incur Permitted Dual Subsidiary Indebtedness pursuant to the terms of the Agreement at the time of such redesignationdesignation; (d) no Default or Event of Default then exists or will result therefrom. Following any such redesignationdesignation, such Subsidiary shall no longer be entitled to utilize the credit facilities provided for in Section 2 with respect to any Removed Franchise; (e) If the applicable Dual Subsidiary will finance any Used Vehicles with Permitted Dual Subsidiary Indebtedness or will grant a Lien in any Used Vehicle to a Dual Subsidiary Lender, the Company shall have provided to the Agent a Used Vehicle Loan Borrowing Base Certificate as of the date of and after giving effect to such designation of such Subsidiary as a Dual Subsidiary and deduction of all Used Vehicles of such Dual Subsidiary from the Used Vehicle Borrowing Base; (f) If the applicable Dual Subsidiary will finance any Service Loaner Vehicles with Permitted Dual Subsidiary Indebtedness or will grant a Lien in any Service Loaner Vehicle to a Dual Subsidiary Lender, the Company shall have provided to the Agent a Service 109 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Loaner Vehicle Borrowing Base Certificate as of the date of and after giving effect to such designation of such Subsidiary as a Dual Subsidiary and deduction of all Service Loaner Vehicles of such Dual Subsidiary from the Service Loaner Vehicle Borrowing Base; (g) the Company shall have provided to the Agent a Revolving Loan Borrowing Base Certificate as of the date of and after giving effect to such designation of such Subsidiary as a Dual Subsidiary and certifying that after giving effect to such designation the Revolving Loan Availability is not less than $1.00; (h) the Company shall have provided to the Agent a Compliance Certificate (prepared on a Pro Forma Basis as of the most recent date for which a Compliance Certificate was furnished to the Agent) signed by the Company’s chief financial officer or other officer acceptable to the Agent; (i) (A) the existing UCC-1 financing statement for the Dual Subsidiary that names the Agent as secured party shall have been amended to remove certain assets and (B) a new UCC-1 financing statement shall have been filed naming the Dual Subsidiary as debtor and the applicable Dual Subsidiary Lender as secured party, in each case, in accordance with the terms of the applicable Intercreditor Agreement; and (j) prior to or concurrently with the initial incurrence of Permitted Dual Subsidiary Indebtedness by any Dual Subsidiary from a Dual Subsidiary Lender, cause to be delivered to the Agent an Intercreditor Agreement, or a joinder to an existing Intercreditor Agreement, executed by each Required Intercreditor Counterparty, along with any applicable revised exhibits thereto. Notwithstanding the foregoing, this Section 6.19 shall not take effect until the Agent has received (x) a duly executed Intercreditor Agreement (or a joinder or supplement thereof), in form and substance satisfactory to the Agent and (y) any additional documentation requested by the Agent in its sole discretion. 6.20 Erroneous Payments.  (a) If the Agent notifies a Lender, LC Issuer or other holder of any Obligations (each, a “Lender Party”), or any Person who has received funds on behalf of a Lender Party (any such Lender Party or other recipient, a “Payment Recipient”), that the Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding clause (b)) that any funds received by such Payment Recipient from the Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously received by, such Payment Recipient (whether or not such error is known to any Payment Recipient) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Agent, and such Payment Recipient shall promptly, but in no event later than one Business Day thereafter, return to the Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment 110 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Recipient to the date such amount is repaid to the Agent in same day funds at the greater of the Federal Funds Effective Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Agent to any Payment Recipient under this clause (a) shall be conclusive, absent manifest error. (b) Without limiting immediately preceding clause (a), if any Payment Recipient receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Agent (or any of its Affiliates) that (x) is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates), or (z) such Payment Recipient otherwise becomes aware was transmitted, or received, in error (in whole or in part): (i) (A) in the case of immediately preceding clause (x) or (y), an error shall be presumed to have been made (absent written confirmation from the Agent to the contrary) or (B) in the case of immediately preceding clause (z), an error has been made, in each case, with respect to such payment, prepayment or repayment; and (ii) such Payment Recipient shall promptly (and, in all events, within one Business Day of its knowledge of such error) notify the Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Agent pursuant to this Section 6.20(b). (c) Each Lender Party hereby authorizes the Agent to set off, net and apply any and all amounts at any time owing to such Lender Party under any Loan Document, or otherwise payable or distributable by the Agent to such Lender Party from any source, against any amount due to the Agent under immediately preceding clause (a) or under the indemnification provisions of this Agreement. (d) An Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations, except to the extent such Erroneous Payment comprises funds received by the Agent from a Loan Party for the purpose of making such Erroneous Payment. (e) To the extent permitted by Applicable Law, each Payment Recipient hereby agrees not to assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment, including without limitation any defense based on “discharge for value” or any similar doctrine, with respect to any demand, claim or counterclaim by the Agent for the return of any Erroneous Payment. 111 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(f) Each party’s agreements under this Section 6.20 shall survive the resignation or replacement of the Agent, any transfer of rights or obligations by, or the replacement of, a Lender or LC Issuer, the termination of the Commitments, or the repayment, satisfaction or discharge of any or all Obligations. ARTICLE 7 YIELD PROTECTION; TAXES 7.1 Yield Protection.  If, after the date of this Agreement, there occurs any adoption of or change in any law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) or in the interpretation, promulgation, implementation or administration thereof by any governmental or quasi-Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, including, notwithstanding the foregoing, all requests, rules, guidelines or directives (x) in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States financial regulatory authorities, in each case of clauses (x) and (y), regardless of the date enacted, adopted, issued, promulgated or implemented, or compliance by any Lender or applicable Lending Installation or the LC Issuer with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency (any of the foregoing, a “Change in Law”) which: (a) subjects any Lender or any applicable Lending Installation, the LC Issuer, or the Agent to any Taxes (other than with respect to Indemnified Taxes, Excluded Taxes, and Other Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or (b) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation or the LC Issuer (other than reserves and assessments taken into account in determining the interest rate applicable to SOFR Loans bearing interest based on the Eurocurrency Base Rate (“Eurocurrency Loan”)), or (c) imposes any other condition (other than Taxes) the result of which is to increase the cost to any Lender or any applicable Lending Installation or the LC Issuer of making, funding or maintaining its EurocurrencySOFR Loans, or of issuing or participating in Letters of Credit, or reduces any amount receivable by any Lender or any applicable Lending Installation or the LC Issuer in connection with its EurocurrencySOFR Loans, Letters of Credit, or participations therein, or requires any Lender or any applicable Lending Installation or the LC Issuer to make any payment calculated by reference to the amount of EurocurrencySOFR Loans, Letters of Credit, or participations therein held or interest or fees received by it, by an amount deemed material by such Lender or the LC Issuer as the case may be, and the result of any of the foregoing is to increase the cost to such Lender or the LC Issuer of making or maintaining its Loans or Commitments or of issuing or participating in Letters of Credit or to reduce the return 112 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

received by such Lender or the LC Issuer in connection with such Loans or Commitment, Letters of Credit or participations therein, then, within fifteen (15) days after demand by such Lender or the LC Issuer, the Borrowers shall pay such Lender or the LC Issuer such additional amount or amounts as will compensate such Lender or the LC Issuer for such increased cost or reduction in amount received. Failure or delay on the part of any Lender or LC Issuer to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or LC Issuer’s right to demand such compensation; provided that the Borrowers shall not be required to pay any amount to compensate any Lender or LC Issuer pursuant to the foregoing provisions of this Section 7.1 for any such increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or such LC Issuer, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such LC Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect). 7.2 Changes in Capital Adequacy Regulations.  If a Lender or the LC Issuer determines the amount of capital or liquidity required or expected to be maintained by such Lender or the LC Issuer, any Lending Installation of such Lender or the LC Issuer, or any corporation or holding company controlling such Lender or the LC Issuer is increased as a result of (a) a Change in Law or (b) any change after the date of this Agreement in the Risk-Based Capital Guidelines, then, within fifteen (15) days of demand by such Lender or the LC Issuer, the Borrowers shall pay such Lender or the LC Issuer the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender or the LC Issuer determines is attributable to this Agreement, its Outstanding Credit Exposure or its Commitment to make Loans and issue or participate in Letters of Credit, as the case may be, hereunder (after taking into account such Lender’s or the LC Issuer’s policies as to capital adequacy or liquidity), in each case that is attributable to such Change in Law or change in the Risk-Based Capital Guidelines, as applicable. Failure or delay on the part of any Lender or LC Issuer to demand compensation pursuant to this Section shall not constitute a waiver of such Lender or LC Issuer’s right to demand such compensation; provided that the Borrowers shall not be required to pay any amount to compensate any Lender or LC Issuer pursuant to the foregoing provisions of this Section 7.2 for any shortfall in the rate of return suffered more than nine months prior to the date that such Lender or such LC Issuer, as the case may be, notifies the Company of the Change in Law giving rise to such shortfall and of such Lender’s or such LC Issuer’s intention to claim compensation (except that, if the Change in Law giving rise to such shortfall is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect). 7.3 Availability of Types of Advances; Adequacy of Interest Rate. 7.3.1 (a)  Notwithstanding anything to the contrary in this Agreement or any other Loan Document (except as provided in clause (b) below), if the Agent determines (which determination shall be conclusive absent manifest error), or the Required Lenders notify the Agent that the Required Lenders have determined, that: 113 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(i) deposits of a type and maturity appropriate to match fund EurocurrencySOFR Loans are not available to such Lenders in the relevant market, or (ii) the interest rate applicable to Eurocurrencythe Term SOFR Alternative Rate Loans or Term SOFR Loans for any requested Interest Period is not ascertainable or available (including, without limitation, because the applicable Reuters Screen (or on any successor or substitute page on such screen) is unavailable) or does not adequately and fairly reflect the cost of making or maintaining Eurocurrencythe Term SOFR Alternative Rate Loans or Term SOFR Loans, then the Agent shall suspend the availability of the New Vehicle Floorplan Borrowing Rate, Used Vehicle Floorplan Borrowing Rate, Service Loaner Vehicle Floorplan Borrowing Rate, and Revolving Loan Borrowing Rate, the loans shall thereafter bear interest at the Alternate Base Rate plus the Alternate Base Rate Margin (New Vehicle) for New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, the Alternate Base Rate plus the Alternate Base Rate Margin (Used Vehicle) for Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans, the Alternate Base Rate plus the Alternate Base Rate Margin (Service Loaner Vehicle) for Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans, and the Alternate Base Rate plus the Alternate Base Rate Margin (Revolving) for Revolving Loans and Revolving Swing Line Loans. (b) Benchmark Replacement Setting. (i) (b)    (i)  Benchmark Transition Event; Early Opt-in Election. Notwithstanding anything to the contrary herein or in any other Loan Document (and any Swap shall be deemed not to be a “Loan Document” for purposes of this Section 7.3.17.3(b)), if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement willthe Administrative Agent and the Borrower may amend this Agreement to replace suchthe then-current Benchmark for all purposes hereunder and under any Loan Document inwith a Benchmark Replacement.  Any such amendment with respect of anyto a Benchmark settingTransition Event will become effective at or after 5:00 p.m. (New York City time) on the fifth Business Day after the date notice of such Benchmark Replacement is provided by theAdministrative Agent has posted such proposed amendment to theall Lenders and the Borrower 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 Replacementamendment from Lenders comprising the Required Lenders. 114 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(ii) Term SOFR Transition Event.  Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in this paragraph, if a Term SOFR Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document; provided that, this clause (b)(ii) shall not be effective unless the Agent has delivered to the Lenders and the Company a Term SOFR Notice. For the avoidance of doubt, the Agent shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so in its sole discretion. (iii) (ii) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document. (iii) (iv) Notices; Standards for Decisions and Determinations. The Agent will promptly notify the Company and the Lenders of (A) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (B) the implementation of any Benchmark Replacement, (Cand (B) the effectiveness of any Benchmark Replacement Conforming Changes, (D) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (v) below and (E) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 7.3.17.3(b), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 7.3.17.3(b). (iv) (v) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR or the Eurocurrency Base Rate or Term SOFR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after 115 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

such time to remove any tenor of such Benchmark that is unavailable or non-representative tenorfor any Benchmark settings and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor. (v) (vi) Benchmark Unavailability Period. Upon notice to the Company by the Agent in accordance with Section 17.11 of the commencement of a Benchmark Unavailability Period and until a Benchmark Replacement is determined in accordance with this Section 7.3.17.3(b), any Borrowerthe Company may revoke any request for a EurocurrencySOFR Loan, or any request for the conversion or continuation of a EurocurrencySOFR Loan to be made, converted or continued during any Benchmark Unavailability Period at the end of the applicable Interest Period, and, failing that, the applicable BorrowerCompany will be deemed to have converted any such request into a request for a borrowingat the end of the applicable Interest Period into loans that bear interest at the Alternate Base Rate plus the applicable margin (e.g., the Alternate Base Rate Margin (New Vehicle) for New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, the Alternate Base Rate Margin (Used Vehicle) for Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans,plus the Alternate Base Rate Margin (Service LoanerUsed Vehicle) for Service LoanerUsed Vehicle Floorplan Loans and Service LoanerUsed Vehicle Swing Line Loans, and the Alternate Base Rate Margin (Revolving) for Revolving Loans and Revolving Swing Line Loans) or conversion to a borrowing at the Alternate Base Rate plus the applicable margin (e.g., the Alternate Base Rate Margin (New Vehicle) for New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, the Alternate Base Rate Margin (Used Vehicle) for Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans, the Alternate Base Rate Margin (Service Loaner Vehicle) for Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans, and the Alternate Base Rate plus the Alternate Base Rate Margin (Revolving) for Revolving Loans and Revolving Swing Line Loans). During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternate Base Rate. 7.4 Taxes. 7.4.1 Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law.  If any Applicable Law (as determined in the good faith discretion of the applicable withholding agent) requires the deduction or withholding of any Tax from any such payment, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax or Other Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 7.4) 116 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

the applicable Lender, the LC Issuer or the Agent receives an amount equal to the sum it would have received had no such deduction or withholding been made as provided in this Section 7.4. 7.4.2 The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with Applicable Law or at the option of the Agent timely reimburse it for the payment of, any Other Taxes. 7.4.3 The Loan Parties shall indemnify the Lender, the LC Issuer or the Agent, within fifteen (15) days after demand therefor, for the full amount of any Indemnified Taxes and Other Taxes (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section 7.4) payable or paid by such Lender, the LC Issuer or the Agent or required to be withheld or deducted from a payment to such Lender, the LC Issuer or the Agent and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes and Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to a Borrower by a Lender or LC Issuer (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Lender or LC Issuer, shall be conclusive absent manifest error. 7.4.4 Each Lender shall severally indemnify the Agent, within fifteen (15) days after demand therefor, for (a) any Indemnified Taxes and Other Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Agent for such Indemnified Taxes and Other Taxes and without limiting the obligation of the Loan Parties to do so), (b) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 17.3.3 relating to the maintenance of a Participant Register, and (c) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Agent to the Lender from any other source against any amount due to the Agent under this Section 7.4.4. 7.4.5 As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 7.4, such Loan Party shall deliver to the Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Agent. 7.4.6 (a) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Company and the Agent, at the time or times reasonably requested by the Company or the Agent, such properly completed and executed documentation reasonably requested by the Company or the Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Company or the Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably 117 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

requested by the Company or the Agent as will enable the Company or the Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 7.4.6(b)(i), (b)(ii), and (b)(iv)) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. (b) Without limiting the generality of the foregoing, (i) any Lender that is a United States person for U.S. federal income Tax purposes shall deliver to the Company and the Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Agent), executed originalscopies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax; (ii) any Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Agent), whichever of the following is applicable: (A) in the case of a Non-U.S. Lender claiming the benefits of an income Tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN  or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such Tax treaty and (2) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such Tax treaty; (B) executed copies of IRS Form W-8ECI; (C) in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (1) a certificate to the effect that such Non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code and (2) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E; or (D) to the extent a Non-U.S. Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, IRS Form W-8IMY or IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable. 118 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(iii) any Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Company or the Agent to determine the withholding or deduction required to be made; and (iv) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Company and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Company or the Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Company or the Agent as may be necessary for the Company and the Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment.  Solely for purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA after the date of this Agreement. (c) Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Company and the Agent in writing of its legal inability to do so. 7.4.7 If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 7.4 (including by the payment of additional amounts pursuant to this Section 7.4), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This paragraph shall not be construed 119 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person. 7.4.8 Each party’s obligations under this Section 7.4 shall survive the resignation or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document. 7.4.9 For purposes of Sections 7.4.4 and 7.4.6, the term “Lender” includes the LC Issuer. 7.4.10 For purposes of determining withholding Taxes imposed under FATCA, from and after the Closing Date, the Company, the other Borrowers and the Agent shall treat (and the Lenders hereby authorize Agent to treat) the Loans and the LC Obligations as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i). 7.5 Selection of Lending Installation; Mitigation Obligations; Lender Statements; Survival of Indemnity.  To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its EurocurrencySOFR Loans to reduce any liability of the Borrowers to such Lender under Sections 7.1, 7.2, and 7.4 or to avoid the unavailability of EurocurrencySOFR Loans under Section 7.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender.  Each Lender shall deliver a written statement of such Lender to the Company (with a copy to the Agent) as to the amount due, if any, under Sections 7.1, 7.2 or 7.4.  Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrowers in the absence of manifest error.  Determination of amounts payable under such Sections in connection with a EurocurrencySOFR Loan shall be calculated as though each Lender funded its EurocurrencySOFR Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining SOFR, Term SOFR or the EurocurrencyTerm SOFR Base Rate applicable to such Loan, whether in fact that is the case or not.  Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Company of such written statement.  The obligations of the Borrowers under Sections 7.1, 7.2 and 7.4 shall survive payment of the Obligations and termination of this Agreement. ARTICLE 8 SECURITY AND GUARANTIES 8.1 Security. 8.1.1 Collateral.  All present and future Loans, Letters of Credit, Obligations, Guarantor Obligations, and Permitted Swap Obligations of the Loan Parties to the Agent and the Lenders under this Agreement and the other Loan Documents shall be, subject to each Intercreditor Agreement (once effective), secured by a perfected security interest, subject only to Permitted Liens, in the property described in the Collateral Documents (collectively, “Collateral”); including, without limitation, the following property of the Company and all of its 120 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

present and future Subsidiaries (except Persons that (x) are not Financed Entities or (y) are Excluded Subsidiaries, Silo Subsidiaries or Canadian Subsidiaries), whether now owned or existing or hereafter acquired and wherever located, and all products and proceeds thereof: (a) All inventory (including, without limitation, all parts inventory, all Vehicles of whatever make, model and description, trade ins, repossessions and inventory held for display or demonstration purposes); equipment (other than fixtures); investment property; stock; partnership interests; membership interests; securities (certificated or uncertificated); security entitlements; securities accounts; accounts; instruments; documents; promissory notes; chattel paper (including electronic and tangible chattel paper); payment intangibles; general intangibles; deposit accounts; contract rights and other rights to payment; personal property leases; rebates, credits, factory holdbacks, incentive payments and other payments from any manufacturer, factory or distributor. (b) All attachments, accessions, accessories, tools, parts, supplies, increases and additions to, and all replacements of, and substitutions for any property described in this Section 8.1.1; all products, produce, and supporting obligations of any of the property described in this Section 8.1.1; all proceeds (including insurance proceeds) of any of the property described in this Section 8.1.1; and all records and data relating to any of the property described in this Section 8.1.1, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all right, title and interest of the Company and each Subsidiary in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media. Notwithstanding the foregoing, the New Vehicle Floorplan Loan Obligations shall be secured only by the Collateral owned by the New Vehicle Floorplan Borrowers. For the avoidance of doubt and notwithstanding anything to the contrary set forth in this Agreement or any Security Document, the term “Collateral” as used in this Agreement and in the Security Documents shall not include any Excluded Property. 8.1.2 Collateral Documents.  The security interests in the Collateral shall be evidenced by such security agreements, assignments, Uniform Commercial Code financing statements, Title Documents, trust deeds, mortgages, and other Collateral Documents covering the Collateral as the Agent or Required Lenders may at any time reasonably require. 8.1.3 Additional Acts.  As a condition precedent to the effectiveness of this Agreement, and from time to time at the Agent’s or any Lender’s request, each Person granting Collateral shall execute and/or deliver to the Agent such security agreements, assignments, pledge agreements, control agreements, Title Documents, landlord and owner consents, amendments to any of the foregoing documents and any other documents and instruments (endorsed or assigned to the Agent as the Agent may request), and shall take such other actions, as may be required under Applicable Law or which the Agent or any Lender may reasonably request to effectuate the transactions contemplated hereunder and to grant, preserve, protect, perfect and continue the validity and priority of their security interests (subject to Permitted Liens). 121 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

8.1.4 Limitations.  Notwithstanding any contrary provision of this Agreement or any Collateral Document, unless Agent otherwise requires (which the Agent may do at any time) (a) the security interest of the Agent and the Lenders in any Loan Party’s patents, trademarks, copyrights, trade names and other intellectual property will not be perfected by filing with the United States Patent and Trademark Office or any other agency of the United States government; (b) the security interest of the Agent and the Lenders will not be noted on the Title Document for any Vehicle; (c) the security interest of the Agent and the Lenders in deposit accounts maintained by any Loan Party with a financial institution other than U.S. Bank may not be perfected if the Agent reasonably determines that the amounts generally maintained in such deposit accounts are not material, (d) the security interest of the Agent and the Lenders in investment property will not be perfected by control, and (e) the security interest of the Agent and the Lenders in aircraft will not be perfected. 8.2 Guaranties.  All present and future Revolving Loans, Revolving Swing Line Loans, LC Obligations, Used Vehicle Floorplan Loans, Used Vehicle Swing Line Loans, Service Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line Loans and other Revolving Loan Obligations, Service Loaner Vehicle Floorplan Obligations and Used Vehicle Floorplan Obligations of Revolving Loan Borrower, Service Loaner Vehicle Borrower and Used Vehicle Floorplan Borrower to the Agent and the Lenders shall be guaranteed by each of the Guarantors. ARTICLE 9 CONDITIONS PRECEDENT 9.1 Initial Conditions Precedent.  The effectiveness of this Agreement and the obligation of the Lenders to make the initial Credit Extensions are subject to satisfaction of the following conditions (each, an “Initial Condition”): 9.1.1 The Agent has received the following: (a) Such fully executed original Loan Documents as the Agent or any Lender requires, including, without limitation, this Agreement; the Security Agreement, the Pledge Agreement, and any other Collateral Documents; the Guaranty signed by each Guarantor; any required LC Agreement; and each other Loan Document required by the Agent or any Lender. (b) Documentation satisfactory to the Agent to establish the due organization, valid existence and (if applicable) good standing of each Loan Party; its qualification to engage in business in each jurisdiction in which it is engaged in business or required to be so qualified; its authority to execute, deliver and perform any Loan Documents to which it is a party and the identity, authority and capacity of each Person authorized to act on its behalf, which shall, without limitation, include certified copies of articles or certificates of incorporation and amendments thereto, bylaws and amendments thereto, certificates of good standing, existence and/or qualification to engage in business, corporate resolutions, incumbency certificates, and the like. 122 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(c) A favorable opinion of acceptable independent counsel for each Loan Party covering such matters as the Agent or any Lender may reasonably request. (d) A certificate, signed by the chief financial officer of the Company, stating that on the date of the initial Credit Extension no Default or Event of Default has occurred and is continuing. (e) (i) One or more intercreditor agreements between the Agent and each Person extending floorplan financing to the Dealerships or an amendment to the existing intercreditor agreement, in form and content satisfactory to the Agent and the Required Lenders, and (ii) any other subordination or intercreditor agreements or amendments to existing intercreditor agreements required by the Agent or the Required Lenders, all in form and content satisfactory to the Agent and the Lenders. 9.1.2 The Agent shall have received copies of any Seller Agreements which it has requested, other than those disclosure of which is prohibited by the relevant manufacturer or distributor, which must be reasonably satisfactory to the Agent, and has received such evidence as it reasonably requires that all Seller Agreements which are necessary for the conduct of the Company’s and each Dealership’s business, are in full force and effect. 9.1.3 The Agent shall have a valid and perfected security interest in the Collateral (subject to the limitations found in Section 8.1.4) with a priority acceptable to the Agent and the Required Lenders and subject only to Permitted Liens and the Agent shall have received satisfactory evidence of perfection and the priority of such security interests, including without limitation such Uniform Commercial Code and other searches, termination statements, and other filings as it deems appropriate. 9.1.4 All required insurance shall be in full force and effect and the Agent shall have received such evidence thereof as it requires. 9.1.5 The representations and warranties contained in this Agreement and in each Loan Document shall be correct, accurate and complete in all material respects as of the Closing Date. 9.1.6 No Default shall have occurred and is continuing on the Closing Date or will exist after giving effect to the making of the Loans to be made on the Closing Date, the Existing Letters of Credit, and any Letters of Credit to be issued on the Closing Date. 9.1.7 All fees accrued under the Existing Loan Agreement for periods prior to the Closing Date and all interest accrued on the outstanding principal balance of the loans made under the Existing Loan Agreement as of the Closing Date shall be paid; provided that (a) interest and fees accrued under the Existing Loan Agreement as of the Closing Date in respect of the Aggregate New Vehicle Floorplan Commitment and New Vehicle Floorplan Loans shall be due and payable on the New Vehicle Monthly Payment Date immediately following the Closing Date, and (b) the Per Annum Fee shall be due and payable on the Quarterly Payment Date immediately following the Closing Date. 123 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

9.1.8 All fees and Attorney Costs payable on or prior to the Closing Date shall have been paid. 9.1.9 The Agent shall have received such additional documents, opinions, approvals, consents and information and each Loan Party shall have satisfied such additional requirements as the Agent or any Lender may reasonably require. 9.1.10 Upon the reasonable request of any Lender made at least ten days prior to the Closing Date, the Loan Parties must have provided to such Lender the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act, in each case at least five days prior to the Closing Date. 9.1.11 At least five days prior to the Closing Date, if any Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, such Borrower must deliver a Beneficial Ownership Certification in relation to such Borrower. 9.1.12 The Agent shall have received a Compliance Certificate (calculated on a Pro Forma Basis after giving effect to this Agreement), dated as of the last day of the fiscal quarter ending December 31, 2020 and signed by the Company’s chief financial officer or other officer acceptable to the Agent. 9.1.13 The Agent shall have received (a) a Used Vehicle Borrowing Base Certificate dated as of the Closing Date certifying as to the Used Vehicle Borrowing Base as of the last day of the calendar month preceding the calendar month ending prior to the Closing Date, (b) a Service Loaner Vehicle Borrowing Base Certificate dated as of the Closing Date certifying as to the Service Loaner Vehicle Borrowing Base as of the last day of the calendar month preceding the calendar month ending prior to the Closing Date and (c) a Revolving Borrowing Base Certificate, dated as of the Closing Date certifying as to the Revolving Borrowing Base as of the last day of the calendar month preceding the calendar month ending prior to the Closing Date, in each case, signed by the Company’s chief financial officer or other officer acceptable to the Agent. 9.2 Conditions Precedent to Each Credit Extension.  Except as otherwise set forth herein (including without limitation Sections 2.2.6(d), 3.2.6(d), and 4.2.6(d)), all of the following conditions must be satisfied on the date of any Credit Extension: 9.2.1 The Agent shall have received a request for the Loan or Letter of Credit as required by the provisions of this Agreement. 9.2.2 No Default shall have occurred and be continuing or will exist after giving effect to the making of such Credit Extension. 9.2.3 All representations and warranties in this Agreement and the other Loan Documents shall be true and correct in all material respects as of such date, except to the extent they relate to another date, and except as previously disclosed to and accepted by the Agent in writing. 124 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

9.2.4 All Initial Conditions have been satisfied at the time of the initial Credit Extension. 9.2.5 The Agent, and/or any Lender, as applicable, shall have received such documents and information as they reasonably require. 9.2.6 All conditions in any other provision of this Agreement or any other Loan Document have been satisfied as of the time required. 9.2.7 With respect to each New Vehicle Loan Advance, the Agent shall have received the following: (a) For New Vehicle Loan Advances made under a Payment Commitment.  Manufacturer or distributor invoice, cash draft, electronic record, depository transfer check, sight draft, or such other documents as specified in the applicable Payment Commitment, identifying the Vehicles delivered or to be delivered to a New Vehicle Floorplan Dealership. (b) For New Vehicle Loan Advances made to finance Fleet Vehicles.  If required by the Agent, a copy of the applicable Fleet Sale Contract and/or an agreement from the purchaser of the Fleet Vehicles agreeing to pay the purchase price due to a New Vehicle Floorplan Dealership directly to the Agent. (c) For New Vehicle Loan Advances made to finance New Vehicles which are obtained from another dealer.  Copy of manufacturer or distributor invoice (or substitute acceptable to the Agent) and bill of sale duly executed by the parties to the transaction or other documentation acceptable to the Agent evidencing the acquisition cost to a New Vehicle Floorplan Dealership of such Vehicles. (d) For New Vehicle Loan Advances made to finance any other New Vehicles.  Manufacturer or distributor invoice or other documents acceptable to the Agent identifying the Vehicles purchased by a New Vehicle Floorplan Dealership. 9.3 Conditions Precedent to Initial Advance to any New Vehicle Floorplan Borrower.  In addition to the requirements in Section 9.1 and 9.2, no New Vehicle Loans shall be made to finance New Vehicles owned by any Dealership (including the initial New Vehicle Floorplan Borrowers) and no Dealership shall become a New Vehicle Floorplan Borrower unless all of the following conditions have been satisfied with respect to such Dealership: 9.3.1 All indebtedness and obligations of the Dealership (or if Required Lenders, in their sole discretion, consent in writing, a franchise or location of a Dealership) to any lender (“Former Lender”) for flooring lines of credit (other than permitted Other Service Loaner Floorplan Financing) have been repaid or will be repaid with the proceeds of the first New Vehicle Loan Advance to be made to finance New Vehicles owned by such Dealership and all commitments of any Former Lender to extend floorplan financing to such Dealership (or if Required Lenders, in their sole discretion, consent in writing, the applicable franchise or location of such Dealership) have been terminated. 125 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

9.3.2 All Liens of any Former Lender in the Collateral (other than Permitted Liens) have been terminated, or at the Agent’s sole discretion, satisfactory arrangements have been made for termination of such Liens, or if such Liens are permitted hereunder, any subordination or intercreditor agreement or amendment to any such agreement required by the Agent has been executed and delivered to the Agent. 9.3.3 The Agent shall have conducted such audits of the Collateral of the New Vehicle Floorplan Dealership as it requires, the results of which are satisfactory to the Agent. 9.3.4 The Agent shall have received such Repurchase Agreements relating to the New Vehicle Floorplan Dealership as it requires. 9.3.5 All conditions in Section 9.1.2, 9.1.3, and 9.1.4 shall be satisfied for such Dealership as of the date it becomes a New Vehicle Floorplan Dealership, and with respect to the Dealership, (i) if it is a Subsidiary as of the date of this Agreement or has previously executed a Guarantor Joinder Agreement, it shall have executed an Existing Subsidiary Joinder Agreement (ii) if it is a new Acquisition Subsidiary, all conditions in Section 13.13 shall have been satisfied, or (iii) if it is a new Subsidiary which is not an Acquisition Subsidiary, all conditions in Section 12.17 shall have been satisfied. 9.3.6 Each Loan Party has satisfied such other conditions as are reasonably required by the Agent. 9.4 Real Property Conditions.  In addition to the other requirements set forth herein, no Real Property shall be included or remain in the Revolving Loan Borrowing Base as Eligible Real Property unless all of the following conditions have been satisfied and continue to be satisfied with respect to such Real Property: 9.4.1 A Real Estate Subsidiary or Dealership shall hold fee simple title to the Real Property free and clear of all Liens and encumbrances of any nature or kind whatsoever except any easements, rights of way, zoning restrictions and other minor encumbrances and exceptions which are acceptable to the Agent in its sole discretion and which shall be the only encumbrances on the Real Property, and such Real Estate Subsidiary or Dealership shall not have entered into any agreement prohibiting or limiting its ability to grant a Lien on such Real Property to the Agent and the Lenders; provided, that, except for (x) tax liens securing obligations that are not yet due and payable or that are being contested in good faith by appropriate proceedings, or (y) mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business or amounts that are not delinquent and which are not, individually or in the aggregate, material to the business of the Borrower, any Lien securing a monetary obligation shall not be considered a minor encumbrance. 9.4.2 Prior to inclusion of theThe Real Property inshall be identified on a monthly basis in a schedule attached to the Revolving Loan Borrowing Base, the Agent shall receive the following, each in form and substance satisfactory to the Agent and the Agent shall deliver to Lenders: (a) an acceptable Appraisal of the Real Property; and (b) a title report regarding the Real Property from a title insurance company acceptable to the Agent, showing the status of title to the Real Property, and all liens, encumbrances, easements and other matters 126 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

affecting the Real Property (“Title Report”) Certificate setting forth the owner name, address, valuation, valuation type (appraisal or tax assessed value) and date of valuation, and the Revolving Loan Borrowing Base Certificate shall set forth a certification by the Company that the information on such schedule is accurate and complete in all material respects and that the Real Property identified on the Schedule is Eligible Real Property. 9.4.3 If any Real Property remainscan remain in the Revolving Loan Borrowing Base for one year or moreindefinitely.  After the occurrence of an Event of Default, the AgentCompany shall receivedeliver to the followingAgent, promptly after the Agent’s request, the following with respect to Real Property that is included in the Revolving Loan Borrowing Base, each in form and substance satisfactory to the Agent, on an annual basis (or, if required by the Agent, more frequently following the occurrence of an Event of Default): (a) an initial Phase I environmental site assessment report and such other environmental audits, assessments, studies and reports as the Agent requires, prepared by a geotechnical engineer or other qualified Person acceptable to the Agent (“Environmental Reports”) and thereafter such new or updated Environmental Reports as the Agent requires, (b) such new or updated appraisals, evaluations or reports as the Agent requires to determine the Value of thesuch Real Property, and (c) such Title Reportstitle reports with respect to such Real Property as the Agent requires and (d) flood hazard certifications and, if applicable, evidence of flood insurance coverage. 9.4.4 In addition to any other insurance required hereunder, all insurance covering the Real Property which is reasonably required by the Agent shall be in full force and effect and the Agent shall receive from time to time such evidence thereof as it requires. 9.4.5 The Real Property and improvements thereon shall be in good condition, and no part of the Real Property and improvements shall have been damaged by fire or other casualty or have been the subject of any eminent domain or condemnation proceedings. 9.4.6 There are no circumstances affecting the Real Property, including without limitation any requirement of Applicable Law of the jurisdiction in which it is located which, in the opinion of the Agent or its counsel, may materially affect the value of the Real Property. 9.4.7 The Agent shall have received such additional documents and information and each Loan Party shall have satisfied such additional requirements as the Agent reasonably requires, with respect to the Real Property. 9.4.8 The Revolving Loan Borrower shall pay all costs and expenses incurred by the Agent in connection with the Real Property, including without limitation all appraisal and appraisal review fees, costs of environmental audits and inspections, and fees of the Agent’s counsel. ARTICLE 10 REPRESENTATIONS AND WARRANTIES Except as set forth in the Disclosure Schedule, each Loan Party hereby represents and warrants to and agrees with the Agent and the Lenders: 127 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

10.1 Existence and Standing.  Each Loan Party (a) is a corporation, partnership or limited liability company (i) duly and properly incorporated, organized or formed, as the case may be, validly existing and in good standing (to the extent such concept applies to such entity) or current status, in its jurisdiction of incorporation or organization and (ii) duly qualified and in good standing (to the extent such concept applies to such entity) or current status, in each other jurisdiction where the conduct of its business or the ownership of its properties requires such qualification, and (b) has full power, authority and legal right to carry on its business as presently conducted, and to own and operate its properties and assets; except in each case referred to in clause (a)(ii) or (b), to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect. 10.2 Authorization and Validity.  Each Loan Party has the power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder.  The execution, delivery, and performance of the Loan Documents by each Loan Party have been duly authorized by proper corporate, limited liability company partnership or other entity proceedings.  This Agreement constitutes, and each other Loan Document to which any Loan Party is a party when executed and delivered to the Agent will constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent transfer and other similar laws affecting creditors’ rights generally. 10.3 Conflict; Government Consent.  Neither the execution and delivery by any Loan Party of the Loan Documents to which it is a party, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof will violate (a) any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on any Loan Party or (b) any Loan Party’s articles or certificate of incorporation, partnership agreement, certificate of limited partnership, articles or certificate of formation or organization, by-laws, or operating or other management agreement, as the case may be, or (c) the provisions of any loan, loan agreement, indenture, instrument or agreement to which any Loan Party is a party or is subject, or by which it, or its property, is bound, or conflict with or constitute a default thereunder, or result in, or require, the creation or imposition of any Lien in, of or on the property of any Loan Party pursuant to the terms of any such indenture, instrument or agreement, except, with respect to this clause (c), as could not reasonably be expected to have a Material Adverse Effect. No Governmental Approval of any Governmental Body is required for the due execution, delivery and performance of the Loan Documents except such as have been obtained and are in full force and effect. 10.4 Financial Statements.  The financial statements that have heretofore been delivered to the Agent or any Lender, and all schedules and notes included in such financial statements, present fairly (a) the financial position of the Company and its Subsidiaries as of the date of such statements and (b) the results of its operations for the periods covered thereby; and with respect to the consolidated financial statements of the Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries), there are not any material liabilities that should have been reflected in the financial statements or the notes thereto under GAAP, contingent or otherwise, including liabilities for taxes or any unusual forward or long-term commitments, that are not disclosed or reserved against in the statements referred to above or in the notes thereto or that are not disclosed herein.  The consolidated financial 128 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

statements of the Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries) have been prepared in accordance with GAAP, except, as to interim financial statements, for the absence of footnotes and subject to year-end adjustments. 10.5 Material Adverse Effect.  Since the date of the most recent audited financial statements delivered to the Agent, no event or circumstance has occurred which has had or which could reasonably be expected to have, a Material Adverse Effect. 10.6 Taxes.  Each Loan Party has filed all federal, state, local, and other tax returns which are required to be filed and has paid all taxes due pursuant to said returns or pursuant to any assessment received by any Loan Party, except such taxes, if any, as are being contested in good faith and by proper proceedings and as to which adequate reserves have been provided in accordance with GAAP and as to which no Lien exists. 10.7 Litigation.  There is no litigation, arbitration, governmental investigation, proceeding or inquiry pending against any Loan Party or, to the knowledge of any of their officers, threatened against or affecting any Loan Party which (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated thereby, which seeks to prevent, enjoin or delay the making of any Credit Extension, or (b) if determined adversely, could reasonably be expected to have a Material Adverse Effect. 10.8 Subsidiaries and Affiliates.  Set forth in the Disclosure Schedule is a complete and accurate list as of the Closing Date of the Company and its Subsidiaries and Affiliates (including a complete and accurate list of each Subsidiary that has been designated as a Silo Subsidiary as of the Closing Date) excluding, as to Affiliates, (a) persons included in clause (c) of the definition of Affiliate, and (b) Persons holding 5% or more of the Company’s Class A Common Stock who have filed required reports under Sections 13(d), 13(g) or 16 of the Securities Exchange Act of 1934, as amended, or are not required to file such reports, showing the jurisdiction of incorporation of each and showing the percentage of the Company’s ownership of the outstanding stock of each Subsidiary and Affiliate.  All of the outstanding capital stock or other Equity Interests of each such Subsidiary that is owned, directly or indirectly, by the Company has been validly issued, is fully paid and nonassessable and is free and clear of all Liens other than Liens securing the Obligations. 10.9 ERISA.  With respect to each Plan, each Loan Party and all ERISA Affiliates have paid all required minimum contributions and installments on or before the due dates provided under Section 430(j) of the Code and could not reasonably be subject to a lien under Section 430(k) of the Code or Title IV of ERISA.  Neither any Loan Party nor any ERISA Affiliate has filed, pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, an application for a waiver of the minimum funding standard.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. 10.10 Accuracy of Information. 129 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

10.10.1      No report, financial statement, certificate or other written information furnished by or on behalf of any Loan Party (other than projected financial information, pro forma financial information and information of a general economic or industry nature) to the Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by other written information so furnished), when taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein (when taken as a whole), in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected and pro forma financial information, each Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time of preparation and delivery; it being understood that such projections may vary from actual results and that such variances may be material. 10.10.2      As of the Closing Date, the information included in any Beneficial Ownership Certification is true and correct in all respects. 10.11 Regulation U.  Margin stock (as defined in Regulation U) constitutes less than 25% of the value of those assets which are subject to any limitation on sale, pledge, or other restriction hereunder. 10.12 Material Agreements.  The Company and each other Loan Party which is a Dealership is in compliance with all Seller Agreements except as could not reasonably be expected to have a Material Adverse Effect.  No Loan Party is a party to any agreement or instrument or subject to any charter or other corporate, partnership, or limited liability company or other restriction which could reasonably be expected to have a Material Adverse Effect.  No Loan Party is in breach of or default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (a) any agreement to which it is a party, or which is binding on it or any of its assets, which default or default could reasonably be expected to have a Material Adverse Effect or (b) any agreement or instrument evidencing or governing Indebtedness in excess of Indebtedness of the Loan Parties described in Section 14.1.3. 10.13 Compliance with Laws.  Each Loan Party is in compliance with all Applicable Laws, including without limitation all environmental permits, Environmental Laws, Access Laws, and the FLSA, except as could not reasonably be expected to have a Material Adverse Effect. 10.14 Ownership of Properties.  Each Loan Party is the true and lawful owner of and has good title to, or valid leasehold interests in, all properties and assets material to its business, real and personal, intangible and tangible which it owns or leases, free of any liens and encumbrances, except Permitted Liens. 10.15 Plan Assets; Prohibited Transactions.  No Loan Party is an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA, of an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975 of the Code), and neither the 130 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

execution of this Agreement nor the making of Credit Extensions hereunder gives rise to a Prohibited Transaction. 10.16 Trademarks; Patents, Etc. Each Loan Party possesses or has the right to use all licenses, permits, franchises, patents, copyrights, trademarks, trade names, servicemarks, or rights thereto, material to the conduct of its business substantially as now conducted and as presently proposed to be conducted and none of the Loan Parties are in material violation of any valid rights of others with respect to any of the foregoing. 10.17 Burdensome Restrictions.  No Loan Party is a party to or otherwise bound by any indenture, loan or credit agreement or any lease or other agreement or instrument or subject to any charter, corporate, limited liability company or partnership or other restriction which could reasonably be expected to have a Material Adverse Effect. 10.18 [Reserved]. 10.19 Investment Company Act, Etc. No Loan Party, Person Controlling any Loan Party, or Subsidiary is an “Investment Company” within the meaning of the Investment Company Act of 1940.  No Loan Party is subject to regulation under the Federal Power Act, any state public utilities code, or any other federal or state statute or regulation limiting its ability to incur indebtedness. 10.20 Solvency.  Each Loan Party is Solvent and, after the execution and delivery of the Loan Documents and the consummation of the transactions contemplated thereby, including the making of each Credit Extension and the use of the proceeds thereof, will be Solvent. 10.21 Franchise Agreements; Material Business Relationships.  As of the Closing Date, neither the Company nor any of its Subsidiaries is a party to any dealer franchise agreement, dealer agreement, dealer sales and service agreement or similar agreement (each, a “Franchise Agreement”) other than those specifically listed in the Disclosure Schedule, which schedule shows the applicable manufacturer or distributor and the Company or Subsidiary, as the case may be, that is a party to each such agreement, the date such agreement was entered into and the expiration date of such agreement.  Except as could not reasonably be expected to result in a Material Adverse Effect: (a) each of such Franchise Agreements is currently in full force and effect; (b) neither the Company nor any Subsidiary has received any notice of termination with respect to any such agreement; and (c) except as disclosed on the Disclosure Schedule, neither the Company nor any Subsidiary is aware of any event that with notice, lapse of time or both would allow any manufacturer or distributor that is a party of any Franchise Agreement to terminate any such agreement.  There exists no actual or threatened termination, cancellation or limitation of, or any modification or change in, the business relationship between the Company or any of its Subsidiaries and any customer or any group of customers or with any manufacturer or distributor that, in any case, could reasonably be expected to have a Material Adverse Effect. 10.22 Security Interests.  The Liens created or to be created in favor of the Agent and the Lenders under the Collateral Documents do and will at all times on and after the Closing Date, constitute perfected security interests (subject to Section 8.1.4), subject only to the 131 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Permitted Liens, in the Collateral as security for the Obligations specified in the Collateral Documents. 10.23 Continuing Representations and Warranties.  Each request for a Credit Extension shall be deemed to be each Borrower’s representation and warranty that (a) such Credit Extension may be made without exceeding the applicable maximum amount determined in accordance with the provisions of this Agreement, (b) no Default has occurred, or will exist after giving effect to the making of such Credit Extension, and (c) all representations and warranties set forth in this Agreement, the Collateral Documents and the other Loan Documents are true, accurate and complete in all material respects as of the date of such request with the same effect as if made on each date, except as previously disclosed to and accepted by the Agent in writing, and except for representations and warranties which specifically refer only to another date. 10.24 Anti-Corruption Laws; Sanctions.  The Borrowers, their Subsidiaries and their respective officers and employees, and to the knowledge of the Borrowers, their directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.  Each Borrower has implemented and maintains in effect for itself and its Subsidiaries policies and procedures to ensure compliance by each Borrower, its Subsidiaries, and their respective officers, employees, directors, and agents with Anti-Corruption Laws and applicable Sanctions.  None of the Borrowers, any of their Subsidiaries or any director, officer, employee, agent, or affiliate of such Borrower or any of its Subsidiaries is an individual or entity that is, or is 50% or more owned (individually or in the aggregate, directly or indirectly) or controlled by individuals or entities (including any agency, political subdivision or instrumentality of any government) that are (i) the target of any Sanctions or (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions (currently Crimea, Cuba, Iran, North Korea, Sudan and Syria). 10.25 EEAAffected Financial Institution.  No Loan Party is an EEAAffected Financial Institution. ARTICLE 11 FINANCIAL COVENANTS AND INFORMATION During the term of this Agreement and until termination of the availability of Credit Extensions and payment and performance in full of all Obligations and Guarantor Obligations of each Loan Party under the Loan Documents, each Borrower agrees that, unless Required Lenders shall otherwise consent in writing: 11.1 Financial Covenants. 11.1.1 [Reserved]. 11.1.2 Fixed Charge Coverage Ratio.  The Fixed Charge Coverage Ratio for the Company and its Subsidiaries, on a consolidated basis, as of the last day of any fiscal quarter, for the period of four consecutive fiscal quarters ending on such date (each, a “Measurement Period”), shall not be less than 1.20 to 1.0. 132 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

As used herein, “EBITDAR” means, for any Person, for any time period, (a) such Person’s net income (or loss) for such time period (adjusted as set forth in the immediately following sentence), plus (b) without duplication, the amounts which, in determining net income or loss, have been deducted for (i) interest expense, (ii) income tax expense, (iii) depreciation, amortization, goodwill impairment charges, stock-based compensation charges and other non-cash charges approved by Required Lenders (less non-cash gains) and (iv) rental or lease expense.  For purposes of clause (a) of this paragraph, net income or loss (A) shall exclude (1) extraordinary gains or losses, and (2) Excluded Items, and (B) shall include net income or loss from discontinued operations. “Excluded Items” means gain or loss from (a) the sale, sale and leaseback or financing of real estate, or (b) the sale of all or substantially all of the Equity Interests or assets of (i) a Dealership or other Subsidiary, (ii) a Dealership location, or (iii) any business unit or franchise of a Dealership or other Subsidiary or a Dealership location. “Fixed Charge Coverage Ratio” means, as of the last day of any fiscal quarter, the ratio for the Measurement Period ending on such date of (a) (i) EBITDAR, minus (ii) dividends and other distributions in respect of Equity Interests and amounts expended to repurchase Equity Interests from a Person that is not a Loan Party, minus (iii) income tax expense to the extent paid in cash, minus (iv) an allowance for maintenance capital expenditures in an amount equal to $85,000 for each Dealership location, plus (v) if any Permitted Acquisition has occurred during any Measurement Period, Pro Forma EBITDAR minus rental or lease expense attributable to any new Acquisition Subsidiary or business acquired in connection with such Permitted Acquisition, as applicable, calculated as if the Permitted Acquisition had occurred on the first day of such Measurement Period (it being understood and agreed that Pro Forma EBITDAR minus rental or lease expense may not be included in this calculation to the extent that it results in an annualized increase of more than 10% in the Company’s consolidated EBITDAR minus rental or lease expense prior to such adjustment, unless the Company provides to the Agent and the Required Lenders the supporting calculations for such adjustment and such other information as they may reasonably request to determine the accuracy of such calculations); to (b) the sum for the applicable Measurement Period of (i) cash interest, plus (ii) required principal payments on Indebtedness plus (iii) rental or lease expense. 11.1.3 Leverage Ratio.  The Leverage Ratio for the Company and its Subsidiaries on a consolidated basis, as of the last day of any fiscal quarter, shall not be greater than 5.75 to 1.0. As used herein: “Leverage Ratio” means, as of the last day of any fiscal quarter, the ratio for the Company and its Subsidiaries on a consolidated basis of: (a) (i) the then outstanding principal balance of all Funded Debt (minus the sum of (A) unrestricted cash and cash equivalents plus (B) any amounts held in the PR Accounts plus (C) any amounts held in accounts established by Dual Subsidiaries or Silo Subsidiaries as an offset to floorplan notes payable (or interest thereon); provided that the aggregate reduction for all of the foregoing clauses (A) through (C) shall not exceed 133 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

$200,000,000), minus (ii) the sum of the then outstanding principal balance of the New Vehicle Floorplan Loans, New Vehicle Swing Line Loans, Used Vehicle Floorplan Loans, Used Vehicle Swing Line Loans, Service Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line Loans, principal amount of any Other Service Loaner Floorplan Financing, Funded Debt permitted under subsection (o) of Section 13.10 (but only to the extent constituting floor plan financing), Funded Debt permitted under subsection (p) of Section 13.10 (but only to the extent constituting floor plan financing), Funded Debt permitted under subsection (r) of Section 13.10 (but only to the extent not guaranteed by the Company), and Funded Debt permitted under subsection (s) of Section 13.10 and, without duplication, Funded Debt permitted under subsection (f) of Section 13.10 (but only to the extent the underlying indebtedness that is guaranteed constitutes floor plan financing), plus (iii) six times rental or lease expense for the Measurement Period ending on such date; to (b) (i) Pro Forma EBITDAR for the Measurement Period ending on such date (it being understood and agreed that Pro Forma EBITDAR minus rental or lease expense may not be included in this calculation to the extent that it results in an annualized increase of more than 10% in the Company’s consolidated EBITDAR minus rental or lease expense prior to such adjustment, unless the Company provides to the Agent and the Required Lenders the supporting calculations for such adjustment and such other information as they may reasonably request to determine the accuracy of such calculations), minus (ii) interest expense with respect to the New Vehicle Floorplan Loans, New Vehicle Swing Line Loans, Used Vehicle Floorplan Loans, Used Vehicle Swing Line Loans, Service Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line Loans and Funded Debt permitted under subsection (o) of Section 13.10 (but only to the extent constituting floor plan financing), Funded Debt permitted under subsection (p) of Section 13.10 (but only to the extent constituting floor plan financing), Funded Debt permitted under subsection (r) of Section 13.10 (but only to the extent not guaranteed by the Company), and Funded Debt permitted under subsection (s) of Section 13.10, in each case for the Measurement Period ending on such date. 11.2 Financial Information.  The Company shall provide to the Agent and each Lender: 11.2.1 As soon as available and in any event within 120 days after the end of each Fiscal Year of the Company, the Form 10(k) for the Company and its Subsidiaries as filed with the Securities and Exchange Commission, including financial statements certified by independent public accountants of recognized national standing which are reasonably acceptable to the Agent (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit and without any other material qualification or exception) to the effect that such financial statements present fairly in all material respects the financial condition and results of operations of the Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries) on a consolidated basis in accordance with GAAP consistently applied. 11.2.2 As soon as available and in any event within 45 days after the end of each of the first three fiscal quarters of each Fiscal Year of the Company, the Form 10-Q for the Company and its Subsidiaries, as filed with the Securities and Exchange Commission certified by the Company’s chief financial officer or other officer acceptable to the Agent as presenting fairly in all material respects the financial condition and results of operations of the Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries) on a 134 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes. 11.2.3 Promptly following the Agent’s or any Lender’s request, the internally prepared consolidated balance sheet and statement of operations for the Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries) for such month and for the fiscal year to date, including such detail as the Agent or any Lender reasonably requires, certified by the Company’s chief financial officer or other officer acceptable to the Agent as presenting fairly in all material respects the financial condition and results of operations of the Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries) on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes. 11.2.4 Within 10 days following delivery thereof, copies of all financial statements, proxy statements, and all material written reports and information provided to its shareholders generally, and copies of all registration statements, regular, periodic or special reports, and other documents of Company or any Subsidiary filed with the Securities and Exchange Commission (or any successor agency), any other national securities exchange, or any other governmental securities regulatory authority having jurisdiction over Company or its Subsidiaries. 11.2.5 With the financial statements required by Sections 11.2.1 and 11.2.2, and in any event within the time required for delivery of such financial statements by Sections 11.2.1 and 11.2.2, a Compliance Certificate signed by the Company’s chief financial officer or other officer acceptable to the Agent. 11.2.6 Within 30 days after the end of each month (or with respect to each month ending December 31, within 45 days after the end of such month) (or more frequently if required by the Agent or Required Lenders during the existence of a Default), a Used Vehicle Borrowing Base Certificate, prepared as of the last day of such month, showing the calculation of the Used Vehicle Borrowing Base. 11.2.7 Within 30 days after the end of each month (or with respect to each month ending December 31, within 45 days after the end of such month) (or more frequently if required by the Agent or Required Lenders during the existence of a Default), a Revolving Loan Borrowing Base Certificate, prepared as of the last day of such month, showing the calculation of the Revolving Loan Borrowing Base. 11.2.8 Within 30 days after the end of each month (or with respect to each month ending December 31, within 45 days after the end of such month) (or more frequently if required by the Agent or Required Lenders during the existence of a Default), a Service Loaner Vehicle Borrowing Base Certificate, prepared as of the last day of such month, showing the calculation of the Service Loaner Vehicle Borrowing Base. 11.2.9 Promptly following the Agent’s or any Lender’s request, a projected consolidated balance sheet for the Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealership Subsidiaries) and related statements of income and cash flows for 135 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

the time period requested by the Agent or any Lender, signed by the Company’s chief financial officer or other officer acceptable to the Agent, acknowledging his or her review of such projections. 11.2.10 Promptly following the Agent’s or any Lender’s request, copies of each financial statement delivered to a manufacturer or distributor by any Dealership, as required by its agreement with the manufacturer or distributor. 11.2.11 Promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of any Loan Party, or compliance with the terms of this Agreement, as the Agent or any Lender may reasonably request, which may include without limitation a monthly statement of cash flows. If any information which is required to be furnished to the Lenders under this Section is required by law or regulation to be filed by any Loan Party with a government body on an earlier date, then the information required hereunder shall be furnished to the Lenders at such earlier date. Any financial statement required to be furnished pursuant to Section 11.2.1, 11.2.2, or 11.2.4 shall be deemed to have been furnished on the date on which the Lenders receive notice that the Company has filed such financial statement with the Securities and Exchange Commission and is available on the EDGAR website on the Internet at www.sec.gov or any successor government website that is freely and readily available to the Agent and the Lenders without charge; provided that the Company shall give notice of any such filing to the Agent (who shall then give notice of any such filing to the Lenders).  Notwithstanding the foregoing, the Company shall deliver paper copies of any such financial statement to the Agent if the Agent so requests, until written notice to cease delivering such paper copies is given by the Agent. ARTICLE 12 AFFIRMATIVE COVENANTS During the term of this Agreement and until termination of the availability of Credit Extensions and payment and performance in full of all Obligations and Guarantor Obligations of each Loan Party under the Loan Documents, each Loan Party agrees that, unless Required Lenders shall otherwise consent in writing: 12.1 Maintenance of Existence and Permits.  Except as permitted by Section 13.1, each Borrower shall, and the Company shall cause each Subsidiary to, preserve and maintain its corporate, limited liability company, partnership, trust or other existence and good standing or current status in the jurisdiction of its incorporation or organization and qualify and remain qualified, as a foreign corporation, limited liability company or other entity in each jurisdiction in which such qualification is required (except to the extent such failure to qualify in a foreign jurisdiction could not reasonably be expected to have a Material Adverse Effect), and to maintain all patents, trademarks, copyrights, trade names, intellectual property, franchises, licenses, and permits to the extent material and necessary for the conduct of its business and the transactions contemplated by the Loan Documents. 136 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

12.2 ERISA.  Each Borrower shall maintain, and the Company shall cause each Subsidiary to maintain, each Plan in compliance with all material applicable requirements of ERISA and of the Code and with all applicable rulings and regulations issued under the provisions of ERISA and of the Code and will not and not permit any of the ERISA Affiliates to (a) engage in any transaction in connection with which any Loan Party or any of the ERISA Affiliates would be subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code, (b) fail to make full payment when due of all amounts which, under the provisions of any Plan, any Loan Party or any ERISA Affiliate is required to pay as contributions thereto, or (c) fail to make any payments to any Multiemployer Plan that any Loan Party or any of the ERISA Affiliates may be required to make under any agreement relating to such Multiemployer Plan or any law pertaining thereto. 12.3 Inspection.  Each Borrower shall, and the Company shall cause each Subsidiary to, permit representatives of the Agent and the Lenders to visit and inspect any of its properties, audit and inspect any of the Collateral and examine any of its books and records (and make copies at its expense) wherever located, including, but not limited to, all manufacturers’ statements of origin, titles, demonstrator agreements, factory invoices, purchase orders, deal jackets and papers included therein, buy-back agreements and other agreements with manufacturers, distributors or other sellers of Vehicles (excluding agreements to the extent that disclosure is specifically prohibited by the terms of such agreements), and all other instruments, documents and records at any reasonable time and as often as the Agent or any Lender may reasonably desire; and each Borrower shall and the Company shall cause each other Loan Party to, assist the Agent and the Lenders in so doing. 12.4 Collateral Audits.  Each Borrower will, and the Company will cause each Subsidiary to, permit the Agent by or through any of the Agent’s representatives, third party inspectors, independent contractors, attorneys or accountants, at such intervals as may be required by the Agent in its sole discretion, to conduct audits of and to verify, the Collateral. Audit reports for any month shall be provided by the Agent to the Lenders in the following month.  The New Vehicle Floorplan Borrowers shall pay to the Agent, for the Agent’s sole account, such fees as are agreed to between them for collateral audits relating to New Vehicles owned by the New Vehicle Floorplan Dealerships; provided, that, (a) prior to the occurrence of an Event of Default, (i) the New Vehicle Floorplan Borrowers shall not be required to pay such fee for more than three New Vehicle collateral audits in any period of twelve consecutive months, if the Leverage Ratio is equal to or less than 2.50 to 1.0 as of the end of each fiscal quarter during such time period, and (ii) the New Vehicle Floorplan Borrowers shall not be required to pay such fee for more than four New Vehicle collateral audits in any period of twelve consecutive months, if the Leverage Ratio is greater than 2.50 to 1.0 as of the end of any fiscal quarter during such time period; and (b) following the occurrence of an Event of Default, the New Vehicle Floorplan Borrowers shall pay the costs of all New Vehicle collateral audits required by the Agent.  The Company shall pay the cost of all collateral audits other than collateral audits relating to New Vehicles. 12.5 Books and Records.  Each Borrower shall, and the Company shall cause each Subsidiary to, keep adequate records and books of account in which complete entries will be made reflecting all material financial transactions and matters involving the assets and business of the Company or such Subsidiary, as the case may be, including, books and records specifying 137 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

the year, make, model, cost, price, location and vehicle identification number of each New Vehicle owned by the Company or such Subsidiary.  The Company will prepare all financial statements, computations and information required hereunder for the Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealership Subsidiaries) consolidated in accordance with GAAP. 12.6 Maintenance of Properties.  Each Borrower shall, and the Company shall cause each Subsidiary to, maintain, repair, and preserve all of each Loan Party’s properties (whether owned, leased or subleased) that are used or useful in the conduct of the business of the Loan Parties, or where any Collateral is located (“Properties”) in good working order and condition, ordinary wear and tear excepted, and will from time to time make or cause to be made all necessary and proper replacements, repairs, renewals, and improvements so that the efficiency and value of its Properties and facilities shall not be materially impaired. 12.7 Taxes and Other Obligations.  Each Borrower shall, and the Company shall cause each Subsidiary to, timely file complete and correct United States federal and applicable foreign, state and local tax returns required by law and to pay and discharge when due all indebtedness, taxes, and other obligations for which it is liable or to which its income or property is subject and all claims for labor and materials or supplies which, if unpaid, might become by law a lien upon its assets, unless it is contesting the indebtedness, taxes, or other obligations in good faith and provision has been made for the payment thereof through setting aside on its books appropriate reserves with respect thereto in accordance with GAAP. 12.8 Insurance. 12.8.1 Maintenance of Insurance.  Each Borrower shall, and the Company shall cause each Subsidiary to, maintain policies of insurance upon all of the insurable Collateral, and on its properties and operations, carried with companies reasonably acceptable to the Agent, in such form and amounts and covering such risks as the Agent may reasonably require and as are required by Applicable Law.  Without limiting the foregoing, each Borrower shall, and the Company shall cause each Subsidiary to, maintain with financially sound and reputable independent insurers, insurance with respect to its properties and business against loss or damage of such types and in such amounts as are customarily carried under similar circumstances by Persons engaged in the same or similar businesses. 12.8.2 Form of Policies.  All policies shall be written in form, amounts, coverages and basis reasonably acceptable to the Agent and shall be issued by a company or companies reasonably acceptable to the Agent.  The Agent shall be designated as loss payee with a “Lender’s Loss Payable” endorsement on casualty policies covering the Collateral and as an additional insured on liability policies.  All policies shall include a provision that such policies will not be cancelled or materially amended, which term shall include any reduction in the scope or limits of coverage, without at least thirty (30) days prior written notice to the Agent.  Each policy also shall include an endorsement providing that coverage in favor of the Agent will not be impaired in any way by any act, omission or default of any Loan Party. 12.8.3 Delivery of Certificates.  Each Borrower shall, and the Company shall cause each Subsidiary to, furnish to the Agent a certificate of insurance in a form reasonably 138 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

acceptable to the Agent evidencing such insurance coverage.  At least thirty (30) days prior to the expiration date of each policy, the Agent shall be provided with a renewal certificate, together with evidence that the renewal premium has been paid. 12.9 Compliance with Laws; Performance Under Agreements.  Each Borrower shall, and shall cause each Subsidiary to, (i) comply with Applicable Laws, including, without limitation, all applicable Environmental Laws, Anti-Corruption Laws and applicable Sanctions, except as could not reasonably be expected to have a Material Adverse Effect and (ii) perform its obligations under agreements to which it is a party except to the extent the failure to perform could not reasonably be expected to have a Material Adverse Effect. Each Borrower shall maintain in effect and enforce policies and procedures designed to ensure compliance by such Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.  The Borrowers shall not use or allow any tenants or subtenants to use, or permit any Subsidiary to use or allow any tenants or subtenants to use, its Property for any business activity that violates in any material respect any federal or state law or that supports a business that violates in any material respect any federal or state law. 12.10 Agreements with Sellers.  Each Borrower shall, and the Company shall cause each Subsidiary to, comply with Franchise Agreements, other Seller Agreements, and all other agreements between such Person and any manufacturer or distributor of New Vehicles in all respects and shall maintain all such agreements in full force and effect, except (a) in accordance with the disposition of or other transaction involving a Dealership or Subsidiary in accordance with Section 13.1, (b) as a result of termination or cessation of business not restricted by Section 13.8, or (c) to the extent the failure to comply with this Section 12.10 could not reasonably be expected to have a Material Adverse Effect. 12.11 Repurchase Agreements.  Each New Vehicle Floorplan Borrower shall comply with all terms and conditions of any applicable Repurchase Agreement except to the extent the failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each New Vehicle Floorplan Borrower shall take any actions reasonably required by the Agent with respect to any Repurchase Agreement. 12.12 [Reserved]. 12.13 Landlord’s Consents.  Promptly following the Closing Date and from time to time thereafter, each Borrower shall, and the Company shall cause each present and future Subsidiary to, use commercially reasonable efforts to obtain and deliver to the Agent an agreement, release and consent to the security interest of the Agent and the Lenders in the Collateral, in form and substance reasonably acceptable to the Agent from any present or future owner or landlord of any real property leased by a Loan Party (other than a Silo Subsidiary) as lessee (each a “Landlord’s Consent”). 12.14 Notification.  Promptly after learning thereof, the Company will notify the Agent in writing of: 12.14.1 The occurrence of any Default, and if such Default is then continuing, will deliver to the Agent a certificate of the Company’s chief financial officer or other authorized 139 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

officer setting forth the details thereof and the action which it is taking or proposes to take with respect thereto. 12.14.2 The occurrence of any of the following that could reasonably be expected to have a Material Adverse Effect: (i) the release of any Hazardous Substances on, under, about, from, or affecting any of the Properties, any adjacent property as a result of contamination, release or activity on the Properties, or any Collateral or (ii) any other condition threatened or asserted with respect to any such property arising under any Environmental Laws. 12.14.3 The details of any lien, litigation, administrative proceeding or judgment involving $35,000,000.00 or more individually or in the aggregate threatened (in writing), instituted or completed against any Loan Party, any Collateral, or any assets of any Loan Party. 12.14.4 Any citation, order to show cause, or other legal process or order that has or could reasonably be expected to have a Material Adverse Effect, directing any Loan Party to become a party to or to appear at any proceeding or hearing by or before any Governmental Body that has granted to it any Governmental Approval, and include with such notice a copy of any such citation, order to show cause, or other legal process or order. 12.14.5 Any (a) refusal, denial, threatened denial, or failure by any Governmental Body to grant, issue, renew, or extend any material Governmental Approval; (b) proposed or actual revocation, termination, or modification (whether favorable or adverse) of any material Governmental Approval by any Governmental Body; (c) dispute or other adverse action with regard to any material Governmental Approval by any Governmental Body; (d) notice from any Governmental Body of the imposition of any material fines or penalties or forfeitures; or (e) written threats or written notice with respect to any of the foregoing or with respect to any proceeding or hearing that might result in any of the foregoing. 12.14.6 Any dispute concerning or any threatened nonrenewal or modification of any lease for real or personal property to which it is a party if such dispute or nonrenewal or modification could reasonably be expected to result in a Material Adverse Effect. 12.14.7 Any material change in the relationship between any Dealership and any Vehicle manufacturer or distributor including, without limitation, the loss or cancellation, or threatened loss or cancellation, of a franchise, or any notice of the existence of a default under any Franchise Agreement or other Seller Agreement. 12.14.8 Any other event or circumstance which has or could reasonably be expected to have a Material Adverse Effect. 12.14.9 The receipt of any material notices (including notices of default or acceleration) received from any holder or trustee of, under or with respect to its Subordinated Debt (if any) (which shall include copies of such notices). 12.14.10 With respect to a Plan, (i) any failure to pay all required minimum contributions and installments on or before the due dates provided under Section 430(j) of the 140 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Code or (ii) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard. 12.14.11 The occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in material liability. 12.15 Further Assurances.  From time to time, when requested by the Agent or any Lender, it shall, and the Company shall cause each Subsidiary to, duly execute and deliver or cause to be duly executed and delivered to the Agent such further instruments, agreements, and documents and do or cause to be done such further acts as the Agent or any Lender deems reasonably necessary to carry out more effectively the provisions and purpose of this Agreement and the other Loan Documents.  Without limiting the foregoing, each Borrower shall, and the Company shall cause each Subsidiary to, promptly correct any defect or error that may be discovered in any Loan Document or in the execution, acknowledgment or recordation thereof. Promptly upon request by the Agent, each Borrower shall, and the Company shall cause each Subsidiary to, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and reregister, any and all deeds, conveyances, mortgages, deeds of trust, trust deeds, assignments, estoppel certificates, financing statements and continuations thereof, notices of assignment, transfers, certificates, assurances and other instruments as the Agent may reasonably require from time to time in order: (a) to carry out more effectively the purposes of the Loan Documents and (b) to better assure, convey, grant, assign, transfer, preserve, protect and confirm unto the Agent the rights granted now or hereafter intended to be granted to the Agent or the Lenders under any Loan Document or under any other instrument executed in connection with any Loan Document or that any Loan Party may be or become bound to convey, mortgage or assign to the Agent in order to carry out the intention or facilitate the performance of the provisions of any Loan Document.  Each Borrower shall, and the Company shall cause each Subsidiary to, furnish to the Agent evidence satisfactory to the Agent of every such recording, filing or registration. 12.16 Deposit Accounts.  Except as consented to in writing by the Agent and Required Lenders, which consent shall not be unreasonably withheld, each Borrower shall, and the Company shall cause each Subsidiary (other than a Canadian Subsidiary, Excluded Subsidiary or Silo Subsidiary) to, maintain its primary operating deposit accounts with one or more of the Lenders.  Except as provided in Subsection (c) of Section 8.1.4, all such deposit accounts other than trust accounts shall be subject to a control agreement (in form and content reasonably satisfactory to the Agent and the Required Lenders) between any Lender having a security interest in such account, depository bank, the Agent, and the applicable Loan Parties, which control agreement shall establish a perfected priority security interest (subject only to the Permitted Liens) in favor of the Agent, for the benefit of the Lenders, in all such deposit accounts. 12.17 Joinder of New Subsidiaries and Dealerships.  Each Person that becomes a Subsidiary of the Company (other than a Canadian Subsidiary, Excluded Subsidiary or Silo Subsidiary) and that owns or operates a Dealership shall, within thirty (30) days thereof (or such longer period as determined by the Agent in its sole discretion), execute a Guarantor Joinder Agreement (or if it is to become a New Vehicle Floorplan Borrower, a Borrower Joinder Agreement) and shall execute such other documents and satisfy such requirements as the Agent 141 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

reasonably requires so that such Person becomes a Guarantor and a Loan Party and, if applicable, a New Vehicle Floorplan Borrower, and grants a security interest to the Agent for the benefit of the Lenders in the Collateral owned by such Person.  Each such Person that becomes a Subsidiary of the Company (other than a Silo Subsidiary) shall satisfy all requirements applicable to an Acquisition Subsidiary which are set forth in Section 13.13 (d), (g), (i), (j), (k) (if such Subsidiary is a Dealership), (l) and (p).  Each Person that becomes a Silo Subsidiary shall execute a Guarantor Joinder Agreement, but only to become a “Guarantor” (as defined in the Loan Agreement and Guaranty) and a Loan Party, and not to become a “Grantor” (as defined in the Security Agreement and Pledge Agreement). The Company may cause, at any time and from time to time, any Subsidiary that is a Real Estate Subsidiary to execute a Guarantor Joinder Agreement and such other documents and satisfy such requirements as the Agent reasonably requires so that such Person becomes a Guarantor and a Loan Party and grants a security interest to the Agent for the benefit of the Lenders in the Collateral owned by such Real Estate Subsidiary. In connection with each Subsidiary becoming a Borrower or a Guarantor hereunder, (a) the Agent shall promptly notify the Lenders of the proposed designation of a Subsidiary as a Borrower or Guarantor hereunder and (b) the Loan Parties shall provide to each Lender requesting the same the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act, in each case at least five days prior to such Subsidiary becoming a Borrower or a Guarantor. 12.18 Use of Proceeds.  The Borrowers will not request any Loan or Letter of Credit, and will not use, and the Borrowers will ensure that their Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Loan or Letter of Credit in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws. The Borrowers will not, directly or indirectly,  use the proceeds of the Loans or any Letter of Credit, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (ii) in any other manner that would, to any Borrower’s knowledge, result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as underwriter, advisor, investor, or otherwise). 12.19 Anti-Money Laundering Compliance. Each Borrower shall, and shall cause each Subsidiary to, provide such information and take such actions as are reasonably requested by the Agent or any Lender in order to assist the Agent and the Lenders in maintaining compliance with anti-money laundering laws and regulations. 12.20 Joinder of Additional Dual Subsidiary Lenders. To the extent not otherwise required to be delivered pursuant to Section 13.16, prior to or concurrently with the initial incurrence of Permitted Dual Subsidiary Indebtedness by any Dual Subsidiary from a Dual Subsidiary Lender, cause to be delivered to the Agent an Intercreditor Agreement, or a joinder 142 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

agreement to an existing Intercreditor Agreement, executed by each Required Intercreditor Counterparty, along with any applicable revised exhibits thereto. 12.21 Financed Entities. Notwithstanding any other provision of this Agreement or any other Loan Document, the Company and each Subsidiary thereof that is a Financed Entity shall pledge Collateral pursuant to Section 8.1 at all times that it is a Financed Entity, subject to the exceptions with respect to Dual Subsidiaries contained in Section 13.16, and shall be a Guarantor, provided if any such Person ceases to be a Financed Entity and is no longer required to be a Guarantor pursuant to the terms of this Agreement, its assets shall not be included in any of the Revolving Loan Borrowing Base, the Service Loaner Vehicle Borrowing Base or the Used Vehicle Borrowing Base. ARTICLE 13 NEGATIVE COVENANTS During the term of this Agreement and until termination of the availability of Credit Extensions and payment and performance in full of all Obligations and Guarantor Obligations of each Loan Party under the Loan Documents, each Loan Party agrees that, unless Required Lenders shall otherwise consent in writing: 13.1 Mergers, Etc. 13.1.1 (a) Each Borrower shall not, and the Company shall not permit any Subsidiary to, wind up, liquidate, dissolve or reorganize, merge into or consolidate with any other Person, permit any other Person to merge into or consolidate with it, or convey, sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or any substantial part of its assets (except, with respect to sales of less than substantially all of its assets, for sales of inventory, chattel paper and equipment in the ordinary course of business) or all or any substantial part of the stock or other Equity Interests of Subsidiaries of the Company (in each case, whether now owned or hereafter acquired), or take any action to authorize winding up, dissolution, or liquidation, except that, if at the time thereof and after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge into the Company in a transaction in which the Company is the surviving corporation, (ii) any wholly-owned Subsidiary may merge into another wholly-owned Subsidiary, (iii) any wholly-owned Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the Company or to another wholly-owned Subsidiary, (iv)  the Company or any wholly-owned Subsidiary may sell, transfer or otherwise dispose of a portion or all of the Equity Interests of any wholly-owned Subsidiary to the Company or to another wholly-owned Subsidiary and (v) the Company or any wholly-owned Subsidiary may engage in a transaction to convert its legal form of organization from one entity type to another entity type or change its jurisdiction of organization, so long as the Agent and the Lenders shall continue to have a perfected security interest in any transferred Collateral, subject to no Liens other than Permitted Liens existing on the date of the transfer. (b) If (i) any New Vehicle Floorplan Dealership is involved in a transaction described in clause (i), (ii), (iii), (iv) or (v) of Section 13.1.1(a) or in Section 13.1.2 and, as a result thereof, will cease to be a New Vehicle Floorplan Dealership, (ii) any Minority Dealer that is a New Vehicle Floorplan Borrower ceases to be a Minority Dealer Subsidiary 143 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

because a Loan Party is no longer the manager of such Minority Dealer or because the manager of the Minority Dealer has no longer delegated to a Loan Party all or a substantial portion of such manager’s power and authority under the Minority Dealer’s applicable organizational documents, (iii) any New Vehicle Floorplan Dealership ceases to own or operate any Dealership and any Eligible Real Property or (iv) any New Vehicle Floorplan Dealership will otherwise cease to be a New Vehicle Floorplan Dealership (whether as a result of becoming a Minority Dealer Affiliate, otherwise ceasing to be a Subsidiary or otherwise), the Subsidiary that is the transferor or will not survive the merger or otherwise will cease to be a New Vehicle Floorplan Dealership (“Terminating Borrower”) shall execute a Borrower Termination Agreement (or if the Dealership will also cease to be a Guarantor, a Loan Party Termination Agreement), the Dealership Loan Limit for such Dealership shall be deleted, and the Agent shall obtain any required amendment to any intercreditor agreement, the Related Principal Portion of all New Vehicle Loans made to finance New Vehicles for such Terminating Borrower shall be repaid, and all conditions in Section 9.3 shall be satisfied with respect to any transferee or surviving New Vehicle Floorplan Dealership. (c) If (i) any Subsidiary other than a New Vehicle Floorplan Dealership is involved in a transaction described in clause (i), (ii), (iii), (iv) or (v) of Section 13.1.1(a) or in Section 13.1.2 and, as a result thereof, will cease to be a Guarantor, (ii) any Subsidiary ceases to own or operate any Dealership and any Eligible Real Property or (iii) any Subsidiary otherwise ceases to be a Guarantor (whether as a result of becoming a Minority Dealer Affiliate, otherwise ceasing to be a Subsidiary or otherwise), the Subsidiary that is the transferor or will not survive the merger or otherwise will cease to be a Guarantor shall execute a Loan Party Termination Agreement and satisfy such other conditions as the Agent reasonably requires to remove such Subsidiary as a Guarantor. 13.1.2 Notwithstanding the provisions of Section 13.1.1, the Company or any Subsidiary may sell (y) any Equity Interests in any Minority Dealer or any Dealership that as a result of such sale becomes a Minority Dealer (provided such Equity Interests are sold to a Minority Dealer Partner in such Minority Dealer) and (z) all or any substantial part of the assets of, or all or any substantial part of its capital stock or Equity Interests in, any Dealership or other Subsidiary (or of any business unit or franchise of a Dealership or other Subsidiary) for not less than fair market value, if, in each case, (a)(i) after giving Pro Forma Effect to such sale (and all other sales permitted under this Section 13.1.2), the Company shall be in compliance with the requirements of Section 11.1, (ii) if the sales price (excluding real property and Vehicle inventory) for the assets or Equity Interests sold is greater than $20,000,000.00, the Company shall have delivered to the Agent a Revolving Loan Borrowing Base Certificate, Used Vehicle Floorplan Borrowing Base Certificate and Service Loaner Vehicle Borrowing Base Certificate, each calculated on a Pro Forma Basis after giving effect to such sale, (iii) no Default shall exist immediately prior to or upon giving effect to any such sale and (iv) the conditions in Section 13.1.1 are satisfied, or (b) Required Lenders have consented in writing to the sale and each Loan Party has complied with all terms and conditions of such consent. 13.1.3 Notwithstanding the provisions of this Agreement (including Sections 12.1, 13.1.1, 13.1.2, 13.8 and 13.9), any Subsidiary that no longer has assets (or that has assets (x) with an aggregate book value less than $25,000 or (y) that will be distributed solely to a Loan Party) may discontinue operations and dissolve or liquidate unless such action would constitute a 144 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Material Adverse Effect or any Default shall exist immediately prior to or upon giving effect thereto. 13.2 [Reserved]. 13.3 Liens.  Each Borrower shall not, and the Company shall not permit any Subsidiary to, grant or permit to exist a security interest in or Lien on its presently owned or hereafter acquired real or personal property except: (a) Liens in favor of the Agent for the benefit of the Lenders which secure the Obligations, Guarantor Obligations, and Permitted Swap Obligations. (b) Liens for taxes, assessments or other government charges or levies not yet due and payable or, if due and payable, if they are being contested in good faith by appropriate proceedings and for which appropriate reserves are maintained. (c) Liens imposed by law, such as mechanics’, materialmen’s, landlords’, warehousemen’s, and carriers’ Liens, and other similar Liens, securing obligations incurred in the ordinary course of business which are not past due for more than 30 days or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established. (d) Liens under workers’ compensation, unemployment insurance, Social Security, or similar legislation (excluding, however, Liens arising under ERISA) which are not past due for more than sixty (60) days or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established. (e) Liens, deposits, or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases (permitted under the terms of this Agreement), public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds, or other similar obligations arising in the ordinary course of business which are not past due for more than 30 days or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established. (f) Judgment and other similar Liens arising in connection with court proceedings, in an aggregate amount not in excess of 3% of Tangible Net Worth as of the last day of the most recently ended fiscal quarter of the Company and its Subsidiaries; provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings, and the existence thereof does not constitute a Default hereunder. (g) Easements, rights-of-way, zoning restrictions, and other similar encumbrances in existence on the date of this Agreement or which, in the aggregate, do not materially interfere with the occupation, use, and enjoyment by any Loan Party of the property or assets encumbered thereby in the normal course of its business or materially impair the value of the property subject thereto. 145 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(h) Liens on Service Loaner Vehicles of a Dealership and proceeds thereof securing Other Service Loaner Floorplan Financing permitted by Section 13.10(e), and which are, only as to liens in existence on the Closing Date, securing Indebtedness listed on the Disclosure Schedule; provided that if required by the Agent, the Other Service Loaner Floorplan Lender providing such financing has entered into an intercreditor agreement with the Agent in form and content reasonably satisfactory to the Agent and the Required Lenders. (i) Purchase money Liens hereafter created by any Loan Party to secure the purchase price of equipment acquired after the Closing Date, so long as (i) such equipment is acquired in the ordinary course of such Person’s business, (ii) such Lien attaches to such equipment no later than 10 days after the acquisition thereof; (iii) such Lien does not extend to any property other than the equipment acquired, (iv) such Lien secures only the obligation to pay the purchase price of such equipment, and (v) the Indebtedness secured is permitted by Section 13.10(j) hereof. (j) Liens in existence on the Closing Date securing Indebtedness permitted by Section 13.10 hereof (if such Indebtedness is permitted to be secured), which are listed on the Disclosure Schedule. (k) Liens securing obligations in respect of Capitalized Leases provided that such Capitalized Leases are otherwise permitted under this Agreement, and such Liens attach only to the property being leased. (l) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of setoff or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution (provided that such deposit accounts are permitted) and, if such deposit accounts are with a Lender (or with another financial institution, if required by the Agent), such liens are subordinated to the Liens in favor of the Agent and the Lenders under the Collateral Documents. (m) Liens on property (excluding Collateral) acquired after the Closing Date which are in existence at the time such property is acquired, which were not incurred in contemplation of the acquisition, and which secure Indebtedness permitted by this Agreement. (n) Liens on assets owned by any Excluded Tax Credit Investment Subsidiary or any other Subsidiary (other than Collateral and Eligible Real Property) which secure Indebtedness permitted by Section 13.10(d), and Liens on Equity Interests in Excluded Tax Credit Investment Subsidiaries (other than LCDC) granted in connection with Investments described in Section 13.6(p). (o) Liens consented to in writing by the Agent and Required Lenders. (p) Liens on Vehicles and other assets of a Silo Subsidiary securing Funded Debt permitted by Section 13.10(o), provided that such Vehicles and other assets do not constitute Collateral. 146 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(q) Liens on assets of, or Equity Interests in, Canadian Subsidiaries that are not Financed Entities and proceeds thereof securing Canadian Subsidiary Indebtedness. (r) (x) Restrictions on transfer and (y) with respect to Equity Interests in Minority Dealer Subsidiaries, call options or other buy-sell rights in favor of Minority Partners, in each case, set forth in the organizational documents of Subsidiaries. (s) Liens securing Pari Passu Funded Debt. (t) Liens  (including, without limitation, certain rights of set-off and title retention agreements) in favor of an Original Equipment Manufacturer attaching to Inventory sold to a Loan Party by such Original Equipment Manufacturer and securing amounts owing in connection with the purchase of such Inventory by such Loan Party  from such Original Equipment Manufacturer, so long as such Liens do not secure Indebtedness and such Liens arise in the ordinary course of business consistent with the Company's existing business practices, and Liens consisting of purchase options and rights of first refusal arising under any Franchise Agreement or Repurchase Agreement. (u) Liens not otherwise permitted under this Section 13.3 provided that (i) at the time of the creation or incurrence of any such Lien, no Default or Event of Default shall exist or would result from such Lien, (ii) no such Lien attaches to any Collateral, and (iii) the aggregate amount of Indebtedness secured by all such Liens shall not exceed $50,000,000 at any time. (v) Liens securing Funded Debt incurred by any DFC Subsidiary to the extent such Funded Debt is permitted by Section 13.10(r). (w) Liens securing Permitted Dual Subsidiary Indebtedness so long as each Required Intercreditor Counterparty has executed and delivered an Intercreditor Agreement, or a joinder to an existing Intercreditor Agreement, to the Agent and such Liens are subject to an Intercreditor Agreement. (x) Liens securing obligations arising in connection with credit card processing services, merchant card processing services and similar services or arrangements in the ordinary course of business. (y) Liens granted by Persons that are not Financed Entities but are parties to a Canadian Receivables or Securitization Transaction arising in connection with such Canadian Receivables or Securitization Transaction. Notwithstanding the foregoing, except for Liens in favor of the Agent, there shall not be any Liens on any of the capital stock or other Equity Interests of any Subsidiary except for (1) capital stock or Equity Interests owned, directly or indirectly, by a Person other than the Company or any Subsidiary where such ownership is otherwise permitted by this Agreement or (2) capital stock or Equity Interests of Canadian Subsidiaries that are not Financed Entities and proceeds thereof if, but only if, the Liens described in this clause (2) do not secure any obligations other than Canadian Subsidiary Indebtedness. 147 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

13.4 Restricted Payments.  Each Borrower shall not, and the Company shall not permit any Subsidiary to (a) declare or pay, or agree to declare or pay, or set aside funds for the payment, directly or indirectly of, any Restricted Payment, or (b) pay or agree to pay or set aside funds to pay any management fees or similar fees in the case of the Company, to any direct or indirect Affiliate thereof, or in the case of any other Loan Party, to any direct or indirect owner of its Equity Interests or any direct or indirect Affiliate thereof, except (c) (i) Subsidiaries of the Company may make Restricted Payments or payments of such fees to the Company or to any other Loan Party, (ii) the Company may reacquire shares from eligible participants in its stock incentive plans, as required under the terms of the plans to permit cashless exercise and tender of shares to meet withholding obligations for income tax purposes and (iii) any Subsidiary may make dividends or distributions to the holders of its Equity Interests that are not Loan Parties so long as, if any Loan Party is a holder of such Equity Interests, such Loan Party receives at least its pro rata share of such dividends or distributions. Notwithstanding the foregoing, and so long as no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto, (w) each Minority Dealer may make distributions to any of its Minority Dealer Partners, (x) the Company or any Subsidiary may acquire, from time to time, any Equity Interests in any Minority Dealer, directly or indirectly, from a Minority Dealer Partner, (y) the Company may pay dividends on its capital stock, and (z) the Company may repurchase shares of its capital stock. 13.5 Subordinated Debt.  If any Subordinated Debt is outstanding, each Borrower shall not, and the Company shall not permit any Subsidiary to (a) make any amendment or modification to the indenture, note or other agreement evidencing or governing any Subordinated Debt; (b) make any scheduled payment of the principal of or interest on any Subordinated Debt which would be prohibited by the terms of such Subordinated Debt or any related subordination agreement; (c) directly or indirectly make any prepayment on or purchase, redeem or defease any Subordinated Debt or offer to do so (whether such prepayment, purchase or redemption, or offer with respect thereto, is voluntary or mandatory); (d) take or omit to take any action if as a result of such action or omission the subordination of such Subordinated Debt, or any part thereof, to the Obligations might be terminated, impaired or adversely affected; or (e) omit to give Agent prompt notice of any notice received from any holder of Subordinated Debt, or any trustee therefor, or of any default under any agreement or instrument relating to any Subordinated Debt by reason whereof such Subordinated Debt might become or be declared to be due or payable. 13.6 Loans and Investments.  Each Borrower shall not, and the Company shall not permit any Subsidiary to (a) make or contract to make any loan or advance to any Person (other than short term trade advances in the ordinary course of business); or (b) purchase or otherwise acquire, any capital stock, obligations, or other securities of, make any capital contributions to, or otherwise invest in or acquire any interest in any Person, or participate as a partner or joint venturer with any other Person (the matters described in clause (a) and (b) are collectively, “Investments”), except: (a) Investments by the Company in any Subsidiary or Affiliate or by any Subsidiary in any of its Subsidiaries or Affiliates, in each case, which exist as of the Closing Date; 148 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(b) In the ordinary course of business, Investments by the Company in any Subsidiary or by any Subsidiary in the Company, or by any Subsidiary in any other Subsidiary, by way of capital contributions, intercompany loans, advances or guaranties, to the extent permitted by this Agreement; (c) (i) Investments made by any Canadian Subsidiary that is not a Financed Entity in any other Canadian Subsidiary and (ii) Investments made by the Company or any Subsidiary (other than a Canadian Subsidiary) provided that the aggregate amount of such Investments under this clause (c)(ii) does not exceed thirty percent (30%) of Stockholders’ Equity (measured as of the date such Investment is made based upon the most recently delivered financial statements); (d) Cash Equivalent Investments; (e) Bank deposits in the ordinary course of business; (f) Investments in securities of account debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors or otherwise in settlement of claims arising in the ordinary course of business; (g) Investments pursuant to a Permitted Acquisition; (h) Investments not otherwise permitted under this Section 13.6 provided that the aggregate amount of such Investments does not exceed $100,000,000; (i) Investments listed on the Disclosure Schedule; (j) Extensions of credit to customers made in the ordinary course of business and in connection with the sale or lease of inventory in the ordinary course of business; (k) (i) Investments (other than loans or other advances) in Minority Dealers, including the acquisition of equity ownership interests of Minority Dealers from one or more Minority Dealer Partners, and (ii) Investments not exceeding $60,000,000 in the aggregate consisting of loans or other advances to Minority Dealers or the Minority Dealer Partners in such Minority Dealers; (l) Such other Investments as are consented to by the Required Lenders in their sole discretion; (m) Extensions of credit to Persons acquiring the assets of a Dealership or another Subsidiary pursuant to a sale permitted by Section 13.1.2 (“Seller Notes”); provided, that at least 75% of consideration received from such sale (together with all other consideration received in all other such sales since the Closing Date, on a cumulative basis) is cash; (n) Investments in equity interests in Permitted New Dealerships; (o) Investments not in the ordinary course of business in equity interests in Other New Subsidiaries, provided that the aggregate of all investments in Other New 149 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Subsidiaries under this clause (o) shall not exceed $4,000,000.00 during the time period from the Closing Date to the Termination Date; (p) Investments by the Company or any Subsidiary (i) in Community Development Entities under the Federal New Markets Tax Credit Program or (ii) in any other Person formed for (and continuing to operate for) the purpose of making investments that are intended to qualify for renewable energy or other tax credits, provided that the aggregate amount of such Investments do not exceed $50,000,000.00 outstanding at any one time; (q) Investments by the Company and its Subsidiaries in Shift consisting of (a)(i) preferred equity investments, together with warrants to acquire additional equity interests and any additional equity interests acquired upon exercise of such warrants in an aggregate amount not to exceed $54,000,000, or (ii) other equity investments, loans or other extensions of credit by the Company and its Subsidiaries to Shift (and/or one or more of its subsidiaries) in an aggregate amount not to exceed $25,000,000 at any time outstanding and (b) guarantees or direct financing by the Company of the Shift Facility or the acquisition of the Shift Facility from the lenders providing such financing to Shift (each, a “Shift Investment” and collectively, the “Shift Investments”); (r) Investments by the Company and its Subsidiaries with the proceeds of any issuance of Equity Interests by such Person; and (s) (i) Investments made solely by one or more Canadian Subsidiaries that are not Financed Entities in connection with any Canadian Receivables or Securitization Transaction and (ii) Investments made solely by one or more DFC Subsidiaries. provided that (x) any Investment which when made complies with the requirements of the definition of the term “Cash Equivalent Investment” may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; (y) no Investment otherwise permitted by clause (c), (g), (h), or (k) shall be permitted to be made if, immediately before or after giving effect thereto, any Default or Event of Default exists; and (z) the Company shall not, and shall not permit any Subsidiary to, create or acquire, or make any Investment in any Subsidiary not organized under the laws of a State of the United States or a province or the federal laws of Canada. 13.7 Transactions with Affiliates.  Other than (i) service agreements with DiMar Holdings, LLC and its subsidiaries and Minority Dealer Affiliates and (ii) any agreement, contract or transaction entered into in connection with the Shift Investments, each Borrower shall not, and the Company shall not permit any Subsidiary to, enter into any transaction with any Affiliate, except a Loan Party, including without limitation, the purchase, sale, or exchange of property or the rendering of any service, except upon fair and reasonable terms no less favorable to it than those that would prevail in a comparable arm’s length transaction with a Person not an Affiliate. 13.8 Type of Business.  Each Borrower shall not, and the Company shall not permit any Subsidiary to (i) engage in any line of business different from those lines of business conducted by the Company and its Subsidiaries on the date hereof, which shall be deemed to 150 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

include motorcycle dealerships, or any business substantially related or incidental thereto or (ii) except as a result of transactions permitted by Sections 13.1, interrupt or cease to engage in, for a time deemed material by the Agent, any material portion of its business activities or operations. 13.9 Structure.  Each Borrower shall not, and the Company shall not permit any Subsidiary to, make any material change in its organizational structure or capital structure, or make any material modification in its Articles of Organization or Incorporation, Partnership Agreement, Operating Agreement, Bylaws, or other organizational documents, in each case to the extent such change or modification impairs the enforceability of any Loan Documents, impairs the ability of any Loan Party to perform its obligations under any Loan Document or would otherwise reasonably be expected to result in a Material Adverse Effect. 13.10 Indebtedness.  Each Borrower shall not, and the Company shall not permit any Subsidiary to, incur or permit to exist any Indebtedness to any Person except: (a) Indebtedness (including Contingent Obligations) incurred pursuant to this Agreement and the Loan Documents. (b) Short-term unsecured trade obligations incurred in the ordinary course of business which are outstanding not more than 90 days after the original date on which such trade obligations were created. (c) Indebtedness in respect of Permitted Swap Obligations. (d) Funded Debt of any Subsidiary which is secured primarily by real estate owned by such Subsidiary, and Funded Debt of any Excluded Tax Credit Investment Subsidiary (other than LCDC). (e) Subject to satisfaction of the requirements of Section 13.3(h) by each Other Service Loaner Floorplan Lender, Funded Debt of the Dealerships with respect to Other Service Loaner Floorplan Financing provided by Other Service Loaner Floorplan Lenders. (f) Unsecured guarantees by the Company of, and unsecured coborrower obligations of the Company in respect of, (i) Other Service Loaner Floorplan Financing obligations of Dealerships to Other Service Loaner Floorplan Lenders, (ii) debt of any Subsidiary which is permitted under Section 13.10(d), (iii) operating leases of its Subsidiaries and Minority Dealer Affiliates, (iv) extensions of credit to a Minority Dealer Affiliate, all proceeds of which are used to purchase New Vehicles or Service Loaner Vehicles to be held by the Minority Dealer Affiliate for sale and/or lease in the ordinary course of business, (v) obligations of Dealerships to manufacturers or distributors of New Vehicles under Seller Agreements and (vi) Indebtedness which is permitted under Section 13.10(o), (p) and (s); provided, that, for the avoidance of doubt, this clause (f) shall not be deemed to prohibit the provision by the Company of other unsecured guarantees that are permitted under other clauses of this Section 13.10. (g) Unsecured Indebtedness of the Company to any Subsidiary. 151 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(h) Unsecured Indebtedness of any Subsidiary to the Company or another Subsidiary. (i) Indebtedness existing on the Closing Date and set forth on the Disclosure Schedule, solely to the extent that such Indebtedness is not increased and no additional collateral is provided for such Indebtedness. (j) Funded Debt consisting of purchase money indebtedness incurred to acquire equipment which is secured only by the equipment acquired and proceeds therefrom and such equipment secures only the obligation to pay the purchase price. (k) Unsecured guaranties by a Subsidiary of the obligations of any other Subsidiary on (i) real estate leases between such other Subsidiary and an owner of real estate which has been subleased by such other Subsidiary to such Subsidiary, and (ii) Indebtedness incurred by such other Subsidiary which is permitted under Subsection 13.10(d) and which is obtained to finance real estate leased by such other Subsidiary to such Subsidiary. (l) Additional Funded Debt, including, without limitation, (i) Pari Passu Funded Debt and (ii) Contingent Obligations in respect of Funded Debt of the Company or any of its Subsidiaries, provided that, after giving Pro Forma Effect to the incurrence of such additional Funded Debt, the Company would have been in compliance with Section 11.1.3 as of such day (and for purposes of determining such compliance for any Funded Debt incurred in connection with a Permitted Acquisition, “Pro Forma Effect” shall take into account, for the Measurement Period most recently ended prior to the incurrence, the Pro Forma EBITDAR attributable to the business or businesses acquired, less interest expense attributable to the business or businesses acquired with respect to vehicle floor plan financing, calculated as if the Permitted Acquisition had occurred on the first day of such Measurement Period). (m) Indebtedness appearing as a claims reserve (or similar term) on the balance sheet of the Company and its Subsidiaries, which represents amounts which have been received but which will be expended to pay warranty and service claims by customers of the Dealerships. (n) Guaranties by Lithia Financial Corporation of Permitted Swap Obligations. (o) Funded Debt owing by a Silo Subsidiary; provided that no Loan Party other than (i) the Company and (ii) one or more Silo Subsidiaries, has any obligation (contingent or otherwise) with respect to such Funded Debt. (p) Funded Debt of Canadian Subsidiaries (i) that are not Financed Entities and (ii) not secured by any assets of the Company or any Subsidiary other than (1) assets of Canadian Subsidiaries other than Financed Entities and/or (2) a pledge by the Company or any Subsidiary of Equity Interests in a Canadian Subsidiary that is not a Financed Entity (“Canadian Subsidiary Indebtedness”). 152 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(q) Obligations in respect of put rights and other buy-sell rights granted  to a Minority Dealer Partner that are set forth in the organizational documents of a Minority Dealer. (r) Funded Debt incurred by any (i) DFC Subsidiary and not secured by any assets of the Company or any Subsidiary other than assets of a DFC Subsidiary (“DFC Indebtedness”) or (ii) Funded Debt incurred by any Canadian Subsidiary that is not a Financed Entity in connection with any Canadian Receivables or Securitization Transaction and not secured by any assets of the Company or any Subsidiary other than one or more Canadian Subsidiaries that are not Financed Entities; provided that no Loan Party other than the Company and one or more DFC Subsidiaries or such Canadian Subsidiaries that are not Financed Entities involved in such Canadian Receivables or Securitization Transaction has any obligation (contingent or otherwise) with respect to such Funded Debt. (s) Permitted Dual Subsidiary Indebtedness so long as each Required Intercreditor Counterparty has executed and delivered an Intercreditor Agreement, or a joinder to an existing Intercreditor Agreement, to the Agent. 13.11 Margin Stock; Speculation.  Each Borrower shall not, and the Company shall not permit any Subsidiary to, use any part of the proceeds of any Loan, either directly or indirectly, for the purpose, whether immediate, incidental, or ultimate, of purchasing or carrying any margin stock (within the meaning of Regulation U) or extending credit to others for the purpose of purchasing or carrying any margin stock or for any purpose which violates any applicable provision of any regulation of the Board of Governors of the Federal Reserve System. No Loan Party shall be engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or conveying any margin stock.  No part of the proceeds of any Loan will be used for speculative investment purposes, including without limitation speculating or hedging in the commodities and/or futures market. 13.12 Restrictive Agreements.  Except for Permitted Restrictions, the provisions of this Agreement and the other Loan Documents or as could not reasonably be expected to have a Material Adverse Effect, each Borrower shall not, and the Company shall not permit any Subsidiary (which, for the avoidance of doubt, includes any Real Estate Subsidiary or Dealership) to, (a) enter into or permit to exist any arrangement, contract, or agreement which directly or indirectly prohibits any Loan Party from or imposes any restrictions on creating, assuming or incurring any Lien upon all or any portion of its properties, revenues or assets or those of any of its Subsidiaries (other than Excluded Subsidiaries) whether now owned or hereafter acquired, to secure the Obligations or to secure any renewals, refundings, replacements, refinancings or restructurings of the Obligations in an aggregate outstanding principal amount or aggregate committed amount that is less than or equal to the Aggregate Commitments as of the date of such arrangement, contract, or agreement, (b) enter into or permit to exist any agreement, contract or arrangement restricting the ability of any Subsidiary (other than Excluded Subsidiaries) from paying or making dividends or distributions in cash or kind to the Company or any other Loan Party, from making loans, advances or other payments of whatsoever nature to the Company or any other Loan Party, from making transfers or distributions of all or any part of its assets to the Company or any other Loan Party, or from borrowing money from the Company or any other Loan Party, (c) enter into or permit to exist 153 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

any agreement, contract or arrangement which directly or indirectly prohibits any Subsidiary (other than an Excluded Subsidiary) from guarantying, or imposes restrictions on the ability of any Subsidiary to guaranty, the Obligations, or (d) enter into or permit to exist any agreement or arrangement which would be violated by the extensions of credit contemplated hereunder or the performance by any Loan Party of its obligations under the Loan Documents. 13.13 Permitted Acquisitions.  Except as otherwise permitted by Section 13.6 and except for acquisitions of real estate, each Borrower shall not, and the Company shall not permit any Subsidiary to acquire Control of any Person or acquire all or substantially all of the assets of any Person or of any business unit or line of business of any Person (an “Acquisition”) except upon satisfaction of the following requirements: (a) The Acquisition consists of the acquisition by the Company, directly or indirectly, of (i) a Person engaged in a line of business that the Company is not prohibited from engaging in under Section 13.8 of this Agreement, (ii) a Real Estate Subsidiary or (iii) a non-operating holding company; provided, that in each case of the foregoing clauses (i) through (iii), such entity is organized under the laws of a State of the United States or a province or the federal laws of Canada. (b) The Company shall give Agent prior written notice of the proposed Acquisition at least 30 days prior to the closing date of such Acquisition or, if later, within 5 days after execution of the purchase agreement for such Acquisition. (c) The Board of Directors (or other Persons exercising similar functions) of the seller have not disapproved the transaction or recommended that such transaction be disapproved. (d) [Reserved]. (e) Each New Loan Party shall have executed a Guarantor Joinder Agreement or Borrower Joinder Agreement, as applicable, and any other documents reasonably required by the Agent so that such New Loan Party (i) becomes a Guarantor of the Used Vehicle Floorplan Obligations, Service Loaner Vehicle Floorplan Obligations, Revolving Loan Obligations, (ii) if applicable, becomes a New Vehicle Floorplan Borrower, and (iii) if applicable, grants a security interest in the Collateral of such Acquisition Subsidiary. (f) Subject to Section 1.5, all representations and warranties in this Agreement shall be true and correct in all material respects as of the date of any Acquisition unless such representation or warranty refers to another date and except as previously disclosed to and accepted by the Agent in writing, and no Default shall have occurred and be continuing or will exist after giving effect to the Acquisition.  For purposes of this determination, all requirements applicable to any Guarantor, New Vehicle Floorplan Borrower (if applicable), or Subsidiary shall be deemed to apply to any Acquisition Subsidiary. (g) The Agent shall have received the organizational documents, status or good standing certificates and resolutions, or other authorizations demonstrating the due organization, valid existence, qualification to do business, good standing and authority of 154 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

each New Loan Party to become a Loan Party, New Vehicle Floorplan Borrower (if applicable), and Guarantor. (h) The Agent shall have received copies of the purchase agreement and lease, if any, relating to that Acquisition. (i) The Agent shall have perfected security interests in the Collateral owned by the New Loan Party as security for all of the Used Vehicle Floorplan Obligations, Service Loaner Vehicle Floorplan Obligations, Revolving Loan Obligations, Guarantor Obligations, and Permitted Swap Obligations, and if applicable, the New Vehicle Floorplan Loan Obligations, subject only to Permitted Liens, and shall have received satisfactory evidence of perfection and the priority of such security interests, including without limitation such Uniform Commercial Code and other searches, signed termination statements or payoff letters and other filings as the Agent deems appropriate, which shall include evidence of the termination of, or reasonably satisfactory arrangements for the termination of, the security interests of any secured party in any of the assets acquired or of the New Loan Party. (j) The Agent shall have conducted such audits of any Collateral being acquired or which is owned by any New Loan Party as is desired by the Agent, the results of which shall be satisfactory to the Agent. (k) The Company and/or any New Loan Party shall have received approval of all material Seller Agreements (including without limitation Franchise Agreements), between any New Loan Party and any manufacturer or distributor of Vehicles for which the New Loan Party will act as a dealer as may be necessary for the New Loan Party to conduct its intended business following the Acquisition.  The Company or the New Loan Party shall deliver to the Agent copies of all such Seller Agreements promptly upon receipt, other than those disclosure of which is prohibited by the relevant manufacturer or distributor, if requested by the Agent. (l) All insurance required under Section 12.8 shall have been obtained and the Agent shall have received evidence thereof in the form of a certificate of insurance as required under Section 12.8. (m) The Company has delivered to the Agent a certificate in a form acceptable to the Agent and signed by its chief financial officer or other officer acceptable to the Agent, certifying that all conditions in Section 13.13(a), (c), (f) and (k) have been satisfied or will be satisfied as of the date of the Acquisition. (n) If requested by the Agent, the Company has delivered to the Agent, (i) a Compliance Certificate, together with all supporting documentation reasonably required by the Agent, prepared on a Pro Forma Basis as of the most recent date for which a Compliance Certificate was furnished to the Agent, demonstrating that the Company and its Subsidiaries would have been in compliance with the requirements of Section 11.1 if the Acquisition had occurred on the first day of the period covered by the Compliance Certificate, and (ii) if requested by the Agent, copies of the seller’s financial statements. The Agent hereby 155 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

agrees to promptly provide to the Lenders copies of all documents received under the foregoing clauses (i) and (ii). (o) For any single Acquisition or group of related Acquisitions, either (x) on the date of consummation of such Acquisition or group of related Acquisitions (or in the case of a Limited Condition Acquisition, on the LCA Test Date) and after giving Pro Forma Effect thereto, the Leverage Ratio is below 5.75 to 1.0; or (y) the aggregate consideration paid for the assets acquired (other than real property and Vehicles), or the Equity Interests acquired, is less than or equal to 10% of Tangible Net Worth as of the last day of the fiscal quarter of the Company and its Subsidiaries most recently ended prior to the date of consummation of such Acquisition or Acquisitions.  For purposes of this subsection (o) of Section 13.13, “Pro Forma Effect” shall mean that the Leverage Ratio shall be calculated as if (i) such Acquisition or Acquisitions had occurred on the first day of the Measurement Period most recently ended prior to consummation of such Acquisition or Acquisitions, taking into account the Pro Forma EBITDAR attributable to the business or businesses acquired, less interest expense attributable to the business or businesses acquired with respect to vehicle floor plan financing, and (ii) any Indebtedness incurred or acquired in connection with such Acquisition or Acquisitions (including without limitation any Indebtedness incurred to enable the Company or any Subsidiary to effect such Acquisition or Acquisitions) had been incurred or acquired on the last day of such Measurement Period. (p) Agent has received such additional documents, approvals, consents and information and each Loan Party has satisfied such additional requirements as the Agent reasonably requests. 13.14 Accounting Changes; Fiscal Year.  Each Borrower shall not, and the Company shall not permit any Subsidiary to, make any change in accounting treatment or reporting practices, except as permitted by GAAP, or change its Fiscal Year. 13.15 Excluded Tax Credit Investment Subsidiaries.   No Excluded Tax Credit Investment Subsidiary (other than LCDC) shall own any assets other than Investments permitted under Section 13.6(p). 13.16 Dual Subsidiaries.   Each Borrower shall not, and the Company shall not permitdesignate any Subsidiary to becomeas a Dual Subsidiary unless (i) each Required Intercreditor Counterparty has delivered to the Agent an Intercreditor Agreement, or a joinder agreement to an existing Intercreditor Agreement, (ii) no New Vehicles of any Removed Franchise of any such Dual Subsidiary shall be financed by the New Vehicle Floorplan Facility, (iii) prior to the time of designation of such Subsidiary as a Dual Subsidiary, all outstanding New Vehicle Floorplan Loans with respect to all Removed Franchises of such Subsidiary shall have been repaid, (iv) with respect to any Dual Subsidiary that will obtain Permitted Dual Subsidiary Indebtedness consisting of floorplan financing forto acquire used Vehicles, nosuch Dual Subsidiary shall not finance the acquisition of any Used Vehicles shall be financed byunder the Used Vehicle Floorplan Facility, and prior to the time of designation of such Subsidiary as a Dual Subsidiary, all outstanding Used Vehicle Floorplan Loans with respect to such Subsidiary shall have been repaid, (v) with respect to any Dual Subsidiary that will obtain Permitted Dual Subsidiary Indebtedness consisting of floorplan financing forto acquire service loaner Vehicles, 156 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

nosuch Dual Subsidiary shall not finance the acquisition of any Service Loaner Vehicles shall be financed byunder the Service Loaner Vehicle Floorplan Facility, and prior to the time of designation of such Subsidiary as a Dual Subsidiary, all outstanding Service Loaner Vehicle Floorplan Loans with respect to such Subsidiary shall have been repaid, and (vi) the Company has complied with all requirements set forth in Section 6.19 and this Section 13.16. Notwithstanding the foregoing, this Section 13.16 shall not take effect until the Agent (w) has received a duly executed Intercreditor Agreement, in form and substance satisfactory to the Agent, (x) the existing UCC-1 financing statements for any Dual Subsidiaries shall have been amended, without limitation, to remove New Vehicles and/or Used Vehicles, as applicable, from the collateral description, in each case, in form and substance satisfactory to the Agent and such New Vehicles and/or Used Vehicles, together with proceeds shall be released as Collateral and Section 16.16 shall apply thereto in accordance with the applicable Intercreditor Agreement, (y) new UCC-1 financing statements have been filed naming each Dual Subsidiary as debtor and the applicable Dual Subsidiary Lender as secured party, in each case, in form and substance satisfactory to the Agent and (z) the Agent has received any additional documentation requested by the Agent in its sole discretion. The Lenders party hereto hereby consent to the Agent entering into each Intercreditor Agreement (and any joinder or supplement thereof) on or after the Closing Date on behalf of the Lenders. 13.17 Additional Credit Support Documentation. Each Borrower shall not, and the Company shall not permit any Subsidiary to Guarantee or grant any Lien in favor of any Dual Subsidiary Lender in respect of Permitted Dual Subsidiary Indebtedness except for such Guarantees by and Liens granted by Dual Subsidiaries which receive Permitted Dual Subsidiary Indebtedness from such Dual Subsidiary Lender. Without limiting the foregoing and without limiting the generality of the Guaranty or Section 12.17, in the event any Dual Subsidiary Lender receives a Guarantee or Lien in violation of the previous sentence, the Company shall cause the applicable Subsidiaries to provide substantially similar Guarantees to the Agent, each L/C Issuer and the Lenders or grant substantially similar Liens in favor of the Agent (for the benefit of the Secured Parties) to the same extent. ARTICLE 14 DEFAULT AND REMEDIES 14.1 Events of Default.  The occurrence of any of the following shall constitute an Event of Default under this Agreement and each of the Loan Documents: 14.1.1 Any Loan Party shall fail to pay (a) when due, any principal owing under this Agreement, Letter of Credit, LC Agreement, or any other Loan Document, except as described in the following clause (d), or (b) within five (5) days after it is due, any interest or fee payable under this Agreement, Letter of Credit, LC Agreement, or any other Loan Document or (c) when due and uncured within five (5) days after notice from the Agent that such amount remains unpaid, any other amount payable under this Agreement, Letter of Credit, LC Agreement, or any other Loan Document or (d) the Company shall fail to cure any Out of Balance Condition, which condition shall remain unremedied for a period of four (4) days after 157 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

notice from the Agent, New Vehicle Swing Line Lender, Used Vehicle Swing Line Lender or Service Vehicle Swing Line Lender. 14.1.2 Any default under or any failure of any Loan Party to perform or comply with any term, condition, covenant or obligation (a) set forth in Section 11.1, 12.1, 12.10 or Article 13 of this Agreement (except Section 13.15) or (b) set forth in any provision of this Agreement (except an Event of Default specified in Section 14.1.1, 14.1.2(a) or elsewhere in Section 14.1), any other Loan Document or any other Agreement between the Agent or any Lender and any Loan Party, and such default or failure is not cured within 30 days after the earlier of the date any Loan Party knows thereof or the date on which the Agent gives written notice thereof to the Company (provided, however, that such cure period is available only if the applicable default or failure is reasonably capable of being cured). 14.1.3 Any Loan Party defaults in the payment or performance of any material provisions of any agreement or condition relating to any Indebtedness of such Loan Party (except as described in Section 14.1.16) in an aggregate amount outstanding for such Indebtedness for all Loan Parties that, together with amounts described in Section 14.1.16, is in excess of $50,000,000 (other than Indebtedness owing under the Loan Documents but including Permitted Dual Subsidiary Indebtedness), and the period of grace, if any, to cure such default shall have passed, and the default constitutes (a) nonpayment or (b) any event or condition, the effect of which is to cause or permit the holder of such Indebtedness to cause such Indebtedness to become due prior to its maturity date. 14.1.4 (a) Any default occurs under or any Loan Party fails to pay, perform or comply with any material terms, conditions or obligations in any Collateral Document or (b) other than in accordance with the terms of such Collateral Document, any Lien created or purported to be created by any Collateral Document shall cease to be, or shall be asserted by any Person not to be, a valid, perfected Lien with a priority that is subject only to the Permitted Liens, and in each case, such default or failure is not cured within ten (10) days after the earlier of the date any Loan Party knows thereof or the date on which the Agent gives written notice thereof to the Company. 14.1.5 (a) Other than in accordance with the terms of the Loan Documents, any Guaranty or other Loan Document ceases to be, or shall be asserted by any Borrower or any Guarantor not to be, in full force and effect, or (b) any Guarantor shall attempt to revoke, repudiate, or limit any Guaranty. 14.1.6 Any warranty, representation, statement, or information made or furnished to the Agent or any Lender by or on behalf of any Loan Party proves to have been false or misleading in any material respect when made, furnished, or certified, or when deemed made, furnished, or certified. 14.1.7 Custody or control of any substantial part of the property of any Loan Party is assumed by any Governmental Body or any Governmental Body takes any final action, the effect of which would be a Material Adverse Effect. 158 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

14.1.8 (a) Any Loan Party shall commence any case, proceeding, or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition, or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its assets, or any Loan Party shall make a general assignment for the benefit of its creditors; or (b) there shall be commenced against any Loan Party any case, proceeding, or other action of a nature referred to in clause (a) above which (iii) results in the entry of an order for relief or any such adjudication or appointment or (iv) remains undismissed, undischarged, unstayed, or unbonded for a period of 30 days; or (c) there shall be commenced against any Loan Party any case, proceeding, or other action seeking issuance of a warrant of attachment, execution, distraint, or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed, or bonded pending appeal within 30 days from the entry thereof; or (d) any Loan Party shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in any of the acts set forth in clauses (a), (b), or (c) above; (e) any Loan Party shall admit in writing its inability to pay its debts as they become due or shall, within the meaning of the United States Bankruptcy Code (11 U.S.C.  §101 et seq.), generally not pay its debts as they become due; or (f) any Loan Party is not Solvent. 14.1.9 Except as permitted by Section 13.1, (a) any Loan Party which is a corporation, partnership, limited liability company or other type of entity is dissolved or liquidated or takes any action to authorize a dissolution or liquidation; or (b) any Loan Party which is a trust (or trustee acting with respect to property held in trust) is revoked, amended or terminated. 14.1.10 Any refusal or failure by any Governmental Body to issue, renew, or extend any material lease or Governmental Approval with respect to the operation of the business of any Loan Party or its Subsidiaries, or any denial, forfeiture or revocation by any Governmental Body of any Governmental Approval, that could reasonably be expected to have a Material Adverse Effect. 14.1.11 One or more judgments, writs of attachment, or similar process, in an aggregate amount in excess of $50,000,000 (in excess of insurance coverage) shall be entered or filed against any Loan Party or any property of any Loan Party and remains unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days or more. 14.1.12 (a) With respect to a Plan, a Loan Party or an ERISA Affiliate is subject to a lien in excess of $50,000,000, pursuant to Section 430(k) of the Code or Section 302(c) or ERISA or Title IV or ERISA, or (b) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect. 14.1.13 (a) The Company or any New Vehicle Floorplan Dealership fails to pay, perform or comply with any term, condition or obligation in any Seller Agreement, or any such agreement ceases to be, or is asserted by any Person not to be, in full force and effect, or the 159 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

other party to such agreement gives notice of default to the Company or any New Vehicle Floorplan Dealership, or (b) any event specified in clause (a) occurs with respect to any Loan Party other than a New Vehicle Floorplan Borrower, except in each case described in clauses (a) and (b) above to the extent such failure, cessation, assertion or notice of default (either individually or in the aggregate with all other such failures, cessations, assertions and notices of default) could not reasonably be expected to have a Material Adverse Effect. 14.1.14 Any Repurchase Agreement ceases to be, or is asserted by any manufacturer or distributor of Vehicles not to be, in full force and effect, except in each case to the extent such cessation or assertion (either individually or in the aggregate with all other such cessations and assertions) could not reasonably be expected to have a Material Adverse Effect. 14.1.15 There is any Change in Control. 14.1.16 (a) Any default occurs under or any Loan Party fails to pay, perform or comply with the terms of any Swap or (b) there occurs under any Swap an Early Termination Date (as defined in such Swap) resulting from (i) any event of default under such Swap as to which the Company or any Subsidiary is the Defaulting Party (as defined in such Swap) or (ii) any Termination Event (as so defined) under such Swap as to which the Company or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owing by the Applicable Loan Parties under all such Swaps as a result thereof, together with all defaulted Indebtedness of the Loan Parties described in Section 14.1.3, is greater than 1.25% of the amount of the Aggregate Commitment. 14.2 Consequences of Default; Rights and Remedies.  Time is of the essence of this Agreement. 14.2.1 Upon the occurrence or existence of any Event of Default (other than an Event of Default referred to in Section 14.1.8) and at any time thereafter during the continuance of such Event of Default, the Agent shall have the right, by written notice to the Company, to: (a) terminate the availability of PR Account Advances and terminate the Commitments to make Loans and issue Letters of Credit; (b) declare all outstanding Obligations payable by the Revolving Loan Borrower, Used Vehicle Floorplan Borrower, Service Loaner Vehicle Floorplan Borrower, and the New Vehicle Floorplan Borrowers to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Loan Documents to the contrary notwithstanding; (c) direct the Revolving Loan Borrower to deliver to the Agent funds in an amount equal to the aggregate stated amount of the LC Obligations, such funds to be held in the LC Collateral Account, and/or (d) direct the New Vehicle Floorplan Borrowers to deliver to the Agent funds in an amount which the Agent estimates it or the Swing Line Lender may be required to pay pursuant to Payment Commitments which may be presented thereafter, such collateral to be held in the Payment Commitment Collateral Account.  The applicable Borrowers shall immediately deliver to the Agent all such funds required by the Agent. 14.2.2 Upon the occurrence or existence of any Event of Default described in Section 14.1.8, immediately and without notice, (a) the Commitments and the availability of Loans and Letters of Credit shall automatically terminate, (b) all outstanding Obligations shall 160 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Loan Documents to the contrary notwithstanding, (c) the Revolving Loan Borrower shall automatically become obligated to deliver to the Agent Cash Collateral in an amount equal to the aggregate stated amount of the LC Obligations, which funds shall be held by the Agent in the LC Collateral Account, and (d) the New Vehicle Floorplan Borrowers shall automatically become obligated to deliver to the Agent funds in an amount which the Agent estimates it or the Swing Line Lender may be required to pay pursuant to Payment Commitments which may be presented thereafter, which funds shall be held by the Agent in the Payment Commitment Collateral Account. 14.2.3 In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, the Agent and the Lenders shall have the right to exercise any right, power or remedy available under this Agreement, any of the other Loan Documents, or otherwise available at law or in equity. 14.2.4 The Agent shall promptly inform the Lenders of the occurrence of any Event of Default of which it is deemed to have knowledge or notice pursuant to Section 16.9 and will promptly provide the Lenders with copies of any and all notices that the Agent has received with respect thereto.  After such notification, the Lenders shall meet to determine the desired course of action and the Agent shall take such course of action, and pursue such rights and remedies under the Loan Documents, as the Required Lenders shall determine.  If the Required Lenders have not agreed upon a course of action within 90 days after the date that the Lenders have received a notice from the Agent of the occurrence of an Event of Default, the Agent shall (and shall be obligated to) terminate the Commitments, accelerate all of the Obligations, apply all amounts collected from the Borrowers, any Guarantors and the Collateral as set forth herein and pursue such other rights and remedies as are prudent under the circumstances.  During the time between the Agent’s giving notice of the occurrence of an Event of Default to the Lenders and the earlier of (a) the Required Lender’s agreement on a course of action or (b) the expiration of the 90 day decision period, the Agent shall take such actions on behalf of the Lenders as the Agent deems prudent.  To the extent inconsistent with Section 14.2.2, this Section shall not apply to any Event of Default referred to in Section 14.1.8 and any Event of Default referred to in Section 14.1.8 shall be governed by Section 14.2.2.  However, decisions as to how to handle, vote, or compromise the Agent’s claims on behalf of the Lenders in any bankruptcy or insolvency proceeding shall be governed by this Section.  This Section confers no rights upon any Loan Party. 14.3 Application of Payments.  If the Obligations have become due and payable in full or if at any time insufficient funds are received by and available to the Agent to fully pay all fees, costs, expenses, principal, interest and other amounts due to the Agent and the Lenders under this Agreement and the other Loan Documents, such funds received by the Agent shall be applied: (a) first, to the payment of fees, costs, disbursements, indemnities and other expenses (including Attorney Costs of the Agent’s counsel) owing to the Agent, including without limitation, if applicable, amounts incurred in realizing on Collateral or otherwise enforcing the Loan Documents; (b) second, to the payment of fees, costs, disbursements, indemnities, and other expenses owing to the Lenders (other than LC Fees, Revolving Loan Commitment Fee, Used Vehicle Floorplan Commitment Fee, Service Loaner Vehicle Floorplan Commitment Fee 161 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

and New Vehicle Floorplan Commitment Fee), including without limitation, if applicable, amounts incurred in realizing on Collateral or otherwise enforcing the Loan Documents and amounts owing pursuant to Article 7 and Section 17.1; (c) third, to the payment of LC Fees, Revolving Loan Commitment Fees, New Vehicle Floorplan Commitment Fee, Used Vehicle Floorplan Commitment Fee and Service Loaner Vehicle Floorplan Commitment Fee; (d) fourth to the payment of accrued interest on all of the Loans and other Obligations, (e) fifth to the payment to Swing Line Lender of any principal amount of the New Vehicle Swing Line Loans in excess of the New Vehicle Swing Line Commitment; (f) sixth, to the payment of the remaining principal owing to all of the Lenders on all of the Loans, LC Obligations, and other Obligations, allocated to the Lenders based upon their Pro Rata Shares; (g) seventh, to fully cash collateralize the LC Obligations and any outstanding Payment Commitments; (h) eighth, to payment of the Permitted Swap Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause (h) held by them; and (i) ninth, the balance, if any, to the Borrowers or as otherwise required by law. ARTICLE 15 HAZARDOUS SUBSTANCES 15.1 Representations and Warranties.  Each Borrower represents and warrants that to its knowledge, as of the Closing Date, any Properties identified as such in the Disclosure Schedule are the only Properties requiring remedial action under applicable Environmental Laws, resulting from the use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any Hazardous Substances on, under, about or from any of the Properties. The performance of such remedial actions will not have a Material Adverse Effect on any Loan Party or its businesses. 15.2 Activities.  Each Borrower shall, and the Company shall cause each Subsidiary to use, generate, manufacture, store, treat, release or dispose of Hazardous Substances on, under, about or from the Properties only as is reasonable and necessary in the operation of its business, and in substantial compliance with all applicable Environmental Laws. 15.3 Inspections.  Each Borrower will permit and the Company will cause each other Loan Party to permit representatives of the Agent and the Lenders to enter upon the Properties to make such inspections and tests as they may reasonably deem appropriate to determine compliance of the Properties with this Article.  Any such inspections or tests shall be at the expense of Borrowers and for Agents’ and the Lenders’ purposes only, and shall not be construed to create any responsibility or liability on the part of the Agent or any Lender to any Borrower or any other Person. 15.4 Release and Indemnity.  Each Borrower hereby (a) releases and waives any future claims against Agent and each Lender for indemnity or contribution in the event the Company or any of its Subsidiaries becomes liable for cleanup or other costs under any Environmental Laws, and (b) agrees to indemnify and hold harmless Agent and each Lender and the other Indemnified Persons against any and all Claims which such Person may directly or indirectly sustain or suffer resulting from a breach of this Article by the Company or any other Borrower or as a consequence of any use, generation, manufacture, storage, disposal, release or 162 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

threatened release of a Hazardous Substance on the Properties, except to the extent arising from the gross negligence or willful misconduct of such Indemnified Person. 15.5 Survival.  The provisions of this Article, including the obligation to indemnify, shall survive the repayment of the Loans and Letters of Credit and other liabilities and Obligations of any one or more of the Borrowers under this Agreement and the other Loan Documents, and the termination or expiration of this Agreement, and, if applicable, shall not be affected by Lender’s acquisition of any interest in any of the Properties, whether by foreclosure or otherwise. ARTICLE 16 THE AGENT 16.1 Appointment; Nature of Relationship.  U.S. Bank is hereby appointed by each of the Lenders as its contractual representative (herein referred to as the “Agent”) hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents.  The Agent agrees to act as such contractual representative upon the express conditions contained in this Article 16.  Notwithstanding the use of the defined term “Agent,” it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement or any other Loan Document and that the Agent is merely acting as the contractual representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents.  In its capacity as the Lenders’ contractual representative, the Agent (a) does not hereby assume any fiduciary duties to any of the Lenders, (b) is a “representative” of the Lenders within the meaning of the term “secured party” as defined in the Uniform Commercial Code and (c) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents.  Each of the Lenders hereby agrees to assert no claim against Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives. 16.2 Powers.  The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto.  The Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Agent. 16.3 General Immunity.  Neither Agent nor any of its directors, officers, agents or employees shall be liable to any Borrower or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except to the extent such action or inaction is determined in a final non-appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person. 16.4 No Responsibility for Loans, Recitals, Etc. Neither Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (a) any statement, warranty or representation made in connection with any 163 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Loan Document or any borrowing hereunder; (b) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including, without limitation, any agreement by an obligor to furnish information directly to each Lender; (c) the satisfaction of any condition specified in Article 9, except receipt of items required to be delivered solely to the Agent; (d) the existence or possible existence of any Default or Event of Default; (e) the validity, enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation, perfection or priority of any Lien in any Collateral; or (g) the financial condition of any Loan Party or of any of any Loan Party’s Subsidiaries.  The foregoing notwithstanding, however, the Agent shall, upon a reasonable request from a Lender, provide such information as may be necessary to demonstrate to such Lender that the Agent has the ability to comply, or has in fact complied, with all regulations or mandates from a governing entity that are applicable to the Loans, including without limitation, the Flood Disaster Protection Act of 1973 and the national Flood Insurance Reform Act (1994). 16.5 Action on Instructions of Lenders.  The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders.  The Lenders hereby acknowledge that the Agent shall be under no duty to take any discretionary action permitted to be taken by it pursuant to the provisions of this Agreement or any other Loan Document unless it shall be requested in writing to do so by the Required Lenders.  The Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. 16.6 Employment of the Agents and Counsel.  The Agent may perform any of its duties as the Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.  The Agent shall be entitled to advice of counsel concerning the contractual arrangement between Agent and the Lenders and all matters pertaining to the Agent’s duties hereunder and under any other Loan Document. 16.7 Reliance on Documents; Counsel.  The Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, electronic mail message, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be employees of the Agent.  For purposes of determining compliance with the conditions specified in Article 9, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Agent shall have received notice from such Lender prior to the applicable date specifying its objection thereto. 164 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

16.8 Reimbursement and Indemnification.  The Lenders agree to reimburse and indemnify Agent ratably in proportion to their respective Commitments (or, if the Commitments have been terminated, in proportion to their Commitments immediately prior to such termination) (a) for any amounts not reimbursed by the Borrowers for which the Agent is entitled to reimbursement by a Borrower or Borrowers under the Loan Documents, (b) for any other expenses incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents (including, without limitation, for any expenses incurred by the Agent in connection with any dispute between Agent and any Lender or between two or more of the Lenders) and (c) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby (including, without limitation, for any such amounts incurred by or asserted against Agent in connection with any dispute between Agent and any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the Loan Documents or of any such other documents, provided that (y) no Lender shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Agent and (z) any indemnification required pursuant to Section 7.4.4 shall, notwithstanding the provisions of this Section, be paid by the relevant Lender in accordance with the provisions thereof.  The obligations of the Lenders under this Section shall survive payment of the Obligations and Permitted Swap Obligations and termination of this Agreement. 16.9 Notice of Event of Default.  The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent, unless (i) Agent has actual knowledge of such Default or Event of Default or (ii) Agent has received written notice from a Lender or Borrower referring to this Agreement describing such Default or Event of Default and stating that such notice is a “notice of default.” In the event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders; provided that, except as expressly set forth in the Loan Documents, the Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to a Loan Party or any of its Subsidiaries that is communicated to or obtained by the bank serving as the Agent or any of its Affiliates in any capacity. 16.10 Rights as a Lender.  The Agent shall have the same rights and powers hereunder and under any other Loan Document with respect to its Commitments and its Loans as any Lender and may exercise the same as though it were not Agent, and the term “Lender” or “Lenders” shall, at any time when Agent is a Lender, unless the context otherwise indicates, include Agent in its individual capacity.  The Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with any Loan Party, or any of their Subsidiaries and Affiliates in which any Loan Party is not restricted hereby from engaging with any other Person. 165 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

16.11 Lender Credit Decision, Legal Representation. (a) Each Lender acknowledges that it has, independently and without reliance upon Agent, or any other Lender and based on the financial statements prepared by the Borrowers and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon Agent, or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.  Except for any notice, report, document or other information expressly required to be furnished to the Lenders by the Agent hereunder or as may be reasonably requested by a Lender from the Agent, the Agent shall have no duty or responsibility (either initially or on a continuing basis) to provide any Lender with any notice, report, document, credit information or other information concerning the affairs, financial condition or business of any Loan Party or any of its Affiliates that may come into the possession of the Agent (whether or not in its capacity as the Agent) or any of their Affiliates. (b) Each Lender further acknowledges that it has had the opportunity to be represented by legal counsel in connection with its execution of this Agreement and the other Loan Documents, that it has made its own evaluation of all Applicable Laws relating to the transactions contemplated hereby, and that the counsel to the Agent represents only Agent and not the Lenders in connection with this Agreement and the transactions contemplated hereby. 16.12 Successor Agent.  The Agent may resign at any time by giving written notice thereof to the Lenders and the Company, such resignation to be effective upon the appointment of a successor Agent or, if no successor Agent has been appointed, forty-five days after the retiring Agent gives notice of its intention to resign.  Upon any such resignation, the Required Lenders shall have the right to appoint, on behalf of the Borrowers and the Lenders, a successor Agent.  Unless a Default exists, such successor Agent shall be reasonably acceptable to the Company.  If no successor Agent shall have been so appointed by the Required Lenders within thirty days after the resigning Agent’s giving notice of its intention to resign, then the resigning Agent may appoint, on behalf of Borrowers and the Lenders, a successor Agent. Notwithstanding the previous sentence, the Agent may at any time without the consent of any Borrower or any Lender, appoint any of its Affiliates which is a commercial bank as a successor Agent hereunder.  If the Agent has resigned and no successor Agent has been appointed, the Lenders may perform all the duties of the Agent hereunder and each Borrower shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders.  No successor Agent shall be deemed to be appointed hereunder until such successor Agent has accepted the appointment.  Any such successor Agent shall be a commercial bank having capital and retained earnings of at least $3,000,000,000.00.  Upon the acceptance of any appointment as the Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning Agent.  Upon the effectiveness of the resignation of the Agent, the resigning Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents.  After the effectiveness of the resignation of an Agent, the provisions of this Article 16 shall continue in effect for the benefit of such Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan 166 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Documents.  In the event that there is a successor to the Agent by merger, or Agent assigns its duties and obligations to an Affiliate pursuant to this Section, then the term “Prime Rate” as used in this Agreement shall mean the prime rate, base rate or other analogous rate of the new Agent. 16.13 Agent’s Fees.  Each Borrower agrees to pay to the Agent, for its account, the fees agreed to by such Borrower and the Agent pursuant to any fee letter between them, or as otherwise agreed from time to time. 16.14 Delegation to Affiliates.  Each Borrower and the Lenders agree that the Agent may delegate any of its duties under this Agreement to any of its Affiliates.  Any such Affiliate (and such Affiliate’s directors, officers, agents and employees) which performs duties in connection with this Agreement shall be (i) entitled to the same benefits of the indemnification, waiver and other protective provisions to which the Agent is entitled under this Agreement; and (ii) subject to the same obligations of the Agent hereunder. 16.15 Execution of Collateral Documents.  The Lenders hereby empower and authorize Agent to execute and deliver the Collateral Documents and all related agreements, documents or instruments as shall be necessary or appropriate to effect the purposes of the Collateral Documents. 16.16 Collateral Releases.  The Lenders hereby empower and authorize Agent to execute and deliver on their behalf any agreements, documents or instruments as shall be necessary or appropriate to effect any releases of Collateral which shall be permitted by the terms hereof or any other Loan Document or which shall otherwise have been approved by the Required Lenders (or, if required by the terms of this Agreement, all of the Lenders) in writing. If any of the Collateral shall be sold or otherwise disposed of by any Loan Party in a transaction permitted by the Loan Documents, then Agent, at the request and sole expense of the applicable Loan Party, shall execute and deliver to such Loan Party all releases and other documents reasonably necessary or advisable for the release of the Liens created under the Loan Documents on such Collateral, provided that the applicable Loan Party shall provide to the Agent evidence of such transaction's compliance with the Loan Documents as the Agent shall reasonably request. 16.17 No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Borrower acknowledges and agrees that: (a)(i) the arranging and other services regarding this Agreement provided by the Lenders are arm’s-length commercial transactions between each Borrower and its Affiliates, on the one hand, and the Lenders, on the other hand, (ii) each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) each Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (b)(i) each of the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Borrower or any of its Affiliates, or any other Person and (ii) no Lender has any obligation to any Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and 167 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(c) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers and their Affiliates, and no Lender has any obligation to disclose any of such interests to any Borrower or its Affiliates. To the fullest extent permitted by law, each Borrower hereby waives and releases any claims that it may have against each of the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby. 16.18 Co-Documentation Agents, Syndication Agent, etc.  Neither any Documentation Agent or the Syndication Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender.  Each Lender hereby makes the same acknowledgments with respect to such Persons as it makes with respect to the Agent in Section 16.11. 16.19 Certain ERISA Matters. (a)    Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Agent and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Company or any other Loan Party, that at least one of the following is and will be true: (i) such Lender is not using “plan assets” within the meaning of 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA, of any Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit or the Commitments, (ii) the transaction exemption set forth in one or more prohibited transaction exemptions issued by the Department of Labor (each, a “PTE”), such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, (iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or (iv) such other representation, 168 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

warranty and covenant as may be agreed in writing between the Agent, in its sole discretion, and such Lender. (b) In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or (2) such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Agent and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Company or any other Loan Party, that the Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Agent under this Agreement, any Loan Document or any documents related hereto or thereto). ARTICLE 17 MISCELLANEOUS 17.1 Expenses; Indemnification.  Each Borrower hereby agrees: (a) to pay or reimburse Agent on demand for all reasonable costs and expenses (including reasonable Attorney Costs of the Agent’s counsel) incurred in connection with the syndication, negotiation, due diligence, preparation, execution, delivery, distribution (including, without limitation, via DebtX and any other internet service selected by the Agent), review, administration and enforcement of the Loan Documents and the transactions contemplated thereby, and any amendment, supplement or modification to, the Loan Documents and any other documents prepared in connection therewith, whether or not the transactions contemplated hereby are consummated, including without limitation all recording costs, filing fees, consultants’ fees, travel expenses, costs of appraisals and reviews, environmental audits and reviews (including costs of internal review of a third party report), collateral audits (subject to Section 12.4), title insurance, lien searches, and costs of perfecting, continuing, monitoring, preserving and protecting security interests in the Collateral; (b) to pay or reimburse Agent and each Lender for all their reasonable costs and expenses incurred in connection with, and to pay, indemnify, and hold the Indemnified Persons harmless from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, disbursements, and Attorney Costs of every kind and nature arising out of or in connection with, the collection, enforcement or protection of any rights and remedies under the Loan Documents and any other documents prepared in connection therewith (including without limitation in connection with negotiations or workout or restructuring affecting the Loan Documents or Obligations and any bankruptcy, or similar proceeding or other legal proceeding involving any Loan Party); 169 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

(c) to pay, indemnify, and to hold the Indemnified Persons harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any failure or delay in paying, stamp, excise and other taxes (other than income and gross revenue taxes), if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, any Loan Document and any such other documents including reasonable Attorney Costs of counsel to the Agent and each Lender in connection with the foregoing and in connection with advising Agent with respect to its rights and responsibility under any Loan Document; and (d) to pay, indemnify, and hold the Indemnified Persons harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature (including reasonable Attorney Costs) which may be incurred by or asserted against any Indemnified Person arising out of or in connection with the Loan Documents, the transactions contemplated by the Loan Documents, or the use of the proceeds of the Loans (including, without limitation, in connection with any investigation, litigation, or proceeding or preparation of defense in connection therewith), whether or not any of the indemnified Persons is a party thereto, or by reason of or in connection with the execution and delivery or transfer of, or payment or failure to make payments under, Letters of Credit (it being agreed that nothing in this Section 17.1 is intended to limit the Revolving Loan Borrower’s obligations pursuant to Section 5.9). Notwithstanding the foregoing, a Borrower shall have no obligation to indemnify any Indemnified Person with respect to any costs of the matters described in subsections (a), (b), (c) and (d) of this Section 17.1 which arise from the gross negligence or willful misconduct of such Indemnified Person.  The agreements in this Section 17.1 shall survive repayment of the Obligations and Permitted Swap Obligations and termination of this Agreement. Without limiting the provisions of Section 7.4, this Section 17.1(d) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. 17.2 Successors and Assigns.  The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrowers and the Lenders and their respective successors and assigns permitted hereby, except that (a) no Borrower shall have the right to assign its rights or obligations under the Loan Documents without the prior written consent of each Lender, (b) any assignment by any Lender must be made in compliance with Section 17.4, and (c) any transfer by participation must be made in compliance with the terms of this Agreement.  Any attempted assignment or transfer by any party not made in compliance with this Section shall be null and void, unless such attempted assignment or transfer is treated as a participation in accordance with the terms of this Agreement.  The parties to this Agreement acknowledge that clause (b) of this Section relates only to absolute assignments and this Section 17.2 does not prohibit assignments creating security interests, including, without limitation, any pledge or assignment by any Lender of all or any portion of its rights under this Agreement to a Federal Reserve Bank; provided, however, that no such pledge or assignment creating a security interest shall release the transferor Lender from its obligations hereunder unless and until the 170 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

parties thereto have complied with the provisions of Section 17.4.  The Agent may treat the Person which made any Loan as the owner thereof for all purposes hereof unless and until such Person complies with Section 17.4; provided, however, that the Agent may in its discretion (but shall not be required to) follow instructions from the Person which made any Loan to direct payments relating to such Loan to another Person.  Any assignee of the rights to any Loan agrees by acceptance of such assignment to be bound by all the terms and provisions of the Loan Documents.  Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the owner of the rights to any Loan, shall be conclusive and binding on any subsequent holder or assignee of the rights to such Loan. 17.3 Participations. 17.3.1 Permitted Participants; Effect.  Any Lender may, in accordance with Applicable Law, at any time sell to one or more banks or other entities (each, a “Participant”) participating interests in any Outstanding Credit Exposure owing to such Lender, the Commitments of such Lender or any other interest of such Lender under the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the owner of its Outstanding Credit Exposure for all purposes under the Loan Documents, all amounts payable by Borrowers under this Agreement shall be determined as if such Lender had not sold such participating interests, and Borrowers and Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under the Loan Documents. 17.3.2 Voting Rights.  Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents; provided, however, that any agreement pursuant to which any Lender sells a participating interest may require the Lender to obtain Participant’s consent to any amendment, modification or waiver which would require the consent of all Lenders pursuant to Section 17.9. 17.3.3 Benefit of Certain Provisions.  Each Borrower agrees that each Participant shall be deemed to have the right of setoff provided in Section 17.8 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in Section 17.8 with respect to the amount of participating interests sold to each Participant.  The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 17.8, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 17.7 as if each Participant were a Lender.  Each Borrower further agrees that each Participant shall be entitled to the benefits of Sections 7.1, 7.2, 7.4, and 17.1 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 17.4, provided that (a) a Participant shall not be entitled to receive any greater payment under Sections 7.1 or 7.2, or 7.4 than the Lender who sold the participating interest to such Participant would have received had it retained such interest for its own account, unless the sale of such interest to such Participant is made with the prior written consent of the Company, and (b) a Participant shall not be entitled to receive any 171 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

greater payment under Section 7.4 than the Lender who sold the participating interest to such Participant would have received had it retained such interest for its own account (i) except to the extent such entitlement to receive a greater payment results from a change in treaty, law or regulation (or any change in the interpretation or administration thereof by any Governmental Authority) that occurs after the Participant acquired the applicable participation and (ii), in the case of any Participant that would be a Non-U.S. Lender if it were a Lender, such Participant agrees to comply with the provisions of Section 7.4 to the same extent as if it were a Lender (it being understood that the documentation required under Section 7.4.6 shall be delivered to the participating Lender).  Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in any Outstanding Credit Exposure, any Commitment or any other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Outstanding Credit Exposure, any Commitment or any other obligations under the Loan Documents) to any Person except to the extent that such disclosure is necessary to establish that such Outstanding Credit Exposure, any Commitment or any other obligations under the Loan Documents is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Agent (in its capacity as the Agent) shall have no responsibility for maintaining a Participant Register. 17.4 Assignments. 17.4.1 Permitted Assignments.  Any Lender may at any time sell to one or more Eligible Assignees or other financial institutions reasonably acceptable to the Agent (each an “Assignee”) all or a ratable part of its Loans and participations in Swing Line Loans and Letters of Credit and other interests under this Agreement and the Loan Documents; provided, however, that (a) unless each of the Company and the Agent otherwise consents, each assignment shall be in a minimum amount of $5,000,000 or if less, the entire Aggregate Lender Commitment and Outstanding Credit Exposure of such Lender; (b) after giving effect to any Assignment, the Aggregate Lender Commitment of the assigning Lender shall be at least $5,000,000.00 or shall be $0; and (c) each assignment shall be of a constant and not a varying, percentage of all of the interests of such Lender in its Outstanding Credit Exposure and all Commitments, Loans and Letters of Credit.  Any assignment shall be pursuant to an Assignment Agreement in such other form reasonably acceptable to the Agent as may be agreed to by the parties thereto. 17.4.2 Consents.  The consent of the Company shall be required prior to an assignment becoming effective unless the Assignee is a Lender, an Affiliate of a Lender or an Approved Fund, provided that the consent of the Company shall not be required if an Event of Default has occurred and is continuing; provided further that the Company shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within five (5) Business Days after having received written notice thereof.  The consent of the Agent shall be required prior to an assignment becoming effective unless the Assignee is a 172 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Lender, an Affiliate of a Lender or an Approved Fund.  The consent of each of the LC Issuer and the Swing Line Lender shall be required prior to an assignment of a Commitment becoming effective unless the Assignee is a Lender with a Commitment.  Any consent required under this Section 17.4.2 shall not be unreasonably withheld or delayed. 17.4.3 Effect; Effective Date.  Upon (a) delivery to the Agent of an Assignment Agreement, together with any required consents, and (b) payment of a $3,500 fee to the Agent for processing such assignment (unless such fee is waived by the Agent), such assignment shall become effective on the effective date specified in such assignment.  The assignment shall contain a representation by the Assignee to the effect that none of the consideration used to make the purchase of the Commitments and Outstanding Credit Exposure under the applicable Assignment Agreement constitutes “plan assets” as defined under ERISA and that the rights and interests of the Assignee in and under the Loan Documents will not be “plan assets” under ERISA.  On and after the effective date of such assignment, the Assignee shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party thereto, and the transferor Lender shall be released with respect to the Commitments and Outstanding Credit Exposure assigned to the Assignee without any further consent or action by any Borrower, the Lenders or the Agent.  In the case of an assignment covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a Lender hereunder but shall continue to be entitled to the benefits of, and subject to, those provisions of this Agreement and the other Loan Documents which survive payment of the Obligations and termination of the applicable agreement.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 17.3. 17.4.4 Tax Treatment.  If any interest in any Loan Document is transferred to any Assignee or Participant which is not incorporated under the laws of the United States or any State thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 7.4. 17.5 Register.  The Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in the United States of America, a copy of each Assignment delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender, and participations of each Lender in Letters of Credit, pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive in the absence of manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by any Borrower or Lender at any reasonable time and from time to time upon reasonable prior notice. 17.6 Dissemination of Information.  Each Borrower, for itself and its Subsidiaries, authorizes each Lender to disclose to any Participant or Assignee and prospective Participant or 173 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Assignee any and all financial or other information in such Lender’s possession concerning any Loan Party, subject to the confidentiality requirements of Section 17.26 of this Agreement. 17.7 Ratable Payments.  If any Lender, whether by setoff or otherwise, has payment made to it upon its Outstanding Credit Exposure, Outstanding New Vehicle Floorplan Exposure, Outstanding Used Vehicle Floorplan Exposure, Outstanding Service Loaner Vehicle Floorplan Exposure, and/or Outstanding Revolving Loan Exposure (other than payments received pursuant to Sections 7.1, 7.2 or 7.4 or payments specifically payable only to such Lender) in a greater proportion than that received by any other Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Aggregate Outstanding Credit Exposure held by the other Lenders so that after such purchase each Lender will hold its Pro Rata Share of the Aggregate Outstanding Credit Exposure, Outstanding New Vehicle Floorplan Exposure, Outstanding Used Vehicle Floorplan Exposure, Outstanding Service Loaner Vehicle Floorplan Exposure and/or Outstanding Revolving Loan Exposure.  If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral or other protection ratably in proportion to their respective Pro Rata Shares.  In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made. 17.8 Setoff.  Each Borrower hereby grants each Lender a security interest in all deposits, credits and deposit accounts (including all account balances, whether provisional or final and whether or not collected or available) of such Borrower with such Lender or any Affiliate of such Lender (the “Deposits”).  In addition to, and without limitation of, any rights of the Lenders under Applicable Law, if any Borrower is not Solvent, or if any Event of Default occurs, each Borrower authorizes each Lender to offset and apply all such Deposits toward the payment of the Obligations owing to such Lender, whether or not the Obligations, or any part thereof, shall then be due and regardless of the existence or adequacy of any collateral, guaranty or any other security, right or remedy available to such Lender or the Lenders; provided, that in the event that any Defaulting Lender shall exercise such right of setoff, (a) all amounts so set off shall be paid over immediately to the Agent for further application in accordance with the provisions of Section 6.14 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Agent, the LC Issuer, and the Lenders, and (b) the Lender shall provide promptly to the Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The aforesaid rights may be exercised by the Agent or such Lender against any Borrower or against any trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver or execution, judgment or attachment creditor of any Borrower or against anyone else claiming through or against any Borrower or such trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver, or execution, judgment or attachment creditor, notwithstanding the fact that such right of setoff shall not have been exercised by the Agent or such Lender prior to the occurrence of an Event of Default. 17.9 Amendments and Waivers. 174 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

17.9.1 Subject to the provisions of this Section 17.9, the Required Lenders (or the Agent with the consent in writing of the Required Lenders) and the Borrowers may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or Borrowers hereunder or waiving any Event of Default hereunder; provided, however, that no such supplemental agreement shall: (a) without the consent of all Lenders, extend the final maturity of any Loan, or extend the expiry date of any Letter of Credit to a date after the Termination Date or postpone any regularly scheduled payment of principal of any Loan or forgive all or any portion of the principal amount thereof or any Reimbursement Obligation, or reduce the rate (except as provided in Section 7.3) or extend the time of payment of interest or fees thereon or on Reimbursement Obligations or increase the amount of any Commitment of any Lender hereunder; (b) without the consent of all of the Lenders, change the definition of Required Lenders or the Pro Rata Shares (or payment mechanics provided in Section 6.9) required to take any action hereunder; (c) without the consent of all of the Lenders, extend the Termination Date, or permit any Borrower to assign its rights under this Agreement; (d) without the consent of all of the Lenders, amend this Section 17.9, or any provision herein which requires consent or other action by all Lenders; (e) without the consent of all of the Lenders, except as permitted by this Agreement, release any Guarantor or, except as provided herein or in the Collateral Documents, release all or a substantial part of the Collateral; (f) without the consent of all of the Lenders, except pursuant to an Intercreditor Agreement or as otherwise permitted by this Agreement, (i) subordinate, or have the effect of subordinating, the Obligations hereunder to any other Indebtedness or other obligation or (ii) subordinate, or have the effect of subordinating, the Liens securing the Obligations to Liens securing any other Indebtedness or other obligation; or (g) without the consent of all of the Lenders, amend Section 14.3 or Section 17.7. No amendment of any provision of this Agreement relating to the Agent shall be effective without the written consent of the Agent, and no amendment of any provision relating to the LC Issuer shall be effective without the written consent of the LC Issuer.  No amendment to any provision of this Agreement relating to the Swing Line Lender or any Swing Line Loans shall be effective without the written consent of the Swing Line Lender. 17.9.2 Notwithstanding the foregoing, or the provisions of this Section 17.9, any fee or other amount payable by any Borrower or Borrowers solely to the Agent, the Swing Line Lender or the LC Issuer, may be changed with the consent of only such Borrower or Borrowers 175 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

and the Agent and, if applicable, the affected Swing Line Lender or LC Issuer, provided that no Lender will be required to pay any such fee to which it has not agreed. 17.10 Waiver; Cumulative Remedies.  No failure or delay on the part of the Agent or any Lender in exercising any right, power, remedy or privilege hereunder or under any of the other Loan Documents and no course of dealing between any Loan Party and the Agent or any Lender will operate as a waiver of such right, power, remedy or privilege, nor will any single or partial exercise of any right, power or privilege hereunder preclude other or further exercise thereof or the exercise of any other right, power, remedy or privilege.  Waiver of any Default shall not be a waiver of any other subsequent or prior Default.  No waiver of any Default (whether or not Agent or any Lender knows or should have known of such Default) shall be deemed to have occurred unless Agent (to the extent authorized under Section 14.2.4 or 17.9.2) or the Required Lenders has expressly agreed in writing specifying such waiver.  No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement shall in any event be effective unless the same shall be in writing and signed and delivered by the Agent, the Required Lenders, or all of the Lenders, as otherwise set forth in this Agreement.  Any waiver of any provision of this Agreement, and any consent to any departure by any Loan Party from the terms of any provision of this Agreement, shall be effective only in the specific instance and for the specific purpose for which given.  No notice to or demand on any Loan Party not required hereunder shall in any event entitle any Loan Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the Agent or any Lender to any other or further action in any circumstances without notice or demand.  The rights and remedies herein specified are cumulative and are not exclusive of any rights or remedies which the Agent or any Lender would otherwise have at law or in equity or otherwise by agreement. 17.11 Notices. 17.11.1 Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Section 17.11.2 below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows: (a) if to any Borrower, at its address or facsimile number set forth on the signature page hereof; (b) if to the Agent, at its address or facsimile number set forth on the signature page hereof; (c) if to LC Issuer, at its address or facsimile number set forth on the signature page hereof; (d) if to a Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire, a copy of which Administrative Questionnaire shall be provided to the Company. 176 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).  Notices delivered through electronic communications to the extent provided in Section 17.11.2 below, shall be effective as provided in said Section 17.11.2. Notwithstanding any contrary provision hereof, any request for a Credit Extension shall not be effective until received by the Agent. 17.11.2 Electronic Communications. (a) Notices and other communications to the Lenders and the LC Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and internet or intranet websites) pursuant to procedures approved by the Agent or as otherwise determined by the Agent, provided that the foregoing shall not apply to notices to any Lender or the LC Issuer if such Lender or the LC Issuer, as applicable, has notified the Agent that it is incapable of receiving notices by electronic communication.  The Agent or any Borrower may, in its respective discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it or as it otherwise determines, provided that such determination or approval may be limited to particular notices or communications. (b) Unless the Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (a) of notification that such notice or communication is available and identifying the website address therefor. 17.11.3 Change of Address.  Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto. 17.12 Integration; Conflicting Terms.  This Agreement (including the exhibits and schedules) together with the other Loan Documents embody the entire agreement of the parties on the subject matter hereof and except as otherwise specifically set forth in this Agreement or any other Loan Document, supersedes and replaces all prior agreements, oral and written, on such subject matter.  If any term of any of the other Loan Documents expressly conflicts with the provisions of this Agreement, the provisions of this Agreement shall control; provided, however, that the inclusion of additional, greater or supplemental rights and remedies of the Agent and Lenders or the inclusion of additional or greater obligations and responsibilities of the Loan Parties, in any of the other Loan Documents shall not be deemed a conflict with this Agreement. 177 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

17.13 Governing Law.  Except to the extent that the Agent or any Lender has greater rights and remedies under federal law or to the extent otherwise specifically stated in any Loan Document, this Agreement and the other Loan Documents shall be governed by and construed and enforced in accordance with the laws of the State of Oregon without regard to conflicts of law principles but giving effect to federal laws applicable to national banks, except that matters concerning the validity and perfection of security interests covered thereby shall be governed by the conflicts of law provisions of the applicable Uniform Commercial Code. 17.14 Consent To Jurisdiction.  EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN OR WITH JURISDICTION OVER PORTLAND, OREGON IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE OBLIGATIONS AND THE LOAN DOCUMENTS AND EACH BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY ANY BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT LOCATED IN OR WITH JURISDICTION OVER PORTLAND, OREGON. 17.15 Documents Satisfactory to the Agent and Required Lenders.  All information, documents and instruments required to be executed or delivered to the Agent shall be in form and substance reasonably satisfactory to the Agent and the Required Lenders. 17.16 Exhibits.  All exhibits and schedules referred to herein are attached hereto and hereby incorporated by reference as if fully set forth herein. 17.17 Headings.  Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents. 17.18 Nonliability of Lenders.  The relationship between the Borrowers on the one hand and the Lenders, the LC Issuer and the Agent on the other hand shall be solely that of borrower and lender.  Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any fiduciary responsibilities to any Borrower.  Neither the Agent, the Arranger, the LC Issuer nor any Lender undertakes any responsibility to any Borrower to review or inform any Borrower of any matter in connection with any phase of any Borrower’s business or operations.  Each Borrower agrees that neither the Agent, the Arranger, the LC Issuer nor any Lender shall have liability to any Borrower (whether sounding in tort, contract or otherwise) for losses suffered by 178 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

any Borrower in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought.  Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any liability with respect to, and each Borrower hereby waives, releases and agrees not to sue for, any special, indirect, consequential or punitive damages suffered by any Borrower in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby.  It is agreed that the Arranger shall, in its capacity as such, have no duties or responsibilities under the Agreement or any other Loan Document.  Each Lender acknowledges that it has not relied and will not rely on the Arranger in deciding to enter into the Agreement or any other Loan Document or in taking or not taking any action. 17.19 Survival of Representations.  All representations and warranties of any Borrower contained in this Agreement shall survive the making of the Credit Extensions herein contemplated. 17.20 Governmental Regulation.  Anything contained in this Agreement to the contrary notwithstanding, neither the LC Issuer nor any Lender shall be obligated to extend credit to the Borrowers in violation of any limitation or prohibition provided by any Applicable Law. 17.21 Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. 17.22 Severability.  Whenever possible, each provision of this Agreement and each of the other Loan Documents shall be interpreted in such a manner as to be valid and effective under Applicable Law.  Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable. 17.23 Construction.  This Agreement and the other Loan Documents are the result of negotiations among, and have been reviewed by, each Loan Party, each Lender, the Agent and their respective counsel (or, if any party has not had the Loan Documents reviewed by its counsel, such party has had the opportunity to do so and has voluntarily chosen not to do so). Accordingly, the Loan Documents shall be deemed to be the product of all parties hereto, and no ambiguity shall be construed in favor of or against any Loan Party, the Agent, or any Lender. 17.24 USA Patriot Act Notification.  The following notification is provided to each Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318: 179 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Each Lender that is subject to the requirements of the PATRIOT Act hereby notifies each Borrower and each other Loan Party that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the PATRIOT Act. 17.25 Nonreliance.  Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U) of the Board for the repayment of the Credit Extensions provided for herein. 17.26 Confidentiality.  The Agent and each Lender agree to take reasonable precautions, in accordance with customary procedures, to maintain the confidentiality of all non-public information provided to it by any Loan Party under this Agreement or any other Loan Document, which is identified as confidential at the time such Person provides the information, and agrees that it shall not use any such information other than in connection with or in enforcement of this Agreement and the other Loan Documents or in connection with other business now or hereafter existing or contemplated with any Loan Party, except to the extent such information (a) was or becomes generally available to the public other than as a result of disclosure by the Agent or Lender, or (b) was or becomes available on a non-confidential basis from a source other than a Loan Party, provided that such source is not bound by a confidentiality agreement with a Loan Party known to the Agent or such Lender; provided, however, that the Agent or any Lender may disclose such confidential information (p) at the request or pursuant to any requirement of any Governmental Body or in connection with an examination of the Agent or such Lender by any such authority; (q) pursuant to subpoena or other court process; (r) when requested or required to do so in accordance with the provisions of any Applicable Law; (s) to the extent reasonably required in connection with any litigation or proceeding to which the Agent, any Lender or their respective affiliates may be party; (t) to the extent reasonably required in connection with the exercise of any remedy hereunder or under any other Loan Document; (u) to the Agent’s or such Lender’s and its affiliates, directors, officers, employees and agents, including accountants, attorneys and other professional advisors who are subject to similar limitations; (v) to any Participant or Assignee, actual or potential, provided that such Person agrees in writing to keep such information confidential to the same extent required of the Lenders hereunder; (w) to its direct or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other professional advisors to such counterparties, (x) to rating agencies if requested or required by such agencies in connection with a rating relating to the Obligations hereunder; (y) as to the Agent or any Lender or its affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which any Loan Party is party or is deemed party with the Agent or such Lender or affiliate; and (z) to its affiliates; provided, that with respect to disclosures under clauses (q) and (r), such Lender shall use commercially reasonable efforts to notify the Company (unless such notification is prohibited by any Applicable Law) of the proposed disclosure before such disclosure is made to reasonably afford the Company the opportunity to seek to prevent such disclosure. 17.27 Ford Letter Agreement.  Each Lender hereby agrees to the terms and conditions set forth in the letter agreement regarding Clarification of Supplemental Terms and Conditions 180 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

Agreement dated April 5, 2012 and agreed to on April 10, 2012 between Ford Motor Company and the Company, a copy of which has been provided to each Lender. 17.28 Waiver of Jury Trial.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, THE AGENT, THE LC ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THE OBLIGATIONS AND THE LOAN DOCUMENTS OR THE RELATIONSHIP ESTABLISHED THEREUNDER.  EACH OF THEM REPRESENTS TO THE OTHER PARTIES THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN. 17.29 Disclosure.  Under Oregon law, most agreements promises and commitments made by any Lender concerning loans and other credit extensions which are not for personal, family or household purposes or secured solely by the borrower's residence must be in writing, express consideration and be signed by the Lender to be enforceable. 17.30 Acknowledgement and Consent to Bail-In of EEAAffected Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEAAffected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Downwrite-down and Conversion Powers of an EEAconversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by: (a) the application of any Write-Down and Conversion Powers by an EEAthe applicable Resolution Authority to any such liabilities arising hereunder whichthat may be payable to it by any party hereto that is an EEAAffected Financial Institution; and (b) the effects of any Bail-In Action on any such liability, including, if applicable: (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEAAffected Financial Institution, its parent entityundertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or (iii) the variation of the terms of such liability in connection with the exercise of the Write-Downwrite-down and Conversion Powers of any EEAconversion powers of the applicable Resolution Authority. 181 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

17.31 Amendment and Restatement. This Agreement constitutes an amendment and restatement of the Existing Loan Agreement effective from and after the Closing Date.  The execution and delivery of this Agreement shall not constitute a novation of any indebtedness or other obligations owing to the existing Lenders or Agent under the Existing Loan Agreement. On the Closing Date, the credit facilities described in the Existing Loan Agreement shall be amended, supplemented, modified and restated in their entirety as described herein, and all loans and other obligations of the Company and the other Borrowers outstanding as of such date under the Existing Loan Agreement shall be deemed to be loans and obligations outstanding under the corresponding facilities described herein, without any further action by any Person, except that the Agent shall make such transfers of funds as are necessary in order that the outstanding balance of such loans, together with any extensions of credit made on the Closing Date, reflect the Commitments of the Lenders hereunder. 17.32 Acknowledgement Regarding any Supported QFCs.  To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States): (a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support. (b) As used in this Section 17.31, the following terms have the following meanings: 182 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party. “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D). [Signature pages follow] 183 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

BORROWERS: LITHIA MOTORS, INC. By: Name: Tina Miller Title: Senior Vice President and Chief Financial Officer ANN ARBOR-B, LLC ANN ARBOR-CC, LLC ANN ARBOR-CJD, LLC ANN ARBOR-M, LLC AUSTIN-H, INC. AUSTIN-KI, INC. AVONDALE-N, INC. BAIERL AUTOMOTIVE CORPORATION BAIERL CHEVROLET, INC. BEND-CDJR, LLC BEND-N, LLC CADILLAC OF PORTLAND LLOYD CENTER, LLC CAMP AUTOMOTIVE, INC. CLEAR LAKE-I, INC. CLINTON-C, LLC CRANBERRY AUTOMOTIVE, INC. DALLAS-H, INC. DALLAS-K, INC. DALLAS-T, INC. DARON MOTORS LLC DCH (OXNARD) INC. DCH BLOOMFIELD LLC DCH CA, LLC DCH CALABASAS-A, LLC DCH CALIFORNIA MOTORS INC. DCH DEL NORTE, INC. DCH ESSEX INC. DCH FREEHOLD LLC DCH KOREAN IMPORTS LLC DCH MAMARONECK LLC DCH MISSION VALLEY LLC DCH MONMOUTH LLC DCH MONTCLAIR LLC DCH MOTORS LLC DCH NANUET LLC DCH NY MOTORS LLC 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

DCH OXNARD 1521 IMPORTS INC. DCH RIVERSIDE-S, INC. DCH TEMECULA IMPORTS LLC DCH TEMECULA MOTORS LLC DCH TORRANCE IMPORTS INC. FARMINGTON HILLS IMPORTS, LLC FARMINGTON HILLS-CJD, LLC FARMINGTON HILLS-H, LLC FARMINGTON HILLS-N, LLC FARMINGTON HILLS-T, LLC FERNDALE-BG, LLC FREEHOLD NISSAN LLC FRISCO-K, INC. GARDEN CITY-CJD, LLC HOUSTON-A, INC. HOUSTON-H, INC. HOUSTON-I, INC. HUTCHINS EUGENE NISSAN, INC. HUTCHINS IMPORTED MOTORS, INC. KATY-H, INC. KNOXVILLE-CJD, LLC LAD CARSON-N, LLC LAD MISSION VIEJO-JLR, INC. LAD-AU, LLC LAD-MB, LLC LAD-N, LLC LAD-P, LLC LAD-T, LLC LAD-V, LLC LBMP, LLC LEAGUE CITY-H, INC LGPAC, INC. LITHIA ACDM, INC. LITHIA ANCHORAGE-C, LLC LITHIA ANCHORAGE-H, LLC LITHIA ARMORY GARAGE, LLC LITHIA BAIERL-S, LLC LITHIA BRYAN TEXAS, INC. LITHIA BUFFALO-A, LLC LITHIA CCTF, INC. LITHIA CDH, INC. LITHIA CIMR, INC. LITHIA CJDO, INC. LITHIA CJDSA, INC. LITHIA CJDSF, INC. 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

LITHIA CM, INC. LITHIA CO, INC. LITHIA CRATER LAKE-M, INC. LITHIA CSA, INC. LITHIA DE, INC. LITHIA DES MOINES-VW, LLC LITHIA DMID, INC. LITHIA DODGE OF TRI-CITIES, INC. LITHIA FRESNO, INC. LITHIA HAMILTON-H, LLC LITHIA HAZLETON-H, LLC LITHIA HDM, INC. LITHIA HGF, INC. LITHIA HMID, INC. LITHIA IMPORTS OF ANCHORAGE, INC. LITHIA JEF, INC. LITHIA KLAMATH, INC. LITHIA KLAMATH-T, INC. LITHIA LSGF, INC. LITHIA MBDM, INC. LITHIA MEDFORD HON, INC. LITHIA MIDDLETOWN-L, LLC LITHIA MOON-S, LLC LITHIA MOON-V, LLC LITHIA MORGANTOWN-CJD, LLC LITHIA MORGANTOWN-S, LLC LITHIA MTLM, INC. LITHIA NA, INC. LITHIA NC, INC. LITHIA ND ACQUISITION CORP. #3 LITHIA ND ACQUISITION CORP. #4 LITHIA NDM, INC. LITHIA NF, INC. LITHIA OF ABILENE, LLC LITHIA OF ANCHORAGE, INC. LITHIA OF BEND #1, LLC LITHIA OF BEND #2, LLC LITHIA OF BENNINGTON – 2, LLC LITHIA OF BENNINGTON – 3, LLC LITHIA OF BENNINGTON – 4, LLC LITHIA OF BILLINGS II LLC LITHIA OF BILLINGS, INC. LITHIA OF CLEAR LAKE, LLC LITHIA OF DES MOINES, INC. LITHIA OF EUREKA, INC. 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

LITHIA OF FAIRBANKS, INC. LITHIA OF GREAT FALLS, INC. LITHIA OF HELENA, INC. LITHIA OF HONOLULU-A, INC. LITHIA OF HONOLULU-BGMCC, LLC LITHIA OF HONOLULU-V, LLC LITHIA OF KILLEEN, LLC LITHIA OF LODI, INC. LITHIA OF MAUI-H, LLC LITHIA OF MISSOULA II, LLC LITHIA OF MISSOULA, INC. LITHIA OF POCATELLO, INC. LITHIA OF PORTLAND I, LLC LITHIA OF PORTLAND, LLC LITHIA OF ROBSTOWN, LLC LITHIA OF ROSEBURG, INC. LITHIA OF SANTA ROSA, INC. LITHIA OF SEATTLE, INC. LITHIA OF SOUTH CENTRAL AK, INC. LITHIA OF STOCKTON, INC. LITHIA OF STOCKTON-V, INC. LITHIA OF TF, INC. LITHIA OF TROY, LLC LITHIA OF UTICA – 1, LLC LITHIA OF UTICA – 3, LLC LITHIA OF UTICA – 4, LLC LITHIA OF WALNUT CREEK, INC. LITHIA OF WASILLA, LLC LITHIA OF YORKVILLE – 1, LLC LITHIA OF YORKVILLE – 2, LLC LITHIA OF YORKVILLE – 3, LLC LITHIA OF YORKVILLE – 4, LLC LITHIA OF YORKVILLE – 5, LLC LITHIA ORCHARD PARK-H, LLC LITHIA PARAMUS-M, LLC LITHIA PITTSBURGH-S, LLC LITHIA RAMSEY-B, LLC LITHIA RAMSEY-L, LLC LITHIA RAMSEY-M, LLC LITHIA RAMSEY-T, LLC LITHIA RENO SUB-HYUN, INC. LITHIA RENO-CJ, LLC LITHIA RENO-VW, LLC LITHIA SALMIR, INC. LITHIA SEA P, INC. 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

LITHIA SEASIDE, INC. LITHIA SOC, INC. LITHIA SPOKANE-B, LLC LITHIA SPOKANE-S, LLC LITHIA TA, INC. LITHIA TO, INC. LITHIA TR, INC. LITHIA VAUDM, INC. LITHIA WEXFORD-H, LLC LLL SALES CO LLC LMBB, LLC LMBP, LLC LMOP, LLC LOS ANGELES-M, INC. MESQUITE-K, INC. MESQUITE-M, INC. MISSION HILLS-H, INC. NEW PORT RICHEY-V, LLC NOVI-I, LLC ORLANDO-JLR, LLC PARAMUS WORLD MOTORS LLC PHOENIX-T, INC. PLYMOUTH-C, LLC ROCKWALL-H, INC. ROCKWALL-K, INC. ROUND ROCK-K, INC. SACRAMENTO-L, INC. SALEM-B, LLC SALEM-H, LLC SALEM-V, LLC SAN FRANCISCO-B, INC. SANFORD-CJD, LLC SHARLENE REALTY LLC SHERMAN OAKS-A, INC. SHERMAN OAKS-AC, LLC SHERMAN OAKS-B, LLC STERLING-BM, LLC STERLING-RLM, LLC TAMPA-H, LLC THOUSAND OAKS-S, INC. TROY EXOTICS, LLC TROY-BG, LLC TROY-C, LLC TROY-CJD, LLC TROY-H, LLC 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

TROY-I, LLC TROY-JLR, LLC TROY-M, LLC TROY-N, LLC TROY-S, LLC TROY-T, LLC TROY-V, LLC TROY-VW, LLC TUSTIN MOTORS INC. UNION-H, LLC URBANDALE-S, LLC VALENCIA-A, INC. VAN NUYS-C, INC. VAN NUYS-H, INC. VAN NUYS-L, INC. VAN NUYS-T, INC. WESLEY CHAPEL-C, LLC WESLEY CHAPEL-H, LLC WESLEY CHAPEL-M, LLC WESLEY CHAPEL-T, LLC By: Name: Tina Miller Title: Authorized Officer 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

ACKNOWLEDGMENT AND CONSENT OF GUARANTORS Each undersigned Guarantor hereby acknowledges, consents, and agrees to all terms and conditions of the foregoing agreement. 797 VALLEY STREET LLC ANN ARBOR-B, LLC ANN ARBOR-CC, LLC ANN ARBOR-CJD, LLC ANN ARBOR-M, LLC AUSTIN-H, INC. AUSTIN-KI, INC. AVONDALE-N, INC. BAIERL AUTO PARTS, LLC BAIERL AUTOMOTIVE CORPORATION BAIERL CHEVROLET, INC. BAIERL HOLDING, LLC BEND-CDJR, LLC BEND-N, LLC CADILLAC OF PORTLAND LLOYD CENTER, LLC CAMP AUTOMOTIVE, INC. CARBONE AUTO BODY, LLC CLEAR LAKE-I, INC. CLINTON-C, LLC CRANBERRY AUTOMOTIVE, INC. DAH CHONG HONG CA TRADING LLC DAH CHONG HONG TRADING CORPORATION DALLAS COLLISION, INC. DALLAS-H, INC. DALLAS-K, INC. DALLAS-T, INC. DARON MOTORS LLC DCH (OXNARD) INC. DCH AUTO GROUP (USA) INC. DCH BLOOMFIELD LLC DCH CA LLC DCH CALABASAS-A, LLC DCH CALIFORNIA INVESTMENTS LLC DCH CALIFORNIA MOTORS INC. DCH DEL NORTE, INC. DCH DMS NJ, LLC DCH ESSEX INC. DCH FINANCIAL NJ, LLC DCH FREEHOLD LLC 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

DCH HOLDINGS LLC DCH INVESTMENTS INC. (NEW JERSEY) DCH INVESTMENTS INC. (NEW YORK) DCH KOREAN IMPORTS LLC DCH MAMARONECK LLC DCH MISSION VALLEY LLC DCH MONMOUTH LLC DCH MONTCLAIR LLC DCH MOTORS LLC DCH NANUET LLC DCH NORTH AMERICA INC. DCH NY MOTORS LLC DCH OXNARD 1521 IMPORTS INC. DCH RIVERSIDE-S, INC. DCH SIMI VALLEY INC. DCH SUPPORT SERVICES, LLC DCH TEMECULA IMPORTS LLC DCH TEMECULA MOTORS LLC DCH THOUSAND OAKS-F, INC. DCH TL HOLDINGS LLC DCH TL NY HOLDINGS LLC DCH TORRANCE IMPORTS INC. DRIVEWAY MOTORS, LLC FARMINGTON HILLS IMPORTS, LLC FARMINGTON HILLS-CJD, LLC FARMINGTON HILLS-H, LLC FARMINGTON HILLS-N, LLC FARMINGTON HILLS-T, LLC FERNDALE COLLISION, LLC FERNDALE-BG, LLC FERNDALE-F, LLC FH COLLISION, LLC FLORIDA SS, LLC FREEHOLD NISSAN LLC FRISCO-K, INC. FUSE AUTO SALES, LLC GARDEN CITY-CJD, LLC GREENCARS, INC. HOUSTON-A, INC. HOUSTON-H, INC. HOUSTON-I, INC. HUTCHINS EUGENE NISSAN, INC. HUTCHINS IMPORTED MOTORS, INC. KATY-H, INC. KNOXVILLE-CJD, LLC 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

LA MOTORS HOLDING, LLC LAD ADVERTISING, INC. LAD CARSON-N, LLC LAD MISSION VIEJO-JLR, INC. LAD MOBU, INC. LAD-AU, LLC LAD-MB, LLC LAD-N, LLC LAD-P, LLC LAD-T, LLC LAD-V, LLC LATHAM FORD-F, LLC LBMP, LLC LEAGUE CITY-H, INC. LFKF, LLC LGPAC, INC. LITHIA ACDM, INC. LITHIA AIRCRAFT, INC. LITHIA ANCHORAGE-C, LLC LITHIA ANCHORAGE-H, LLC LITHIA ARMORY GARAGE, LLC LITHIA AUCTION & RECON, LLC LITHIA AUTO SERVICES, INC. LITHIA BA HOLDING, INC. LITHIA BAIERL-S, LLC LITHIA BNM, INC. LITHIA BRYAN TEXAS, INC. LITHIA BUFFALO-A, LLC LITHIA CCTF, INC. LITHIA CDH, INC. LITHIA CIMR, INC. LITHIA CJDO, INC. LITHIA CJDSA, INC. LITHIA CJDSF, INC. LITHIA CM, INC. LITHIA CO, INC. LITHIA CRATER LAKE-F, INC. LITHIA CRATER LAKE-M, INC. LITHIA CSA, INC. LITHIA DE, INC. LITHIA DES MOINES-VW, LLC LITHIA DM, INC. LITHIA DMID, INC. LITHIA DODGE OF TRI-CITIES, INC. LITHIA EATONTOWN-F, LLC 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

LITHIA FINANCIAL CORPORATION LITHIA FLCC, LLC LITHIA FLORIDA HOLDING, INC. LITHIA FMF, INC. LITHIA FORD OF BOISE, INC. LITHIA FRESNO, INC. LITHIA HAMILTON-H, LLC LITHIA HAZLETON-H, LLC LITHIA HDM, INC. LITHIA HGF, INC. LITHIA HMID, INC. LITHIA HPI, INC. LITHIA IDAHO FALLS-F, INC. LITHIA IMPORTS OF ANCHORAGE, INC. LITHIA JEF, INC. LITHIA KLAMATH, INC. LITHIA KLAMATH-T, INC. LITHIA LBGGF, INC. LITHIA LHGF, INC. LITHIA LSGF, INC. LITHIA MBDM, INC. LITHIA McMURRAY-C, LLC LITHIA MEDFORD HON, INC. LITHIA MICHIGAN HOLDING, INC. LITHIA MIDDLETOWN-L, LLC LITHIA MMF, INC. LITHIA MONROEVILLE-A, LLC LITHIA MONROEVILLE-C, LLC LITHIA MONROEVILLE-F, LLC LITHIA MOON-S, LLC LITHIA MOON-V, LLC LITHIA MORGANTOWN-CJD, LLC LITHIA MORGANTOWN-F, LLC LITHIA MORGANTOWN-S, LLC LITHIA MOTORS SUPPORT SERVICES, INC. LITHIA MTLM, INC. LITHIA NA, INC. LITHIA NC, INC. LITHIA ND ACQUISITION CORP. #1 LITHIA ND ACQUISITION CORP. #3 LITHIA ND ACQUISITION CORP. #4 LITHIA NDM, INC. LITHIA NF, INC. LITHIA NORTHEAST REAL ESTATE, LLC LITHIA NORTHWEST REAL ESTATE, LLC 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

LITHIA OF ABILENE, LLC LITHIA OF ANCHORAGE, INC. LITHIA OF BEND #1, LLC LITHIA OF BEND #2, LLC LITHIA OF BENNINGTON – 1, LLC LITHIA OF BENNINGTON – 2, LLC LITHIA OF BENNINGTON – 3, LLC LITHIA OF BENNINGTON – 4, LLC LITHIA OF BILLINGS II LLC LITHIA OF BILLINGS, INC. LITHIA OF CASPER, LLC LITHIA OF CLEAR LAKE, LLC LITHIA OF CORPUS CHRISTI, INC. LITHIA OF DES MOINES, INC. LITHIA OF EUREKA, INC. LITHIA OF FAIRBANKS, INC. LITHIA OF GREAT FALLS, INC. LITHIA OF HELENA, INC. LITHIA OF HONOLULU-A, INC. LITHIA OF HONOLULU-BGMCC, LLC LITHIA OF HONOLULU-F, LLC LITHIA OF HONOLULU-V, LLC LITHIA OF KILLEEN, LLC LITHIA OF LODI, INC. LITHIA OF MAUI-H, LLC LITHIA OF MISSOULA II, LLC LITHIA OF MISSOULA III, INC. LITHIA OF MISSOULA, INC. LITHIA OF POCATELLO, INC. LITHIA OF PORTLAND I, LLC LITHIA OF PORTLAND, LLC LITHIA OF ROBSTOWN, LLC LITHIA OF ROSEBURG, INC. LITHIA OF SANTA ROSA, INC. LITHIA OF SEATTLE, INC. LITHIA OF SOUTH CENTRAL AK, INC. LITHIA OF SPOKANE II, INC. LITHIA OF SPOKANE, INC. LITHIA OF STOCKTON, INC. LITHIA OF STOCKTON-V, INC. LITHIA OF TF, INC. LITHIA OF TROY, LLC LITHIA OF UTICA – 1, LLC LITHIA OF UTICA – 2, LLC LITHIA OF UTICA – 3, LLC 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

LITHIA OF UTICA – 4, LLC LITHIA OF WALNUT CREEK, INC. LITHIA OF WASILLA, LLC LITHIA OF YORKVILLE – 1, LLC LITHIA OF YORKVILLE – 2, LLC LITHIA OF YORKVILLE – 3, LLC LITHIA OF YORKVILLE – 4, LLC LITHIA OF YORKVILLE – 5, LLC LITHIA ORCHARD PARK-H, LLC LITHIA PARAMUS-M, LLC LITHIA PITTSBURGH-S, LLC LITHIA RAMSEY-B, LLC LITHIA RAMSEY-L, LLC LITHIA RAMSEY-M, LLC LITHIA RAMSEY-T, LLC LITHIA REAL ESTATE, INC. LITHIA RENO SUB-HYUN, INC. LITHIA RENO-CJ, LLC LITHIA RENO-VW, LLC LITHIA ROSE-FT, INC. LITHIA SALMIR, INC. LITHIA SEA P, INC. LITHIA SEASIDE, INC. LITHIA SOC, INC. LITHIA SPOKANE-B, LLC LITHIA SPOKANE-S, LLC LITHIA SSP, LLC LITHIA TA, INC. LITHIA TENNESSEE HOLDING, INC. LITHIA TO, INC. LITHIA TR, INC. LITHIA UNIONTOWN-C, LLC LITHIA VA REAL ESTATE, LLC LITHIA VAUDM, INC. LITHIA VF, INC. LITHIA VIRGINIA HOLDING, INC. LITHIA WEXFORD-H, LLC LLL SALES CO LLC LMBB, LLC LMBP, LLC LMOP, LLC LOS ANGELES-M, INC. LSTAR, LLC MEDFORD INSURANCE, LLC MESQUITE-K, INC. 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

MESQUITE-M, INC. MILFORD DCH, INC. MISSION HILLS-H, INC. NEW PORT RICHEY-H, LLC NEW PORT RICHEY-V, LLC NORTHLAND FORD INC. NOVI-I, LLC ORLANDO-JLR, LLC PA REAL ESTATE, LLC PA SUPPORT SERVICES, LLC PARAMUS COLLISION, LLC PARAMUS WORLD MOTORS LLC PERSONALIZED MARKETING, LLC PHOENIX-T, INC. PLYMOUTH-C, LLC RAMSEY HOLDINGCO, INC. RFA HOLDINGS, LLC ROCKWALL-H, INC. ROCKWALL-K, INC. ROUND ROCK-K, INC. SACRAMENTO-L, INC. SALEM-B, LLC SALEM-H, LLC SALEM-V, LLC. SAN FRANCISCO-B, INC. SANFORD-CJD, LLC SHARLENE REALTY LLC SHERMAN OAKS-A, INC. SHERMAN OAKS-AC, LLC SHERMAN OAKS-B, LLC SHIFT PORTLAND, LLC STERLING HEIGHTS-F, LLC STERLING-BM, LLC STERLING-RLM, LLC SUBURBAN AUTO AGENCY, LLC TAMPA-H, LLC THOUSAND OAKS-S, INC. TN REAL ESTATE, LLC TROY COLLISION, LLC TROY EXOTICS, LLC TROY-A, LLC TROY-BG, LLC TROY-C, LLC TROY-CJD, LLC TROY-H, LLC 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

TROY-I, LLC TROY-JLR, LLC TROY-M, LLC TROY-N, LLC TROY-S, LLC TROY-T, LLC TROY-V, LLC TROY-VW, LLC TUSTIN MOTORS INC. UNION-H, LLC URBANDALE-S, LLC VALENCIA-A, INC. VAN NUYS-C, INC. VAN NUYS-H, INC. VAN NUYS-L, INC. VAN NUYS-T, INC. WATERFORD-F, LLC WESLEY CHAPEL-C, LLC WESLEY CHAPEL-H, LLC WESLEY CHAPEL-Hy, LLC WESLEY CHAPEL-M, LLC WESLEY CHAPEL-T, LLC ZELIENOPLE REAL ESTATE I, L.P. ZELIENOPLE REAL ESTATE, L.L.C. By: Name: Tina Miller Title: Authorized Officer 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

U.S. BANK NATIONAL ASSOCIATION, as Agent, Lender, Swing Line Lender, and LC Issuer By:  Name: Shaun Ross Title: Vice President Notice Address: 13010 SW 68th Parkway Portland, OR 97223 Fax: (503) 872-7562 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

[LENDER NAME], as Lender By:  Name: Title: 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

110393723.6 0063724-00082 115525625.4 0063724-00082 

 

110393723.6 0063724-00082 115525625.4 0063724-00082 Revolving Loan Commitment TD Bank [***] Pro Rata Share of Aggregate Lender Commitment Service Loaner Vehicle Commitment Bank of America Truist Bank [***] [***] JP Morgan Chase Bank [***] Wells Fargo Bank, NA [***] New Vehicle Floorplan Commitment U.S. Bank Mercedes-Benz Financial Capital One NA [***] [***] SCHEDULE 1Name of Financial Institution [***] BMW Financial Services [***] Used Vehicle Floorplan Commitment American Honda Finance Corporation Toyota Motor Credit PNC Bank, National [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] 

 

110393723.6 0063724-00082 115525625.4 0063724-00082 BMO Harris Bank [***] Santander Bank, N.A. Hyundai Capital America [***] [***] The Huntington National Bank [***] M&T Bank [***] Nissan Motor Acceptance Corporation [***] VW Credit, Inc. Association [***] TOTAL$3,750,000,000.00 Ally Bank $2,880,000,000.00 $1,700,000,000.0 0 $336,000,000.00 $1,000,000,000.00 $434,000,000.00 $1,000,000,000.00 $100,000,000.0 0$50,000,000 .00 [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] 

 

SCHEDULE 2 – DUAL SUBSIDIARIES None. 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

110393723.6 0063724-00082 115525625.4 0063724-00082 0.75% Leverage Ratio Greater than 4.50 to 1.00 Greater than 3.50 to 1.00 but less than or equal to 4.00 to 1.00 1.50% 2.00% 0.25% LC Fee Percentage/ Revolving Loan Margin 0.50% 0.40% PRICING SCHEDULE In addition to the terms defined elsewhere in this Agreement, for purposes of determining the applicable interest rates and fees, the following terms shall have the meanings set forth in this Pricing Schedule: “Alternate Base Rate Margin (New Vehicle)” means a percentage rate per annum equal to 0.10%. “Alternate Base Rate Margin (Service Loaner Vehicle)” means a percentage rate per annum equal to 0.10%. “Alternate Base Rate Margin (Used Vehicle)” means a percentage rate per annum equal to 0.40%. “LC Fee Percentage” means the applicable percentage rates per annum set forth below opposite the applicable Leverage Ratio, as adjusted from time to time. “New Vehicle Floorplan Commitment Fee Rate” means a percentage rate per annum equal to 0.15%. “New Vehicle Floorplan Margin” means a percentage rate per annum equal to 1.10%.  “Revolving Loan Margin”, “Revolving Loan Commitment Fee Rate” and “Alternate Base Rate Margin (Revolving)” mean the applicable percentage rates per annum set forth below opposite the applicable Leverage Ratio, as adjusted from time to time. Greater than 2.50 to 1.00 but less than or equal to 3.50 to 1.00 1.00% 1.25% Revolving Loan Commitment Fee Rate 0.20% 0.25% Greater than 4.00 to 1.00 but less than or equal to 4.50 to 1.00 Less than or equal to 2.50 to 1.00 Alternate Base Rate Margin (Revolving) 1.00% 1.75% 0.15% 0.15% 0.30% 

 

The Revolving Loan Margin (“Applicable Margin”) and Revolving Loan Commitment Fee Rate (“Applicable Fee Rate”) shall be determined by the Agent from time to time based upon the information set forth in Borrower’s financial statements and Compliance Certificate furnished to the Agent pursuant to this Agreement as of the end of each fiscal quarter and shall be based upon the Leverage Ratio as of such date. Any change in the Applicable Margin or Applicable Fee Rate shall take effect on the first Business Day of the month following the date of delivery to the Agent of the applicable financial statements and Compliance Certificate, and the Applicable Margin and Applicable Fee Rate, as so determined, shall remain in effect until the earlier of: a. the first Business Day of the month following the delivery to the Agent of a subsequent financial statement and Compliance Certificate indicating a Leverage Ratio requiring a change in the Applicable Margin or Applicable Fee Rate, or b. the day upon which the Company fails to deliver to the Agent the applicable financial statements and Compliance Certificate within the time provided under this Agreement.  Upon any failure of the Company to deliver to the Agent the applicable financial statements and Compliance Certificate within the time required by this Agreement, the Applicable Margin and Applicable Fee Rate shall be the highest Applicable Margin and Applicable Fee Rate set forth in the foregoing table, which shall remain in effect until five Business Days following the date of delivery to the Agent of financial statements and Compliance Certificate reflecting a Leverage Ratio for which a lower Applicable Margin and Applicable Fee Rate would be applicable. Notwithstanding the foregoing, the Revolving Loan Margin shall be 1.25% and the Revolving Loan Commitment Fee Rate shall be 0.20% from the Closing Date until the earlier of (a) the first Business Day of the month following the delivery to the Agent of a financial statement and Compliance Certificate indicating a Leverage Ratio requiring a change in the Applicable Margin or Applicable Fee Rate, per the delivery requirements set forth in Section 11.2.5, or (b) the day upon which the Company fails to deliver to the Agent the applicable financial statements and Compliance Certificate within the time provided under this Agreement. If, as a result of any restatement of or other adjustment to the financial statements of the Company and its Subsidiaries or for any other reason, the Agent determines that the calculation of the Leverage Ratio by the Company as of the last day of any fiscal quarter was inaccurate and a correct calculation of the Leverage Ratio would have resulted in a higher Applicable Margin and Applicable Fee Rate, the Applicable Margin and Applicable Fee Rate shall be retroactively adjusted to the rate that would have been applicable if the Leverage Ratio had been correctly calculated.  Promptly upon demand by the Agent, the Revolving Loan Borrower shall pay to the Agent for the account of the Lenders the additional interest and fees that would have been payable based upon the correct calculation of the Leverage Ratio.  Nothing set forth herein shall limit the Required Lenders’ right to increase the interest rate upon the occurrence of an Event of Default. 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

“Service Loaner Vehicle Floorplan Commitment Fee Rate” means a percentage rate per annum equal to 0.15%. “Service Loaner Vehicle Floorplan Margin” means a percentage rate per annum equal to 1.20%. “Used Vehicle Floorplan Commitment Fee Rate” means a percentage rate per annum equal to 0.15%. “Used Vehicle Floorplan Margin” means a percentage rate per annum equal to 1.40%. 110393723.6 0063724-00082 115525625.4 0063724-00082 

 

39211237.v17  115525627.2 0063724-00082   Schedule 1  [see attached].  

 

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

 

M&T Bank [***] [***] [***] [***] [***] Nissan Motor  Acceptance  Corporation [***] [***] [***] [***] [***] TOTAL$3,750,000,000.00 $1,700,000,000.00 $1,000,000,000.00 $1,000,000,000.00 $50,000,000.00  

 

39211237.v17  115525627.2 0063724-00082   Exhibit B-1  [see attached]. 

 

Page 6 – Exhibit B-1 – Used Vehicle Borrowing Base Certificate  115525621.4 0063724-00082 EXHIBIT B-1  USED VEHICLE BORROWING  BASE CERTIFICATE  This Used Vehicle Borrowing Base Certificate (“Borrowing Base Certificate”) is  executed and delivered by Lithia Motors, Inc. (the “Company”) on behalf of itself and its  Subsidiaries to U.S. Bank National Association, as Agent (in such capacity, “Agent”) pursuant to  the requirements of Section 11.2.6 of the Fourth Amended and Restated Loan Agreement dated as  of April 29, 2021, between the Company, certain of its Subsidiaries, the Lenders which are from  time to time parties thereto, and Agent (as amended to date, the “Loan Agreement”).  Any  capitalized terms used herein and not defined herein shall have the meanings given to such terms  in the Loan Agreement.  This Borrowing Base Certificate is prepared as of ___________________  (“Calculation Date”).  Attached are the calculations showing the status of the Used Vehicle Borrowing Base as of  the Calculation Date.  This Borrowing Base Certificate has been prepared in accordance with the  requirements of the Loan Agreement and the information contained therein is true, accurate and  complete as of the Calculation Date.  This Borrowing Base Certificate is executed on ________________________.  LITHIA MOTORS, INC.  By:   Name:   Title:   

 

Page 7 – Exhibit B-1 – Used Vehicle Borrowing Base Certificate  115525621.4 0063724-00082 Used Vehicle Borrowing Base Calculation10  Value of  Collateral  Advance  Rate % Margined Value  A. Used Vehicle Borrowing Base 1. Aggregate net book value of the Used Vehicle inventory   $ 2. Less aggregate net book value of such Used Vehicles in which the Agent does not have a perfected,  first-priority security interest  $ 3. Less aggregate outstanding principal amount of indebtedness secured by Trade-in Liens  4. Less aggregate net book value of such Used Vehicles that are not otherwise Eligible Vehicles  $ $ 5. Used Vehicle Borrowing Base (lines 1 - 2 – 3 - 4) $ 85% $  B. Outstanding Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans (as of Calculation Date) $ 1. Outstanding Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans repaid as of a date within five Business Days of the Calculation Date (net of additional Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans borrowed) $_____________  C. Aggregate Used Vehicle Floorplan Commitment $ D. Net Aggregate Used Vehicle Floorplan Commitment (C – B + B.1) $ E. Net Used Vehicle Borrowing Base (A.5 – B + B.1) $ 10 In no event shall the aggregate net book value of the Eligible Vehicles consisting of motorcycles included in the Service Loaner  Vehicle Borrowing Base, Used Vehicle Borrowing Base and the Revolving Loan Borrowing Base exceed $25,000,000.  

 

39211237.v17  115525627.2 0063724-00082   Exhibit C  [see attached]. 

 

Page 10 – Exhibit C – Revolving Loan Borrowing Base Certificate  115525621.4 0063724-00082 EXHIBIT C  REVOLVING LOAN BORROWING BASE CERTIFICATE  This Revolving Loan Borrowing Base Certificate (“Borrowing Base Certificate”) is  executed and delivered by Lithia Motors, Inc. (the “Company”) on behalf of itself and its  Subsidiaries to U.S. Bank National Association, as Agent (in such capacity, “Agent”) pursuant to  the requirements of Section 11.2.7 of the Fourth Amended and Restated Loan Agreement dated as  of April 29, 2021, between the Company, certain of its Subsidiaries, the Lenders which are from  time to time parties thereto, and Agent (as amended to date, the “Loan Agreement”).  Any  capitalized terms used herein and not defined herein shall have the meanings given to such terms  in the Loan Agreement.  This Borrowing Base Certificate is prepared as of ________________  (“Calculation Date”).  Attached are the calculations showing the status of the Revolving Loan Borrowing Base as  of the Calculation Date.  This Borrowing Base Certificate has been prepared in accordance with  the requirements of the Loan Agreement and the information contained therein is true, accurate  and complete as of the Calculation Date.  Schedule 1 attached hereto identifies, as of the Calculation Date, all Real Property that is  included in the Revolving Loan Borrowing Base. All information on Schedule 1 attached hereto  is accurate and complete in all material respects and all Real Property identified thereon is Eligible  Real Property.  This Borrowing Base Certificate is executed on __________________.  LITHIA MOTORS, INC.  By:  Name:  Title:  

 

Page 11 – Exhibit C – Revolving Loan Borrowing Base Certificate  115525621.4 0063724-00082 Revolving Loan Borrowing Base Calculation12  Value of  Collateral  Advance  Rate % Margined Value Collateral Type A. Contracts in Transit: Contracts in Transit (CIT) $__________  Less CIT aged > 15 days $__________  Net Eligible Contracts in Transit (lines 1 – 2) $__________ 100% $_____________  B. Eligible Receivables: 1. Receivables for Parts and Accessories and Service $__________   2. Less:  Receivables for Parts and Accessories > 60 days past due $__________  3. Net Receivables for Parts and Accessories (lines 1-2) $__________  4. Finance Receivables $__________  5. Less:  Finance Receivables Aged > 90 days $__________  6. Net Finance Receivables (lines 4-5) $__________  7. Factory Receivables $__________  8. Less:  Factory Receivables Aged > 90 days $__________  9. Net Factory Receivables (lines 7-8) $__________  12 In no event shall the aggregate net book value of the Eligible Vehicles consisting of motorcycles included in the  Service Loaner Vehicle Borrowing Base, Used Vehicle Borrowing Base and the Revolving Loan Borrowing Base  exceed $25,000,000.  

 

Page 12 – Exhibit C – Revolving Loan Borrowing Base Certificate  115525621.4 0063724-00082 10. Total Eligible Receivables (lines 3 + 6 + 9) $__________ 80% $_____________  C. Eligible New Vehicles $__________ 100% $_____________  D. Used Vehicle Borrowing Base (as of Calculation Date) $__________ 100% $_____________  E. Real Property 1. Value of Eligible Real Property $__________ 75% $_____________  2. Lesser of $1,000,000,000.00 or line 1  $_____________ F. Parts and Accessories 1. Parts and Accessories $__________ 2. Less:  unpaid acquisition costs owed to sellers or financiers of such inventory $__________  3. Net Parts and Accessory Inventory (lines 1- 2) $__________ 65% $_____________  G. Equipment (excluding aircraft) 1. Office Equipment at Cost $__________  2. Less:  Office Equipment accumulated depreciation $__________  3. Service and Parts Equipment at Cost $__________  

 

    Page 13 – Exhibit C – Revolving Loan Borrowing Base Certificate  115525621.4 0063724-00082    4. Less:  Service and  Parts Equipment  accumulated  depreciation  $__________     5. Less debt secured  by above Office,  Service and Parts  Equipment  $__________     6. Net Equipment  (lines 1 – 2 + 3 – 4  – 5)  $__________ 40% $_____________  H. Deductions      1. Outstanding New  Vehicle Floorplan  Loans and New  Vehicle Swing Line  Loans less the sum  of the aggregate  amount held in the  PR Accounts, in an  amount up to  $200,000,000  $__________     2. Outstanding Used  Vehicle Floorplan  Loans and Used  Vehicle Swing Line  Loans       3. Pari Passu Funded  Debt  $__________     4. Total Deductions  (lines 1 + 2 + 3)  $__________  $_____________  I. Revolving Loan Borrowing  Base (margined value of  lines A.3 + B.10 + C + D +  E.5 + F.3 + G.6 minus H.4)    $_____________   (i). Outstanding Used Vehicle  Floorplan Loans and Used  Vehicle Swing Line Loans  repaid as of a date within five       $__________    

 

Page 14 – Exhibit C – Revolving Loan Borrowing Base Certificate  115525621.4 0063724-00082 Business Days of the  Calculation Date (net of  additional Used Vehicle  Floorplan Loans and Used  Vehicle Swingline Loans  borrowed subsequent to the  Calculation Date)  Adjusted Revolving Loan  Borrowing Base (I plus I(i))  $_____________  J. Outstanding Revolving and Revolving Swing Line Loans (as of the Calculation Date) (i) Advance to repay Used Vehicle (I.(i)) above) Adjusted Outstanding  Revolving and Swing Line  Loans. (J - J(i))  $__________  $__________  $_____________  K. Outstanding Letters of Credit $_____________  L. Reserve Amount $_____________  M. Total Outstanding (lines J + K + L) $_____________  N. Aggregate Revolving Loan Commitment $_____________  O. Net Aggregate Revolving Loan Commitment (N – M) $_____________  P. Net Revolving Loan Borrowing Base (I – M) $_____________  

 

Page 15 – Exhibit C – Revolving Loan Borrowing Base Certificate  115525621.4 0063724-00082 SCHEDULE 1 TO  REVOLVING LOAN BORROWING BASE CERTIFICATE  Eligible Real Property  Owner Name Address Valuation Valuation Type  (Appraisal or Tax  Assessed Value)  Date of Valuation  1.  2.  3.  4.  5.  6.  7.  8.  9.  10. 

 

39211237.v17  115525627.2 0063724-00082   Exhibit O  [see attached].  

 

Page 119 - Exhibit O – Reallocation Request  115525621.4 0063724-00082 EXHIBIT O  REALLOCATION REQUEST  This Reallocation Request is executed and delivered by Lithia Motors, Inc. (the  “Company”) on behalf of itself and its Subsidiaries to U.S. Bank National Association, as Agent  (in such capacity, “Agent”) pursuant to the requirements of Section 6.17.2 of the Fourth Amended  and Restated Loan Agreement dated as of April 29, 2021, between the Company, certain of its  Subsidiaries, the Lenders which are from time to time parties thereto, and Agent (as amended to  date, the “Loan Agreement”).  Any capitalized terms used herein and not defined herein shall  have the meanings given to such terms in the Loan Agreement.  1. Borrowers request a Reallocation as set forth below: Current Commitment Increase / Decrease New Commitment  Aggregate New  Vehicle Floorplan  Commitment  $_______________ $_______________ $_______________  Aggregate Used  Vehicle Floorplan  Commitment  $_______________ $_______________ $_______________  Aggregate  Revolving Loan  Commitment  $_______________ $_______________ $_______________  Aggregate Service  Loaner Vehicle  Floorplan  Commitment  $_______________ $_______________ $_______________  Total $_______________ $_______________ $_______________  Current Swingline  Commitment  Increase / Decrease New Swingline  Commitment  Revolving Swing  Line Commitment  $_______________ $_______________ $_______________  Used Vehicle  Swing Line  Commitment  $_______________ $_______________ $_______________  

 

Page 120 - Exhibit O –Reallocation Request  115525621.4 0063724-00082 Service Loaner  Vehicle Floorplan  Swing Line  Commitment  $_______________ $_______________ $_______________  Total $_______________ $_______________ $_______________  Requested Effective Date of Reallocation: _______________________________  2. [Attached are the calculations showing the status of the ___________________ Borrowing Base as of the date of this Reallocation Request.  The ___________________ Borrowing Base is not less than the amount required by Section 6.17.3 of the Loan Agreement.] This Reallocation Request is executed on ___________________________.  LITHIA MOTORS, INC.  By:  Name:  Title:executed-bns_lithiaxsynd

EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  CREDIT AGREEMENT  Made as of June 3rd, 2022  Among  LITHIA MASTER LP COMPANY, LP  together with certain of its subsidiaries as may become Borrowers from time to time  (the “Borrowers”)  and  LITHIA MASTER GP COMPANY, INC.  together with the other General Partners of the Borrowers from time to time, as Obligors  and  THE BANK OF NOVA SCOTIA, ROYAL BANK OF CANADA, BANK OF  MONTREAL, THE TORONTO-DOMINION BANK, VW CREDIT CANADA, INC. and  BMW GROUP FINANCIAL SERVICES, A DIVISION OF BMW CANADA INC.  and such other persons as become parties hereto as lenders  (the “Lenders”)  and  THE BANK OF NOVA SCOTIA  in its capacity as Administrative Agent  (the “Administrative Agent”)  and  THE BANK OF NOVA SCOTIA  in its capacity as Sole Lead Arranger and Sole Bookrunner  and  THE BANK OF NOVA SCOTIA  in its capacity as Syndication Agent  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY <*>, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL 

 

  EXECUTION COPY     (i) CREDIT AGREEMENT    TABLE OF CONTENTS  ARTICLE 1 – INTERPRETATION ............................................................................................... 2  Section 1.1 Certain Defined Terms ............................................................................................. 2  Section 1.2 Terms Generally ..................................................................................................... 39  Section 1.3 Business Day .......................................................................................................... 39  Section 1.4 Conflict ................................................................................................................... 39  Section 1.5 Currency ................................................................................................................. 39  Section 1.6 Time ....................................................................................................................... 39  Section 1.7 Accounting Principles and Terms .......................................................................... 39  Section 1.8 Officer’s Certificate................................................................................................ 40  Section 1.9 Headings and Table of Contents ............................................................................ 40  Section 1.10 Time of Day ......................................................................................................... 40  Section 1.11 Governing Law ..................................................................................................... 41  Section 1.12 Severability........................................................................................................... 41  Section 1.13 Schedules .............................................................................................................. 41  ARTICLE 2 - THE CREDIT FACILITIES .................................................................................. 42  Section 2.1 Revolving Facility .................................................................................................. 42  Section 2.2 Wholesale Flooring Facility ................................................................................... 45  Section 2.3 Used Vehicle Flooring Facility .............................................................................. 48  Section 2.4 Wholesale Leasing Facility .................................................................................... 49  Section 2.5 Daily Rental Facility .............................................................................................. 50  Section 2.6 Accordion Feature .................................................................................................. 51  Section 2.7 Reallocation of Commitments ................................................................................ 52  Section 2.8 Obligations of the Lenders and the Administrative Agent ..................................... 54  ARTICLE 3 - BORROWING PROCEDURES ............................................................................ 54  Section 3.1 General ................................................................................................................... 54  Section 3.2 CDOR Loans .......................................................................................................... 56  Section 3.3 Letters of Credit ..................................................................................................... 57  Section 3.4 Conversion Option ................................................................................................. 63  Section 3.5 Conversion and Rollover Not Repayment ............................................................. 64  Section 3.6 Determination Final ............................................................................................... 64  Section 3.7 Mandatory Conversion ........................................................................................... 64  Section 3.8 Deposit of Proceeds of Loans................................................................................. 64  Section 3.9 Administrative Agent May Debit Accounts ........................................................... 64  Section 3.10 Evidence of Obligations ....................................................................................... 65  

 

  EXECUTION COPY     (ii) CREDIT AGREEMENT    Section 3.11 Borrowers’ Right to Rely on Administrative Agent ............................................ 65  ARTICLE 4 - INTEREST, FEES AND EXPENSES ................................................................... 65  Section 4.1 Interest on Prime Loans.......................................................................................... 65  Section 4.2 CDOR Loans .......................................................................................................... 65  Section 4.3 Pricing Grid ............................................................................................................ 66  Section 4.4 Standby Fees .......................................................................................................... 67  Section 4.5 Agent Fees .............................................................................................................. 67  Section 4.6 Supplemental Fee Letter......................................................................................... 67  Section 4.7 Interest on Overdue Amounts ................................................................................ 67  Section 4.8 Interest Act ............................................................................................................. 68  Section 4.9 Limit on Rate of Interest ........................................................................................ 68  Section 4.10 Increased Costs ..................................................................................................... 68  Section 4.11 Taxes .................................................................................................................... 70  Section 4.12 Mitigation Obligations: Replacement of Lenders ................................................ 72  Section 4.13 Illegality ............................................................................................................... 74  ARTICLE 5 – REDUCTION AND REPAYMENT .................................................................... 74  Section 5.1 Term and Maturity ................................................................................................. 74  Section 5.2 Extension of Termination Date .............................................................................. 74  Section 5.3 Repayment Terms – Final Maturity Date ............................................................... 77  Section 5.4 Mandatory Repayment ........................................................................................... 77  Section 5.5 Mandatory Prepayment .......................................................................................... 77  Section 5.6 Voluntary Prepayment............................................................................................ 78  Section 5.7 Bulk Prepayments under Wholesale Flooring Facility .......................................... 78  Section 5.8 Cancellation; Commitment Reductions ................................................................. 79  ARTICLE 6 - PAYMENTS .......................................................................................................... 79  Section 6.1 Payments Generally................................................................................................ 79  Section 6.2 No Setoff ................................................................................................................ 79  Section 6.3 Application of Payments After Exercise of Rights Under Section 11.2 ................ 80  ARTICLE 7 – SECURITY DOCUMENTS ................................................................................. 80  Section 7.1 Security Documents ............................................................................................... 80  ARTICLE 8 - CONDITIONS PRECEDENT ............................................................................... 81  Section 8.1 Conditions Precedent to Borrowings ..................................................................... 81  Section 8.2 Conditions Precedent to All Borrowings ............................................................... 83  Section 8.3 Waiver of a Condition Precedent ........................................................................... 84  ARTICLE 9 – REPRESENTATIONS AND WARRANTIES ..................................................... 84  Section 9.1 Representations and Warranties ............................................................................. 84  

 

  EXECUTION COPY     (iii) CREDIT AGREEMENT    Section 9.2 Deemed Repetition ................................................................................................. 88  ARTICLE 10 – COVENANTS .................................................................................................... 88  Section 10.1 Affirmative Covenants of the Borrowers ............................................................. 88  Section 10.2 Negative Covenants of the Borrowers ................................................................. 92  Section 10.3 Financial Covenants ............................................................................................. 94  Section 10.4 Accounting, Financial Statements and Other Information ................................... 95  ARTICLE 11 – DEFAULT, ENFORCEMENT & ACCELERATION ....................................... 97  Section 11.1 Events of Default .................................................................................................. 97  Section 11.2 Rights upon Default and Event of Default ......................................................... 100  Section 11.3 Demand .............................................................................................................. 101  Section 11.4 Waiver of Default ............................................................................................... 101  ARTICLE 12 – REMEDIES ....................................................................................................... 101  Section 12.1 Remedies Cumulative ........................................................................................ 101  Section 12.2 Remedies Not Limited ....................................................................................... 102  Section 12.3 Sharing of Payments by Lenders ........................................................................ 102  Section 12.4 Right of Setoff .................................................................................................... 103  Section 12.5 Administrative Agent or Lender May Perform Covenants ................................ 103  Section 12.6 Decision to Enforce Security Documents .......................................................... 104  ARTICLE 13 – THE ADMINISTRATIVE AGENT AND THE LENDERS ............................ 104  Section 13.1 Appointment and Authority ............................................................................... 104  Section 13.2 Rights as a Lender .............................................................................................. 104  Section 13.3 Exculpatory Provisions ...................................................................................... 105  Section 13.4 Reliance by Administrative Agent ..................................................................... 106  Section 13.5 Indemnification of Administrative Agent .......................................................... 106  Section 13.6 Delegation of Duties........................................................................................... 106  Section 13.7 Replacement of Administrative Agent ............................................................... 107  Section 13.8 Non-Reliance on Administrative Agent and Other Lenders .............................. 107  Section 13.9 Collective Action of the Lenders ....................................................................... 108  Section 13.10 No Other Duties, etc. ........................................................................................ 108  Section 13.11 Administrative Agent’s Clawback ................................................................... 109  Section 13.12 Erroneous Payments ......................................................................................... 109  Section 13.13 Arrangements for Borrowings .......................................................................... 112  Section 13.14 Arrangements for Repayment of Borrowings .................................................. 112  Section 13.15 No Partnership .................................................................................................. 112  Section 13.16 Administrative Agent May Deal With Collateral ............................................ 112  Section 13.17 Indemnity of Administrative Agent ................................................................. 113  

 

  EXECUTION COPY     (iv) CREDIT AGREEMENT    ARTICLE 14 - SUCCESSORS AND ASSIGNS ....................................................................... 113  Section 14.1 Successors and Assigns Generally ..................................................................... 113  Section 14.2 Assignments by Lenders .................................................................................... 113  Section 14.3 Register............................................................................................................... 115  Section 14.4 Participations ...................................................................................................... 115  Section 14.5 Limitations Upon Participant Rights .................................................................. 115  Section 14.6 Certain Pledges ................................................................................................... 115  ARTICLE 15 – MISCELLANEOUS ......................................................................................... 116  Section 15.1 Amendments, Waivers, etc................................................................................. 116  Section 15.2 Waivers Effective in Specific Instance .............................................................. 117  Section 15.3 No Deemed Subordination ................................................................................. 118  Section 15.4 Notices: Effectiveness; Electronic Communication ........................................... 118  Section 15.5 Further Assurances ............................................................................................. 119  Section 15.6 Judgment Currency ............................................................................................ 119  Section 15.7 Exercise of Rights, etc. ....................................................................................... 119  Section 15.8 Expenses: Indemnity: Damage Waiver .............................................................. 119  Section 15.9 Submission to Jurisdiction ................................................................................. 121  Section 15.10 WAIVER OF JURY TRIAL ............................................................................ 121  Section 15.11 Counterparts ..................................................................................................... 122  Section 15.12 Treatment of Certain Information: Confidentiality .......................................... 122    Schedule 1.1(1) – Accordion Agreement  Schedule 1.1(14) – Applicable Percentage  Schedule 1.1(16) – Assignment and Assumption  Schedule 1.1(24) – Branch of Account  Schedule 1.1(43) – Commitments  Schedule 1.1(46) – Compliance Certificate  Schedule 1.1(59) – Daily Rental Borrowing Base Certificate  Schedule 1.1(126) – Joinder Agreement  Schedule 1.1(163) – Officer’s Certificate  Schedule 1.1(186) – Revolving Borrowers  Schedule 1.1(188) – Revolving Borrowing Base Certificate  Schedule 1.1(215) – Used Vehicle Flooring Borrowing Base Certificate  Schedule 1.1(222) – Wholesale Flooring Borrowers  Schedule 1.1(232) – Wholesale Leasing Borrowing Base Certificate  Schedule 3.1(1)(a) – Notice of Requested Borrowing  

 

  EXECUTION COPY     (v) CREDIT AGREEMENT    Schedule 3.3(3)(b) – Letter of Credit Extension Request  Schedule 3.3(11) – Existing L/Cs  Schedule 3.4 – Conversion Option Notice  Schedule 5.6 – Notice of Repayment  Schedule 5.8 – Notice of Cancellation of Credit Facility  Schedule 9.1(8) – Owned Property  Schedule 9.1(9) – Real Property Leases  Schedule 9.1(11) – Location of Assets, Places of Business  Schedule 9.1(17) – Canadian Benefit and Pension Plans  Schedule 9.1(18) – Labour Matters  Schedule 9.1(20) – Corporate Organization      

 

  EXECUTION COPY      CREDIT AGREEMENT      CREDIT AGREEMENT  This Agreement is made as of June 3rd, 2022, among  LITHIA MASTER LP COMPANY, LP  together with certain of its subsidiaries as may become Borrowers  from time to time (the “Borrowers”)  and  LITHIA MASTER GP COMPANY, INC.  together with the other General Partners of the Borrowers from  time to time, as Obligors  and  THE BANK OF NOVA SCOTIA, ROYAL BANK OF  CANADA, BANK OF MONTREAL, THE TORONTO- DOMINION BANK, VW CREDIT CANADA, INC. and BMW  GROUP FINANCIAL SERVICES, A DIVISION OF BMW  CANADA INC.  and such other persons as become parties hereto as lenders (the  “Lenders”)  and  THE BANK OF NOVA SCOTIA  in its capacity as Administrative Agent (the “Administrative  Agent”)  and  THE BANK OF NOVA SCOTIA  in its capacity as Sole Lead Arranger and Sole Bookrunner  and  THE BANK OF NOVA SCOTIA  in its capacity as Syndication Agent  RECITALS  FOR VALUE RECEIVED, the parties agree as follows:  A. The Borrowers have requested that the Lenders make the Credit Facilities available.  B. Each Lender is prepared to make Borrowings available to the Borrowers, subject to the terms  and conditions of this Agreement.  

 

 - 2 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT      ARTICLE 1 – INTERPRETATION  Section 1.1 Certain Defined Terms  The terms defined below shall have the indicated meanings unless the context expressly  or by necessary implication requires otherwise:  (1) “Accordion Agreement” means an agreement in the form of Schedule 1.1(1) (or in such  other form to substantially similar effect as the Administrative Agent may accept) duly  completed, executed and delivered by the Borrowers, an Accordion Lender, and the  Administrative Agent pursuant to Section 2.6.  (2) “Accordion Lender” means a Lender that has agreed to accept an increase to such  Lender’s Applicable Percentage of the Revolving Limit, the Wholesale Flooring Facility Limit,  the Used Vehicle Flooring Facility Limit, the Wholesale Leasing Limit and/or the Daily Rental  Limit, as applicable, pursuant to and in accordance with Section 2.6(b).  (3) “Accordion Notice” has the meaning given to it in Section 2.6(a).  (4) “Acquisition” means the following:  (a) with respect to any Person that is a Designated Subsidiary, the acquisition  (whether for cash, property, services, securities or otherwise) of any businesses  within the retail automotive and/or recreational vehicle sectors, automotive,  recreational vehicle leasing and finance sectors, any dealerships, any automotive  body shops, any automotive and/or recreational vehicle service shops, and in each  case any ancillary businesses related thereto, in each case, located within Canada  or the United States of America or any agreements to make such acquisition.  (b) with respect to any Person that is a Non-Designated Subsidiary, the acquisition  (whether for cash, property, services, securities or otherwise) of any businesses  within the retail automotive and/or recreational vehicle sectors, equipment  (including heavy and agricultural equipment) sales and service sector, automotive,  equipment and recreational vehicle leasing and finance sectors, any dealerships,  any automotive body shops, any automotive and/or recreational vehicle service  shops, any motor vehicle registry services, and in each case any ancillary  businesses related thereto, in each case, located within Canada or the United  States of America or any agreements to make such acquisition.  (5) “Administrative Agent” means The Bank of Nova Scotia when acting as administrative  agent and any successor administrative agent appointed under Section 13.7.  (6) “Administrative Agent’s Account for Payments” means for all payments for and by  the Borrowers, the following account maintained by the Administrative Agent at its Toronto  main branch, to which payments and transfers are to be effected as follows:     

 

- 3 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Item  Clearing Agent /  Payment To  Address  ABA No./ Swift  Beneficiary / For  Account Of  Address / Branch  Account No.  Reference  Attention  Canadian Dollars  The Bank of Nova Scotia, International Banking  Division  <*> NOSCCATT  The Bank of Nova Scotia,  GWS Loan Administration & Agency Services  720 King Street West, 2nd Floor, Toronto,  Ontario, M5V 2T3  <*> Lithia  Toronto Corporate Loans  or any other account of the Administrative Agent as the Administrative Agent may from  time to time advise the Borrowers and the Lenders in writing.  (7) “Administrative Agent’s Branch of Account” means the office of the Administrative Agent located at: The Bank of Nova Scotia  <*> Attn: Senior Manager  Email: <*> or other office or branch of the Administrative Agent in Canada as the Administrative  Agent may from time to time advise Master Borrower and the Lenders in writing.  (8) “Administrative Questionnaire” means an administrative questionnaire supplied by the Administrative Agent. (9) “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. (10) “Agreed Currency” has the meaning given to it in Section 15.6. 

 

- 4 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (11) “Agreement” means this agreement, including the Schedules hereto, as amended, varied, supplemented, restated, renewed or replaced at any time and from time to time. (12) “Applicable Law” means (a) any domestic or foreign statute, law (including common and civil law), treaty, code, ordinance, rule, regulation, restriction or by-law (zoning or otherwise); (b) any judgment, order, writ, injunction, decision, ruling, decree or award; (c) any regulatory policy, practice, guideline or directive; or (d) any franchise, licence, qualification, authorization, consent, exemption, waiver, right, permit or other approval of any Governmental Authority, binding on or affecting the Person referred to in the context in which the term is used or binding on or affecting the property of such Person, in each case whether or not having the force of law. (13) “Applicable Margin” shall have the meaning given to it in Section 4.3. (14) “Applicable Percentage” means for any Lender the percentage of each Credit Facility set forth opposite each Lender’s name in Schedule 1.1(14) .  If any Credit Facility has terminated or expired, the Applicable Percentages shall be the percentage of the total outstanding Loans represented by such Lender’s Loans for such Facility. (15) “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender. (16) “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee and accepted by the Administrative Agent, in substantially the form of Schedule 1.1(16) or any other form approved by the Administrative Agent. (17) “Associate” has the meaning given to it in the Canada Business Corporations Act. (18) “Bankruptcy Event” means, with respect to any Person, such Person files a petition or application seeking relief under any Insolvency Law or becomes the subject of a bankruptcy or insolvency proceeding, or has had an interim receiver, receiver, receiver and manager, liquidator, sequestrator, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business, appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof; provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within Canada or the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality), to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person. (19) “BNS” means The Bank of Nova Scotia. (20) “BNS Credit Agreement” means the commitment letter dated August 30, 2021 among, inter alios, BNS, Master Borrower and certain Subsidiaries of Master Borrower, as amended, varied, supplemented, restated, renewed or replaced at any time and from time to time up to the Closing Date. 

 

- 5 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (21) “Borrowers” means Master Borrower and each of its Subsidiaries signatory hereto, or as may become Borrowers by the execution and delivery to the Administrative Agent of a completed Joinder Agreement, or a singular Borrower where the context requires, and shall mean all Borrowers jointly and severally. (22) “Borrowers’ Account” means an account or accounts of the Borrowers (or any of them) maintained with the Administrative Agent in Canada. (23) “Borrowing” means an extension of credit under this Agreement, by way of Loan or Letter of Credit. (24) “Branch of Account” means, with respect to each Lender, the branch of the Lender at the address set out opposite the Lender’s name on Schedule 1.1(24) or other branch as the Lender may advise Master Borrower and the Administrative Agent in writing. (25) “Bulk Credit” has the meaning given to it in Section 5.7. (26) “Bulk Pre-Payment Cap” has the meaning given to it in Section 5.7. (27) “Bulk Prepayments” means a repayment program allowing a Wholesale Flooring Borrower to make lump sum payments from time to time in repayment of outstanding Loans under the Wholesale Flooring Facility (without allocating such repayment to specific Loans for New Motor Vehicles). (28) “Business Day” means a day on which chartered banks are open for over-the-counter business in Toronto and excludes Saturday, Sunday and any other day which is a statutory holiday in Toronto, Ontario, Canada. (29) “Canadian Black Book” means that publication that provides, inter alia, values for New Motor Vehicles and Used Motor Vehicles in Canada. (30) “Canadian Benefit Plans” means all material employee benefit plans or arrangements maintained or contributed to by any Obligor that are not Canadian Pension Plans, including all profit sharing, savings, supplemental retirement, retiring allowance, severance, pension, deferred compensation, welfare, bonus, incentive compensation, phantom stock, legal services, supplementary unemployment benefit plans or arrangements and all life, health, dental and disability plans and arrangements in which the employees or former employees of any Obligor participate or are eligible to participate but excluding all stock option or stock purchase plans. (31) “Canadian Dollars” and the symbols “$” and “Cdn$” each means lawful money of Canada. (32) “Canadian Pension Plans” means any pension plan required to be registered under the ITA and contributed to by an Obligor for its employees, contractors or former contractors, including a pension plan within the meaning of the Pension Benefits Act (Ontario) but does not include the Canada Pension Plan maintained by the Government of Canada or the Quebec Pension Plan maintained by the Government of Quebec. (33) “CAP Vehicle” means any New Motor Vehicle previously driven by manufacturer executives and representatives. 

 

- 6 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (34) “Capital Lease” means, with respect to a Person, any lease or other arrangement for the  use of property or assets that would be required to be accounted for as a capital lease on a balance  sheet of that Person in accordance with GAAP.  The amount of any Capital Lease at any date  shall be the amount of the obligation in respect thereof required to be included on the balance  sheet of the Person. (35) “Cash Equivalent Investments” means (a) securities issued or fully guaranteed by the  government of Canada, United States or any agency or instrumentality thereof, (b) commercial  paper rated A-1 or better by S&P or P-1 or better by Moody’s, (c) demand deposit accounts  maintained in the ordinary course of business, and (d) certificates of deposit issued by and time  deposits with commercial banks (whether domestic or foreign) having capital and surplus in  excess of $500,000,000, (e) shares of money market mutual funds that are rated at least “AAAm”  or “AAAG” by S&P or “P-1” or better by Moody’s, (f) Canadian Dollars or U.S. Dollars, and (g)  other cash equivalent investments approved in writing by the Administrative Agent. (36) “CDOR Loan” means a Loan in Canadian Dollars at the 30 day CDOR Rate plus the  Applicable Margin. (37) “CDOR Rate” means as of any day, the annual rate of interest, calculated on the basis of  a year of 365 days, which is the rate determined in normal market practice as being the arithmetic  average of the quotations of Schedule I Lenders listed in respect of Canadian Dollar denominated  bankers’ acceptances for the applicable period displayed and identified as such by Refinitiv  Benchmark Services (UK) Limited rounded upward to the nearest multiple of 0.01%; and in no  event less than zero, as of 10:00 a.m. Toronto time on such day and, if such day is not a Business  Day, then on the immediately preceding Business Day (as adjusted by the Administrative Agent  after 10:00 a.m. Toronto time to reflect any error in a posted rate of interest or in the posted  average annual rate of interest); and if such rates are not available from Refinitiv Benchmark  Services (UK) Limited on any particular day, then the CDOR Rate on that day shall be calculated  as the rate applicable to Canadian Dollar denominated bankers’ acceptances for the applicable  period quoted by the Administrative Agent as of 10:00 a.m. Toronto time on such day; or if such  day is not a Business Day, then as quoted by the Agent on the immediately preceding Business  Day. (38) “Change in Law” means the occurrence, after the date of this Agreement, of any of the  following: (a) the adoption or taking effect of any Applicable Law, (b) any change in any  Applicable Law or in the administration, interpretation or application thereof by any  Governmental Authority or (c) the making or issuance of any Applicable Law by any  Governmental Authority. (39) “Change of Control” means, at any time, (a) Master Borrower ceases to Control any of  the other Borrowers; and (b) LITHIA MOTORS, INC. ceases to own, directly or indirectly, at  least <*>% of the voting shares of Master Borrower. (40) “Claims” means all claims, demands, complaints, actions, suits, causes of action,  assessments or reassessments, charges, judgments, debts, liabilities, expenses, costs, damages or  losses, contingent or otherwise, including loss of value, professional fees, including fees of legal  counsel on a full indemnity basis, and all costs incurred in investigating or pursuing any of the  foregoing or any proceeding relating to any of the foregoing. 

 

 - 7 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (41) “Closing Date” means June 3rd, 2022.  (42) “Collateral” means the undertaking, property and assets covered by the Security  Documents and any other property, real or personal, tangible or intangible, now existing or  hereafter acquired by any Obligor that may at any time be or become subject to a Lien in favour  of the Administrative Agent on behalf of the Lenders and L/C Issuer to secure any or all of the  Obligations.  (43) “Commitment” means, in respect of each Lender from time to time, the aggregate  amount of Loans that such Lender has agreed to make at that time as set out in Schedule 1.1(43)  to this Agreement (as such amounts may be increased, reduced or cancelled in accordance with  the provisions of this Agreement).  (44) “Committed Credit Facility Limits” means, collectively, the Revolving Limit, the Used  Vehicle Flooring Facility Limit, the Wholesale Leasing Limit, and the Daily Rental Limit.  (45) “Committed Facilities” means, collectively, the Revolving Facility, the Used Vehicle  Flooring Facility, the Wholesale Leasing Facility, and the Daily Rental Facility.  (46) “Compliance Certificate” means a compliance certificate substantially in the form  attached as Schedule 1.1(46) signed by a Responsible Officer of Master Borrower.  (47) “Contaminant” means any solid, liquid, gas, odour, heat, sound, vibration, radiation or  combination of any of them that may (a) impair the quality of the environment for any use that  can be made of it, (b) injure or damage property or plant or animal life, (c) harm or materially  discomfort any Person, (d) adversely affect the health of any individual, (e) impair the safety of  any individual, (f) render any property or plant or animal life unfit for use by man, or (g) cause  loss of enjoyment of normal use of property, and includes any “contaminant” within the meaning  assigned to such term in any Environmental Law.  (48) “Contingent Obligation” means any guarantee of Debt of any other Person or any  agreement to maintain the net worth, working capital or other financial condition of any other  Person in respect of such other Person’s Debt, whether direct, indirect or contingent, including,  without limitation, any purchase or repurchase agreement, comfort letter, or keep-well, take-or- pay, through-put or other arrangement of whatever nature having the effect of assuring or  holding harmless any Person against loss with respect to any Debt of such other Person;  provided, however, that the term “Contingent Obligation” shall not include endorsements of  instruments for deposit or collection in the ordinary course of business. The amount of any  Contingent Obligation shall be deemed to be an amount equal to the stated or determinable  amount of the primary obligation in respect of which such Contingent Obligation is made or, if  not stated or determinable, the maximum reasonably anticipated liability in respect thereof as  determined in good faith by the Person subject to such obligation.  (49) “Contracts in Transit” means all amounts due to a Borrower from any financial  institution on retail finance contracts from vehicle sales, including amounts receivable from  wholesale sales (excluding financial institutions or finance companies which are Affiliates of a  Borrower).  (50) “Contract Period” means the thirty (30) days with respect to CDOR Loans and with  respect to Letters of Credit, the period selected by the applicable Borrower in accordance with  

 

 - 8 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 3.1(1) commencing on the Drawdown Date, Rollover Date or Conversion Date, as  applicable, and expiring on a Business Day, subject to the terms of Section 3.3.  (51) “Control” means the possession, directly or indirectly, of the power to direct or cause the  direction of the management or policies of a Person, whether through the ability to exercise  voting power, by contract or otherwise.  “Controlling” and “Controlled” have corresponding  meanings.  (52) “Conversion” means the conversion of an outstanding Borrowing, or a portion of an  outstanding Borrowing, into an alternative type of Borrowing under Section 3.4.  (53) “Conversion Date” means the Business Day that the Borrowers elects as the date on  which a Conversion is to occur.  (54) “Credit Facilities” means Revolving Facility, the Wholesale Flooring Facility, the Used  Vehicle Flooring Facility, Wholesale Leasing Facility and Daily Rental Facility, and “Credit  Facility” means any one of them.  (55) “Credit Facilities Hedge” means a Hedge Contract, which may be entered into between  the Borrowers (or any of them) and any of the Lenders, provided to fix such Borrowers’ interest  rate risk under the Credit Facilities (or any of them), in an aggregate notional amount not to  exceed the principal amount of such Credit Facilities.  (56) “Credit Facility Limits” means the Revolving Limit, the Wholesale Flooring Facility  Limit, the Used Vehicle Flooring Facility Limit, the Wholesale Leasing Limit and the Daily  Rental Limit, and “Credit Facility Limit” means any one of them.  (57) “Daily Rental Borrower” means Motus Car Rental, LP., and its successors and  permitted assigns  (58) “Daily Rental Borrowing Base” means 100% of the aggregate depreciated book value  (in accordance with the below) of the applicable Borrower’s Eligible Daily Rental Leases  outstanding at any time, as evidenced by the Daily Rental Lease Management Report.  For the purposes of calculating such value, the minimum vehicle depreciation of the  capital cost of all vehicles forming part of the Daily Rental Management Report, is based  on the following schedule:  Original Lease Term   Rate per month  Up to 12 months  1.75%  13 to 24 months    2.00%  (59) “Daily Rental Borrowing Base Certificate” means a borrowing base certificate  substantially in the form attached as Schedule 1.1(59) signed a Responsible Officer of Master  Borrower.  (60) “Daily Rental Facility” has the meaning given to it in Section 2.5(1).  

 

 - 9 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (61) “Daily Rental Lease Management Report” means a report, in form and substance  satisfactory to the Administrative Agent, from Daily Rental Borrower summarizing such  Borrower’s Eligible Daily Rental Leases and, in connection with any request Borrowing by such  Borrower, identifying all Eligible Daily Rental Leases including, for each such rental, unit  description, VIN (serial) number, term, depreciated book value, depreciation rate, and  depreciation amount.  (62) “Daily Rental Limit” means the aggregate amount of the Commitments of the Lenders  from time to time under the Daily Rental Facility which on the Closing Date is $25,000,000.  (63) “Daily Rental Loans” means Loans made under the Daily Rental Facility.  (64) “Dealer Trade” means a vehicle financed under the Wholesale Flooring Facility that is  purchased and sold between Wholesale Flooring Borrowers or between a Wholesale Flooring  Borrower and a third party arm’s length dealer.  (65) “Debt” means, without duplication, in respect of any Person:  (a) all debts and liabilities of the Person for borrowed money;  (b) all Contingent Obligations of the Person;  (c) any obligation, contingent or other, which is required to be classified in  accordance with GAAP upon the Person’s balance sheet as a liability;  (d) any obligation secured by any Lien existing on property owned or acquired by the  Person subject to the Lien whether or not the obligation secured thereby shall  have been assumed;  (e) any debt or liability of the Person representing the deferred acquisition cost of  property or assets created or arising under any conditional sale agreement or other  title retention agreement even though the rights and remedies of the seller under  that agreement in the event of default may be limited to repossession or sale of  property or assets covered thereby;  (f) any liabilities, contingent, unmatured or other, under indemnities or other  agreements of the Person given in respect of any bankers’ acceptance, letter of  credit, or letter of guarantee;  (g) the amount of any operating lease under which the Person has furnished a residual  value guarantee and in respect of which the Person is liable as lessee;  (h) the amount of any Capital Lease in respect of which the Person is liable as lessee;  and  (i) all Hedging Liabilities of the Person,  but “Debt” does not include deferred taxes or obligations to trade creditors incurred in  the ordinary course of business.  

 

- 10 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (66) “Default” means any event or condition that constitutes an Event of Default or that would constitute an Event of Default except for satisfaction of any condition subsequent required to make the event or condition an Event of Default, including giving of any notice, passage of time, or both. (67) “Defaulting Lender” means any Lender that (a) has failed, within three (3) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii) pay over to any of the Administrative Agent or other Lenders any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied; (b) has notified the Borrowers or any of the Administrative Agent or other Lenders in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding an Borrowing under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit; (c) has failed, within three (3) Business Days after request by any of the Administrative Agent or other Lenders, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Borrowing under this Agreement; provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Administrative Agent or any Lender’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent; or (d) has become the subject of a Bankruptcy Event. (68) “Delayed Payment Privilege Program” means a program under which a Wholesale Flooring Borrower is permitted to grant short term payment terms (not to exceed thirty (30) days) to eligible purchasers on delivered vehicles; for the purposes of this definition, eligible purchasers means governments, large national corporations, financially strong lessors and daily rental counterparties, or such other counterparties acceptable to the Administrative Agent, acting reasonably. (69) “Demand” shall have the meaning given to it in Section 11.3. (70) “Designated Subsidiary” means each Subsidiary, direct or indirect, of a Borrower designated by Master Borrower, in its sole discretion, as a Designated Subsidiary, provided that such Subsidiary must be formed or incorporated pursuant to (a) the laws of Canada or its provinces or territories to be a Borrower under any of the Credit Facilities, or (b) the United States of America to be a Borrower under any of the Credit Facilities (excluding the Wholesale Flooring Facility). (71) “Disposition” has the meaning given to it in Section 10.2(1). (72) “Distribution” means any payment, loan, contribution or other transfer of funds or property to the beneficial holder of any security issued by any Obligor (where security has the meaning assigned in the Securities Act (Ontario)), including preference shares or any Subordinated Debt issued to such holder, or to any Associate or Affiliate of that holder, either directly or indirectly, and includes management, consulting or servicing fees, bonuses, dividends, 

 

- 11 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  interest, principal repayment of any loans or the redemption, retraction or purchase of any of  those securities or debt instruments.  (73) “Drawdown Date” means a Business Day on which a Borrowing is made or is deemed to be made. (74) “EBITDAR” means, with respect to any fiscal period of Master Borrower, consolidated net income from continuing operations (excluding extraordinary gains or losses and unrealized gains or losses with respect to Hedge Contracts) of Master Borrower plus, to the extent deducted in determining net income, Interest Expense and income Taxes accrued during, and depreciation (other than depreciation related to leased vehicles and daily rental vehicles), depletion and amortization expenses deducted, rental or lease expense for, the period, all computed and consolidated in accordance with GAAP.  Notwithstanding the foregoing, with respect to any Permitted Acquisition, EBITDAR shall include normalized EBITDAR of the Person being acquired or whose assets are being acquired, as if such Permitted Acquisition was made at the beginning of the 12-month period prior to such Permitted Acquisition solely with respect to the calculation of the Fixed Charge Coverage Ratio and the Leverage Ratio and with respect to each business which has ceased to be owned or operated, directly or indirectly, by an Obligor (whether by way of disposition of Equity Interests or all or substantially all of the assets of a business as a going concern or discontinuance of operations) in the immediately preceding 12- month period, exclude, without duplication, EBITDAR of such business as if it had ceased to be owned or operated for the previous full four (4) Fiscal Quarters. (75) “Eligible Assignee” means any Person (other than a natural person, any Obligor or any Affiliate of an Obligor or any Defaulting Lender), in respect of which any consent that is required by Section 14.2 has been obtained. (76) “Eligible Daily Rental Leases” means all leases for motor vehicles which adhere to the following parameters: (a) are in respect of new and used passenger cars and Light Duty Trucks; (b) are for motor vehicles from the current and preceding one model year with an odometer reading of 24,000 kilometres or less, per model year; and (c) the lease terms do not exceed 24 months; and (d) the applicable Borrower shall have provided evidence satisfactory to the Administrative Agent of the insurance on the leased vehicle(s) as follows: (i) fire, theft and comprehensive (or combined additional coverage for trucks), in an amount not less than the actual cash/value; (ii) collision or upset in an amount not less than the actual cash value with a deductible amount not exceeding $1,000 for automobiles and light trucks; and (iii) public liability (property damage and bodily injury) in the minimum amount of  $1,000,000. 

 

- 12 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Notwithstanding the above, the form of the lease agreement to be used for Eligible Daily  Rental Leases is subject to approval of the Administrative Agent. The Administrative  Agent shall have the right, acting reasonably, in its sole discretion, to exclude any motor  vehicle lease from the Daily Rental Borrowing Base.  (77) “Eligible Equipment” means at any time, the equipment, and machinery of the Revolving Facility Borrowers that, at such time: (a) are permanently located in Canada; (b) are subject to a first-ranking Lien held by the Administrative Agent, and are not subject to any other Lien (including any purchase money security interest); (c) are not, in the Administrative Agent’s opinion, obsolete, unsaleable or damaged; and (d) are not fixtures (other than trade fixtures of the Revolving Borrowers) or leasehold improvements. (78) “Eligible Finance Contracts” means Finance Contracts which meet the following criteria: (a) are negotiated between the applicable Borrower and other Obligors or unrelated third parties with terms not exceeding 84 months; (b) have initial capitalized book value of the vehicle subject to the Finance Contract not to exceed the applicable Borrowers’ acquisition cost (net of HST) supported by purchase documentation; (c) are in respect of vehicles from the current and preceding eight (8) model years; (d) the sum of the age of the vehicle subject to the Finance Contract in model years and the term of the lease does not exceed the aggregate of 108 months; (e) the Finance Contract shall not be in arrears of payments for (i) over 30 days at the time of its initial inclusion in the Wholesale Leasing Borrowing Base and (ii) 90 days or over at any time thereafter; (f) the applicable Borrower shall have performed a credit investigation on each new purchaser and have maintained a copy of such report for review by the Agent at any time requested by them; and (g) the applicable Borrower shall have conducted the appropriate Lien searches and the Administrative Agent shall have received and be satisfied with evidence of personal property registrations in respect of the Finance Contract against each purchaser in all relevant jurisdictions. (79) “Eligible New Vehicle” means a New Motor Vehicle owned by a Revolving Borrower which satisfy the following requirements: 

 

- 13 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (a) The vehicle is subject to a perfected Lien in favour of the Administrative Agent, and free of any title defects, Liens, leases, bailments, consignments or other interests of any Person other than Administrative Agent, except as agreed by the Administrative Agent in writing. (b) Unless the vehicle is in transit, it is located at locations that Master Borrower has disclosed to the Administrative Agent and which are acceptable to the Administrative Agent. If the vehicle is in transit from a seller, then upon receipt by a Revolving Borrower it will be located at one of such locations; (c) The vehicle is held for sale or lease in the ordinary course of a Revolving Borrower’s business. (d) The vehicle is undamaged and of good and merchantable quality. (e) The vehicle is otherwise acceptable to the Administrative Agent. (80) “Eligible Parts and Accessories Inventory” means at any time parts and accessories inventory held by Revolving Borrowers that at such time satisfies the following eligibility criteria: (a) it is subject to a first-ranking Lien held by the Administrative Agent pursuant to the Security, and is not subject to any other Liens, and (b) it is permanently located in Canada. (81) “Eligible Parts and Service Accounts Receivable” means accounts receivable of Revolving Borrowers which satisfy the following eligibility criteria (in this definition, individually called an “account”): (a) the account arises from a bona fide, fully-completed transaction consisting of the sale of Eligible Parts and Accessories Inventory by it to an account debtor domiciled in Canada or the performance of services by it for an account debtor domiciled in Canada; (b) the account is subject to a first-ranking Lien held by the Administrative Agent, and is not subject to any other Lien (including any purchase money security interest); (c) the account debtor is not another Obligor, a non-arm’s length party of an Obligor or an employee of an Obligor; (d) the account is not in dispute, and the account debtor has not asserted any defence, counterclaim or claim for credit, set-off, allowance or adjustment; (e) the account is not a contra account or factory accounts receivable; (f) it does not have an obligation to hold any portion of the account in trust or as agent for any other Person; 

 

- 14 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (g) an invoice relating to the account has been issued by it and sent to the account debtor; (h) the account is not outstanding for more than 90 days from the invoice date; (i) the account debtor is not, to the knowledge of any Obligor or the Administrative Agent, Insolvent or subject to any proceeding under insolvency legislation; and (j) the Administrative Agent has not notified any of the Borrowers that, in the opinion of the Administrative Agent (acting reasonably), the account is subject to undue credit risk. (82) “Eligible Real Property” means Real Property that satisfy the following conditions: (a) A Borrower shall hold fee simple title to the Real Property free and clear of all Liens and encumbrances of any nature or kind whatsoever except any easements, rights of way, zoning restrictions and other minor encumbrances and exceptions which are acceptable to the Administrative Agent, in its sole discretion or encumbrances which are accepted by the Administrative Agent, in its sole discretion, in writing, in advance, and which shall be the only Liens and encumbrances on the Real Property (other than a Lien in favour of the Administrative Agent), and such Borrower shall not have entered into any agreement prohibiting or limiting its ability to grant a Lien on such Real Property to the Administrative Agent and the Lenders. (b) The Administrative Agent shall receive the following, each in form and substance satisfactory to the Administrative Agent and the Administrative Agent shall deliver to Lenders: (i) an acceptable Appraisal of the Real Property completed within the three (3) year period prior to the date of the Borrowing Base Certificate in which the Real Property is included; and (ii) a title report regarding the Real Property from either counsel to the applicable Borrower or a title insurance company acceptable to the Administrative Agent, acting reasonably, showing the status of title to the Real Property, and all registered Liens and other matters affecting the Real Property (each, a “Title Report”). (c) If any Real Property remains in the Revolving Borrowing Base for one year or more, the Administrative Agent shall have received the following, each in form and substance satisfactory to the Administrative Agent, on an annual basis (or, if required by the Administrative Agent, more frequently following the occurrence of an Event of Default) (i) an initial Phase I environmental site assessment report and such additional environmental audits, assessments, studies and reports as are recommended thereby including without limitation any Phase II report, record of site condition or other remediation report or any such report that the Administrative Agent requires, prepared by a geological engineer or other qualified Person acceptable to the Administrative Agent (“Environment Reports”) and thereafter such new updated Environment Reports as the Administrative Agent requires, (ii) such new or updated Appraisals, evaluations or reports as the Administrative Agent requires to determine the value of the Real Property including without limitation and if applicable any Phase II reports, 

 

- 15 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  record of site condition or other remediation report, and (iii) such Title Reports as  the Administrative Agent requires.  (d) In addition to any other insurance required hereunder, all insurance covering the Real Property which is reasonably required by the Administrative Agent shall be in full force and effect and the Administrative Agent shall receive from time to time such evidence thereof as it requires. (e) The Real Property and improvements thereon shall be in good condition, and no part of the Real Property and improvements shall have been damaged by fire or other casualty or have been the subject of any expropriation, eminent domain or condemnation proceedings. (f) There are no circumstances affecting the Real Property, including without limitation any requirement of Applicable Law of the jurisdiction in which it is located which, in the opinion of the Administrative Agent or its consultants or counsel, may materially affect the value of the Real Property. (g) The Administrative Agent shall have received such additional documents and information and each Borrower shall have satisfied such additional requirements as the Administrative Agent reasonably requires, with respect to the Real Property. For purposes of the foregoing “Appraisal” means an appraisal of the Real Property  which is (i) prepared by an appraiser satisfactory to the Administrative Agent, (ii) in  compliance with all federal and provincial standards for appraisals (if any) and all  regulatory requirements (if any), (iii) reviewed by the Administrative Agent, (iv) includes  a reliance letter in favour of the Administrative Agent, and (v) in form and substance  satisfactory to the Administrative Agent in its sole and absolute discretion.  (83) “Eligible Used Motor Vehicle” means at any time, a Used Motor Vehicle maintained as inventory of the applicable Borrowers provided that it satisfies the following eligibility criteria: (a) it is subject to a perfected first priority Lien in favour of Administrative Agent, (b) it is being offered for sale to customers in the normal course of business, (c) it is not in such Borrower’s inventory for over 180 days, (d) it is permanently located in Canada or it is exported to the U.S. (“US Export Used Vehicle”) provided that (i) all US Export Used Vehicles are specifically identified (including vehicle identification numbers), (ii) do not exceed $1,000,000 in the aggregate, and (iii) the Administrative Agent has received confirmation that all filings have been made to provide Administrative Agent a perfected first priority Lien in the US Export Used Vehicles, and (e) it is not financed under the Wholesale Flooring Facility. (84) “Eligible Wholesale Leases” means all leases for Leased Units which adhere to the following parameters: 

 

- 16 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (a) are negotiated between the applicable Borrower and unrelated third parties with terms not exceeding 72 months; (b) have initial capitalized book value of any Leased Unit subject to the lease not to exceed the applicable Borrowers’ acquisition cost (net of HST) supported by purchase documentation; (c) are in respect of Leased Units from the current and preceding eight model years; (d) the sum of the age of the Leased Unit in model years and the term of the lease does not exceed the aggregate of 108 months (the “Rule of Nine”); (e) the lease shall not be in arrears of lease payments for (i) over 30 days at the time of its initial inclusion in the Wholesale Leasing Borrowing Base and (ii) 90 days or over at any time thereafter; (f) the applicable Borrower shall have performed a credit investigation on each new lessee of a lease and have maintained a copy of such report for review by the Administrative Agent at any time requested by them; (g) are not for Leased Units that are boats or motorcycles; (h) the applicable Borrower shall have provided evidence satisfactory to the Administrative Agent of the insurance on the leased vehicle(s) as follows: (i) fire, theft and comprehensive (or combined additional coverage for trucks), in an amount not less than the actual cash/value; (ii) collision or upset in an amount not less than the actual cash value with a deductible amount not exceeding $1,000 for automobiles and light trucks ($2,000 for vehicles costing over $40,000); and (iii) public liability (property damage and bodily injury) for $1,000,000; (i) the Administrative Agent shall have received and be satisfied evidence of contingent liability insurance for each lessor under each lease in the minimum amount of $1,000,000; and (j) the applicable Borrower shall have conducted the appropriate Lien searches and the Administrative Agent shall have received and be satisfied with evidence of personal property registrations in respect of the lease against each lessee in all relevant jurisdictions. Notwithstanding the above, the form of the lease agreement to be used for Eligible  Wholesale Leases is subject to approval of the Administrative Agent. The Administrative  Agent shall have the right, acting reasonably, in its sole discretion, to exclude any motor  vehicle lease from the Wholesale Lease Borrowing Base.  (85) “Environmental Activity” means any activity, event or circumstance in respect of a Contaminant or other Hazardous Material, including its storage, use, holding, collection, 

 

- 17 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  purchase, accumulation, assessment, generation, manufacture, construction, processing,  treatment, stabilization, disposition, handling or transportation or its Release into the natural  environment including movement through or in the air, soil, subsoil, surface water or  groundwater.  (86) “Environmental Claim” means any claim, proceeding, litigation or notice by any Person alleging potential liability (including potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries or penalties), except to the extent covered by insurance as to which the insurance company has not disclaimed or reserved the right to disclaim coverage, and which arises out of, is based on or resulting from (a) circumstances forming the basis of any material violation or alleged material violation of any Environmental Law or (b) any Environmental Activity at any location owned, leased, managed, controlled or operated by any Obligor, which, in the case of either (a) or (b), if sustained or determined adversely to any Obligor, would have a Material Adverse Effect. (87) “Environmental Law” means any Applicable Law to the extent relating to the protection of the environment or to occupational health and safety (including the use, handling, transportation, production, disposal, discharge or storage of any Contaminant, Hazardous Materials or Waste). (88) “Environmental Liability” means any liability arising as a result of an Environmental Claim. (89) “Equity Interest” means, with respect to any Person, any and all present and future shares, units, trust units, partnership, membership or other interests, participations or other equivalent rights in the Person’s equity or capital, however designated and whether voting or non-voting,  and warrants, options or other rights to acquire any of the foregoing and securities convertible   into or exchangeable for any of the foregoing. (90) “Equivalent Amount” in one currency on any day means the amount of that currency into which a specified amount of another currency can be converted at the Bank of Canada’s noon spot rate for that day (or at any other rate to which the parties agree) and if that day is not a Business Day, on the immediately preceding Business Day. (91) “Event of Default” means any of the events or circumstances specified in Section 11.1. (92) “Excess Amount” shall have the meaning given to it in Section 5.4. (93) “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of an Obligor hereunder, (a) taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) 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 or any similar tax imposed by any jurisdiction in which the Lender is located and (c) in the case of a Foreign Lender (other than (i) an assignee pursuant to a request by the Borrowers under Section 4.12(2), (ii) an assignee pursuant to an Assignment and Assumption made when an Event of Default has occurred and is continuing or (iii) any other assignee to the 

 

- 18 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  extent that the Borrowers has expressly agreed that any withholding tax shall be an Indemnified  Tax), any withholding tax that (A) is not imposed or assessed in respect of a loan or other  extension of credit that was made on the premise that an exemption from such withholding tax  would be available where the exemption is subsequently determined, or alleged by a taxing  authority, not to be available and (B) is required by Applicable Law to be withheld or paid in  respect of any amount payable hereunder or under any Loan Document to such Foreign Lender  at the time such Foreign Lender becomes a party hereto (or designates a new lending office) or is  attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in  Law) to comply with Section 4.11(5), except to the extent that such Foreign Lender (or its  assignor, if any) was entitled, at the time of designation of a new lending office (or assignment),  to receive additional amounts from an Obligor with respect to such withholding tax pursuant to  Section 4.11(1).  For greater certainty, for purposes of item (c) above, a withholding tax includes  any Tax that a Foreign Lender is required to pay pursuant to Part XIII of the ITA.  (94) “Exit Notice” means a written notice delivered by the Administrative Agent to the Borrowers pursuant to Section 11.3 declaring certain Obligations of the Borrowers outstanding under the Wholesale Flooring Facility to be due and payable within 120 days. (95) “Extension Request” means a written request from Master Borrower to the Administrative Agent requesting an extension of the Termination Date pursuant to Section 5.2. (96) “FATCA” means Sections 1471 through 1474 of the U.S Internal Revenue 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 agreements entered into pursuant to Section 1471(b)(1) of the U.S Internal Revenue Code. (97) “Fee Letter” means the fee letter between the Administrative Agent and Master Borrower dated May 2nd, 2022 and accepted by Master Borrower on June 3rd, 2022, as amended, supplemented or replaced from time to time. (98) “Final Maturity Date” means (a) in respect of the Wholesale Flooring Facility, the earlier of the date of (i) a Demand by all of the Lenders in accordance with Section 11.3 or (ii) the Termination Date, and (b) in respect of the Committed Facilities, the Termination Date. (99) “Finance Contract” means a conditional sales contract for the purchase and sale of a vehicle pursuant to which all the rights to and risks of ownership of such vehicle have been transferred to the purchaser of such vehicle and the purchaser agrees to pay to a Borrower over a period of time, the loan amount advanced for such vehicle being the purchase price of such vehicle plus interest and/or other fees.  For certainty, the applicable Borrower shall record interest income for Finance Contracts over the term of the contract as loan payments are received by the applicable Borrower from the purchaser. (100) “Financial Covenants” means the financial covenants described in Section 10.3. (101) “Fiscal Quarter” means each fiscal quarter of the Borrowers, currently ending on March 31, June 30, September 30 and December 31. (102) “Fiscal Year” means each fiscal year of the Borrowers, which currently ends on December 31. 

 

- 19 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (103) “Fixed Charge Coverage Ratio” means, on the last day of any Fiscal Quarter for Master Borrower calculated on a consolidated basis, the ratio of (a) EBITDAR for the Rolling Period ended on that date minus the aggregate of (i) an allowance for maintenance capital expenditures in an amount equal to $85,000 for each dealership location of the Borrowers (such amounts to be normalized for the first Four Quarter from the Closing Date only), (ii) all Income Tax Expense paid in cash during such Rolling Period and (iii) all dividends, capital withdrawals, intercompany loans made to Affiliates (not including other Borrowers), payments in respect of purchase, redemption or return of capital or reduction in shareholder loans made by Master Borrower during such Rolling Period, net of any capitalization requirements of a manufacturer for a Borrower that are no longer required by such manufacturer, to (b) Fixed Charges over the same Rolling Period. (104) “Fixed Charges” means for any period, for Master Borrower calculated on a consolidated basis, the sum of (a) the cash Interest Expense for such period, (b) the scheduled principal payments of Debt during such period reduced by prepayments as permitted by the Loan Documents and (c) rental or lease expense.  Notwithstanding the foregoing, with respect to rental or lease expenses related to any Permitted Acquisition, Fixed Charges shall include the rental or lease expenses of the Person being acquired or whose assets are being acquired, as if such acquisition was made at the beginning of the 12-month period prior to such Permitted Acquisition, and with respect to each business which has ceased to be owned or operated, directly or indirectly, by an Obligor (whether by way of disposition of Equity Interests or all or substantially all of the assets of a business as a going concern or discontinuance of operations) in the immediately preceding 12-month period, exclude, without duplication, rental or lease expense of such business as if it had ceased to be owned or operated for the previous full four (4) Fiscal Quarters. (105) “Foreign Lender” means any Lender that is not organized under the laws of the jurisdiction in which the Borrowers are resident for tax purposes and that is not otherwise considered or deemed in respect of any amount payable to it hereunder or under any Loan Document to be resident for income tax or withholding tax purposes in the jurisdiction in which the Borrowers are resident for tax purposes by application of the laws of that jurisdiction.  For purposes of this definition Canada and each Province and Territory thereof shall be deemed to constitute a single jurisdiction and the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. (106) “Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. (107) “Funded Debt” means, at any time, for any Borrower (i) Debt of the type described in paragraphs (a) (including any amounts payable under letters of credit and letters of guarantee), (d), (e) and (h) in definition of Debt, and (ii) all Contingent Obligations in respect of Debt of the type described in paragraphs (a) (including any amounts payable under letters of credit and letters of guarantee), (d), (e) and (h) in definition of Debt; provided however, that Funded Debt shall not include deferred taxes or obligations to trade creditors incurred in the ordinary course of business. (108) “GAAP” means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board of the American Institute 

 

- 20 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  of Certified Public Accountants and statements and pronouncements of the Financial Accounting  Standards Board (or agencies with similar functions or stature and authority within the US  accounting profession) which are applicable to the circumstances as of the date of application.  (109) “General Partners” means the general partners of the Borrowers from time to time that are a party hereto as an Obligor and their successors and assigns, and “General Partner” means any one of them. (110) “Government Approvals” means, with respect to any Person, all licences, permits, consents, authorizations and approvals from any and all Governmental Authorities required by Applicable Law for the conduct of that Person’s business as presently conducted. (111) “Governmental Authority” means the government of Canada or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including any supra-national bodies such as the European Union or the European Central Bank and including a Minister of the Crown, Superintendent of Financial Institutions or other comparable authority or agency. (112) “Hazardous Materials” means any pollutant or Contaminant, including any hazardous, dangerous, registerable or toxic chemical material or other substance within the meaning of such terms in any applicable Environmental Law. (113) “Heavy Duty Truck” means a heavy-duty truck having a minimum gross vehicle weight exceeding 26,000 lbs. (114) “Hedge Contract” means a contract for the purchase of any currency with any other currency at an agreed rate of exchange on a specified date, an interest rate or currency swap or any other interest or exchange rate exposure management arrangements. (115) “Hedging Liabilities” means, with respect to a Person, at any date of calculation, an amount equal to the aggregate of all amounts which would be owing to the Person by the Borrowers under all Hedge Contracts if those agreements were terminated on the date of calculation.  Unless netting or setting off is not permitted as a result of the operation of law or judicial authority, Hedging Liabilities shall equal the amount so determined after netting or setting off any amounts which might be owing under the Hedge Contracts by the Person to the Borrowers on that date.  If netting or setting off is not permitted as a result of the operation of law or judicial authority, Hedging Liabilities shall equal the amount owing by the Borrowers to the Person under all Hedge Contracts without netting or setting off any amounts which might be owing under the Hedge Contracts by the Person to the Borrowers on that date. (116) “HST” means the sales tax imposed under Part IX of the Excise Tax Act (Canada). (117) “Income Tax Expense” means, with respect to a Person, for any period, the aggregate of all taxes on the income of the Person on a consolidated basis for such period, whether current or deferred (net of any tax credits which are applied against any income tax otherwise payable). (118) “Indemnified Taxes” means Taxes other than Excluded Taxes. 

 

- 21 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (119) “Indemnitee” has the meaning given to it in Section 15.8(2). (120) “Intellectual Property” shall have the meaning given to it in Section 9.1(23). (121) “Interest Expense” means in respect of any fiscal period, the cost to the Master Borrower on a consolidated basis for such period of advances of credit outstanding during that period including interest charges, capitalized interest, the interest component of Capital Leases and all net amounts charged or credited to interest expense in respect of interest rate Hedge Contracts, all computed in accordance with GAAP. (122) “Interest Payment Date” means (i) with respect to each Borrowing under the Wholesale Flooring Facility, the 2nd Business Day of each calendar month, and (ii) with respect to all other Borrowings, the 22nd day of each calendar month (or such other date or dates as Master Borrower and the Agent may agree); provided that: (a) if such day is not a Business Day, the Business Day next following such day shall be the Interest Payment Date for such month, and (b) in any case, the Final Maturity  Date or, if applicable, any earlier date on which the applicable Credit Facility is fully cancelled or permanently reduced in full, shall be an Interest Payment Date with respect to all Borrowings then outstanding under such Credit Facility. (123) “Investment” means, for any Person, (i) the acquisition (whether for cash, property, services, securities or otherwise) of shares, bonds, notes, debentures, partnership or other ownership interests or other securities (where securities has the meaning assigned in the Securities Act (Ontario)) of any other Person or any agreement to make that acquisition or (ii) the making or contract to make any loan or advance to any Person or other form of direct or indirect financial support of any other Person or any obligation (contingent or other). (124) “Issuance Date” means the date on which a Letter of Credit is issued by the L/C Issuer. (125) “ITA” means the Income Tax Act (Canada). (126) “Joinder Agreement” means a joinder agreement substantially in the form of Schedule 1.1(126) (or such other form of similar effect that the Administrative Agent may accept). (127) “Judgment Currency” has the meaning given to it in Section 15.6. (128) “L/C Agreement” has the meaning given to it in Section 3.3(2). (129) “L/C Collateral Account” has the meaning given to it in Section 3.3(9). (130) “L/C Disbursement” means any payment by the L/C Issuer under a Letter of Credit plus all taxes, fees, charges and other costs and expenses incurred in connection with such payment. (131) “L/C Exposure” means, as regards the L/C Issuer, the undrawn and unexpired amounts of outstanding Letters of Credit. (132) “L/C Fee” means a fee payable by the Borrowers with respect to a Letter of Credit, as set out in Section 3.3(4)(b). 

 

- 22 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (133) “L/C Issuer” means BNS, and its successors and assigns, in its capacity as issuer of Letters of Credit in accordance with the terms of this Agreement. (134) “L/C Participant” has the meaning given to it in Section 3.3(10)(a). (135) “L/C Participation” has the meaning given to it in Section 3.3(10)(a). (136) “L/C Sublimit” means $30,000,000. (137) “Lease Adjusted Funded Debt” means, at any time, for Master Borrower on a consolidated basis and without duplication, all Funded Debt plus six times rental or lease expense. Notwithstanding the foregoing, with respect to any Permitted Acquisition, rent or lease expense shall include normalized rent or lease expense of the Person being acquired or whose assets are being acquired, as if such acquisition was made at the beginning of the 12-month period prior to such Permitted Acquisition solely with respect to the calculation of Lease Adjusted Funded Debt and with respect to each business which has ceased to be owned or operated, directly or indirectly, by an Obligor (whether by way of disposition of Equity Interests or all or substantially all of the assets of a business as a going concern or discontinuance of operations) in the immediately preceding 12-month period, exclude, without duplication, rental or lease expense of such business as if it had ceased to be owned or operated for the previous full four (4) Fiscal Quarters. (138) “Leased Property” has the meaning given to it in Section 9.1(9). (139) “Leased Unit” means New Leased Units and Used Leased Units. (140) “Lenders” mean all of the banks and other financial institutions named on the signature pages of this Agreement, and their permitted successors and assigns, and “Lender” means any one of them, and for greater certainty, includes BNS in its capacity as L/C Issuer. (141) “Letter of Credit” and “L/C” each means a letter of credit issued by the L/C Issuer at the request and for the account of the applicable Borrower and includes a Letter of Guarantee. (142) “Letter of Guarantee” means a letter of guarantee issued by the L/C Issuer at the request and for the account of the applicable Borrower for the purpose of providing security to a Person that such Borrower will perform a contractual obligation owed by such Borrower to that Person. (143) “Leverage Ratio” means with respect to Master Borrower and with respect to any Rolling Period, the ratio of Lease Adjusted Funded Debt to EBITDAR. (144) “Lien” means any mortgage, charge, lien, hypothec or encumbrance, whether fixed or floating on, or any security interest in, any property, whether real, personal or mixed, tangible or intangible, any pledge or hypothecation of any property, any conditional sale agreement, other title retention agreement, Capital Lease or other arrangement of any kind intended to create or grant security. (145) “Light Duty Truck” means a light-duty truck having a maximum gross vehicle weight of 10,000 lbs. 

 

- 23 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (146) “Loan” means any Borrowing made available by a Lender under this Agreement by way of Prime Loan or CDOR Loan. (147) “Loan Documents” means this Agreement, the Security Documents, any guarantee provided by any Obligor with respect to the Obligations of the Borrowers, and all certificates, instruments, agreements and other documents delivered, or to be delivered, to the Administrative Agent, the L/C Issuer and the Lenders under this Agreement or any other Loan Document and, when used in relation to any Person, the term “Loan Documents” means the Loan Documents executed and delivered by the Person. (148) “Manufacturer Flooring Facilities” means any floor plan financing agreement (other than this Agreement) entered into by any Borrower in the ordinary course of business solely for the purposes of financing all or a portion of the purchase of vehicle inventory. (149) “Material Adverse Change” means, where used in relation to the affairs of the Obligors, a change that, in the opinion of the Lenders, has or would reasonably be expected to have a Material Adverse Effect and, where used in relation to any other entity, has a similar meaning. (150) “Material Adverse Effect” means a material adverse effect on (a) the financial condition of the Obligors on a combined basis and taken as a whole (b) the ability of the Obligors to observe or perform their obligations under the Loan Documents to which they are a party or the validity or enforceability of such Loan Documents or any material provision thereof; (c) the property, business, operations, liabilities or capitalization of the Obligors on a combined basis and taken as a whole; or (d) the Security Documents, the priority of the Liens granted thereunder or any right or remedy of the Administrative Agent thereunder. (151) “Master Borrower” means LITHIA MASTER LP COMPANY, LP, and its successors and permitted assigns. (152) “Material Contract” means any contract or agreement to which a Borrower is a party or by which it is bound, which is material to the business of that Borrower, having regard to its subject matter or the potential consequences of breach or termination (and shall include, without limitation, any OEM Agreement). (153) “Medium Duty Truck” means a medium-duty truck having a gross vehicle weight between 10,001 lbs. and 26,000 lbs. (154) “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) in the case of a casualty, insurance proceeds and (ii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, and (ii) the amount of all payments required to be made as a result of such event to repay Debt (other than the Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event. (155) “New Leased Unit” means a passenger car, Light Duty Truck, motorcycle or boat from car, motorcycle or boat manufacturers, as applicable, approved by the Administrative Agent, from the current and preceding one model year and with an odometer reading of 24,000 

 

- 24 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  kilometres or less per model year, for domestic lease by the applicable Borrower as lessor to  third party lessees.  (156) “New Motor Vehicles” means new passenger cars, motorcycles and Light Duty Trucks as well as CAP vehicles and Program Vehicles supplied to Wholesale Flooring Borrowers by manufacturers acceptable to the Administrative Agent from the current and preceding one model year with an odometer reading of 24,000 km or less per model year, for domestic sale by Wholesale Flooring Borrowers. (157) “Non-Designated Subsidiary” means each Subsidiary, direct or indirect, of a Borrower that is not a Designated Subsidiary or otherwise an Obligor hereunder. (158) “Non-Formula Amount” means $25,000,000. (159) “Obligations” means (a) all loans, advances, debts, liabilities and obligations for the performance of covenants, tasks or duties or for the payment of monetary amounts (whether or not performance is then required or contingent, or those amounts are liquidated or determinable) owing by the Borrowers to the Administrative Agent, the L/C Issuer or any Lender under any or all of the Loan Documents and all covenants and duties regarding those amounts, of any kind or nature, present or future, whether or not evidenced by any agreement or other instrument, owing under any or all of the Loan Documents including all obligations owed by the Borrowers to the Administrative Agent, the L/C Issuer and the Lenders under the Credit Facilities and (b) Other Secured Obligations. (160) “Obligors” means, collectively, the Borrowers, the General Partners and any other Designated Subsidiary of the Borrowers that becomes a Borrower under this Agreement from time to time in accordance with Section 10.1(15) (and includes, if applicable, its General Partner), and their respective successors and permitted assigns. (161) “OEM” shall mean a vehicle manufacturer or distributor that engages in the wholesale sale of new motor vehicles to any Borrower pursuant to an OEM Agreement. (162) “OEM Agreement” shall mean each OEM dealer sales and service agreement or “franchise” or similar agreement giving any Borrower the right to sell new OEM vehicles, each as amended, supplemented, restated or replaced from time to time. (163) “Officer’s Certificate” means a certificate of a Responsible Officer substantially in the form attached hereto as Schedule 1.1(163) . (164) “Other Secured Obligations” means the present and future debts, liabilities and obligations of the Borrowers or any other Obligor to any Lender under or in connection with, (a) the Credit Facilities Hedge and other Hedge Contracts (including all Hedging Liabilities in connection therewith), (b) cash management and consolidation, money management, foreign- exchange, credit card and other facilities provided by a Lender to the Borrowers or any other Obligor, and (c) other transactions not made under this Agreement if it is agreed by the Borrowers and the Administrative Agent acting on the instructions of the Required Lenders that such facilities, debts, liabilities and obligations shall be secured; provided, for greater certainty, that upon any financial institution ceasing to be a “Lender”, the Other Secured Obligations to such financial institution and its Affiliates, as the case may be, shall continue to be secured by 

 

 - 25 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    the Security Documents so long as such financial institution was a Lender at the time any  agreement under which any such Other Secured Obligations arise was entered into.  (165) “Other Taxes” means all present or future stamp or documentary taxes or any other  excise or property taxes, charges or similar levies arising from any payment made hereunder or  under any other Loan Document or from the execution, delivery or enforcement of, or otherwise  with respect to, this Agreement or any other Loan Document.  (166) “Out of Balance Condition” means, with respect to (a) the Wholesale Flooring Facility,  the principal amount has not been repaid in accordance with Sections 2.2(5)(b) or 2.2(5)(c)(i),  (ii) or (v), (b) the Wholesale Leasing Facility, the principal amount has not been repaid in  accordance with Section 2.4(5) (but not including the repayment required to be made on the  Final Maturity Date), and (c) with respect to any of the Credit Facilities, the principal amount  thereunder has not been repaid in accordance with Section 5.4.  (167) “Owned Property” has the meaning given to it in Section 9.1(8).  (168) “Participant” has the meaning given to it in Section 14.4.  (169) “Permitted Acquisitions” means Acquisitions of the following:  (a) Designated Subsidiaries subject to the following requirements:  (i) Master Borrower shall have provided the Administrative Agent with  fifteen (15) Business Days prior written notice of the Acquisition;  (ii) Master Borrower shall have delivered to the Administrative Agent, at least  2 days prior to the closing date of the Acquisition, the following:    (A) a Joinder Agreement executed by the Designated Subsidiary (to be  held in escrow until the closing of the Acquisition),    (B) an insurance certificate confirming that the insurance requirements  under Section 10.1(2) in respect of the Designated Subsidiary have  been satisfied,   (C) an Officer’s Certificate, confirming that Master Borrower would  have been in compliance with the Financial Covenants if the  Acquisition had occurred on the first day of the period covered by  the Officer’s Certificate (using Master Borrower’s historical  methods of calculation for purposes of the target to be acquired),  and   (D) a vehicle inventory listing;  (iii) Master Borrower shall have provided to the Administrative Agent on or  before the closing date of the Acquisition, the following:  (A) copies of the purchase agreement and lease, (if any), relating to the  Acquisition,  

 

- 26 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (B) copies of all required approvals to the Acquisition from the applicable OEMs of the Designated Subsidiary being acquired, and (C) executed copies all account opening documentation, mirror netting agreements and any other applicable ancillary documents required by Administrative Agent for such Designated Subsidiary to become a Borrower hereunder; (iv) if the Acquisition  is a purchase of Equity Interests, the Acquisition is for  the purchase of not less than 85% of the outstanding Equity Interests in the  applicable Person (including goodwill, assets, and real property); (v) the Person being acquired or whose assets, division, line of business or  business unit is being acquired is located in Canada or the United States;  provided that a Person incorporated or located in the United States (x)  may only become a “Borrower” under the Revolving Facility (at the  discretion of the Administrative Agent and the Lenders), and (y) shall  become a secured guarantor of the Obligations and an Obligor hereunder; (vi) Administrative Agent shall have perfected Liens in the Collateral owned  by the Designated Subsidiary as security for all of the Obligations, and  shall have received satisfactory evidence of perfection and the priority of  such Liens, including without limitation such PPSA and other searches,  signed discharge statements or payoff letters and other filings as  Administrative Agent deems appropriate, which may include no interest  letters with respect to, or evidence of the discharge/termination of, or  reasonably satisfactory arrangements for the discharge/termination of, the  Liens of any secured party in any of the assets acquired or of the  Designated Subsidiary; (vii) Administrative Agent shall have received the organizational documents,  status  or good standing certificates and resolutions, or other authorizations  demonstrating the due organization, valid existence, qualification to do  business, good standing and authority of each Designated Subsidiary to  become an Obligor and Borrower; (viii) if the floorplan inventory of the Designated Subsidiary being acquired and  funded by Lenders is $<*> or greater, the Administrative Agent shall have  conducted and completed an audit on the Collateral owned by the  Designated Subsidiary, with results satisfactory to the Administrative  Agent, at least 3 Business Days prior to the closing date of the Acquisition; (ix) at the time of such Permitted Acquisition, and after giving effect thereto,  no Default or Event of Default shall have occurred and be continuing; (x) the board of directors (or Persons performing similar functions) of the  seller of the subject assets or any Person whose Equity Interest are subject 

 

- 27 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  to the Acquisition has not disapproved the transaction or recommended  that the transaction be disapproved,   (xi) Master Borrower shall deliver to the Agent, no later than 30 days after the  closing date of the Acquisition (or such later date as Administrative Agent  may agree to), copies of all OEM Agreements relating to the Designated  Subsidiary or the Acquisition; (xii) if the floorplan inventory of the Designated Subsidiary being acquired and  funded by Lenders is less than $<*>, the Administrative Agent shall be  permitted to conduct an audit on the Collateral owned by the Designated  Subsidiary, with results satisfactory to the Administrative Agent, within  10 Business Days after the closing date of the Acquisition; (xiii) Administrative Agent has received such additional documents, approvals,  consents and information and each Obligor has satisfied such additional  requirements as Administrative Agent reasonably requests, and (b) Non-Designated Subsidiary subject to the following requirements: (i) Master Borrower shall have provided the Administrative Agent with fifteen (15) Business Days prior written notice of the Acquisition (ii) Master Borrower shall have delivered to the Administrative Agent, at least 2 days prior to the closing date of the Acquisition, an Officer’s Certificate, confirming that Master Borrower would have been in compliance with the Financial Covenants if the acquisition had occurred on the first day of the period covered by the Officer’s Certificate (using Master Borrower’s historical methods of calculation for purposes of the target to be acquired); (iii) at the time of such Permitted Acquisition, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; and (iv) the board of directors (or Persons performing similar functions) of the seller of the subject assets or any Person whose Equity Interest are subject to the Acquisition has not disapproved the transaction or recommended that the transaction be disapproved. (170) “Permitted Debt” means: (a) the Obligations; (b) Manufacturing Flooring Facilities, provided that: (i) at the time of the entering into of any Manufacturing Flooring Facilities, Master Borrower has delivered to the Administrative Agent an Officer’s Certificate confirming that Master Borrower would be in compliance with the Financial Covenants both before and after giving effect to the entering into of such Manufacturing Flooring Facilities, and 

 

- 28 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (ii) the Administrative Agent has, acting reasonably, entered in an acceptable intercreditor agreement with each applicable third party lender; (c) unsecured Debt of a Borrower to any other Borrower; (d) Debt consisting of Capital Leases and purchase money indebtedness incurred to acquire equipment which is secured only by the equipment acquired and proceeds therefrom and such equipment secures only the obligation to pay the purchase price; (e) Debt consisting of leases entered into with an OEM with respect to vehicles used by a Borrower for service loaners, subscription services or otherwise leased to its customers; (f) Debt appearing as a claims reserve (or similar term) on the balance sheet of an Obligor, which represents amounts which have been received but which will be expended to pay warranty and service claims by customers of the Obligors; (g) Subordinated Debt, including: (i) Debt incurred in connection with reverse earn-outs granted pursuant to Permitted Acquisitions; and (ii) Debt owed by a Borrower to a General Partner or another Affiliate (other than another Borrower), that in each case is (x) consented to and on terms acceptable to the Administrative  Agent and the Required Lenders, and (y) is subject to a postponement and  subordination agreement made between the Administrative Agent and the  applicable holder of such Subordinated Debt in form and substance satisfactory to  the Administrative Agent and the Required Lenders, acting reasonably;  (h) Debt incurred with respect to Securitization Programs; (i) Debt that is only secured by owned real property of an Obligor, provided that such owned real property is not included in the Revolving Facility Borrowing Base; (j) unsecured Debt of an Obligor in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business; (k) unsecured Debt with respect to any operating lease of an Obligor under which an Obligor has furnished a residual value guarantee and in respect of which an Obligor is liable as lessee; (l) Hedging Liabilities in connection with Hedge Contracts that are permitted under Section 10.2(16); and 

 

- 29 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (m) such other Funded Debt of any Obligor to the extent that (i) such Funded Debt is unsecured, and (ii) Master Borrower has delivered to the Administrative Agent an Officer’s Certificate confirming that Master Borrower would be in compliance with the Financial Covenants, both before and after giving effect to the incurrence of such Funded Debt. (171) “Permitted Distribution” means (a) management salaries and bonuses paid in the ordinary course of business and consistent with past practice; (b) Distributions from one Borrower to another Borrower; and (c) Distributions by Master Borrower (in addition to those permitted under paragraph (a) above) so long as (i) No Event of Default has occurred and is continuing and (ii) Master Borrower has delivered to the Administrative Agent an Officer’s Certificate confirming that Master Borrower would be in compliance with the Financial Covenants after such Distribution is made. (172) “Permitted Investments” means: (a) Investments by an Obligor in another Obligor; (b) Cash Equivalent Investments; (c) Investments pursuant to a Permitted Acquisition; (d) Investments by an Obligor in a Non-Designated Subsidiary; (e) Investments not otherwise permitted in this definition provided that the aggregate  amount of such Investments does not exceed $<*> in any Fiscal Year; and (f) such other Investments as are consented to by the Required Lenders in writing in  their sole discretion, provided that the making of any such Permitted Investment  shall not cause an Event of Default to occur and be continuing and Master  Borrower has delivered to the Administrative Agent an Officer’s Certificate  confirming that Master Borrower would be in compliance with the Financial  Covenants after giving effect to the incurrence of such Investment. (173) “Permitted Liens” means: (a) Liens for taxes, assessments or other government charges or levies not yet due  and payable or, if due and payable, if they are being contested in good faith by  appropriate proceedings and for which appropriate reserves are maintained;; (b) Liens imposed by law, such as mechanics’, materialmen’s, landlords’,  warehousemen’s, and carriers’ Liens, and other similar Liens, securing  obligations incurred in the ordinary course of business which are not past due for  more than 30 days or which are being contested in good faith by appropriate  proceedings and for which appropriate reserves have been established; 

 

- 30 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (c) Liens under workers’ compensation, unemployment insurance, or similar legislation which are not past due for more than 60 days or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established; (d) Liens, deposits, or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases (permitted under the terms of the Loan Documents), public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds, or other similar obligations arising in the ordinary course of business which are not past due for more than 30 days or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established; (e) judgment and other similar Liens arising in connection with court proceedings, in an aggregate amount not in excess of the Threshold Amount; provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings; (f) easements, rights-of-way, zoning restrictions, and other similar encumbrances in existence on the Closing Date or which, in the aggregate, do not materially interfere with the occupation, use, and enjoyment by any Obligor of the property or assets encumbered thereby in the normal course of its business or materially impair the value of the property subject thereto; (g) purchase money Liens hereafter created by any Obligor to secure the purchase price of equipment acquired after the date hereof, so long as (i) such equipment is acquired in the ordinary course of such Person’s business, (ii) such Lien attaches to such equipment no later than 10 days after the acquisition thereof; (iii) such Lien does not extend to any property other than the equipment acquired and proceeds thereof, (iv) such Lien secures only the obligation to pay the purchase price of such equipment, and (v) the Debt secured is Permitted Debt; (h) Liens securing obligations in respect of Capital Leases provided that such Capital Leases are Permitted Debt, and such Liens attach only to the property being leased and proceeds thereof; (i) Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of setoff or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution (provided that such deposit accounts are permitted hereunder); (j) Liens (including, without limitation, certain rights of set-off and title retention agreements) in respect of the Manufacturer Flooring Facilities and OEM Agreements attaching to a vehicle sold or leased to an Obligor by an OEM and securing amounts owing in connection with the purchase or lease of such vehicle by such Obligor from such OEM, so long as such Liens do not secure Funded Debt (other than Permitted Debt), such Liens arise in the ordinary course of business consistent with the Borrowers’ existing business practices and, in the 

 

- 31 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  case of Liens in respect of Manufacturing Flooring Facilities, the Administrative  Agent has received a priorities agreement from such OEM in form and substance  satisfactory to the Administrative Agent, acting reasonably;  (k) Liens in favour of Lithia Canada Leasing, LP attaching to a vehicle sold or leased by Lithia Canada Leasing, LP to another Borrower; (l) Liens securing Securitization Programs; (m) Liens granted with respect to owned real property of an Obligor, provided that such owned real property is not included in the Revolving Facility Borrowing Base; and (n) such other Liens consented to in writing by the Administrative Agent and the Required Lenders, provided that nothing in this definition or otherwise in this Agreement or any other Loan  Document shall (i) be construed as evidencing an intention or agreement on the part of  the Administrative Agent that the Security Documents or the Obligations be or have been  subordinated to any Permitted Liens, or (ii) cause any such subordination to occur.   (174) “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. (175) “Preferred Claims” means, at any time, all Liens or claims created by, or arising under any statute or regulation or arising under common law without the consent of the Borrowers (in contrast with Liens voluntarily granted) which rank, or are capable of ranking, prior to or pari passu with the Liens created by the Security Documents against all or any part of the Borrowers’ assets, whether then existing or, in the Administrative Agent’s judgment acting reasonably, likely to arise, including claims for unremitted rents, Taxes, wages, vacation pay, employee deductions, workers’ compensation obligations, government royalties or pension fund obligations. (176) “Prime Loan” means a Loan denominated in Canadian Dollars in respect of which the Borrowers are obligated to pay interest in accordance with Section 4.1. (177) “Prime Rate” means, with respect to a Prime Loan, on any day the greater of: (a) the annual rate of interest announced from time to time by the Administrative Agent  as being its reference rate then in effect on such day for determining interest rates on Canadian Dollar denominated commercial loans made by it in Canada; and (b) the CDOR Rate for 1 month bankers’ acceptances in effect from time to time plus 100 basis points per annum. Any change in the Prime Rate shall be effective on the date the change becomes effective  generally.  

 

- 32 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (178) “Program Vehicle” means any vehicle with special option packages produced for sale to major daily rental fleets. Under their fleet incentive programs, the manufacturer agrees to repurchase vehicles from the daily rental company after a specified time period at a predetermined price. (179) “Real Property” means real property, acceptable to the Administrative Agent, that is owned by a Borrower and occupied by a Borrower as a motor vehicle sales facility. (180) “recreational vehicle”, “recreational vehicle sector” shall include, without limitation boats, motorcycles, off-road vehicles, and electric vehicles of any kind; (181) “Reimbursement Obligation” means the obligation of the Borrowers in respect of a Letter of Credit to reimburse the L/C Issuer pursuant to Section 3.3(5). (182) “Related Parties” means, with respect to any Person, such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates. (183) “Release” means the method by which a Contaminant or other Hazardous Material comes to be in the environment at large and includes discharging, spraying, injection, abandonment, depositing, spilling, leaking, seeping, pouring, emitting, emptying, throwing, dumping, placing and exhausting, and when used as a noun has a correlative meaning. (184) “Required Lenders” means: (a) if 3 or less Lenders exist, all Lenders (other than Defaulting Lenders and the Lender(s) that have requested the issuance of an Exit Notice); or (b) if more than 3 Lenders exist, the Lenders (other than Defaulting Lenders and the Lender(s) that have requested the issuance of an Exit Notice) from whom, in the aggregate, hold at least 66 2/3% of the Loans that have been made or are available to the Borrowers. (185) “Responsible Officer” means the chief financial officer, chief executive officer or other senior officer acceptable the Administrative Agent of a General Partner, for and on behalf of its applicable Borrower, that has the capacity to bind such General Partner and the applicable Borrower. (186) “Revolving Borrowers” means, collectively, the Persons listed on Schedule 1.1(186), and “Revolving Borrower” means any one of them. (187) “Revolving Borrowing Base” means, with respect to Revolving Borrowers, as of any date of determination: (a) an amount equal to the sum of the following (without duplication): (i) the Non-Formula Amount, 

 

- 33 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (ii) 100% of Contracts in Transit owing to Revolving Borrower in which Administrative Agent has a perfected first priority Lien, which have not remained unpaid for more than fifteen (15) days; (iii) 80% of Eligible Parts and Service Accounts Receivable; (iv) 65% of the (i) the net book value of Eligible Parts and Accessories Inventory, minus (ii) the unpaid acquisition cost owed to sellers and financiers of such inventory; (v) 75% of the most recent appraised value of Eligible Real Property; (vi) 100% of the sum of invoices from OEMs (including freight, advertising and holdbacks) for Eligible New Vehicles; (vii) 100% of the amount of the Used Vehicle Flooring Borrowing Base; and (viii) 40% of (x) the net book value of Eligible Equipment, minus (ii) the principal amount of indebtedness or obligations of any Person (other than the Obligations) which is secured by such Eligible Equipment. (b) Minus, the sum of the then outstanding aggregate principal balance of the (i) Wholesale Flooring Loans, (ii) Wholesale Flooring Swing Line Loans, (iii) Used Vehicle Flooring Loans, and (iv) Used Vehicle Flooring Swing Line Loans. Notwithstanding anything to the contrary in this Agreements, the amount included in the  Revolving Facility Borrowing Base pursuant to components (a)(i) and (a)(v) above shall not at  any time exceed $50,000,000 in the aggregate.  (188) “Revolving Borrowing Base Certificate” means a borrowing base certificate substantially in the form attached as Schedule 1.1(188) signed by a Responsible Officer of Master Borrower. (189) “Revolving Facility” has the meaning given to it in Section 2.1(1). (190) “Revolving Limit” means, at any time, the lesser of: (a) the aggregate amount of the Commitments of the Lenders from time to time under the Revolving Facility which on the Closing Date is $100,000,000, and (b) the Revolving Facility Borrowing Base. (191) “Revolving Loans” means Loans made under the Revolving Facility. (192) “Revolving Swing Line Loan” has the meaning given to it in Section 2.1(6)(a). (193) “Revolving Swing Line Limit” means $20,000,000. (194) “Rolling Period” means a rolling four Fiscal Quarter period. 

 

- 34 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (195) “Rollover” means the rollover of a Borrowing by way of a CDOR Loan into another CDOR Loan under Section 3.2(2) or an extension of a Letter of Credit for an additional Contract Period under Section 3.3(3)(b). (196) “Rollover Date” means the Business Day on which a Rollover occurs. (197) “Sale-Leaseback” has the meaning given to it in Section 10.2(1). (198) “Schedule I Lender” means any Lender named on Schedule I to the Bank Act (Canada). (199) “Schedules” means the schedules attached to and forming part of this Agreement, as particularized in Section 1.13. (200) “Security Documents” means any documents creating Liens on the assets of the Obligors in favour of the Administrative Agent on behalf of itself, the L/C Issuer and the Lenders, and all other instruments, agreements and documents which have been or may hereafter from time to time be executed in connection therewith, including the documents set out in Section 7.1. (201) “Securitization Program” means the Sun Life Securitization Program and any other transaction whereby a Borrower may sell, transfer and/or assign to a third party certain leases and personal property related thereto, and the proceeds of which are repaid to the Administrative Agent if required pursuant to Section 10.2(1). (202) “Subordinated Debt” of a Person means any Debt of such Person the payment of which is subordinated to payment of the Obligations. (203) “Subsidiary” of a Person means (a) any corporation of which the Person and/or any one of its Affiliates holds, directly or beneficially, other than by way of security only, securities to which are attached more than 50% of the votes that may be cast to elect directors of such corporation, (b) any corporation of which the Person and/or any one of its Affiliates has, through operation of law or otherwise, the ability to elect or cause the election of a majority of the directors of such corporation and (c) any partnership, limited or unlimited liability company or joint venture in which such Person and/or one or more Subsidiaries of such Person shall have, directly or indirectly, more than 50% of the votes that may be cast to elect the governing body of such entity (204) “Sun Life” means Sun Life Assurance Company of Canada and its successors and assigns. (205) “Sun Life Securitization Program” means the securitization program made pursuant to that certain master purchase and servicing agreement dated as of December 21, 2018, originally made between Sun Life and Pfaff Motors Inc. and others, as assigned by Sun Life and assumed by Lithia Canada Leasing, L.P. pursuant to an assignment and assumption agreement dated as of August 30, 2021, as amended, supplemented, restated or replaced from time to time. (206) “Supplemental Fee Letter” means the fee letter dated June 3rd, 2022 between the Administrative Agent and Master Borrower, as amended, supplemented or replaced from time to time. 

 

- 35 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (207) “Swing Line Lender” means BNS (so long as BNS is Administrative Agent) or such  other Lender that may become Swing Line Lender. (208) “Taxes” means all present or future taxes, levies, imposts, duties, deductions,  withholdings, assessments, fees or other charges imposed by any Governmental Authority,  including any interest, additions to tax or penalties applicable thereto. (209) “Termination Date” means the date which is three (3) years after the Closing Date, as  extended from time to time hereunder. (210) “Threshold Amount” means $<*>. (211) “Used Leased Unit” means a reconditioned passenger car or Light Duty Truck,  motorcycle or boat listed in the current Canadian Black Book (current plus up to eight previous  model year units) for domestic lease by the applicable Borrower as lessor to third party lessees  with: (a) an odometer reading of 150,000 km or less; and (b) a Canadian Black Book Value or acquisition cost (net of HST) of at least $7,500;  or (c) as otherwise approved by the Administrative Agent. (212) “Used Motor Vehicles” means reconditioned used passenger cars, motorcycles and  Light Duty Trucks for domestic sale. (213) “Used Vehicle Flooring Borrower” means Master Borrower. (214) “Used Vehicle Flooring Borrowing Base” means, as of any date of determination, an  amount equal to eighty-five percent (85%) of the sum, without duplication, of the following: (a) the net book value of Used Motor Vehicles of Master Borrower and any other  Borrowers which are Eligible Used Motor Vehicle (net of GST / HST), minus (b) the aggregate outstanding principal amount of any indebtedness or obligation to  any Person (other than the obligations to the Administrative Agent and Lenders  under the Loan Documents) which is secured by such Eligible Used Motor  Vehicles, including but not limited to amounts owing to holders of any Lien in a  Used Motor Vehicle at the time it is traded in, sold to, or otherwise acquired by a  Borrower until such amounts have been paid in full. Notwithstanding the foregoing, the net book value of motorcycles constituting Used  Motor Vehicles included in the Used Vehicle Flooring Facility Borrowing Base shall not,  at any time, exceed five percent (5%) of the total Used Vehicle Flooring Facility  Borrowing Base.  (215) “Used Vehicle Flooring Borrowing Base Certificate” means a borrowing base certificate substantially in the form attached as Schedule 1.1(215) signed by a Responsible Officer of Master Borrower. 

 

 - 36 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (216) “Used Vehicle Flooring Facility” has the meaning given to it in Section 2.3(1).  (217) “Used Vehicle Flooring Facility Limit” means the aggregate amount of the  Commitments of the Lenders from time to time under the Used Vehicle Flooring Facility which  on the Closing Date is $100,000,000.  (218) “Used Vehicle Flooring Loans” means Loans made under the Used Vehicle Flooring  Facility.  (219) “Used Vehicle Flooring Swing Line Loan” has the meaning given to it in  Section 2.3(6)(a).  (220) “Used Vehicle Flooring Swing Line Limit” means $20,000,000.  (221) “Waste” means ashes, garbage and refuse and includes domestic waste, industrial waste,  municipal refuse or such other materials as are designated as waste under any Environmental  Law.  (222) “Wholesale Flooring Borrowers” means, collectively, the Persons listed on  Schedule 1.1(222), and “Wholesale Flooring Borrower” means any one of them.  (223) “Wholesale Flooring Facility” has the meaning given to it in Section 2.2(1).  (224) “Wholesale Flooring Facility Bulk Prepayments” means a program allowing the  Borrowers to make lump sum payments from time to time in payment of the outstanding Loans  under the Wholesale Flooring Facility (without paying out specific units).  (225) “Wholesale Flooring Facility Limit” means the aggregate amount of the Commitments  of the Lenders from time to time under the Wholesale Flooring Facility which on the Closing  Date is $500,000,000.  (226) “Wholesale Flooring Loans” means Loans made under the Wholesale Flooring Facility.  (227) “Wholesale Flooring Swing Line Loan” has the meaning given to it in  Section 2.2(6)(a).  (228) “Wholesale Flooring Swing Line Limit” means $50,000,000.  (229) “Wholesale Lease Management Report” means a report, in form an substance  satisfactory to the Administrative Agent, from the applicable Borrower summarizing such  Borrower’s Eligible Wholesale Leases  and, in connection with any requested Borrowing  by the  applicable Borrower, which identifies all Eligible Wholesale Leases, including, for each such  Eligible Wholesale Lease, customer (account) name, unit description, VIN (serial) number, lease  term, finance rate, depreciated book value, residual value, net rent, depreciation amount, interest  amount, and lease type.  (230) “Wholesale Leasing Borrower” means Lithia Canada Leasing, LP., and its successors  and permitted assigns.  

 

 - 37 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (231) “Wholesale Leasing Borrowing Base” means, without duplication, the aggregate  amount equal to the following:  (a) with respect to Eligible Wholesale Leases and Eligible Finance Contracts, 100%  of the aggregate depreciated book value (calculated in accordance with the below)  of the Wholesale Leasing Facility Borrowers’ Eligible Wholesale Leases and  Eligible Finance Contracts outstanding at any time, as evidenced by the  Wholesale Lease Management Report;  (b) with respect to leases for Leased Units and loans for Finance Contracts that do not  meet the Rule of Nine but otherwise meet all the criteria of Eligible Wholesale  Leases and Eligible Finance Contracts, 100% of the aggregate depreciated book  value (calculated in accordance with the below) of such leases outstanding at any  time (not to exceed 35% of the Wholesale Leasing Facility Limit), as evidenced  by the Wholesale Lease Management Report; and  (c) with respect to leases for Leased Units that are not Eligible Wholesale Leases and  loans for Finance Contracts that are not Eligible Finance Contracts, 100% of the  aggregate depreciated book value (calculated in accordance with the below) of  such leases outstanding at any time (not to exceed 10% of the Wholesale Leasing  Facility Limit), as evidenced by the Wholesale Lease Management Report.  Notwithstanding the foregoing, (i) any Wholesale Lease or Finance Contract included in  the Wholesale Leasing Borrowing Base shall only be for units/vehicles in Canada and the  United States1, (ii) the value of the leases (as calculated above) relating to Leased Units  of Medium Duty Trucks or Heavy Duty Trucks that are included in the Wholesale  Leasing Borrowing Base shall not exceed 15% of the Wholesale Leasing Limit, (iii) none  of the leases included in the Wholesale Leasing Borrowing Base shall be financed by any  other third-party financing, (iv) up to a maximum of $40,000,000 of the Wholesale  Leasing Limit shall be available to finance Eligible Finance Contracts, (v) the form of the  agreement to be used for Eligible Wholesale Leases and Eligible Finance Contracts is  subject to approval of the Administrative Agent, acting reasonably, and (vi) the  Administrative Agent shall have the right, acting reasonably, in its sole discretion, to  exclude any lease or Finance Contract from the Wholesale Leasing Borrowing Base.  For the purposes of calculating the aggregate depreciated book value for Eligible  Wholesale Leases, the minimum average depreciation of the capital cost of all vehicles  forming part of the Wholesale Lease Management Report, is based on the following  schedule:  Original Lease Term  Rate per Month  up to 12 months  2.20%  13 to 24 months  1.70%                                                    1 The value of the units/vehicles located in the US that can be included in the Wholesale Leasing Facility Borrowing Base is limited to 2% of the  Wholesale Leasing Facility Borrowing Base.  

 

 - 38 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    25 to 36 months  1.40%  37 to 48 months  1.20%  49 to 60 months  1.10%  61 to 72 month  1.00%  For the purposes of calculating the aggregate depreciated book value for Eligible Finance  Contracts, the minimum average depreciation of the capital cost of all vehicles forming  part of the Wholesale Lease Management Report, is based on the following schedule:  Original Loan Term  Rate per Month  up to 12 months  2.20%  13 to 24 months  1.70%  25 to 36 months  1.40%  37 to 48 months  1.20%  49 to 60 months  1.10%  61 to 72 months  1.00%  73 to 84 months  1.00%  With respect to any lease included in the Wholesale Leasing Borrowing Base, for audit  purposes, the Administrative Agent shall have the right to verify any lease and/or or  Finance Contract directly with the lessee/customer thereunder. The verification of leases  and /or Finance Contract shall either be completed (i) directly by the Administrative  Agent at no cost to the Borrowers or, (ii) at the option of the Borrowers, the verification  of leases and / or Finance Contract may be completed by the Borrowers’ auditor so long  as the auditor is satisfactory to the Administrative Agent and the verification is completed  in accordance with the terms stipulated by the Administrative Agent. The costs of the  verification completed by the Borrowers’ auditor shall be paid by the Borrowers.  (232) “Wholesale Leasing Borrowing Base Certificate” means a borrowing base certificate  substantially in the form attached as Schedule 1.1(232) signed by a Responsible Officer of  Master Borrower.  (233) “Wholesale Leasing Facility” has the meaning given to it in Section 2.4(1).  (234) “Wholesale Leasing Limit” means the aggregate amount of the Commitments of the  Lenders from time to time under the Wholesale Leasing Facility which on the Closing Date is  $400,000,000.  (235) “Wholesale Leasing Loans” means Loans made under the Wholesale Leasing Facility.  

 

- 39 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Section 1.2 Terms Generally  The definitions of terms herein shall apply equally to the singular and plural forms of the  terms defined.  Whenever the context may require, any pronoun shall include the corresponding  masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be  deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to  have the same meaning and effect as the word “shall”.  Unless the context requires otherwise  (a) any definition of or reference to any agreement, instrument or other document herein (including this Agreement) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented, restated or otherwise modified (subject to any restrictions on such amendments, supplements, restatements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) unless otherwise expressly stated, all references in this Agreement to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement,  (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. Section 1.3 Business Day  If under this Agreement any payment or calculation is to be made, or any other action is  to be taken, on or as of a day which is not a Business Day, that payment or calculation is to be  made, and that other action is to be taken, as applicable, on or as of the next day that is a  Business Day.  Section 1.4 Conflict  If there is a conflict between any provision of this Agreement and any provision of  another document contemplated by or delivered under or in connection with this Agreement,  including without limitation, any standard documentation entered into with respect to Bankers’  Acceptances, the relevant provision of this Agreement is to prevail.  Section 1.5 Currency  Unless otherwise specified, all amounts are stated in Canadian Dollars.  Section 1.6 Time  Time shall be of the essence in all provisions of this Agreement.  Section 1.7 Accounting Principles and Terms  Wherever in this Agreement reference is made to GAAP, such reference shall be deemed  to be to the recommendations at the relevant time of the Accounting Principles Board of the  American Institute of Certified Public Accountants, or any successor institute, applicable on a  consolidated basis (unless otherwise specifically provided or contemplated herein to be  

 

- 40 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  applicable on an unconsolidated basis as at the date on which such calculation is made or  required to be made in accordance with generally accepted accounting principles). Where the  character or amount of any asset or liability or item of revenue or expense or amount of equity is  required to be determined, or any consolidation or other accounting computation is required to be  made for the purpose of this Agreement or any other Document, such determination or  calculation shall, to the extent applicable and except as otherwise specified herein or as  otherwise agreed in writing by the Parties, be made in accordance with generally accepted  accounting principles applied on a consistent basis. In the event that any “Accounting Change”  (as defined below) shall occur and such change results in a change in the method of calculation  of the Financial Covenants, standards or terms of this Agreement, then the Borrowers and the  Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as  to reflect equitably such Accounting Changes with the desired result that the criteria for  evaluating the Borrowers’ financial condition shall be substantially the same after such  Accounting Changes as if such Accounting Changes had not been made. Until such time as such  an amendment shall have been executed and delivered by the Borrowers, the Administrative  Agent and the Required Lenders, all Financial Covenants, standards and terms in this Agreement  shall continue to be calculated or construed as if such Accounting Changes had not occurred.  “Accounting Changes” refers to changes in accounting principles required by the promulgation  of any rule, regulation, pronouncement or opinion by the Accounting Principles Board of the  American Institute of Certified Public Accountants including as a result of a conversion to  International Financial Reporting Standards, and in all events including changes which have  resulted from implementation and adoption of the International Financial Reporting Standards or  accounting standards for private or public enterprises to the extent required by the Financial  Accounting Standards Board and to the extent applicable to the Borrowers.  Section 1.8 Officer’s Certificate  If Master Borrower delivers an Officer’s Certificate in accordance with the provisions of  this Agreement or any other Loan Document, Administrative Agent has the right to request  details of the calculation of the Financial Covenants referenced therein (consistent with the  details provided in connection with a Compliance Certificate) and Master Borrower shall deliver  such information to Administrative Agent no later that 10 days after receipt of such request.  Administrative Agent may circulate the information received from Master Borrower pursuant to  this Section 1.8 to the Lenders.  Section 1.9 Headings and Table of Contents  The division of this Agreement into sections, the insertion of headings and the provision  of a table of contents are for convenience of reference only and are not to affect the construction  or interpretation of this Agreement.  Section 1.10 Time of Day  Unless otherwise specified, references to time of day or date mean the local time or date  in the City of Toronto, Province of Ontario.  

 

- 41 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Section 1.11 Governing Law  This Agreement shall be governed by, and construed in accordance with, the laws of the  Province of Ontario and the laws of Canada applicable in the Province of Ontario.  Section 1.12 Severability  If any provision of this Agreement is or becomes illegal, invalid or unenforceable in any  jurisdiction, the illegality, invalidity or unenforceability of that provision will not affect:  (a) the legality, validity or enforceability of the remaining provisions of this Agreement; or (b) the legality, validity or enforceability of that provision in any other jurisdiction. Section 1.13 Schedules  The following Schedules are attached to and form part of this Agreement:  Schedule 1.1(1) – Accordion Agreement  Schedule 1.1(14) – Applicable Percentage  Schedule 1.1(16) – Assignment and Assumption  Schedule 1.1(24) – Branch of Account  Schedule 1.1(43) – Commitments  Schedule 1.1(46) – Compliance Certificate  Schedule 1.1(59) – Daily Rental Borrowing Base Certificate  Schedule 1.1(126) – Joinder Agreement  Schedule 1.1(163) – Officer’s Certificate  Schedule 1.1(186) – Revolving Borrowers  Schedule 1.1(188) – Revolving Borrowing Base Certificate  Schedule 1.1(215) – Used Vehicle Flooring Borrowing Base Certificate  Schedule 1.1(222) – Wholesale Flooring Borrowers  Schedule 1.1(232) – Wholesale Leasing Borrowing Base Certificate  Schedule 3.1(1)(a) – Notice of Requested Borrowing  Schedule 3.3(3)(b) – Letter of Credit Extension Request  Schedule 3.3(11) – Existing L/Cs  Schedule 3.4 – Conversion Option Notice  Schedule 5.6 – Notice of Repayment  Schedule 5.8 – Notice of Cancellation of Credit Facility  Schedule 9.1(8) – Owned Property  Schedule 9.1(9) – Real Property Leases  Schedule 9.1(11) – Location of Assets, Places of Business  Schedule 9.1(17) – Canadian Benefit and Pension Plans  Schedule 9.1(18) – Labour Matters  Schedule 9.1(20) – Corporate Organization  

 

 - 42 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    ARTICLE 2 - THE CREDIT FACILITIES  Section 2.1 Revolving Facility  (1) Establishment.  Subject to the terms and conditions hereof, the Lenders hereby establish in favour of  Revolving Borrowers a committed revolving term credit facility (the “Revolving  Facility”) in an aggregate amount of up to the Revolving Limit.  (2) Purpose.  The Revolving Facility may be used by Revolving Borrowers to finance their working  capital and otherwise for general corporate purposes of Revolving Borrowers.  (3) Availability and Maximum Advances.  (a) The Revolving Facility is available to Revolving Borrowers by way of the  following:  (i) Prime Loans;  (ii) CDOR Loans; and/or  (iii) Letters of Credit up to an aggregate face amount not exceeding at any time  the L/C Sublimit.  (b) Borrowings under Revolving Facility are not to exceed the Revolving Limit.  (4) Revolving Nature.  The principal amount of any Borrowing under the Revolving Facility that is repaid may  be reborrowed from time to time, if Revolving Borrowers are otherwise entitled to a  Borrowing under the Revolving Facility.  On the Final Maturity Date, the Commitments  under the Revolving Facility shall be automatically cancelled and all Obligations under  the Revolving Facility shall become immediately due and payable.  (5) Repayments.  In addition to the mandatory repayments required pursuant to Section 5.4(a), Revolving  Borrowers shall repay to the Lenders all outstanding Obligations in respect of the  Revolving Facility by way of:  (a) one principal repayment in the amount of all outstanding Borrowings under the  Revolving Facility due on the Final Maturity Date; and  (b) payments of accrued interest due and payable monthly in arrears on each Interest   Payment Date and on the Final Maturity Date,  until all outstanding Obligations under the Revolving Facility owing to the Lenders have  been repaid and satisfied in full. Revolving Borrowers shall ensure that all Letters of  

 

 - 43 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Credit issued under the Revolving Facility shall mature on or prior to the Final Maturity  Date. Revolving Borrowers may repay amounts borrowed under the Revolving Facility at  any time without penalty prior to the Final Maturity Date.  (6) Revolving Swing Line Loans  (a) Subject to payment of applicable fees and charges of the Swing Line Lender, and  the terms and  conditions set out in this Section 2.1, the Swing Line Lender shall  provide Revolving Borrowers with Canadian Dollar netting or zero balance  accounts at the main branch of the Swing Line Lender (or at such other branch of  the Swing Line Lender as may be agreed upon by the Swing Line Lender and  Master Borrower from time to time).  At any time that Revolving Borrowers  would be entitled to obtain Loans under the Revolving Facility, Revolving  Borrowers shall be entitled to obtain Loans from the Swingline Lender (including  by way of overdraft), draw cheques or request wire transfers or other debit  transactions in Canadian Dollars on their Canadian Dollar accounts respectively at  the Swing Line Lender. The amount of any overdraft in such zero netting or zero  balance accounts of Revolving Borrowers at the end of each Business Day,  subject to appropriate adjustments, shall be deemed to be a CDOR Loan in the  case of such Canadian Dollar accounts outstanding to Revolving Borrowers from  the Swing Line Lender (each, a “Revolving Swing Line Loan”). The credit  balance in such netting or zero balance accounts at the end of each Business Day,  subject to appropriate adjustments, shall be applied by the Swing Line Lender as a  repayment of outstanding Revolving Swing Line Loans and such netting or zero  balance accounts shall be reduced accordingly.  (b) If, on any Business Day, either (i) the aggregate amount of all outstanding  Revolving Swing Line Loans exceeds the Revolving Swing Line Limit, or (ii) the  Swing Line Lender providing its Applicable Percentage of a requested Borrowing  under the Revolving Facility would, when combined with the amount of all  outstanding Revolving Swing Line Loans, cause the Swing Line Lender’s  Applicable Percentage of the Revolving Limit to be exceeded, then the Swing  Line Lender may deliver a written notice to the Administrative Agent and each of  the Lenders and Revolving Borrowers requiring repayment of that portion of the  Revolving Swing Line Loans which will reduce the outstanding balance of all  Revolving Swing Line Loans to an amount less than the Revolving Swing Line   Limit (or will permit the Swing Line Lender to make its Applicable Percentage of  the requested Borrowings under the Revolving Facility, as applicable). Upon  delivery of such written notice, Revolving Borrowers shall be deemed to have  given at such time an notice to the Administrative Agent requesting CDOR Loans  under the Revolving Facility in an aggregate amount equal to the repayment  amount specified by the Swing Line Lender and, for greater certainty, the required  number of Business Days’ notice and the minimum amount of the Loans shall not  be applicable to such CDOR Loans. If the aggregate principal amount of all such  requested Loans and all Borrowings outstanding under the Revolving Facility  would not exceed the Revolving Limit at such time, and if no Default or Event of  Default is then continuing, then the Lenders shall make such requested Loans  based upon each Lender’s Applicable Percentage thereof on the same Business  Day (if such written notice was given by 11:00 a.m. (Eastern Standard Time) on  

 

 - 44 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    such Business Day) or on the next Business Day (if such written notice was given  after 11:00 a.m. (Eastern Standard Time) on such Business Day) and the  Administrative Agent shall apply the proceeds thereof in reduction of the  Revolving Swing Line Loans then outstanding. The Administrative Agent shall  promptly notify Master Borrower of any such Loans made and Master Borrower  agrees to accept each such Loans and hereby irrevocably authorizes and directs  the Administrative Agent to apply the proceeds thereof in payment of the  Revolving Swing Line Loans as aforesaid.  (c) If and to the extent that Loans under the Revolving Facility cannot be made when  required under Section 2.1(6)(b) as a result of there not being enough undrawn  availability remaining under the Revolving Facility Limit or by reason of an  Event of Default having occurred and being continuing, each of the Lenders  agrees that it will purchase from the Swing Line Lender, and the Swing Line  Lender shall sell to the Lenders, for cash, at par, without representation or  warranty from or recourse against the Swing Line Lender (and irrespective of  whether any condition precedent to a Loan has been satisfied or any Default or  Event of Default has occurred and is continuing) an interest in such of the  Revolving Swing Line Loans outstanding from the Swing Line Lender so that,  after the completion of such purchases and sales, all Loans outstanding under the  Revolving Facility (including Revolving Swing Line Loans) are outstanding  rateably from the Lenders in accordance with their Applicable Percentage of the  Revolving Limit of the Lenders. The intention of this Section 2.1(6)(c) is that  when all purchases and sales required hereby have been completed, the  outstanding Loans under the Revolving Facility will be outstanding rateably from  the Lenders in  accordance with their Applicable Percentage of the Revolving  Limit. The Administrative Agent, upon consultation with the Lenders, shall have  the power to settle any documentation required to evidence any such purchase and  sale and, if deemed advisable by the Administrative Agent, to execute any  document as attorney for any Lender in order to complete such purchase and sale.  The Borrowers and the Lenders acknowledge that the foregoing arrangements are  to be settled by the Lenders among themselves and the Borrowers expressly   consent to the foregoing arrangements among the Lenders.  (d) Upon the occurrence and during the continuance of an Event of Default, no  Revolving Swing Line Loans shall be made without the consent of the Required  Lenders.  (e) Each of the Lenders shall indemnify and save harmless the Swing Line Lender on  a rateable basis based on such Lender’s Applicable Percentage of the Revolving  Limit of the Lenders against all liabilities, obligations, losses, damages, penalties,  actions, judgments, suits, costs, expenses, payments or disbursements of any kind  or nature whatsoever which may be imposed on, incurred by or asserted against  the Swing Line Lender in  any way related to or arising out of any Revolving  Swing Line Loan made by the Swing Line Lender (except for any such liabilities  resulting from the gross negligence or wilful misconduct of the Swing Line  Lender), other than solely related to or arising out of cash management services  provided by the Swing Line Lender.  

 

- 45 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (7) Proportionate Share Calculation – Revolving Facility Notwithstanding any other provision of this Agreement, having regard to the provision of Section 2.1 that no Borrowings of a Lender under the Revolving Facility  shall exceed its Applicable Percentage of the Revolving Limit, and that the Swing Line Lender’s Commitment under the  Revolving Facility includes the full amount of the Revolving Swing Line Limit, the Administrative Agent may, at its sole discretion, adjust the amount of each Lender’s Applicable Percentage of Borrowings under the Revolving Facility to reflect as closely as practicable the respective Applicable Percentage of each Lender after giving effect to the initial allocation of the full amount of the Revolving Swing Line Limit to the Swing Line Lender’s Revolving Facility Commitment, and may readjust any such amounts as it may reasonably determine following any notice requiring repayment of the Revolving Swing Line Loans  pursuant to Section 2.1(6)(b). Section 2.2 Wholesale Flooring Facility  (1) Establishment. Subject to the terms and conditions hereof, the Lenders hereby establish in favour of Wholesale Flooring Borrowers a demand revolving new vehicle wholesale flooring financing credit facility (the “Wholesale Flooring Facility”) in a maximum amount principal amount not to exceed the Wholesale Flooring Facility Limit. (2) Purpose. Borrowings under the Wholesale Flooring Facility shall be used by the applicable Wholesale Flooring Borrower to finance the purchase of New Motor Vehicles in which the Administrative Agent has a perfected first priority Lien. (3) Availability and Maximum Advances. (a) Subject to the terms and conditions hereof, Wholesale Flooring Borrowers may obtain Borrowings for New Motor Vehicles (including qualifying CAP Vehicles and Program Vehicles in accordance with the definition of “New Motor Vehicles”) under the Wholesale Flooring Facility by way of the following: (i) Prime Loans; and (ii) CDOR Loans, in all cases, secured by inter alia conditional sale contracts assigned by  manufacturers in a form satisfactory to the Administrative Agent.  (b) Any Borrowing under Wholesale Flooring Facility is not to exceed the manufacturer’s / auction invoice amount plus the amount of GST/HST in respect of the New Motor Vehicle financed by such Borrowing, provided that GST/HST will not be financed for Dealer Trades. The Administrative Agent must be provided with Wholesale Flooring Borrowers’ purchase documentation for all CAP Vehicles and Program Vehicles which is to include the make, model, year, serial number and odometer reading, within five (5) Business Days of the date of 

 

- 46 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  the Borrowing, or such other timeframe as determined by the Administrative  Agent, acting reasonably.  (4) Revolving Nature. The principal amount of any Borrowings under the Wholesale Flooring Facility that is repaid may be reborrowed from time to time if Wholesale Flooring Borrowers are otherwise entitled to a Borrowing under the Wholesale Flooring Facility. (5) Repayment of Wholesale Flooring Facility Subject to Section 2.2(6), Wholesale Flooring Borrowers shall repay to the Lenders all outstanding Obligations in respect of Wholesale Flooring Facility on demand in accordance with Section 11.3, and otherwise shall: (a) make payments of accrued interest due and payable monthly in arrears on each Interest Payment Date; (b) in accordance with the terms of any Delayed Payment Privilege Program; and (c) repay or pay, as the case may be, to the Administrative Agent, on behalf of the Lenders, any Borrowings under the Wholesale Flooring Facility and all related Obligations on the earlier of: (i) within two (2) Business Days after the date of the sale of a New Motor Vehicle (the original purchase of which was financed by a Borrowing to the applicable Wholesale Flooring Borrower under the Wholesale Flooring Facility) if customer paid by cash, cheque, electronic funds transfer or credit card, (ii) within ten (10) Business Days after the date of the sale of a New Motor Vehicle (the original purchase of which was financed by a Loan to the applicable Wholesale Flooring Borrower under the Wholesale Flooring Facility) if such sale is pursuant to a Contract in Transit or otherwise (subject to paragraph (c)(i)), (iii) the date of demand by the Administrative Agent pursuant to Section 11.3, (iv) the Final Maturity Date, and (v) the month-end following the maturity date of the loan term as follows: Type of Vehicle Loan Term  New & CAP Vehicles 15 months  Program Vehicles 180 days  

 

- 47 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Wholesale Flooring Borrowers may repay amounts borrowed under the Wholesale  Flooring Facility at any time without penalty prior to the Final Maturity Date.  (6) Wholesale Flooring Swing Line Loans (a) Subject to the terms and conditions of this Agreement, the Swing Line Lender shall make swing line loans (“Wholesale Flooring Swing Line Loans”) to Wholesale Flooring Borrowers on a revolving credit basis during the period from the Closing Date to but not including the Final Maturity Date; provided that, (a) the aggregate outstanding principal balance of the Wholesale Flooring  Swing Line Loans shall not at any time exceed the Wholesale Flooring Swing Line Limit; and (b) the outstanding principal balance of all Wholesale Flooring Loans made by all Lenders plus the outstanding principal balance of all Wholesale Flooring Swing Line Loans, shall not at any time exceed the Wholesale Flooring Facility Limit. Subject to the terms and conditions hereof, Wholesale Flooring Borrowers may borrow, prepay and reborrow Wholesale Flooring Swing Line Loans. (b) The Lenders shall, upon notice from the Administrative Agent (in accordance with instructions from the Swing Line Lender), make a Wholesale Flooring Loan to Wholesale Flooring Borrowers in an amount determined by the Swing Line Lender in its sole discretion, provided that such amounts shall not exceed each Lender’s Applicable Percentage in respect of Wholesale Flooring Facility. The proceeds of the Wholesale Flooring Loans shall be deposited by the Administrative Agent to the applicable Wholesale Flooring Swing Line Account to be applied against the outstanding Wholesale Flooring Swing Line Loans. (c) If an Event of Default or Demand has occurred, the Administrative Agent will notify the other Lenders of the requirement for a Wholesale Flooring Loan to be made available by each of them in an amount determined by the Administrative Agent, provided that such amounts shall not exceed each Lender’s Applicable Percentage in respect of Wholesale Flooring Facility.  The proceeds of the Wholesale Flooring Loans shall be deposited by the Administrative Agent to the applicable Wholesale Flooring Swing Line Account to be applied against all of the outstanding Wholesale Flooring Swing Line Loans. (d) All payments of principal, interest, fees and other amounts relating to Wholesale Flooring Swing Line Loans shall be made solely to the Swing Line Lender. (e) Each Lender agrees to indemnify the Swing Line Lender (to the extent not reimbursed by the Borrowers), rateably according to its Applicable Percentage in respect of Wholesale Flooring Facility from and against any and all losses and claims of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Swing Line Lender in any way relating to or arising out of any Wholesale Flooring Swing Line Loan made under this Section 2.2(6), provided that no Lender shall be liable for any portion of such losses or claims resulting from the Swing Line Lender’s gross negligence or wilful misconduct. 

 

- 48 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Section 2.3 Used Vehicle Flooring Facility  (1) Establishment. Subject to the terms and conditions hereof, the Lenders hereby establish in favour of Used Vehicle Flooring Borrower a committed revolving used vehicle flooring financing credit facility (“Used Vehicle Flooring Facility”) in the maximum amount of the Used Vehicle Flooring Facility Limit. (2) Purpose. The Borrowings obtained under Used Vehicle Flooring Facility shall be used by Used Vehicle Flooring Borrower to finance the purchase of Used Motor Vehicles for sale domestically and export to the United States of America (subject to the limitations and criteria set out in the definition of Eligible Used Motor Vehicles). (3) Availability and Maximum Amount. (a) Subject to the terms and conditions hereof, Used Vehicle Flooring Borrower may obtain Borrowings for Used Motor Vehicles under the Used Vehicle Flooring Facility by way of the following: (i) Prime Loans; and (ii) CDOR Loans. (b) Borrowings under Used Vehicle Flooring Facility for any Used Motor Vehicle is not to exceed the lesser of Used Vehicle Flooring Borrowing Base and Used Vehicle Flooring Facility Limit. (c) The aggregate outstanding Borrowing under the Used Vehicle Flooring Facility used to finance the purchase of any US Export Used Vehicles shall at no time exceed $1,000,000. (4) Revolving Nature. The principal amount of any Borrowings under the Used Vehicle Flooring Facility that is repaid may be reborrowed from time to time if Used Vehicle Flooring Borrower is otherwise entitled to a Borrowing under the Used Vehicle Flooring Facility. (5) Repayment of Used Vehicle Flooring Facility. The Used Vehicle Flooring Facility shall be repaid on the Final Maturity Date.  Used Vehicle Flooring Borrower may repay amounts borrowed under the Used Vehicle Flooring Facility at any time without penalty prior to the Final Maturity Date. (6) Used Vehicle Flooring Swing Line Loans (a) Subject to the terms and conditions of this Agreement, the Swing Line Lender shall make swing line loans (“Used Vehicle Flooring Swing Line Loans”) to Used Vehicle Flooring Borrower on a revolving credit basis during the period from the Closing Date to but not including the Final Maturity Date; provided that, (a) the aggregate outstanding principal balance of the Used Vehicle Flooring Swing Line Loans shall not at any time exceed the Used Vehicle Flooring Swing Line Limit; and (b) the outstanding principal balance of all Used Vehicle Flooring Loans made by all Lenders plus the outstanding principal balance of all Used Vehicle Flooring Swing Line Loans, shall not at any time exceed the lesser of the 

 

 - 49 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (i) Used Vehicle Flooring Facility Limit, and (ii) Used Vehicle Flooring  Borrowing Base (the “Used Vehicle Flooring Maximum Amount”).  If at any  time the sum of the aggregate outstanding Used Vehicle Flooring Loans and Used  Vehicle Flooring Swing Line Loans exceed the Used Vehicle Flooring Maximum  Amount, Used Vehicle Flooring Borrower shall repay an amount equal to 100%  of such excess. Subject to the terms and conditions hereof, Used Vehicle Flooring  Borrower may borrow, prepay and reborrow Used Vehicle Flooring Swing Line  Loans.  (b) The Lenders shall, upon notice from the Administrative Agent (in accordance  with instructions from the Swing Line Lender), make a Used Vehicle Flooring  Loan to Used Vehicle Flooring Borrower in an amount determined by the Swing  Line Lender in its sole discretion, provided that such amounts shall not exceed  each Lender’s Applicable Percentage in respect of Used Vehicle Flooring  Facility. The proceeds of the Used Vehicle Flooring Loans shall be deposited by  the Administrative Agent to the applicable Used Vehicle Flooring Swing Line  Account to be applied against the outstanding Used Vehicle Flooring Swing Line  Loans.  (c) If an Event of Default has occurred, the Administrative Agent will notify the other  Lenders of the requirement for a Used Vehicle Flooring Loan to be made  available by each of them in an amount determined by the Administrative Agent,  provided that such amounts shall not exceed each Lender’s Applicable Percentage  in respect of Used Vehicle Flooring Facility.  The proceeds of the Used Vehicle  Flooring Loans shall be deposited by the Administrative Agent to the applicable  Used Vehicle Flooring Swing Line Account to be applied against all of the  outstanding Used Vehicle Swing Line Loans.  (d) All payments of principal, interest, fees and other amounts relating to Used  Vehicle Flooring Swing Line Loans shall be made solely to the Swing Line  Lender.  (e) Each Lender agrees to indemnify the Swing Line Lender (to the extent not  reimbursed by the Borrowers), rateably according to its Applicable Percentage in  respect of Used Vehicle Flooring Facility from and against any and all losses and  claims of any kind or nature whatsoever which may be imposed on, incurred by,  or asserted against the Swing Line Lender in any way relating to or arising out of  any Used Vehicle Flooring Swing Line Loan made under this Section 2.3(6),  provided that no Lender shall be liable for any portion of such losses or claims  resulting from the Swing Line Lender’s gross negligence or wilful misconduct.   Section 2.4 Wholesale Leasing Facility  (1) Establishment. Subject to the terms and conditions hereof, the Lenders hereby establish  in favour of Wholesale Leasing Borrower a committed wholesale lease revolving credit facility  (“Wholesale Leasing Facility”) in the maximum amount of the Wholesale Leasing Limit.  

 

 - 50 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (2) Purpose. The Borrowings obtained under Wholesale Leasing Facility shall be used by  Wholesale Leasing Borrower for the wholesale lease financing of Leased Units and Finance  Contracts.  (3) Availability and Maximum Advances.  (a) Subject to the terms and conditions hereof, Wholesale Leasing Borrower may  obtain Borrowings for under the Wholesale Leasing Facility by way of the  following:  (i) Prime Loans; and  (ii) CDOR Loans.  (b) Borrowings under Wholesale Leasing Facility is not to exceed the lesser of the  Wholesale Leasing Borrowing Base and Wholesale Leasing Limit.  (4) Revolving Nature. The principal amount of any Borrowings under the Wholesale  Leasing Facility that is repaid may be reborrowed from time to time if Wholesale Leasing  Borrower is otherwise entitled to a Borrowing under the Wholesale Leasing Facility.  (5) Repayment of Wholesale Leasing Facility.  Wholesale Leasing Borrower shall repay to  the Administrative Agent all outstanding obligations in respect of the Wholesale Leasing Facility  (including, without limitation, all outstanding Wholesale Leasing Facility Loans together with all  accrued interest thereon) on the Final Maturity Date; provided that, any Wholesale Leasing Loan  against a Leased Unit which has been returned from lease (whether during or at the end of the  lease term) is to be removed from the Wholesale Lease Management Report on the date the unit  is sold, or in any event, by no later than thirty (30) days from the date the unit was returned from  lease and the Wholesale Leasing Loan is to be repaid on such date. Wholesale Leasing Borrower  may repay amounts borrowed under the Wholesale Leasing Facility at any time without penalty  prior to the Final Maturity Date.  Section 2.5 Daily Rental Facility  (1) Establishment. Subject to the terms and conditions hereof, the Lenders hereby establish  in favour of Daily Rental Borrower a committed daily rental revolving credit facility (“Daily  Rental Facility”) in the maximum amount of the Daily Rental Limit.  (2) Purpose. The Borrowings obtained under Daily Rental Facility shall be used by Daily  Rental Borrower to finance Eligible Daily Rental Leases.  (3) Availability and Maximum Advances.  (a) Subject to the terms and conditions hereof, Daily Rental Borrower may obtain  Borrowings for under the Wholesale Leasing Facility by way of the following:  (i) Prime Loans; and  (ii) CDOR Loans.  

 

- 51 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (b) Borrowings under Daily Rental Facility is not to exceed the lesser of the Daily Rental Borrowing Base and Daily Rental Limit. (4) Revolving Nature. The principal amount of any Borrowings under the Daily Rental Facility that is repaid may be reborrowed from time to time if Daily Rental Borrower is otherwise entitled to a Borrowing under the Daily Rental Facility. (5) Repayment of Daily Rental Facility.  Daily Rental Borrower shall repay to the Administrative Agent all outstanding obligations in respect of the Daily Rental Facility (including, without limitation, all outstanding Daily Rental Loans together with all accrued interest thereon) on the Final Maturity Date. Daily Rental Borrower may repay amounts borrowed under the Daily Rental Facility at any time without penalty prior to the Final Maturity Date. Section 2.6 Accordion Feature  (a) Master Borrower, from time to time, by notice to the Administrative Agent (an “Accordion Notice”), may request that: (i) the Commitment of any one or more of the Committed Facilities be increased by an aggregate amount of up to $200,000,000 (in the aggregate for all Accordion Notices and all Committed Facilities) and that each Lender participate in such increase in accordance with their respective Applicable Percentage in respect of which the Accordion Notice has been received, and the Administrative Agent shall promptly provide such Accordion Notice to all Lenders in accordance with Section 2.6; and (ii) the Commitment of the Wholesale Flooring Facility be increased, provided that, the aggregate amount of all such increases does not exceed $200,000,000 and that each Lender participate in such increase in accordance with their respective Applicable Percentage in respect of which the Accordion Notice has been received, and the Administrative Agent shall promptly provide such Accordion Notice to all Lenders in accordance with Section 2.6, provided that, any accordion increases requested will be granted at the sole  discretion of each of the Lenders (including, without limitation, subject to a  Lender obtaining the necessary internal credit approval).  (b) Each existing Lender shall, within fifteen (15) Business Days of receipt of such Accordion Notice by the Administrative Agent, notify the Administrative Agent in writing whether it agrees to increase the applicable Credit Facility Limit by an amount equal to its Applicable Percentage of the requested increase (but in no way shall any existing Lender be obliged to do so). If such notification is not received from a Lender within such fifteen (15) Business Day period, then such Lender will be deemed not to have agreed to participate in the increase. Each consenting Lender’s portion of the applicable Credit Facility Limit shall be so increased in accordance with the provisions of this Section 2.6 as of the sixteenth (16th) Business Day after the receipt by the Administrative Agent of the 

 

- 52 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Accordion Notice and Schedule 1.1(42) hereto shall be deemed to be amended  accordingly.  (c) In the event that fifteen (15) Business Days after Master Borrower’s delivery of an Accordion Notice to the Administrative Agent no existing Lender agrees to become an Accordion Lender or the amount by which the existing Lenders that agree to become Accordion Lenders are willing to increase the applicable Credit Facility Limit is not sufficient, in the aggregate, to accommodate the requested increase in the applicable Credit Facility Limit, then subject to the provisions of this Section 2.6 a lender other than an existing Lender may, within the twenty (20) Business Day period following such fifteen (15) Business Days, become an Accordion Lender. Upon delivery to the Administrative Agent and the Lenders of an Accordion Agreement executed by Master Borrower and a proposed Accordion Lender that is acceptable to the Administrative Agent, the Lenders and Master Borrower, acting reasonably, the Lenders shall promptly execute and deliver such Accordion Agreement whereupon (a) this Agreement and each other Loan Document shall, henceforth be read and construed as if such Accordion Lender were party to this Agreement as a Lender having all of the rights and obligations of a Lender expressed herein with respect to the applicable Credit Facility that the Accordion Lender has agreed to accept and all references to any Lenders in any Loan Document shall (to the extent the context so admits) be construed accordingly and (b) Schedule 1.1(42) hereto shall be deemed to be amended to add the amount of the Credit Facility Limit of such Accordion Lender.  Borrowers shall be responsible for all reasonable fees, costs and expenses relating to the adding of any new Accordion Lender.  For greater certainty, Borrowers shall not have the right to replace any existing Lender pursuant to Section 4.12(2) solely on the basis that such Lender decides not to become an Accordion Lender pursuant to this Section 2.6. (d) No increase in any Credit Facility Limit in accordance with this Section 2.6 shall be permitted at any time that a Default or Event of Default has occurred and is continuing. (e) The Administrative Agent, the Borrowers, and the Lenders shall execute and deliver such documents and agreements as Administrative Agent deems appropriate to evidence the increase in and allocations of the Commitments pursuant to this Section 2.6. Section 2.7 Reallocation of Commitments  (a) Subject to the provisions of this Section 2.7 and so long as no Event of Default has occurred and is continuing or will exist after giving effect thereto, Master Borrower may from time to time request a reallocation of all or part of any unused portion of the Committed Facility Limits as follows: (i) the Revolving Limit to the Used Vehicle Flooring Facility Limit and/or the  Wholesale Leasing Limit, (ii) the Used Vehicle Flooring Facility Limit to the Revolving Limit and/or the Wholesale Leasing Limit, (iii) the Wholesale Leasing Limit to the Revolving Limit and/or the  Used Vehicle Leasing Limit, or (iv) the Daily Rental Limit to 

 

- 53 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  the Revolving Limit, the  Used Vehicle Leasing Limit and/or the Wholesale  Leasing Limit (each a “Reallocation”).  (b) Master Borrower may request a Reallocation no more frequently than once in any Fiscal Quarter (unless otherwise approved by the Administrative Agent and the Required Lenders in their sole discretion). If Master Borrower wish to request a Reallocation, Master Borrower shall give the Administrative Agent irrevocable written notice thereof in such form as is acceptable to the Agent (a “Reallocation Request”) no later than 11:00 a.m. (Eastern Time) at least two (2) Business Days prior to the requested effective date of the Reallocation.  The Administrative Agent will promptly notify Master Borrower and the Lenders of the effective date of any Reallocation and the amount of the new Commitments for each Lender and Schedule 1.1(42) hereto shall be deemed to be amended accordingly. (c) Following any Reallocation, (i) the aggregate Committed Facility Limits shall not change; (ii) the aggregate Used Vehicle Flooring Facility Limit (A) shall not be more than 40% of the amount of the aggregate Committed Facility Limits at the time of such Reallocation, and (B) shall not be less than the then outstanding principal balance of the Used Vehicle Flooring Loans and the Used Vehicle Flooring Swing Line Loans; (iii) the aggregate Revolving Limit (A) shall not be more than 40% of the amount of the aggregate Committed Facility Limits at the time of such Reallocation, and (B) shall not be less than the then outstanding principal balance of the Revolving  Loans and Revolving Swing Line Loans plus any L/C Exposure and unpaid L/C Disbursements; (iv) the aggregate Wholesale Leasing Flooring Limit (A) shall not be more than 90% of the amount of the aggregate Committed Facility Limits at the time of such Reallocation, and (B) shall not be less than the then outstanding principal balance of the Wholesale Leasing Loans; and (v) the Daily Rental Limit shall not be less than the then outstanding principal balance of the Daily Rental Loans. (d) All Reallocations shall be made pro rata among the Lenders according to their respective Applicable Percentage of the applicable Credit Facilities. (e) In connection with a Reallocation (a) the Wholesale Flooring Facility Limit, the Revolving Swing Line Limit, the L/C Sublimit and the Used Vehicle Flooring Swing Line Limit shall not be increased, (b) the Used Vehicle Flooring Swing Line Limit shall not be reduced unless the Used Vehicle Flooring Facility Limit is reduced to less than the amount of the Used Vehicle Flooring Swing Line Limit, (c) the Revolving Swing Line Limit and the L/C Sublimit shall not be reduced unless the Revolving Limit is reduced to less than the amount of the Revolving Swing Line Limit and L/C Sublimit, as applicable. (f) Following any Reallocation, the Revolving Limit, the Used Vehicle Flooring Facility Limit, the Wholesale Leasing Limit and the Daily Rental Limit and the updated Commitment amounts of each Lender based on their respective Applicable Percentages shall be noted in the Administrative Agent’s records, which records will be conclusive evidence thereof, absent manifest error; provided, however, that any failure by the Administrative Agent to record such information shall not affect or limit the obligations of the Borrowers hereunder. 

 

 - 54 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 2.8 Obligations of the Lenders and the Administrative Agent  (1) Applicable Percentage.  Subject to the provisions of this Agreement, each Lender agrees  to make available its Applicable Percentage of each Borrowing under each Credit Facility (or  Rollover or Conversion thereof) to the Borrowers.  No Lender or the L/C Issuer shall be  responsible for the Applicable Percentage of the Wholesale Flooring Facility or Commitment of  any other Lender.  The failure of a Lender or the L/C Issuer to make available a Borrowing (or  Rollover or Conversion thereof) in accordance with its obligations under this Agreement shall  not release any other Lender from its obligations.  Notwithstanding anything to the contrary in  this Agreement, no Lender shall be obligated to make Borrowings available to the Borrowers in  excess of its Commitment and the L/C Issuer shall not be obligated to issue any L/C in excess of  the L/C Sublimit.  (2) Separate Obligation.  The obligation of each Lender to make its Commitment available  to the Borrowers is a separate obligation between each Lender and the Borrowers, and that  obligation is not the several or joint and several obligation of any other Lender or the L/C Issuer.  ARTICLE 3- BORROWING PROCEDURES  Section 3.1 General  (1) Notice of Borrowing.  (a) To request a Borrowing under any Credit Facility (other than (i) Prime Loans  from the Swing Line Lender under an applicable Credit Facility which may be  obtained by way of overdraft without notice, (ii) CDOR Loans from the Swing  Line Lender under an applicable Credit Facility which may be obtained upon one  (1) Business Day prior written notice to the Swing Line Lender, and (iii) the  Wholesale Flooring Facility), the applicable Borrowers shall give to the  Administrative Agent written notice substantially in the form attached as  Schedule 3.1(1)(a) , indicating the amount of the requested Borrowing, at or  before the time set out below opposite the type of Borrowing that such Borrowers  wish to request.  Type of  Borrowing  Time of Notice  Prime Loans Before 11:00 a.m. (8 a.m. Pacific Standard Time) one (1)   Business Day(s) prior to the Drawdown Date  CDOR Loans Before 11:00 a.m. (8 a.m. Pacific Standard Time) two (2)   Business Day prior to the Drawdown Date   Letters of Credit Before 11:00 a.m. (8 a.m. Pacific Standard Time) five (5)   Business Day(s) prior to the Issuance Date    Each notice given in respect of a Loan by way of Prime Loan or CDOR Loan shall  indicate the amount of the required Loan, the relevant Credit Facility under which such  Loan is made and the date funds are required.  Each notice given in respect of a  

 

- 55 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Borrowing by way of Letters of Credit shall indicate the amount of the Letter of Credit to  be issued, the applicable Contract Period, the beneficiary, the terms of draw under the  requested Letter of Credit and all other relevant information.  In connection with any  request for the issuance Letters of Credit, the applicable Borrower shall execute an  “Agreement for Application of Irrevocable Standby Letter of Credit / Letter of  Guarantee” in form satisfactory to L/C Issuer.  (b) For Borrowings pursuant to the Wholesale Flooring Facility, the applicable Wholesale Flooring Borrower shall submit an electronic request through the Administrative Agent’s “Scotia Dealer Link Service” or such other electronic portal approved by the Administrative Agent , no later that 6:00 pm (4:00 pm Mountain Standard Time) on the requested date of such Borrower.  No later than five (5) days of any such request, the applicable Borrower shall deliver to the Administrative Agent all purchase documentation (including any conditional sales contract) in respect of New Motor Vehicles which shall include the model, year, serial number and odometer reading of the New Motor Vehicles to be financed by such Borrowing. (c) No Borrowing under any of Credit Facilities shall have a term or Contract Period that extends beyond the applicable Final Maturity Date.  Borrowings by way of Prime Loans (other than from the Swing Line Lender) shall be in a minimum amount of $1,000,000 and multiples of $100,000.  Borrowings by way of CDOR Loans (other than from the Swing Line Lender) shall be in a minimum amount of $1,000,000 and multiples of $100,000. (2) Limits.  Notwithstanding any other term of this Agreement, the Borrowers shall not request from the Administrative Agent a Borrowing if, on the day notice of the Borrowing is given pursuant to Section 3.1(1), after giving effect to the Borrowing, (a) the principal amount of all Borrowings outstanding under the Revolving Facility would exceed the lesser of the Revolving Facility Limit and the Revolving Borrowing Base, (b) the principal amount of all Borrowings outstanding under the Wholesale Flooring Facility would exceed the Wholesale Flooring Facility Limit, (c) the principal amount of all Borrowings outstanding under the Used Vehicle Flooring Facility would exceed the lesser of the Used Vehicle Flooring Facility Limit and the Used Flooring Borrowing Base, (d) the principal amount of all Borrowings outstanding under the Wholesale Leasing Facility would exceed the lesser of the Wholesale Leasing Limit and the Wholesale Leasing Borrowing Base, and (e) the principal amount of all Borrowings outstanding under the Daily Rental Facility would exceed the lesser of the Daily Rental Limit and the Daily Rental Facility Borrowing Base. Notwithstanding anything to the contrary in this Agreement, no Lender shall be obligated  to make Borrowings available to the Borrowers in excess of its Applicable Percentage of  

 

 - 56 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    the applicable Credit Facility Limit or its Commitment and the L/C Issuer shall not be  obligated to issue any L/C that would result in the L/C Sublimit being exceeded.  (3) Administrative Agent Determination. Each determination by the Administrative Agent  of the Prime Rate and the CDOR Rate shall, in the absence of manifest error, be final, conclusive  and binding on the Borrowers and the Lenders.  Section 3.2 CDOR Loans  (1) CDOR Rate. On each Drawdown Date, Rollover Date or Conversion Date on which any  CDOR Loan is to be made, the Administrative Agent shall advise Master Borrower as to its  determination of the CDOR Rate applicable to such CDOR Loan.  (2) CDOR Loans Rollover.  If, on the expiry of the Contract Period of a CDOR Loan, the  applicable Borrower(s) has not elected to convert the CDOR Loan into another type of Loan in  accordance with the conversion provisions set out in Section 3.4, then the applicable Borrower(s)  shall be deemed to have provided the Administrative Agent notice to issue  a new CDOR Loan  to replace such maturing CDOR Loan with the same Contract Period as such maturing CDOR  Loan. If a Default or an Event of Default has occurred and is continuing on the last day of the  Contract Period, the Obligations of the applicable Borrower(s) in respect of the maturing CDOR  Loan shall be deemed to have been converted into a Prime Loan as of the last day of the Contract  Period thereof in an amount equal to the aggregate amount of the expiring CDOR Loans.  (3) Circumstances Making CDOR Loans Unavailable. If the Administrative Agent  determines, which determination shall be final, conclusive and binding upon the Borrowers, and  notifies Master Borrower that adequate and reasonable means do not exist for ascertaining the  CDOR Rate, then:  (a) the right of any Borrower to request a Borrowing by means of CDOR Loans shall  be suspended until the Administrative Agent determines that the circumstances  causing such suspension no longer exist and the Administrative Agent so notifies  Master Borrower; and  (b) a Borrower may revoke any pending request for a Borrowing of, Conversion to or  Rollover of CDOR Loans or, failing that, will be deemed to have converted such  request into a request for a Borrowing of a Prime Loan in the amount specified  therein.  The Administrative Agent shall promptly notify Master Borrower of the suspension of a  Borrower’s right to request a Borrowing by means of CDOR Loans and of the  termination of any such suspension.  (4) CDOR Discontinuance. If the Administrative Agent determines in good faith, which  determination is final, conclusive and binding upon the Borrowers, that:  (a) adequate and reasonable means do not exist for ascertaining the CDOR Rate,  including because the Refinitiv Screen CDOR Page is not available or published  on a current basis for the applicable period and such circumstances are unlikely to  be temporary;  

 

- 57 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (b) the administrator of the CDOR Rate or a Governmental Authority having jurisdiction has made a public statement identifying a specific date after which the CDOR Rate will permanently or indefinitely cease to be made available or permitted to be used for determining the interest rate of loans; (c) a Governmental Authority having jurisdiction over the Administrative Agent or a Lender has made a public statement identifying a specific date after which the CDOR Rate shall no longer be permitted to be used for determining the interest rate of loans (each such specific date in subsection (b) above and in this subsection (c) a “CDOR Scheduled Unavailability Date”); or (d) Canadian Dollar denominated syndicated loans currently being executed, or that include language similar to that contained in this Section 3.2(4), are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace the CDOR Rate, then reasonably promptly after such determination the Administrative Agent shall notify  Master Borrower of such determination and the Administrative Agent (with the consent  of the Required Lenders) and Master Borrower may mutually agree upon a successor  rate, and the Administrative Agent and Master Borrower may amend this Agreement to  replace the CDOR Rate with an alternate benchmark rate (including any mathematical or  other adjustments to the benchmark (if any) incorporated therein), giving due  consideration to any evolving or then existing convention for similar Canadian Dollar  denominated syndicated credit facilities for such alternative benchmarks (any such  proposed rate, a “CDOR Successor Rate”), together with any proposed CDOR  Successor Rate conforming changes.  If no CDOR Successor Rate has been determined and the circumstances under  Section 3.2(4)(a) above exist or a CDOR Scheduled Unavailability Date has occurred (as  applicable), the Administrative Agent will promptly so notify Master Borrower.  Thereafter, the obligation of the Lenders to make or maintain CDOR Loans shall be  suspended (to the extent of the affected CDOR Loans or applicable periods). Upon  receipt of such notice, a Borrower may revoke any pending request for a Borrowing of,  Conversion to or Rollover of CDOR Loans (to the extent of the affected CDOR Loans or  applicable periods) or, failing that, will be deemed to have converted such request into a  request for a Borrowing of a Prime Loan in the amount specified therein.  Notwithstanding anything else herein, any definition of the CDOR Successor Rate  (exclusive of any margin) shall provide that in no event shall such CDOR Successor Rate  be less than zero for the purposes of this Agreement. In addition, the CDOR Rate shall  not be included or referenced in the definition of Prime Rate.  Section 3.3 Letters of Credit  (1) Revolving Facility. Subject to the terms and conditions of this Agreement and the applicable L/C Agreements, if any, the L/C Issuer agrees to issue L/Cs under Revolving Facility in such form as may be approved from time to time by the L/C Issuer up to maximum amount of the L/C Sublimit.  Each L/C shall be denominated in Canadian Dollars.  Each L/C shall have a Contract Period of not more than two (2) years, subject to extensions in accordance with this 

 

- 58 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Agreement, and that expires no later than 3 business days prior to the applicable Final Maturity  Date (or such later date as the L/C Issuer may agree in its sole discretion).  (2) Other Documentation.  The issuance of an L/C is subject to the execution and delivery of an application and agreement or other specific agreement relative to the instrument in form and substance satisfactory to the L/C Issuer acting reasonably (“L/C Agreements”).  In the event of a conflict between the terms and conditions of the L/C Agreements and this Agreement, the L/C Agreements shall prevail. (3) Procedure for Issuance of Letters of Credit. (a) Revolving Borrowers may borrow from time to time by way of L/C by requesting that the L/C Issuer issue an L/C by delivering to the Administrative Agent a notice in accordance with the procedure set forth in Article 3 and delivering to the L/C Issuer at its Branch of Account (with a copy to the Administrative Agent) an L/C Agreement therefor.  Upon receipt of any L/C Agreement, the L/C Issuer will process such L/C Agreement in accordance with its customary procedures and shall promptly (and, in any event, within 5 Business Days after receipt of the L/C Agreement therefor) issue the L/C requested thereby (but in no event shall the L/C Issuer be required to issue any L/C earlier than two Business Days after receipt of the L/C Agreement therefor) by issuing the original of such L/C to the beneficiary thereof or as otherwise may be agreed by the L/C Issuer and the applicable Borrower.  The L/C Issuer shall furnish a copy of such L/C (or, if applicable, the amendment effecting its extension or renewal or any other amendment) to the applicable Borrower. (b) A L/C may have a provision for automatic renewal for successive 365 day periods (provided that the L/C expires no later than 5 business days prior to the applicable Final Maturity Date or such later date as the L/C Issuer may agree in its sole discretion), otherwise, Revolving Borrowers may request the extension or renewal of the Contract Period with respect to an L/C or other amendment of any L/C by giving written notice as set forth in Schedule 3.3(3)(b) specifying the details of such request to the L/C Issuer at its Branch of Account (with a copy to the Administrative Agent) at least five Business Days (or any shorter period acceptable to the L/C Issuer) before the then current expiry date of such L/C. Subject to the terms of the L/C Agreement therefor and the terms of this Agreement, the L/C Issuer shall promptly extend or renew or, subject to any such amendment being acceptable to the L/C Issuer, amend such L/C and shall furnish a copy of such extended or renewed or amended L/C to the applicable Borrower, the Administrative Agent and the beneficiary thereof or as otherwise may be agreed by the L/C Issuer and the applicable Borrower promptly following the extension or renewal or amendment thereof. (4) Fees, Commissions, Interest and Other Charges. (a) Fees and Expenses.  Revolving Borrowers shall pay to L/C Issuer such administrative fees and expenses on such terms as may be agreed to from time to time by Master Borrower and L/C Issuer in connection with Revolving Facility. 

 

- 59 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (b) L/C Fee Payable.  In addition to the fees and expenses under Section 3.3(4)(a) above, Revolving Borrowers shall pay to the Administrative Agent, for the rateable account of the L/C Issuer and the Lenders, a fee (“L/C Fee”) with respect to each L/C in an amount equal to the Applicable Margin for L/C Fees then in effect, which fee shall be payable quarterly in arrears on the last day of March, June, September and December after the date of issuance for the number of days elapsed until the last day of the relevant quarterly period or the last day of the Contract Period for such L/C, as the case may be, and based on a year of 365 days, and shall not be refundable. (c) Distribution of Fees.  The Administrative Agent shall, promptly following its receipt thereof, distribute to the L/C Issuer and the Lenders all fees and commissions received by the Administrative Agent for their respective accounts pursuant to this Section 3.3(4). (5) Reimbursement Obligation of the Borrowers. (a) The Borrowers shall reimburse the L/C Issuer on each date on which a drawing is made under any L/C and paid by the L/C Issuer for the amount equal to the aggregate of (i) such drawing so paid and (ii) any charges or other reasonable costs or expenses payable under Section 3.3 which are incurred by the L/C Issuer in connection with such payment.  Each such payment shall be made to the L/C Issuer at its Branch of Account in lawful money of the currency in which such L/C is denominated and in immediately available funds. (b) Unless the Borrowers shall reimburse the L/C Issuer for such L/C Disbursement and such other amounts owing under Section 3.3(5)(a) due in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such amounts are paid to but excluding the date that the Borrowers reimburses such unpaid amounts, at the rate per annum then applicable to a Prime Loan under the Revolving Facility. (6) Obligations Absolute. (a) The obligations of the Borrowers under this Section 3.3 shall be absolute and unconditional under any and all circumstances and irrespective of any set-off, compensation, counterclaim or defence to payment which the Borrowers may have or have had against the L/C Issuer or any beneficiary of a L/C issued for the account of the Borrowers. (b) The Borrowers agrees with the L/C Issuer that the L/C Issuer shall not be responsible for, and the Borrowers’ obligations under Section 3.3(5) shall not be affected by, among other things, (i) the validity or genuineness of documents even though such documents shall in fact prove to be invalid, fraudulent or forged, or (ii) any dispute between or among the Borrowers and any beneficiary of any L/C or any other party to which such L/C may be transferred or (iii) any claims whatsoever of the Borrowers against any beneficiary of such L/C or any such transferee, except that the Borrowers reserves its right to subsequently assert 

 

 - 60 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    claims against the L/C Issuer in case of the gross negligence or wilful misconduct  of the L/C Issuer.  (c) The L/C Issuer shall not be liable for any error, omission, interruption or delay in  transmission, dispatch or delivery of any message or advice, however transmitted,  in connection with any L/C, except for errors or omissions caused by the L/C  Issuer’s gross negligence or wilful misconduct.  (d) The Borrowers agree that any action taken or omitted by the L/C Issuer under or  in connection with any L/C issued for the account of the Borrowers or the related  drafts or documents, if done in good faith in the absence of gross negligence or  wilful misconduct and in accordance with the standards of care specified in the  Uniform Customs and Practice for Documentary Credits, as published from time  to time by the International Chamber of Commerce, shall be binding on the  Borrowers and shall not result in any liability of the L/C Issuer to the Borrowers.  (7) Drawings under Letters of Credit.  If any draft shall be presented for payment under  any L/C, the L/C Issuer shall promptly notify the Borrowers of the date and amount thereof  which shall be reimbursed to the L/C Issuer on the same Business Day.  The responsibility of the  L/C Issuer to the Borrowers in connection with any draft presented for payment under any L/C  shall, in addition to any payment obligation expressly provided for in such L/C, be limited to  determining that the documents (including each draft) delivered under such L/C in connection  with such presentment are in compliance with such L/C.  (8) Retirement.  An L/C may only be retired on its maturity date which must be a Business  Day unless and to the extent it has been honoured or unless the written consent of the beneficiary  of the instrument has been obtained and the original instrument has been returned to the L/C  Issuer.  (9) Cash Collateralization.  The L/C Issuer may, in its sole discretion if a Default or Event  of Default has occurred and is continuing, or if the Final Maturity Date for the Revolving  Facility has been accelerated pursuant to Section 11.2, deliver written notice to the Borrowers  demanding the repayment in full and/or cancellation of L/Cs issued under the Revolving Facility  (which notice shall be deemed to be given if an Event of Default occurs under Section 11.1(9) or  Section 11.1(10)), and the Borrowers shall, immediately upon receipt of such notice:  (a)  permanently repay the L/C Issuer the full amount of all L/C Exposure consisting of outstanding  unreimbursed L/C Disbursements and related interest, fees and expenses thereon, and (b) at the  option of the L/C Issuer (in its sole discretion): (i) arrange for posting of replacement letters of  credit (and return of the L/Cs so replaced) or back-stop letters of credit in form and substance  and on terms acceptable to the L/C Issuer in its sole discretion and with a Canadian Schedule I  Bank acceptable to the L/C Issuer, or alternatively, (ii) deposit cash in an account with the  Administrative Agent, in the name of the Administrative Agent and for the benefit of the L/C  Issuer (the “L/C Collateral Account”),  such cash deposit or replacement or back-stop letters of  credit, as the case may be, in an amount equal to 105% of the L/C Exposure; provided that the  obligation to deposit such cash collateral or post such replacement or back-stop letters of credit,  as the case may be, shall become effective immediately, and such deposit shall become  immediately due and payable, without demand or other notice of any kind, upon the occurrence  of any Event of Default with respect to the Borrowers described in  Section 11.1(9) or  Section 11.1(10).  Such deposit shall be held by the Administrative Agent as an absolute transfer  

 

 - 61 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    of funds for the payment and performance of the Obligations.  The Administrative Agent shall  have sole control and the exclusive right of withdrawal, over such account.  Other than any  interest earned on the investment of such deposits, which investments shall be made at the option  and sole discretion of the Administrative Agent and at the Borrowers’ risk and expense, such  deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate  in such account.  Moneys in such account shall be applied by the Administrative Agent to  reimburse the L/C Issuer for LC Disbursements for which it has not been reimbursed and, to the  extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the  Borrowers for the L/C Exposure at such time or, if the maturity of the Loans has been  accelerated (but subject to the consent of L/C Issuer in its sole discretion), be applied to satisfy  other Obligations.  Upon (i) the curing or waiving of the applicable Events of Default, or (ii) the  termination of the Credit Facilities and reimbursement in full of all Obligations, any remaining  balance in the L/C Collateral Account (to the extent not applied as aforesaid) shall be transferred  by the Administrative Agent to the Borrowers in an amount equal to the remaining balance in the  L/C Collateral Account within three Business Days after all such Events of Default have been  cured or waived or the termination of the Credit Facilities and reimbursement in full of all  Obligations, as applicable.  (10) Participations.  (a) Upon the occurrence of an Event of Default,  the L/C Issuer shall be deemed to  have sold and transferred to each other Lender (each such other Lender, in its  capacity under this Section 3.3(10), an “L/C Participant”), and each such L/C  Participant shall be deemed irrevocably and unconditionally to have purchased  and received from the L/C Issuer, without recourse or warranty, an undivided  interest and participation (each an “L/C Participation”), to the extent of such L/C  Participant’s Applicable Percentage from time to time, in such Letter of Credit,  each substitute letter of credit, each drawing made thereunder and the Obligations  of the Borrowers under this Agreement with respect thereto.  (b) In determining whether to pay under any Letter of Credit, the L/C Issuer shall  have no obligation relative to the L/C Participants other than to confirm that any  documents required to be delivered under such Letter of Credit have been  delivered and that they appear to comply on their face with the requirements of  such Letter of Credit.  Any action taken or omitted to be taken by the L/C Issuer  under or in connection with any Letter of Credit issued by it, if taken or omitted in  the absence of gross negligence or willful misconduct, shall not create for the L/C  Issuer any resulting liability.  (c) If Section 3.3(10)(a) applies, then in the event that the L/C Issuer makes any  payment under any Letter of Credit issued by it and the Borrowers shall not have  repaid (or caused to be repaid) such amount in full to the L/C Issuer pursuant to  Section 3.3(5)(a), the L/C Issuer shall promptly notify the Administrative Agent  (who shall in turn promptly notify each L/C Participant) of such failure, and each  L/C Participant shall promptly and unconditionally pay to the Administrative  Agent, for the account of the L/C Issuer, the amount of such L/C Participant’s  Applicable  Percentage (determined as of the date of the notice referred to above)  of such unreimbursed payment in Canadian Dollars and in same day funds;  provided, however, that no L/C Participant shall be obligated to pay to the  

 

- 62 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Administrative Agent for the account of the L/C Issuer such L/C Participant’s  Applicable  Percentage of such unreimbursed amount arising from any wrongful  payment made by the L/C Issuer under such Letter of Credit as a result of acts or  omissions constituting willful misconduct or gross negligence on the part of the  L/C Issuer.  If the L/C Issuer so notifies, prior to 12:00 Noon (EST) on any  Business Day, any L/C Participant required to fund a payment under such Letter  of Credit, such L/C Participant shall make available to the Administrative Agent  for the account of the L/C Issuer such L/C Participant’s Applicable Percentage of  the amount of such payment on such Business Day in same day funds.  If and to  the extent such L/C Participant shall not have so made its Applicable Percentage  of the amount of such payment available to the Administrative Agent for the  account of the L/C Issuer, such L/C Participant agrees to pay to the  Administrative Agent for the account of such the L/C Issuer, forthwith on  demand, such amount, together with interest thereon for each day from such date  until the date such amount is paid to the Administrative Agent for the account of  the L/C Issuer at the standard interbank reference rate then in effect in Canada.   The failure of any L/C Participant to make available to the Administrative Agent  for the account of a the L/C Issuer such L/C Participant’s Applicable Percentage  of any payment under any Letter of Credit shall not relieve any other L/C  Participant of its obligation hereunder to make available to the Administrative  Agent for the account of the L/C Issuer such other L/C Participant’s Applicable  Percentage of any payment under such Letter of Credit on the date required, as  specified above, but no L/C Participant shall be responsible for the failure of any  other L/C Participant to make available to the Administrative Agent such other  L/C Participant’s Applicable  Percentage of any such payment.  (d) Whenever the L/C Issuer receives a payment in respect of an unpaid reimbursement obligation as to which the Administrative Agent has received for the account of the L/C Issuer any payments from the L/C Participants pursuant to paragraph (c) above, the L/C Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each L/C Participant that has paid its applicable portion of such reimbursement obligation, in Canadian Dollars and in same day funds, an amount equal to such L/C Participant’s share (based upon the proportionate aggregate amount originally funded by such L/C Participant to the aggregate amount funded by all L/C Participants) of the principal amount of such reimbursement obligation and interest thereon accruing after the purchase of the respective L/C Participations. (e) The obligations of the L/C Participants to make payments to the Administrative Agent for the account of the L/C Issuer with respect to Letters of Credit issued by it shall be irrevocable and not subject to counterclaim, set-off or other defense or any other qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any of the other Loan Documents; 

 

- 63 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (ii) the existence of any claim, set-off, defense or other right that the Borrowers may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, the L/C Issuer, any Lender or other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between a Borrower or and the beneficiary named in any such Letter of Credit); (iii) any draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Loan Documents; or (v) the occurrence of any Default or Event of Default; (f) provided, however, that no L/C Participant shall be obligated to pay to the Administrative Agent for the account of the L/C Issuer such L/C Participant’s Applicable Percentage of any unreimbursed amount arising from any wrongful payment made by the L/C Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the L/C Issuer. (11) Existing L/Cs.  The letters of credit described in Schedule 3.3(11),, issued under the BNS Credit Agreement shall be assumed by the Revolving Borrowers as L/Cs under this Agreement, in the same manner, and with the same effect, as if they were issued under this Agreement, and as of the date of such assumption shall be, and be deemed to be, L/Cs issued by the L/C Issuer on behalf of the Lenders and outstanding under Revolving Facility of this Agreement.  L/C Fees paid in respect of such L/Cs shall be adjusted with BNS under the BNS Credit Agreement being entitled to amounts paid on account of such fees for the period up to but excluding the date of such assumption and the Lenders under this Agreement being entitled to amounts paid on account of such fees for the period commencing with and after the date of such assumption.  L/C Fees in respect of L/Cs originally issued under the BNS Credit Agreement were paid upon issuance of such L/Cs in an amount equal to 1.00% per annum of the face amount of any L/C issued based on increments of 30 days or multiples thereof, from the date of issuance to the expiry date (provided that periods less of 30 days were pro rated to the applicable number of days).  It is acknowledged and agreed by BNS and the Lenders that the Borrowers shall not pay any L/C Fees on such existing L/Cs until their respective dates of renewal (as the Borrowers have already paid the fees on such existing L/Cs to BNS in advance) and accordingly, any adjustments due and owing to the Lenders with respect to any fees payable on such existing L/Cs from the Closing Date until their respective renewal date shall be paid by BNS to the Lenders.. Section 3.4 Conversion Option  Subject to this Agreement, the Borrowers may, during the term of this Agreement,  effective on any Business Day, convert, in whole or in part, an outstanding Loan into another  

 

- 64 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  type of Loan permitted under the same Credit Facility upon giving written notice to the  Administrative Agent in substantially the form attached hereto as Schedule 3.4, the notice period  being that which would be applicable to the type of Loan into which the outstanding Loan is to  be converted.  Conversions under this Section 3.4 may only be made provided that:  (a) each conversion to a Loan shall be for minimum aggregate amounts and whole multiples in excess thereof as are specified in respect of that type of Loan in this Article 3; (b) a Borrowing by way of CDOR Loan may be converted only on the last day of the Contract Period; and (c) no Default or Event of Default shall have occurred and be continuing on the relevant Conversion Date or after giving effect to the conversion of the Loan to be made on the Conversion Date. Section 3.5 Conversion and Rollover Not Repayment  No Conversion or Rollover shall constitute a repayment of any Borrowing or a new  Borrowing.  Section 3.6 Determination Final  With respect to all matters referred to in this Article 3 and the calculation of interest and  fees referred to in Article 4, the determination by the Administrative Agent shall be final,  conclusive and binding on the Borrowers, the L/C Issuer and the Lenders, absent manifest error.  Section 3.7 Mandatory Conversion  Subject to Section 11.2, if a Default or Event of Default has occurred and is continuing  on the last day of a Contract Period, the Borrowers shall be deemed to have converted each  CDOR Loan that is not repaid on such last day into a Prime Loan, as applicable in an amount  equal to the face amount of the CDOR Loan.  Section 3.8 Deposit of Proceeds of Loans  The Administrative Agent shall credit to the applicable Borrowers’ Account on the  applicable Drawdown Date the proceeds of each Prime Loan or CDOR Loan made to the  Borrowers (or any of them).  Section 3.9 Administrative Agent May Debit Accounts  The Borrowers authorize and direct the Administrative Agent, in the Administrative  Agent’s discretion, to debit automatically, by mechanical, electronic or manual means, any bank  account of the Borrowers maintained with BNS (for so long as BNS is Administrative Agent) for  all amounts payable by the Borrowers under this Agreement or any other Loan Document,  including the repayment of principal and the payment of interest, fees and all charges for the  keeping of that bank account.  The Administrative Agent shall notify the Borrowers as to the  particulars of those debits in the normal course.  

 

- 65 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Section 3.10 Evidence of Obligations  The Administrative Agent shall open and maintain at its Branch of Account, accounts and  records evidencing the Obligations of the Borrowers to each Lender with respect to Borrowings  made available by that Lender.  The Administrative Agent shall record in those accounts by  appropriate entries all amounts on account of those Obligations and all payments on account  thereof.  Those accounts and records will constitute, in the absence of manifest error, prima facie  evidence of those Obligations from time to time, the date each Borrowing was made and the  amounts that the Borrowers has paid from time to time on account of those Obligations.  Section 3.11 Borrowers’ Right to Rely on Administrative Agent  Unless otherwise required hereunder, during the term of this Agreement, the Borrowers  shall be entitled to deal exclusively with the Administrative Agent and to rely on discussions  with and instructions from the Administrative Agent in order to fulfil its obligations hereunder.  ARTICLE 4 - INTEREST, FEES AND EXPENSES  Section 4.1 Interest on Prime Loans  (1) Rate.  The Borrowers shall pay to the Administrative Agent on behalf of the Lenders interest on Prime Loans at the Administrative Agent’s Account for Payments at a rate per annum equal to the Prime Rate plus the Applicable Margin. (2) Change in Rate.  Each change in the fluctuating interest rate applicable to each Prime Loan will take place simultaneously with the corresponding change in the Prime Rate without the necessity for any notice to the Borrowers. (3) Calculation.  Interest on Prime Loans shall be payable monthly in arrears on every Interest Payment Date and on the applicable Final Maturity Date for the period from and including, as the case may be, the Drawdown Date, the Conversion Date or the immediately preceding Interest Payment Date to but excluding the first-mentioned Interest Payment Date or the applicable Final Maturity Date, as applicable. Interest on Prime Loans shall be calculated on a daily basis on the principal amount of the Prime Loans remaining unpaid on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be. Section 4.2 CDOR Loans  (1) Rate.  The Borrowers shall pay to the Administrative Agent on behalf of the Lenders interest on CDOR Loans at the Administrative Agent’s Account for Payments  at a rate per annum equal to the CDOR Rate plus the Applicable Margin as determined by the Administrative Agent for each calendar month based on the one (1) month CDOR Rate available on the last Business Day of the immediately preceding calendar month.  The Administrative Agent shall publish the Applicable Reference Rate for CDOR Loans for the next calendar month on the Scotia Dealer Link inventory control system by approximately 10:00 am (Toronto time) on the last Business Day of each calendar month.  Such published CDOR Rate for CDOR Loans shall be effective on the second Business Day of such next calendar month. (2) Calculation.  Interest on each CDOR Loan shall be payable in arrears on every applicable Interest Payment Date for the period from and including, the immediately preceding 

 

- 66 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  applicable Interest Payment Date to but excluding the first-mentioned applicable Interest  Payment Date, and shall be calculated on a daily basis on the principal amount of such CDOR  Loan on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case  may be.  (3) Contract Period. Each CDOR Loan shall only have a Contract Period of thirty (30) days. Section 4.3 Pricing Grid  The applicable margin with respect to Prime Loans, CDOR Loans, Standby Fees and L/C  Fees under the applicable Credit Facilities shall be as set out in the following matrices (each an  “Applicable Margin”). With respect to Revolving Facility, the Applicable Margin shall be as set  forth in the applicable row representing the Leverage Ratio on the date of determination and each  Applicable Margin for a Fiscal Quarter shall be determined on the first Business Day of the first  month following the date on which the most recent Compliance Certificate was delivered or  required to be delivered to the Lenders by the Borrowers, whichever is earlier. Any such  determination of the Applicable Margin in respect of Loans, Standby Fees and L/C Fees under  the Revolving Facility shall be effective during the period commencing on and including such  date of determination and ending on the date immediately preceding the effective date of the next  such change, provided that the pricing shall be deemed to be at the highest level (A) at any time  that an Event of Default has occurred and is continuing or (B) at the option of the Administrative  Agent or at the request of the Required Lenders if the Borrowers fails to deliver the annual or  quarterly consolidated financial statements or Compliance Certificate required to be delivered by  it pursuant Section 10.4(3) and Section 10.4(4) and such failure is not remedied within seven (7)  days, during the period from the expiration of the time for delivery thereof until such  consolidated financial statements and Compliance Certificate are delivered.  Until delivery of the  first quarterly Compliance Certificate for the first full Fiscal Quarter following the Closing Date,  and provided that no Event of Default has occurred and is continuing, the applicable Margin for  the Revolving Facility shall be those set forth in Tier I.  Applicable Margins  Facilities Prime Loan CDOR Loan Standby Fee  Wholesale Flooring Facility <*> <*> <*> Used Vehicle Flooring Facility <*> <*> <*> Wholesale Leasing Facility <*> <*> <*> Daily Rental Facility <*> <*> <*> Applicable Margin  - Revolving Facility  Tier Leverage Ratio Prime Loan CDOR Loan Standby Fee L/C Fee  I <*> <*> <*> <*> <*> II <*> <*> <*> <*> <*> III <*> <*> <*> <*> <*> 

 

- 67 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  IV <*> <*> <*> <*> <*> V <*> <*> <*> <*> <*> Section 4.4 Standby Fees  The Borrowers shall pay a Standby Fee on the daily unadvanced portions of the  applicable Credit Facility at a rate equal to the Applicable Margin specified under “Standby Fee”  with respect to the applicable Credit Facility.  In the case of the Revolving Facility, the  Applicable Margin applicable to the Standby Fee shall be adjusted based on the Leverage Ratio  in in accordance with the terms set out in Section 4.3. The Standby Fees shall be payable  monthly in arrears on the first Business Day after the end of each month, with the first payment  to be made on the first Business Day of the month which immediately follows the Closing Date  based on the number of days elapsed between the Closing Date and the end of the month. On  termination of all or any part of the Commitments under the applicable Credit Facilities, the  Borrowers shall also pay any accrued but unpaid Standby Fees.  Section 4.5 Agent Fees  From and after the execution and delivery of the Fee Letter as contemplated hereunder,  the Borrowers shall pay to the Agent, for its own account, until the Credit Facilities have been  fully cancelled and all Obligations hereunder have been paid in full, the nonrefundable agency  fees and other amounts specified in the Fee Letter.  Section 4.6 Supplemental Fee Letter  From and after the execution and delivery of the Supplemental Fee Letter as  contemplated hereunder, the Borrowers shall pay to the Agent, for its own account and the  account of the other Lenders, the fees and other amounts specified in the Supplemental Fee  Letter.  Section 4.7 Interest on Overdue Amounts  Notwithstanding any other provision hereof, in the event that any amount due hereunder  (including, without limitation, any interest payment) is not paid when due (whether by  acceleration or otherwise), the Borrowers shall pay interest on such unpaid amount (including,  without limitation, interest on interest), if and to the fullest extent permitted by Applicable Law,  from the date that such amount is due until the date that such amount is paid in full (but  excluding the date of such payment if the payment is received for value at the required place of  payment on the date of such payment), and such interest shall accrue daily, be calculated and  compounded monthly and be payable on demand, after as well as before maturity, default and  judgment, at a rate per annum that is equal to the rate of interest then payable pursuant to Article  4 plus 2.00% per annum.  

 

 - 68 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 4.8 Interest Act  For purposes of the Interest Act (Canada), where in this Agreement a rate of interest is to  be calculated on the basis of a year of 360, 365 or 366 days, the yearly rate of interest to which  the rate is equivalent is the rate multiplied by the number of days in the year for which the  calculation is made and divided by 360, 365 or 366, as applicable.  Section 4.9 Limit on Rate of Interest  (1) Adjustment. If any provision of this Agreement or any of the other Loan Documents  would obligate the Borrowers to make any payment of interest or other amount payable to any  Lender in an amount or calculated at a rate which would be prohibited by law or would result in  a receipt by that Lender of interest at a criminal rate (as construed under the Criminal Code  (Canada)), then notwithstanding that provision, that amount or rate shall be deemed to have been  adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as  would not be so prohibited by law or result in a receipt by that Lender of interest at a criminal  rate, the adjustment to be effected, to the extent necessary, as follows:  (a) firstly, by reducing the amount or rate of interest required to be paid to the  affected Lender under this Article 4; and  (b) thereafter, by reducing any fees, commissions, premiums and other amounts  required to be paid to the affected Lender which would constitute interest for  purposes of Section 347 of the Criminal Code (Canada).  (2) Reimbursement.  Notwithstanding Section 4.9(1), and after giving effect to all  adjustments contemplated thereby, if any Lender shall have received an amount in excess of the  maximum permitted by the Criminal Code (Canada), then the Borrowers shall be entitled, by  notice in writing to the affected Lender, to obtain reimbursement from that Lender in an amount  equal to the excess, and pending reimbursement, the amount of the excess shall be deemed to be  an amount payable by that Lender to the Borrowers.  (3) Actuarial Principles.  Any amount or rate of interest referred to in this Section 4.9 shall  be determined in accordance with generally accepted actuarial practices and principles as an  effective annual rate of interest over the term that any Borrowing remains outstanding on the  assumption that any charges, fees or expenses that fall within the meaning of interest (as defined  in the Criminal Code (Canada)) shall, if they relate to a specific period of time, be pro-rated over  that period of time and otherwise be pro-rated over the period from the Closing Date to the  applicable Final Maturity Date and, in the event of a dispute, a certificate of a Fellow of the  Canadian Institute of Actuaries appointed by the Administrative Agent shall be conclusive for  the purposes of that determination.  Section 4.10 Increased Costs  (1) Increased Costs Generally.  If any Change in Law shall:  (a) impose, modify or deem applicable any reserve, special deposit, compulsory loan,  insurance charge or similar requirement against assets of, deposits with or for the  account of, or credit extended or participated in by, any Lender;  

 

 - 69 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (b) subject any Lender to any Tax of any kind whatsoever with respect to this  Agreement, any Letter of Credit, any participation in a Letter of Credit or any  Loan made by it, or change the basis of taxation of payments to such Lender in  respect thereof, except for Indemnified Taxes or Other Taxes covered by  Section 4.11 and the imposition, or any change in the rate, of any Excluded Tax  payable by such Lender; or  (c) impose on any Lender or any applicable interbank market any other condition,  cost or expense affecting this Agreement or Loans made by such Lender or any  Letter of Credit;  and the result of any of the foregoing shall be to increase the cost to such Lender of making or  maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase  the cost to the L/C Issuer of issuing or maintaining any Letter of Credit (or of maintaining its  obligation to issue any Letter of Credit), or to reduce the amount of any sum received or  receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other  amount), then upon request of such Lender, the Borrowers will pay to such Lender such  additional amount or amounts as will compensate such Lender for such additional costs incurred  or reduction suffered.  (2) Capital Requirements.  If any Lender determines that any Change in Law affecting such  Lender or any lending office of such Lender or such Lender’s holding company, if any,  regarding capital requirements has or would have the effect of reducing the rate of return on such  Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of  this Agreement, the Commitment of such Lender or the Loans made by, or the Letters of Credit  issued by such Lender, to a level below that which such Lender or its holding company could  have achieved but for such Change in Law (taking into consideration such Lender’s policies and  the policies of its holding company with respect to capital adequacy), then from time to time the  Borrowers will pay to such Lender such additional amount or amounts as will compensate such  Lender or its holding company for any such reduction suffered.  (3) Certificates for Reimbursement.  A certificate of a Lender setting forth the amount or  amounts necessary to compensate such Lender or its holding company, as the case may be, as  specified in Sections 4.10(1) or (2) (“Additional Compensation”), including reasonable detail  of the basis of calculation of the amount or amounts, and delivered to the Borrowers shall be  conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due  on any such certificate within 10 days after receipt thereof.  In the event the Lender subsequently  recovers all or part of the Additional Compensation paid by the Borrowers, it shall promptly  repay an equal amount to the Borrowers.  The obligation to pay such Additional Compensation  for subsequent periods will continue until the earlier of termination of the Borrowings or the  Commitments affected by the Change in Law, change in capital requirement or the lapse or  cessation of the Change in Law giving rise to the initial Additional Compensation.  A Lender  shall make reasonable efforts to limit the incidence of any such Additional Compensation and  seek recovery for the account of the Borrowers upon such Borrowers’ request at the Borrowers’  expense, provided such Lender in its reasonable determination suffers no appreciable economic,  legal, regulatory or other disadvantage.  Notwithstanding the foregoing provisions, each Lender  agrees that it will not claim Additional Compensation from  Borrowers under this Section 4.9 if  it is not generally claiming similar compensation from its other customers in similar  circumstances where such other customers are bound by similar provisions to the foregoing.  

 

- 70 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (4) Delay in Requests.  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, except that the Borrowers shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions (i) suffered more than nine months prior to the date that such Lender notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor, unless the Change in Law giving rise to such increased costs or reductions is retroactive, in which case the nine-month period referred to above shall be extended to include the period of retroactive effect thereof and (ii) for which such Lender has not demanded similar compensation from its other customers in similar circumstances where such other customers are bound by similar provisions to the foregoing. Section 4.11 Taxes  (1) Payments Subject to Taxes.  If any Obligor, the Administrative Agent, or any Lender is required by Applicable Law to deduct or pay any Indemnified Taxes (including any Other Taxes) in respect of any payment by or on account of any obligation of an Obligor hereunder or under any other Loan Document, then (a) the sum payable shall be increased by that Obligor when payable as necessary so that after making or allowing for all required deductions and payments (including deductions and payments applicable to additional sums payable under this Section) the Administrative Agent or Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions or payments been required, (b) the Obligor shall make any such deductions required to be made by it under Applicable Law and (c) the Obligor shall timely pay the full amount required to be deducted to the relevant Governmental Authority in accordance with Applicable Law. (2) Payment of Other Taxes by the Borrowers.  Without limiting the provisions of Section 4.11(1), the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law. (3) Indemnification by the Borrowers.  The Borrowers shall indemnify the Administrative Agent and each Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent or such Lender 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 Borrowers 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. In the event the Lender subsequently recovers all or part of the payment made under this Section paid by the Borrowers, it shall promptly repay an equal amount to the Borrowers.  A Lender shall make reasonable efforts to limit the incidence of any payments under this Section and seek recovery for the account of the Borrowers upon the Borrowers’ request at the Borrowers’ expense, provided such Lender in its reasonable determination suffers no material economic, legal, regulatory or other disadvantage. (4) Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by an Obligor to a Governmental Authority, the Obligor shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental 

 

- 71 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Authority evidencing such payment, a copy of the return reporting such payment or other  evidence of such payment reasonably satisfactory to the Administrative Agent.  (5) Status of Lenders.  Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrowers are resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall, at the request of the Borrowers, deliver to the Borrowers (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by the Borrowers or the Administrative Agent, such properly completed and executed documentation prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, (a) any Lender, if requested by the Borrowers or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to withholding or information reporting requirements, and (b) any Lender that ceases to be, or to be deemed to be, resident in Canada for purposes of Part XIII of the ITA shall within 5 days thereof notify the Borrowers and the Administrative Agent in writing. (6) Treatment of Certain Refunds and Tax Reductions.  If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which an Obligor has paid additional amounts pursuant to this Section or that, because of the payment of such Taxes or Other Taxes, it has benefited from a reduction in Excluded Taxes otherwise payable by it, it shall pay to the Borrowers or Obligor, as applicable, an amount equal to such refund or reduction (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers or Obligor under this Section with respect to the Taxes or Other Taxes giving rise to such refund or reduction), net of all out-of-pocket expenses of the Administrative Agent or such Lender, as the case may be, and without interest (other than any net after-Tax interest paid by the relevant Governmental Authority with respect to such refund).  The Borrowers or Obligor as applicable, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrowers or Obligor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender if the Administrative Agent or such Lender is required to repay such refund or reduction to such Governmental Authority.  This Section 4.11(6) shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrowers or any other Person, to arrange its affairs in any particular manner or to claim any available refund or reduction. (7) Delivery of Documents. Each Lender shall, at such times as are reasonably requested by the Borrowers or the Administrative Agent, provide the Borrowers and the Administrative Agent with any properly completed and executed documentation prescribed by Applicable Law, or reasonably requested by the Borrowers or the Administrative Agent, certifying as to any entitlement of such Lender to an exemption from, or reduction in, any withholding Tax with respect to any payments to be made to such Lender under the Loan Documents (including any documentation necessary to establish an exemption from, or reduction of, any Taxes that may be imposed under FATCA).  Each such Lender shall, whenever a lapse in time or change in circumstances renders such documentation expired, obsolete or inaccurate in any respect, deliver promptly to the Borrowers and the Administrative Agent updated or other appropriate 

 

- 72 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  documentation (including any new documentation reasonably requested by the applicable  withholding agent) or promptly notify the Borrowers and the Administrative Agent of its  inability to do so.  In addition, any Lender, if reasonably requested by the Borrowers or the  Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or  reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers  or the Administrative Agent to determine whether or not such Lender is subject to backup  withholding or information reporting requirements.  Notwithstanding anything to the contrary in  the preceding two sentences, the completion, execution and submission of such documentation  (other than such documentation set forth in Section 4.11(8) 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.  (8) U.S. Withholdings. If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Lender shall deliver to Borrowers and the Administrative Agent at the time or times prescribed by Applicable Law and at such time or times reasonably requested by Borrowers or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by Borrowers or the Administrative Agent as may be necessary for Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause, “FATCA” shall include any amendments made to FATCA after the date of this Agreement. (9) Survival.  The Borrowers’ obligations under this Section 4.11 shall survive the termination of this Agreement and the payment of all amounts payable under or with respect to this Agreement. Section 4.12 Mitigation Obligations: Replacement of Lenders  (1) Designation of a Different Lending Office.  If any Lender requests compensation under Section 4.10, or requires the Borrowers to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.11, then such Lender shall 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 judgment of such Lender, such designation or assignment (a) would eliminate or reduce amounts payable pursuant to Section 4.10 or Section 4.11, as the case may be, in the future and (b) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrowers hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. (2) Replacement of Lenders.  If any Lender requests compensation under Section 4.10, if 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 4.11, if any Lender’s obligations are suspended pursuant to Section 4.13, if any Lender becomes a Defaulting Lender or if any Lender 

 

 - 73 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    fails to consent to an amendment or waiver approved by the Required Lenders as to any matter  for which the consent of all Lenders is required hereunder, then Master Borrower may either, at  its sole expense and effort, upon 10 days’ notice to such Lender and the Administrative Agent (i)  repay all outstanding amounts due to such affected Lender (or such portion which has not been  acquired pursuant to clause (ii) below) and thereupon such Applicable Percentage of such Lender  (in respect of the Wholesale Flooring Facility) and Commitments of the affected Lender shall be  permanently cancelled and the aggregate Applicable Percentages (in respect of the Wholesale  Flooring Facility) and Commitments shall be permanently reduced by the same amount and the  allocations (in respect of the Wholesale Flooring Facility) and the Commitments of each of the  other Lenders shall remain the same; or (ii)  require such Lender to assign and delegate, without  recourse (in accordance with and subject to the restrictions contained in, and consents required  by, Article 14), all of its interests, rights and obligations under this Agreement and the related  Loan Documents to an assignee that shall assume such obligations (which assignee may be  another Lender, if a Lender accepts such assignment), provided that;  (a) incumbent Lenders (that is not at such time a Defaulting Lender) shall have the  right to assume any such rights and obligations in accordance with their  Applicable Percentage in priority to any other Person which is not a Lender at the  time that Master Borrower has provided the aforementioned notice to the  Administrative Agent;  (b) any consent required pursuant to Section 14.2 in respect of such assignee shall  have been obtained;  (c) the Borrowers pays the Administrative Agent the assignment fee specified in  Section 14.2;  (d) the assigning Lender receives payment of an amount equal to the outstanding  principal of its Loans and in the case of the L/C participations in disbursements  under Letters of Credit, accrued interest thereon, accrued fees and all other  amounts payable to it hereunder and under the other Loan Documents (including  any breakage costs and amounts required to be paid under this Agreement as a  result of prepayment to a Lender) from the assignee (to the extent of such  outstanding principal and accrued interest and fees) or the Borrowers (in the case  of all other amounts);  (e) in the case of any such assignment resulting from a claim for compensation under  Section 4.10 or payments required to be made pursuant to Section 4.11, such  assignment will result in a reduction in such compensation or payments thereafter;  and  (f) such assignment does not conflict with Applicable Law.  A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a  result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to  require such assignment and delegation cease to apply.  

 

 - 74 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 4.13 Illegality  If any Lender determines that any Applicable Law has made it unlawful, or that any  Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending  office to make or maintain any Loan (or to maintain its obligation to make any Loan), or to  participate in, issue or maintain any Letter of Credit (or to maintain its obligation to participate in  or to issue any Letter of Credit), or to determine or charge interest rates based upon any  particular rate, then, on notice thereof by such Lender to the Borrowers through the  Administrative Agent, any obligation of such Lender with respect to the activity that is unlawful  shall be suspended until such Lender notifies the Administrative Agent and the Borrowers that  the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice,  the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent),  prepay or, if conversion would avoid the activity that is unlawful, convert any Loans, or take any  necessary steps with respect to any Letter of Credit in order to avoid the activity that is unlawful.   Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest on the  amount so prepaid or converted.  Each Lender agrees to designate a different lending office if  such designation will avoid the need for such notice and will not, in the good faith judgment of  such Lender, otherwise be materially disadvantageous to such Lender.  ARTICLE 5– REDUCTION AND REPAYMENT  Section 5.1 Term and Maturity  The term of each of the Credit Facilities shall commence on the Closing Date and end on  the applicable Final Maturity Date.  Section 5.2 Extension of Termination Date  (a) Master Borrower may, at its option, by delivering to the Administrative Agent an  Extension Request, request the Lenders to extend the Termination Date provided  that the request cannot be more than 90 days and not less than 60 days prior to  any anniversary of the Closing Date (the “Anniversary Date”). Master Borrower  may make an Extension Request in respect of the Credit Facilities from each  Lender which has not previously refused (or been deemed to have refused) to  extend the Termination Date pursuant to any prior Extension Request (each, a  “Requested Lender”) to a specified Business Day provided that such date is no  later than three (3) years from the effectiveness of such extension (such requested  date being the “New Date”) by delivering to the Administrative Agent an  executed Extension Request. The Administrative Agent shall forthwith, and in  any event within two (2) Business Days, notify each Requested Lender of such  request by Master Borrower (the date on which such notice is given being the  “Notification Date”). Each Requested Lender shall advise the Administrative  Agent as to whether or not it agrees to such request not later than 30 days after the  Notification Date; provided that in the event any Requested Lender does not so  advise the Administrative Agent within such 30 day period, such Requested  Lender shall be deemed to have elected not to agree to such request. Within two  (2) Business Days of the Administrative Agent having received from all  Requested Lenders their respective decision or deemed decision with regard to the  an Extension Request, the Administrative Agent shall, unless the provisions of  

 

 - 75 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    paragraph 5.2(c) below are applicable at that time, advise Master Borrower which  Lenders have agreed to extend the Termination Date to the New Date pursuant to  the Extension Request, and deliver to Master Borrower an acceptance of the  Extension Request, which may be conditional upon any additional terms and  conditions specified by the Administrative Agent (the date on which  Administrative the Agent notifies Master Borrower of such conditional  acceptance being the “Extension Decision Date”). If the acceptance is not  conditional upon additional terms and conditions, effective on the Anniversary  Date, the Termination Date shall be extended to the New Date. If the acceptance  is conditional upon additional terms and conditions, Master Borrower shall have  10 Business Days to accept such additional terms and conditions. Upon written  notice being provided by Master Borrower to the Administrative Agent accepting  such additional terms and conditions, the Termination Date shall be extended to  the New Date effective on the Anniversary Date.  For clarity, any extension of the  Termination Date shall not limit the Lenders’ right to make demand at any time in  respect of the Wholesale Flooring Facility, and shall not extend the time for any  repayment required hereunder, other than repayments to be made on the  Termination Date which shall be extended to the New Date.  (b) For the purposes of this Section 5.2: (i) a “Non-Agreeing Lender” means any  Requested Lender which does not agree (or is deemed not to have agreed) to  extend the Termination Date pursuant to Section 5.2(a), and (ii) an “Agreeing  Lender” means any Requested Lender which agrees to extend the Termination  Date pursuant to Section 5.2(a).  (c) If, in respect of any Extension Request, the Required Lenders are Non-Agreeing  Lenders, then:  (i) the Termination Date for all Requested Lenders shall not be extended; and  (ii) the Borrowers shall not be entitled to request any further extensions of the  Termination Date.  (d) If all Requested Lenders agree to the Extension Request pursuant to  Section 5.2(a), then the Termination Date for all Requested Lenders shall be  extended to the New Date pursuant to such Section 5.2(a).  (e) If, after any Extension Request pursuant to Section 5.2(a), the provisions of  Section 5.2(c) and 5.2(d) are not applicable, then:  (i) each of the Agreeing Lenders shall have the right, but not the obligation,  to purchase the Commitment of any Non-Agreeing Lender, and each of  the Agreeing Lenders wishing to exercise its rights to purchase the  Commitment of a Non-Agreeing Lender (each, a “Purchasing Lender”)  shall forthwith so notify Master Borrower, the Administrative Agent and  the other Lenders, and such Purchasing Lender shall thereupon be  obligated to purchase not less than the 30th day after the Extension  Decision Date an amount of such Commitment equal to the Commitment  of the Non-Agreeing Lender multiplied by such Purchasing Lender’s  

 

- 76 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Applicable Percentage of the Credit Facilities over the aggregate of all  Purchasing Lenders’ Applicable Percentage of the Credit Facilities, or  as  otherwise agreed to by Master Borrower and all Purchasing Lenders. The  Non-Agreeing Lender, the Purchasing Lender(s), the Administrative  Agent, the Borrowers and each of the other Lenders, if any, shall forthwith  duly execute and deliver any necessary documentation to give effect to  such purchase, whereupon the Non-Agreeing Lender shall, as of the  effective date thereof, be released from its obligations to the Borrowers  hereunder and under the other Loan Documents arising subsequent to such  date; or  (ii) if none of the Agreeing Lenders exercises its rights under Section 5.2(e)(i), then Master Borrower shall: (A) so long as there exists no Default or Event of Default which is continuing, repay all Obligations owing hereunder to any such Non-Agreeing Lender on or prior to the 30th day after the Extension Decision Date (and in any event no later than the unextended Termination Date applicable to Borrowers and such Non-Agreeing Lender), and upon such payment any such Non- Agreeing Lender shall cease to be a Lender hereunder and each such Non-Agreeing Lender’s Commitment shall be terminated and the applicable Commitment reduced accordingly; or (B) arrange for a replacement lender (or lenders) (which may be one or more Lenders) to replace each Non-Agreeing Lender’s Loans and its Commitment; provided that any such replacement lender (or lenders) (if not already a Lender hereunder) shall have been approved by the Administrative Agent (acting reasonably), shall qualify as a permitted assignee and all other requirements hereunder shall have been satisfied on or prior to the 30th day after the Extension Decision Date, and in respect of which the Lenders shall do all things and make all such adjustments as are reasonably necessary to give effect to any such replacement. (f) Master Borrower understands that consideration of any Extension Request constitutes an independent credit decision which each Lender retains the absolute and unfettered discretion to make, and that no commitment in this regard is hereby given by any Lender. (g) Notwithstanding the foregoing, the Termination Date will not be extended if a Default or Event of Default has occurred and is continuing, unless such Default or Event of Default is waived by all of the Agreeing Lenders; provided that any such waiver shall, unless otherwise specified therein, be effective only for the purposes of this Article 5. (h) This Section shall apply to permit two (2) extensions of the Termination Date . 

 

- 77 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Section 5.3 Repayment Terms – Final Maturity Date  Subject to Section 5.4, all Borrowings and other amounts outstanding under the Credit  Facilities, including principal, interest and fees shall be paid and Letters of Credit shall be cash  collateralized, replaced in a manner satisfactory to the Administrative Agent or returned for  cancellation and Credit Facilities shall be cancelled on the applicable Final Maturity Date.   Section 5.4 Mandatory Repayment  If for any reason whatsoever:  (a) the principal amount of all Borrowings outstanding under the Revolving Facility exceeds the lesser of the Revolving Limit and the Revolving Borrowing Base, (b) the principal amount of all Borrowings outstanding under the Wholesale Flooring Facility exceeds the Wholesale Flooring Limit, (c) the principal amount of all Borrowings outstanding under the Used Vehicle Flooring Facility exceeds the lesser of the Used Vehicle Flooring Limit and the Used Flooring Borrowing Base, (d) the principal amount of all Borrowings outstanding under the Wholesale Leasing Facility exceeds the lesser of the Wholesale Leasing Limit and the Wholesale Leasing Borrowing Base, or (e) the principal amount of all Borrowings outstanding under the Daily Rental Facility exceeds the lesser of the Daily Rental Limit and the Daily Rental Borrowing Base, (the amount of the excess, in each case, being referred to herein as an “Excess Amount”), then,  the Borrowers shall, without further notice, forthwith (but no later than three (3) Business Days)  repay Loans in an amount not less than the Excess Amount, as necessary so as to reduce the  applicable Excess Amount to zero.  Section 5.5 Mandatory Prepayment  The Borrowers shall be required to prepay the Loans outstanding as follows:  (1) Insurance Proceeds. Prepayments in an amount equal to 100% of the Net Proceeds from any casualty loss, insurance or condemnation proceeds (“Insurance Payment”) received by any Borrower in respect of Collateral (if the value of the Collateral is in excess of $5,000,000 and if any of the Collateral forms part of a borrowing base) unless the Master Borrower delivers to the Administrative Agent the following: (a) updated borrowing base certificates indicating that there is no Excess Amount after removing the Collateral from the applicable borrowing base, and (b) an Officer’s Certificate confirming compliance with the Financial Covenants immediately following any of the events described above. 

 

- 78 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Notwithstanding the foregoing, 100% of the Net Proceeds of any Insurance Payments relating to  New Motor Vehicles shall be prepaid to reduce the outstanding Loans under the Wholesale  Flooring Facility.  Section 5.6 Voluntary Prepayment  From time to time, prior to the applicable Final Maturity Date, the Borrowers may  voluntarily repay, without premium or penalty, in whole or in part, the Loans outstanding under  the Credit Facilities provided that all accrued interest with respect to the amount to be repaid  shall have been paid. The applicable Borrowers shall give to the Administrative Agent three (3)  Business Days prior written notice substantially in the form attached hereto as Schedule 5.6  indicating its desire to make any repayment and the amount of the repayment, provided that no  notice is required with respect to a repayment to be made to the Swing Line Lender under the  swingline component of an applicable Credit Facility.  Each such repayment specified in a  repayment notice shall be in the minimum aggregate amounts of $1,000,000 or whole multiplies  of $100,000 in excess thereof, depending on the currency of the Loans being repaid.  Section 5.7 Bulk Prepayments under Wholesale Flooring Facility  Each Wholesale Flooring Borrower may at any time and from time to time pre-pay to the  Administrative Agent for the account of the Lenders the whole or any part of any Borrowings  under the Wholesale Flooring Facility (without paying out a specific unit) on the following terms  and conditions only:  (a) all the Wholesale Flooring Bulk Prepayments are indefeasible payments to the Administrative   Agent on behalf of the Lenders which create a credit for the benefit of Wholesale Flooring Borrowers that has not, at the time of such payment, been allocated to specific Wholesale Flooring Loan (the “Bulk Credit”); (b) so long as no Default or Event of Default has occurred and is continuing, Wholesale Flooring Borrowers may allocate the Bulk Credit, from time to time, to whichever of their specific  Wholesale Flooring Loan as the such Borrowers see fit, in their sole discretion; (c) Bulk Credits exceeding 60% of the aggregate principal amount of the Wholesale Flooring Loans outstanding (the “Bulk Credit Cap”) are permitted provided that Bulk Credit Cap may temporarily be increased to 100% for a period not exceeding one hundred and twenty (120) days in any calendar year; however, such prepayments will not reduce the principal outstanding under interest-bearing Wholesale Flooring Loans, for the purpose of interest calculation only. Wholesale Flooring Borrowers agree at all times to monitor the amount of the Bulk Credit with respect to the Bulk Credit Cap; and (d) subject to the following limitations, Wholesale Flooring Borrowers may, from time to time, request that the Administrative Agent re-advance amounts equal to any of its Wholesale Flooring Bulk Prepayments to Wholesale Flooring Borrowers and when any such re-advance is made by the Administrative Agent to Wholesale Flooring Borrowers, the Administrative Agent shall reduce the total 

 

- 79 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  amount of the Bulk Credits  by an amount equal to the amount of such re- advance:  (i) the Wholesale Flooring Bulk Prepayments in excess of 60% of interest-  bearing Wholesale Flooring Facility Loans will not be used to reduce interest on the Wholesale Flooring Facility Loans; (ii) re-advances in an amount greater than the outstanding unapplied Wholesale Flooring Bulk Prepayments are not permitted; (iii) there will be no re-advances on vehicles where a partial or full Wholesale Flooring Bulk Prepayment has been applied to a specific vehicle Borrowing; and (e) re-advances are not permitted: (i) if the Wholesale Flooring Facility Limit would be exceeded, or (ii) if a Default or Event of Default has occurred and is continuing, or would occur from the Borrowing. Section 5.8 Cancellation; Commitment Reductions  The Borrowers may at any time cancel undrawn amounts of the Credit Facilities without  premium or penalty, in minimum amounts of $1,000,000 and in multiples of $500,000 subject to  giving the Administrative Agent five (5) Business Days prior written notice substantially in the  form attached as Schedule 5.8.  Amounts cancelled will not be reinstated.  ARTICLE 6 - PAYMENTS  Section 6.1 Payments Generally  All amounts owing in respect of the Credit Facilities, whether on account of principal,  interest or fees or otherwise, shall be paid in the currency in which the Borrowing is outstanding.   Each payment under this Agreement shall be made for value on the day the payment is due,  provided that if that day is not a Business Day, the payment shall be due on the Business Day  next following the day, unless the Business Day next following the day is in the next following  month, in which event the payment shall be made on the immediately preceding Business Day.   All interest and other fees shall continue to accrue until payment has been received by the  Administrative Agent.  Each payment shall be made, and each payment made hereunder shall be  credited for same day value if received, at the Administrative Agent’s Account for Payments at  or before 1:00 p.m. on the day the payment is due.  Receipt by the Administrative Agent from  the Borrowers of funds under this Agreement, as principal, interest, fees or otherwise, shall be  deemed to be in receipt of those funds by the Lenders.  Section 6.2 No Setoff  All payments to be made by the Borrowers shall be made without setoff or counterclaim  and without any deduction of any kind.  

 

 - 80 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 6.3 Application of Payments After Exercise of Rights Under Section 11.2  All payments made by or on behalf of the Borrowers after the exercise of any rights  arising under Section 11.2 shall be paid to the Administrative Agent and distributed, as the case  may be, rateably, to or among the Administrative Agent, the L/C Issuer, the Lender or the  Lenders to whom those payments are owing, in each instance in the following order:  (a) firstly, in payment of fees owing to the Administrative Agent under this  Agreement, the Fee Letter and the Supplemental Fee Letter and the reasonable  costs and expenses of any realization against the Borrowers or of its property and  assets, including the out-of-pocket expenses of the Administrative Agent and the  reasonable fees and out-of-pocket expenses of counsel, consultants and other  advisers employed in connection therewith and in payment of all costs and  expenses incurred by the Administrative Agent in connection with the  administration and enforcement of this Agreement or the other Loan Documents,  to the extent that those funds, costs and expenses shall not have been reimbursed  to the Administrative Agent;  (b) secondly, in payment of all other unpaid fees, reasonable expenses and accrued  and unpaid interest under the Credit Facilities owing by the Borrowers to the  Lenders and the L/C Issuer, on a rateable basis;  (c) thirdly, in payment of all principal and other reimbursement amounts under the  Credit Facilities owing by the Borrowers to the Lenders and the L/C Issuer and  Other Secured Obligations owing to Lenders under the Credit Facilities Hedge, on  a rateable basis;  (d) fourthly, in payment of all Other Secured Obligations owing to any Lender, on a  rateable basis; and  (e) fifthly, in payment of the balance, if any, to the Borrowers or such other person or  persons who may be entitled under Applicable Law or, in each case, their  respective successors or assigns, or as a court of competent jurisdiction may  otherwise direct.  ARTICLE 7– SECURITY DOCUMENTS  Section 7.1 Security Documents  The Borrowers have caused or shall cause the following documents to be executed and  delivered to the Administrative Agent on behalf of the Lenders to secure the Obligations, those  documents to be in form and substance satisfactory to the Administrative Agent and the Lenders:  (1) an unlimited guarantee and postponement of claim from each of the Borrowers  guaranteeing the due payment and performance to the Administrative Agent for and on behalf of  the Lenders of all Obligations of the other Borrowers;  (2) a first ranking general security agreement creating a security interest in all of the personal  property, assets and undertaking of each of the Borrower in favour of the Administrative Agent  for an on behalf of the Lenders, subject only to Permitted Liens (the “GSA”);  

 

 - 81 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (3) an assignment of insurance granted by each of the Borrowers, as applicable, in favour of  the Administrative Agent for and on behalf of the Lenders;  (4) landlord and bailee waivers and postponements in respect of the leased properties listed  on Schedule 9.1(11) where Collateral included in a borrowing base is located, to the extent  attainable using reasonable commercial efforts in the case of arms-length landlords;  (5) subordination agreements requested by the Administrative Agent with respect to  Subordinated Debt; and  (6) priority agreements requested by the Administrative Agent with respect to any secured  Securitization Programs or Manufacturer Flooring Facilities.  ARTICLE 8 - CONDITIONS PRECEDENT  Section 8.1 Conditions Precedent to Borrowings  The effectiveness of this Agreement and the obligation of each Lender to make available  any Borrowing requested to be made available by it pursuant to this Agreement are subject to  and conditional upon the satisfaction of the following conditions as of the Closing Date:  (1) Delivery of Documents.  The Administrative Agent shall have received, in form and  substance satisfactory to the Administrative Agent, each of the following:  (a) this Agreement duly executed by all the parties thereto;  (b) each Security Document (other than those required to be delivered on a  reasonable commercial efforts basis in accordance with Section 7.1, which shall  only be required to be delivered on such basis) and all other Loan Documents (to  the extent required on the Closing Date) duly executed by all the parties thereto;  (c) any estoppels, no-interest letters or acknowledgments in respect of third-party  Liens, as may be required by the Administrative Agent;  (d) a closing Compliance Certificate dated the Closing Date confirming, among other  things:  (i) no Default or Event of Default, the absence of any Material Adverse  Change since December 31, 2021, with respect to the Obligors,  compliance with the Financial Covenants as of the most recently  completed Fiscal Quarter on a pro forma basis after giving effect to the  Credit Facilities; and  (ii) a certified statement of a Responsible Officer evidencing all necessary  third party authorizations and approvals being obtained;  (e) a Revolving Borrowing Base Certificate, Used Vehicle Flooring Borrowing Base  Certificate, Wholesale Leasing Borrowing Base Certificate and Daily Rental  Borrowing Base Certificate, in each case, executed by a Responsible Officer;  

 

 - 82 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (f) a certificate of each of the General Partners, for and on behalf of itself and its  applicable Borrower, executed by a Responsible Officer of the such General  Partner, certifying:  (i) the names and the specimen signatures of the Persons authorized to sign  this Agreement and any other Loan Documents to be executed and  delivered by the Obligor under this Agreement as of the Closing Date;  (ii) that the constating documents and the by-laws of each General Partner and  the limited partnership agreement for its applicable Borrower, which in  each case shall be attached thereto, are complete and correct copies and  that such constating documents, by-laws and limited partnership  agreement have not been amended, modified or supplemented except as  attached thereto and are in full force and effect; and  (iii) the directors’ resolutions of each General Partner and all other corporate  and partnership authorizations necessary to authorize the execution and  delivery of and the performance by the Obligors of its obligations under  this Agreement, the Security Documents and the other Loan Documents to  which it is a party and all the transactions contemplated thereby;  (g) a certificate of status, good standing, or equivalent in respect of each Obligor  issued under the laws of the applicable jurisdictions in which such Obligor was  incorporated or formed, as the case may be;  (h) legal opinions of counsel to the Obligors in all relevant jurisdictions, in each case,  addressed to the Administrative Agent and each Lender with respect to, inter alia,  as applicable, due authorization, execution, delivery by, and enforceability  against, the Obligors of this Agreement, the Fee Letter, the Supplemental Fee  Letter and the Security Documents executed and delivered by the Obligors as of  the Closing Date and, with respect to the Provinces of Ontario, Alberta and  British Columbia, the creation of a valid security interest and the perfection, by  way of registration, of such security interests (with respect to the GSA), subject to  usual and customary assumptions and qualifications; and  (i) such other documents as the Administrative Agent and the Lenders may  reasonably require in connection with the Credit Facilities including, without  limitation, standard documentation used by a Lender in connection with the  issuance of Letters of Credit.  (2) Registration of Security Documents. All registrations, recordings and filings of or with  respect to the Security Documents which in the opinion of counsel to the Administrative Agent  are necessary to render effective and perfected, or to give notice of, the security intended to be  created thereby shall have been completed.  (3) Insurance.  The Administrative Agent shall have received duly executed certificate(s) of  insurance evidencing the insurance required under this Agreement showing first loss payable to  the Administrative Agent and showing the Administrative Agent as an additional insured under  all liability policies.  

 

- 83 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (4) No Material Adverse Change.  No Material Adverse Change with respect to any of the Obligors shall have occurred since December 31, 2021. (5) Searches.  The Administrative Agent shall have received satisfactory Lien, Tax and judgment searches against the Obligors in such jurisdictions and offices as reasonably determined by the Administrative Agent. (6) No Litigation.  There shall exist no judicial, administrative or other proceeding, investigation or litigation that has, or would reasonably be expected to have, a Material Adverse Effect. (7) Fees. All fees payable in accordance with this Agreement and the other Loan Documents (including the Fee Letter and the Supplemental Fee Letter), including reasonable legal fees and disbursements of counsel to the Arranger and Administrative Agent, due and payable on or before the Closing Date, shall have been paid, or will be paid concurrently with the closing of this Agreement, to the Administrative Agent. (8) Approvals.  The Administrative Agent shall have received confirmation satisfactory to the Administrative Agent that all Governmental Approvals necessary in connection with this Agreement, the Credit Facilities and the continuing operations of the Borrowers have been obtained. (9) Due Diligence. The Arranger, Administrative Agent and Lenders shall have completed their business and legal due diligence with results satisfactory to them, including satisfactory review of the legal and organizational structure of the Obligors. (10) Financial Statements. The Administrative Agent and the Lenders shall have received and be satisfied with (a) the unaudited consolidated financial statements of Master Borrower for the most recent Fiscal Year ended prior to the Closing Date, (b) unaudited interim consolidated financial statements of Master Borrower for each Fiscal Quarter end subsequent to the date of the latest financial statements delivered to the Administrative Agent; and (c) unconsolidated interim financial statements of the most recently ended Fiscal Quarter of each Borrower. (11) Prior Indebtedness. The Administrative Agent and the Lenders shall have received and be satisfied that all prior Debt, Liens and security in connection therewith, except for Permitted Debt and Permitted Liens, have been paid in full and terminated. (12) Know Your Client.  The Administrative Agent and each of the Lenders shall have received, not less than five Business Days prior to the Closing Date, all documentation and information in respect of the Borrowers, including their ownership and structure, and their respective authorized signing officers, including addresses and verified personal identification, as the Administrative Agent and Lenders may reasonably require in respect of Credit Facilities, including in respect of compliance with applicable “know your customer” and anti money laundering rules and regulations, including, without limitation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Section 8.2 Conditions Precedent to All Borrowings  The obligations of the Lenders to make available any Borrowing, Rollover or  Conversion, in addition to being subject to and conditional upon the conditions being satisfied in  

 

- 84 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Section 8.1 on the Closing Date, are subject to and conditional upon each of the conditions below  being satisfied on the applicable Drawdown Date, Rollover Date or Conversion Date:  (1) No Default. No Default or Event of Default shall exist, nor shall the Borrowing, Rollover or Conversion result in the occurrence of a Default or Event of Default. (2) Representations Correct.  The representations and warranties contained in Section 9.1 shall be true and correct in all material respects on each Drawdown Date, Rollover Date or Conversion Date as if made on that date, except where any representation or warranty relates to a specified date, in which case that representation or warranty shall be made as of the date to which it relates. (3) Notice of Borrowing. The Borrowers shall have provided, to the extent required, any notice required in respect of such Borrowing, Rollover or Conversion in accordance with Article 3, in form and substance satisfactory to the Administrative Agent. Section 8.3 Waiver of a Condition Precedent  The conditions stated in Section 8.1 and Section 8.2 are inserted for the sole benefit of the  Administrative Agent and Lenders and may be waived by the Administrative Agent with the  consent of the Required Lenders, in whole or in part, with or without terms or conditions, in  respect of all or any portion of the Borrowings, without affecting the right of the Lenders to  require fulfilment of such conditions in connection with any subsequent Borrowing.  ARTICLE 9– REPRESENTATIONS AND WARRANTIES  Section 9.1 Representations and Warranties  Each of the Obligors makes the following representations and warranties to the  Administrative Agent, the L/C Issuer and each Lender, all of which shall survive the execution  and delivery of this Agreement:  (1) Existence, Power and Qualification.  Each of the Obligors (a) is duly incorporated or otherwise formed, organized and validly existing under the laws of its jurisdiction of incorporation, formation, or organization (b) is up to date in all filings required under those laws, (c) has the requisite power and authority to own, operate and lease its properties and assets and to conduct the businesses in which it is presently engaged, and (d) is duly qualified under the laws of each jurisdiction where its ownership, lease or operation of properties or assets or the conduct of its business requires qualification, except in each case referred to in (c) and (d), to the extent the failure to do so would not reasonably be expected to have a Material Adverse Effect. (2) Power and Authority.  The execution, delivery and performance by each of the Obligors of this Agreement, the Security Documents and the other Loan Documents to which it is a party (a) are within its powers, (b) have been duly authorized by all necessary or proper corporate, shareholder or other action, (c) do not conflict with, result in a breach or violation of, or constitute a default under, its constating documents, any unanimous shareholders’ agreement applicable to it or any Applicable Law, (d) do not conflict with or result in the breach or termination of, constitute a default under, or accelerate any performance required by any Material Contract, in each case, to the extent that such conflict, breach, termination, default or termination would reasonably be expected to have a Material Adverse Effect, and (e) do not and 

 

- 85 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  will not result in the creation of any Lien, except as set out in the Security Documents, upon any  of its assets or properties under any Material Contract.  (3) Authorization, Execution, Delivery and Binding Effect.  Each of this Agreement, the Security Documents and the other Loan Documents executed by the Obligors has been or will be duly authorized, executed and delivered and constitutes or will constitute a legal, valid and binding obligation of the Obligors, enforceable in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally, (b) the fact that specific performance and injunctive relief may only be given at the discretion of the courts, and (c) the equitable or statutory powers of the courts to stay proceedings before them and to stay the execution of judgments. (4) No Approvals Required.  (a) Each of the Obligors has obtained all Governmental Approvals which are necessary for the conduct of its business as presently conducted, each of which is in full force and effect, is a good, valid and subsisting approval which has not been surrendered, forfeited or become void or voidable and is unamended, (b) there is no default under any Governmental Approval, nor are there any proceedings in progress, pending or threatened which may result in the revocation, suspension or material adverse modification of the Governmental Approval, and (c) no further registration, order, permit, filing, consent, authorization, licence, decree or approval of, from or with any Person (including any Governmental Authority) is necessary or advisable in order to ensure the legality, validity, binding effect and enforceability of this Agreement, the Security Documents, or any other Loan Document or the execution, delivery or performance of the Obligors’ Obligations, except in each case referred to in (a) and (b), to the extent it would not reasonably be expected to have a Material Adverse Effect. (5) Financial Statements.  Master Borrower’s most recent consolidated financial statements (including pro forma consolidated financial statements), copies of which have been furnished to the Administrative Agent, were prepared in accordance with GAAP applied on a basis consistent with preceding periods, except as stated therein or in the notes, and those financial statements fairly represent Master Borrower’s financial condition as at their date. (6) Material Adverse Change.  Since the date of the financial statements referred to in Section 9.1(5), except as otherwise disclosed to the Administrative Agent in writing, there has been no Material Adverse Change with respect to the Obligors and no other change, event or condition has occurred that has had, or would reasonably be expected to have, a Material Adverse Effect. (7) Contingent Liabilities and Debt.  None of the Obligors has any contingent liabilities which are not disclosed in the most recent financial statements furnished to the Administrative Agent or otherwise disclosed to the Administrative Agent in writing which would have a Material Adverse Effect, nor has any of the Obligors incurred any Debt which would have a Material Adverse Effect which is not disclosed in those financial statements or otherwise disclosed to the Administrative Agent in writing. (8) Title to Assets and Liens.  Each of the Obligors are the legal and beneficial owners of, or validly leases, all of their respective real and personal assets free and clear of any Liens, other than Permitted Liens, and attached hereto as Schedule 9.1(8) is a list of all owned real property owned by any of the Obligors (the “Owned Property”). 

 

- 86 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (9) Real Property Leases.  Attached here as Schedule 9.1(9) is a description of all leases and licences respecting real property (the “Leased Property”) to which any of the Obligors is a party as lessee, including the name of the lessee and the lessor and the municipal address thereof. True and complete copies of all such lease agreements have been provided to the Administrative Agent.  Except as disclosed in Schedule 9.1(9), none of the Obligors has any material oral or written agreement with any lessor, tenant or sub-tenant of its real property or Leased Property. (10) GSA.  Upon execution and delivery thereof, the GSA will create valid and enforceable Liens upon the Collateral on the terms set out therein, subject only to the terms of this Agreement and to Permitted Liens. (11) Location of Assets, Places of Business.  All of the Borrowers’ tangible property and assets (other than property and assets in transit) and places of business are located in the locations set out in Schedule 9.1(11) and the jurisdiction of formation and the chief executive office (and principal place of business) of each Borrower is listed in Schedule 9.1(11). (12) No Default or Event of Default.  There exists no Default or Event of Default. (13) Compliance.  Each of the Obligors are in compliance with its constating documents and is in compliance in all with the Material Contracts to which it is a party and with all Applicable Laws, including health, safety and employment standards, labour codes and Environmental Laws, except in each case where failure to do so would not reasonably be expected to have Material Adverse Effect. (14) Litigation.  Other than as reported in the Borrowers’ most recent annual financial statements, no litigation, investigation or proceeding of or before any Governmental Authority, arbitrator, court or administrative agency is pending or, to its knowledge, threatened against any of the Obligors or against any of their respective properties, assets or revenues, including the Collateral, which, if determined adversely against any of them, would reasonably be expected to have a Material Adverse Effect. (15) Full Disclosure.  Neither the financial statements referred to in Section 9.1(5) nor any other statement furnished by any Obligor to the Administrative Agent in connection with this Agreement contains any untrue statement of a material fact or omits a material fact necessary to make those statements not misleading, and all those statements, taken as a whole, do not contain any untrue statement of a material fact or omit a material fact necessary to make the statements not misleading.  All expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful inquiry by the Obligor who furnished the statements. (16) Tax Returns.  Each of the Obligors has filed or caused to be filed all tax returns which are required to have been filed, and has paid all Taxes shown to be due and payable on those returns or on any assessments made against it and all other Taxes, fees or other charges imposed on it by any Governmental Authority, other than those the amount or validity of which is currently being contested in good faith by appropriate proceedings being diligently pursued, and with respect to which adequate reserves in conformity with GAAP have been provided in its books and of which the details have been provided to the Administrative Agent.  To its knowledge, no Liens for Taxes have been filed and no claims are being asserted with respect to any Taxes. 

 

- 87 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (17) Canadian Benefit and Pension Plans.  All Canadian Pension Plans (if any) to which the Obligors is a party are described in Schedule 9.1(17) .  None of the Borrowers maintains, or has any liability in respect of, any “defined benefit provision” (as defined in the ITA). All Canadian Pension Plans are being operated, administered and maintained in compliance with all Applicable Laws, except for such instances of non-compliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect.  All premiums, contributions and any other amounts required by applicable Canadian Pension Plan documents or Applicable Laws to be paid or accrued by the Borrowers are being paid or accrued as required. Each Obligor has adopted all Canadian Benefit Plans required by Applicable Law and each of such plans has been maintained and each Obligor is in compliance with such Applicable Laws in all material respects including, without limitation, all requirements relating to employee participation, funding, investment of funds, benefits and transactions with the Obligors and persons related to them.  There is no proceeding, action, suit or claim pending or, to the knowledge of the Obligors, threatened involving the Canadian Benefit Plans or Canadian Pension Plans which, if determined adversely against any of them, would reasonably be expected to have a Material Adverse Effect. (18) Labour Matters.  Except as described in Schedule 9.1(18), there are (a) no strike or other labour disputes against any of the Obligors that are pending or, to any of the Obligors’ knowledge, threatened, and (b) none of the Obligors, is party to any labour, union or collective bargaining agreement or subject to any current union organizing event.  All payments due from the Obligors on account of employee insurance of every kind and vacation pay and any other remittances or obligations relating to employees of the Obligors have been paid or accrued as a liability on the books of the Obligor, except for such instances of non-compliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect. (19) Insurance.  The Obligors maintain insurance in compliance with Section 10.1(2) and all premiums and other sums of money payable for that purpose have been paid. (20) Corporate Organization.  The corporate organization chart set out in Schedule 9.1(20) is a complete and accurate representation of the Obligors. (21) Engaged in Business of Vehicle Sales and Related Businesses. Except as otherwise consented to be the Administrative Agent, no Obligor is engaged in any business other than the business of (a) selling, leasing and financing motor vehicles, recreational vehicles and related activities, including rental programs and selling parts, services and accessories, (b) operating any body and service shops and related activities, (c) acquiring, owning, operating and, in some cases, selling dealerships engaged in such businesses, and (d) leasing or sub-leasing owned real property. (22) Environmental Activity.  Except as would not reasonably be expected to have a Material Adverse Effect, each of the Obligors has conducted its business in compliance with Environmental Laws and there is no Environmental Claim pending or, to the knowledge of any of the Obligors, threatened against any of them or their respective properties and assets, which if determined adversely would reasonably be expected to have a Material Adverse Effect. (23) Trade-marks, Patents, etc. Each of the Obligors possesses all patents, industrial designs, trade-marks, trade secrets, know-how, environmental technology, biotechnology, confidential information, trade-names, goodwill, quotas, copyrights, integrated circuit topographies, software and all other forms of intellectual and industrial property, and any 

 

- 88 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  registrations and applications for registration of any of the foregoing (collectively, the  “Intellectual Property”), necessary for the conduct of its business as now conducted., except to  the extent that the failure to do so would not reasonably be expected to have a Material Adverse  Effect  To the knowledge of the Obligors, none of the Obligors is infringing in any material  respect on the rights of any person with respect to any Intellectual Property and none of the  Obligors knows of any fact which is likely to result in the successful assertion against the  Obligors of a claim for such an infringement.  Section 9.2 Deemed Repetition  The representations and warranties made in Section 9.1 shall (a) continue in effect until payment  and performance of all the Obligations, and (b) be deemed to be repeated on each Drawdown  Date, Rollover Date and Conversion Date, mutatis mutandis, as if made on that date except  where any representation or warranty relates to a specified date in which case that representation  or warranty shall be made as of the date to which it relates.  ARTICLE 10– COVENANTS  Section 10.1 Affirmative Covenants of the Borrowers  While any amount owing under this Agreement or any of the other Loan Documents  remains unpaid, or the Administrative Agent or the Lenders have any obligations under this  Agreement or any of the other Loan Documents, each of the Obligors covenants with the  Administrative Agent and each Lender as follows:  (1) Corporate Existence. Each Obligor shall do or cause to be done all things necessary to keep in full force and effect its corporate existence and all rights, franchises, trademarks, licences and qualifications required for it and them to carry on their respective businesses and own, lease or operate their respective properties in each jurisdiction in which they carry on business or own, lease or operate property or assets from time to time. (2) Insurance.  Each Obligor shall maintain insurance on its and their respective properties and assets and for the operation of its and their respective businesses in such amounts and against such risks as would be customarily obtained and maintained by a prudent owner of similar properties and assets operating a similar business, including appropriate liability insurance, business interruption insurance and third party liability insurance.  Each Borrower shall provide copies of those policies to the Administrative Agent, which policies shall be satisfactory to the Administrative Agent, acting reasonably, and shall not be subject to any co-insurance clause. Each insurance policy shall include an endorsement whereby the insurers agree to give the Administrative Agent on behalf of the Lenders not less than 30 days notice of the cancellation of the policy of insurance.  The Administrative Agent shall either be named as loss payee or additional insured as its interest may appear in all of the Borrowers’ policies of insurance or otherwise be assured of the availability of continuing coverage in a manner satisfactory to the Administrative Agent. (3) Compliance with Laws, etc.  Each Obligor shall comply with all Applicable Laws and all Government Approvals required in respect of its and their respective businesses, properties, the Collateral, or any activities or operations carried out thereon including anti-money laundering laws , anti-corruption laws, health, safety and employment standards, labour codes and 

 

 - 89 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Environmental Laws, except in each case where failure to do would not reasonably be expected  to have a Material Adverse Effect.  (4) Government Approvals.  The Obligors shall obtain and maintain, by the observance and  performance of all obligations thereunder and conditions thereof, all Government Approvals  required for it and them to carry on their respective businesses.  (5) Conduct of Business.  Each of the Obligors shall:  (a) conduct its business in a proper and efficient manner and keep proper books of  account and records with respect to the operation of its business;  (b) diligently maintain, repair, use and operate its property and premises in a  commercially reasonable and efficient manner;  (c) maintain its physical assets in good condition so that each asset may be used at all  times for the purpose for which it was intended; and  (d) comply in with its obligations under its Material Contracts except where failure to  do would not reasonably be expected to have a Material Adverse Effect.  (6) Rights of Inspection and Audit. (a) at any reasonable time during normal business hours  and from time to time upon reasonable prior notice, not more than twice per year per Obligor,  unless an Event of Default has occurred and is continuing, the Obligors shall permit the  Administrative Agent and any Lender or any representative thereof (at the reasonable expense of  the Borrowers) to (i) examine and make copies of and abstracts from the records and books of  account of the Obligors, (ii) visit and inspect the premises and properties of the Borrowers (in  each case at the risk of the Borrowers, except for the gross negligence or wilful misconduct of  the inspecting party or the failure of any such inspecting party to comply with the Obligors’  health and safety requirements, as advised to such inspecting party), and (iii) discuss (outside of  the normal course communications between the Administrative Agent and any Obligor) the  affairs, operations, finances and accounts of the Obligors with any of the officers or directors of  the Obligors or, with the prior written consent of Master Borrower or after the occurrence and  during the continuance of an Event of Default, their respective accountants, consultants or other  third party consultants or representatives of the Obligors, and (b) make the necessary information  available and permit the Agent and the Lenders or their agents to conduct flooring, and/or daily  rental and/or revolving term audits, as applicable, during normal business hours once per Fiscal  Quarter for each Borrower, provided that the Administrative Agent and the Lenders reserve the  right to increase the frequency of such audits once per month for each Borrower if (i) an Event of  Default has occurred and is continuing or (ii) the results of a prior audit were not satisfactory to  the Agent and the Lenders, acting reasonably, and the applicable Borrower is provided with  written notice that such results were not satisfactory. Except for information required to be  disclosed by Applicable Law and information in the public domain, any information regarding  the Obligors obtained pursuant to this Section 10.1(6) or otherwise pursuant to any Loan  Document shall, for so long as no Event of Default has occurred and is continuing, not be  disclosed to third parties other than agents or other professionals engaged by the Administrative  Agent or any Lender to advise it with respect to this Agreement.  

 

 - 90 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (7) Preservation of Existence, Etc.; Maintenance of Vehicle Title Documentation. If  applicable, preserve and maintain, in accordance with its standard policies and procedures, all  manufacturer statements of origin, certificates of origin, certificates of title or ownership and  other customary motor vehicle title documentation necessary or desirable in the normal conduct  of its business, except where failure to do so would not reasonably be expected to have a  Material Adverse Effect.  (8) Payment.  Each Obligor shall duly and punctually pay or cause to be paid all sums of  money due and payable by it under this Agreement and the other Loan Documents on the dates,  at the places and in the currency and the manner set forth herein and therein.  (9) Litigation.  Promptly upon becoming aware thereof, each applicable Obligor shall (a)  give notice to the Administrative Agent of any litigation, proceeding or dispute, threatened (in  writing) or commenced against it for claims in excess of the Threshold Amount, (b) advise the  Administrative Agent of the extent to which any adverse determination with respect to such  litigation, proceeding or dispute is covered by insurance, and (c) provide all reasonable  information requested by the Administrative Agent concerning the status of any such litigation,  proceeding or dispute.  (10) Pay Claims and Taxes.  Each Obligor shall promptly pay and discharge promptly to pay  and discharge, when due all Taxes charged to or payable by it or them and all lawful Claims  which, if unpaid, may result in a Lien (other than Permitted Liens) on its or their properties or  assets unless the relevant Tax or Claim is being actively and diligently contested in good faith by  appropriate proceedings and is adequately reserved against in accordance with GAAP.  Master  Borrower shall notify the Administrative Agent of each contest involving an amount in excess of  the Threshold Amount promptly upon forming the intention to contest the relevant payment, Tax  or Claim.  (11) Notice of Default or Material Adverse Change.  Each Obligor shall provide to the  Administrative Agent prompt notice of any event, change or condition that has had, or would be  reasonably expected to have, a Material Adverse Effect or any Default or Event of Default of  which it is aware, setting forth its details and, if such Material Adverse Effect, Default or Event  of Default is continuing, the action taken or to be taken to remedy it.  (12) Canadian Benefit and Pension Plans.  (a) The Obligors shall ensure that each Canadian Pension Plan and Canadian Benefit  Plan, if any, retains its registered status under and is administered in a timely  manner in all respects in accordance with the applicable pension plan text,  funding agreement, the ITA and all other Applicable Laws.  (b) The Obligors shall perform in all material respects all obligations (including (if  applicable), funding, investment and administration obligations) required to be  performed by it in connection with each Canadian Pension Plan and Canadian  Benefit Plan and the funding media therefor.  (c) The Obligors shall promptly deliver to the Administrative Agent (i) a copy of any  material direction, order, notice, ruling or opinion that the Obligors may receive  from any applicable Governmental Authority with respect to any Canadian  

 

 - 91 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Pension Plan; and (ii) notification any material increases in the benefits of any  existing Canadian Pension Plan, or the establishment of any new Canadian  Pension Plan.  (13) Use of Proceeds.  The Borrowers shall use all Borrowings solely for the purposes set out  in Article 2.  (14) Bank Accounts.  The Borrower shall maintain all of their operating bank accounts with  the Administrative Agent.  (15) Additional Borrower.  (a) The Borrowers shall, within thirty (30) days, cause any Person that is or becomes  a Designated Subsidiary of any of the Borrowers to become a “Borrower” for the  purposes of this Agreement and the other Borrowers shall cause such new  Borrower to:  (i) execute and deliver in favour of the Administrative Agent a Joinder  Agreement;  (ii) grant or cause to be granted to the Administrative Agent a first priority  perfected Lien (subject to Permitted Liens) in all of the assets of such new  Borrower(s) (which grant may be included in the Joinder Agreement); and  (iii) execute such other documents and take such other actions, including  delivery of legal opinions of counsel to such Borrower, as may be  reasonably required by the Lenders in connection therewith.  (b) Upon compliance with the applicable requirements of this Section, the applicable  Designated Subsidiary shall become a Borrower hereunder and under the other  applicable Loan Documents with the same force and effect as if originally named  as a Borrower herein.  The execution and delivery by an additional Borrower of a  Joinder Agreement adding such additional Borrower as a party to this Agreement  and the applicable Security Documents shall not require the consent of any other  Obligor hereunder.  The rights and obligations of each Obligor hereunder shall  remain in full force and effect notwithstanding the addition of any new Borrower  hereunder.  (16) Maintenance of Perfection; Further Assurances  Without limiting the foregoing, each Obligor will execute and deliver to the  Administrative Agent such documents, agreements and instruments, and will take or cause to be  taken such further actions (including the filing and recording of financing statements, fixture  filings, mortgages (but only with respect to Eligible Real Property), delivery of legal opinions  and/or title insurance policies, and other documents and such other actions or deliveries of the  type required by Section 7.1  as applicable), which may be required by Applicable Law or which  the Administrative Agent may, from time to time, reasonably request to carry out the terms and  conditions of this Agreement and the other Loan Documents and to ensure perfection and  priority of the Liens created or intended to be created by the Security Documents, all at the  expense of the Obligors.  

 

- 92 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  If any material assets (including any Real Property that is Eligible Real Property or  material improvements thereto) are owned or acquired by the Borrowers after the Closing Date  (other than assets constituting Collateral under the Security Documents that are or, upon  acquisition thereof, become subject to the Lien under the Security Documents), the Borrowers  will notify the Administrative Agent and the Lenders thereof, and, if requested by the  Administrative Agent or the Required Lenders, the Borrowers will cause such material assets to  be subjected to a Lien securing the Obligations and will take such actions as shall be necessary  or reasonably requested by the Administrative Agent to grant and perfect such Liens, all at the  reasonable expense of the Obligors.  Section 10.2 Negative Covenants of the Borrowers  While any amount owing under this Agreement or any of the other Loan Documents  remains unpaid, or the Administrative Agent or the Lenders have any obligations under this  Agreement or any of the other Loan Documents, each Obligor covenants with the Administrative  Agent and each Lender that it shall not without the prior consent of the Required Lenders:  (1) Dispositions.  Sell, lease, transfer, assign, convey or otherwise dispose of, any of their respective properties or assets (each, a “Disposition”), or enter into any sale and leaseback or similar transaction (each a “Sale-Leaseback”), except for (a) Dispositions in respect of Securitization Programs, the proceeds of which are used to repay the outstanding Wholesale Leasing Facility Loans to the extent such assets are included in the Wholesale Leasing Borrowing Base, (b) Dispositions in the ordinary course of business, (c) Dispositions of the Equity Interests in any Borrower (and its related General Partner) or all or substantially all of the assets of any Borrower (and its related General Partner) in each case for not less than fair market value, provided that at the time of such Disposition (i) no Event of Default has occurred and is continuing, (ii) Master Borrower has delivered to the Administrative Agent an Officer’s Certificate confirming that Master Borrower would be in compliance with the Financial Covenants after giving effect to such Disposition, and (iii) the remaining Borrowers are in compliance with the various borrowing base requirements, and (d) such other Dispositions or Sale-Leasebacks in respect of which (i) the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this clause do not exceed the Threshold Amount during any Fiscal Year, (ii) Master Borrower has delivered to the Administrative Agent an Officer’s Certificate confirming that Master Borrower would be in compliance with the Financial Covenants after giving effect to such Disposition, and (iii) the remaining Borrowers are in compliance with the various borrowing base requirements.  Notwithstanding the foregoing, 100% of the Net Proceeds from the Disposition of any New Motor Vehicles (regardless of the amount) shall be prepaid to reduce the outstanding Loans under the Wholesale Flooring Facility in accordance with Section 2.2. (2) Negative Pledge.  Assume, create or permit to exist any Lien, other than Permitted Liens, in respect of any of their respective undertakings, properties and assets, whether now owned or hereafter acquired. (3) Debt.  Create, incur, assume or permit to exist any Debt other than Permitted Debt. (4) Distributions.  Make any Distributions except for Permitted Distributions. 

 

- 93 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (5) Amalgamation and Merger.  Enter into any merger, consolidation, amalgamation, reorganization, reconstruction or arrangement (collectively, a “Reorganization”) with any Person other than (a) Permitted Acquisitions and (b) provided that the Administrative Agent is provided with 30 days prior notice, any Reorganization (i) that involves only the Obligors under this Agreement and no other Person,  and (ii) under which the Borrowers ensure that the Administrative Agent maintains a first ranking security interest on all the assets and property of all Borrowers and all documentation satisfactory to the Administrative Agent, acting reasonably, has been provided prior to such Reorganization (provided that such documentation may be provided to the Administrative Agent in escrow pending the completion of such Reorganization); provided that no Default or Event Of Default is existing at the time of such Reorganization and no Default or Event Of Default will exist after giving effect to such Reorganization. (6) Fundamental Change.  Undertake or give effect to any of the following: (a) change its business objectives, purposes or operations in any way which would adversely affect the repayment of the Obligations or result in a Material Adverse Effect; (b) materially change its capital structure (except as otherwise permitted pursuant to this Agreement, including permitted Dispositions); (c) amend its articles of incorporation or other constating documents if such amendment would reasonably be expected to have a Material Adverse Effect (provided prior written notice of such amendment is provided to the Administrative Agent); or (d) engage in any business other than businesses of the type described in Section 9.1(21). (7) Change of Control. Permit any Change of Control to occur without the prior consent of the Administrative Agent. (8) Material Contracts.  (a) Cancel or terminate any Material Contract; (b) waive any default or breach under any Material Contract; (c) amend or otherwise modify any Material Contract; or (d) take any other action in connection with any Material Contract, in each case in (a), (b), (c) and (d), if such action would reasonably be expected to have a Material Adverse Effect. (9) Leases.  Enter into any lease agreement other than in the ordinary course of business and on terms that are not less than market. (10) Investments.  Make any Investments other than Permitted Investments. (11) Expenditures.  Make any capital expenditures not otherwise permitted under Section 10.2(10) unless Master Borrower has delivered to the Administrative Agent an Officer’s Certificate confirming that Master Borrower would be in compliance with the Financial Covenants after giving effect to the capital expenditure. (12) Subordinated Debt. Make any prepayment, redemption or repurchase of any Subordinated Debt except any prepayments, redemptions or repurchases made in accordance with the terms of the subordination and postponement agreement applicable to such Subordinated Debt. (13) Fiscal Year End; Accounting Policies. Change its Fiscal Year or any material accounting policies or reporting practices, except as permitted by GAAP, without the prior written consent of the Administrative Agent and the Required Lenders. For greater certainty, and 

 

 - 94 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    without limitation, any changes to accounting policies or reporting practices that will affect the  calculation of the Financial Covenants shall be deemed to be “material” hereunder.  (14) Business Outside Certain Jurisdictions.  Have any material place of business or keep or  store any tangible property (other than property or assets in transit) outside of those jurisdictions  set forth in Schedule 9.1(11) unless prior to doing so (a) it provides prompt written notice to the  Administrative Agent of the new jurisdiction; and (b) the Administrative Agent has obtained a  perfected Lien in favour of the Administrative Agent on behalf of itself and the Lenders in such  new jurisdiction with the same scope as the Liens held by, or granted to, the Administrative  Agent on the Closing Date and, in this regard, it agrees to do all such acts and things and  executes and delivers all such deeds, transfers, assignments and instruments as the  Administrative Agent may reasonably require in order to facilitate the Administrative Agent  obtaining such Lien.  (15) No Export. Except as provided in paragraph (d) of definition of “Eligible Used Motor  Vehicle”, export any New Motor Vehicles and Used Motor Vehicles being financed by any of  the Credit Facilities outside of Canada unless, the financing related to such New Motor Vehicle  or Used Motor Vehicle has been repaid prior to or concurrently with its export.  (16) Hedge Contracts.  Enter into any Hedge Contracts of a speculative nature or outside the  scope of the Borrowers’ business or Hedge Contracts with a Lender or any other Person, other  than (a) the Credit Facilities Hedge (which may be entered into by the Lenders and the  Borrowers in their sole discretion), and (b) other non-speculative Hedge Contracts entered into  with a Lender for the purpose of mitigating the risk to the Borrowers from interest rate and US  Dollar exchange rate fluctuations.  (17) Transactions with Affiliates.  Enter into any transactions with any Affiliate or other  Person with whom the Obligor does not deal with at “arm’s length” for the purposes of the ITA,  except (a) transactions on commercially reasonable terms that are no less favourable to the  Obligors than would be obtained in a comparable arm’s length transaction with unrelated third  parties, and (b) transactions between or among the Obligors not involving any other Affiliate.  (18) Canadian Pension Plans.  It shall not contribute to or assume an obligation to contribute  to any Canadian Pension Plan which has a “defined benefit provision” (as defined in ITA).  Section 10.3 Financial Covenants  While any amount owing under this Agreement or any of the other Loan Documents  remains unpaid, or the Lenders have any obligations under this Agreement or any of the other  Loan Documents, Master Borrower covenants with each Lender that it shall maintain, at all  times, on a consolidated basis (excluding any Non-Designated Subsidiary), tested at the end of  each Fiscal Quarter:  (a) a Fixed Charge Coverage Ratio of not less than 1.20:1.00; and  (b) a Leverage Ratio of not more than 5.75:1.00.  For the purposes of calculating the above Financial Covenants:  (i) “Funded Debt” shall include Contingent Obligations,  

 

- 95 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (ii) capitalized rent payments in connection with any Permitted Acquisition shall be calculated on a trailing twelve month basis, (iii) Debt and Interest Expense incurred with respect to the Wholesale Flooring Facility, the Used Vehicle Flooring Facility, the Wholesale Leasing Facility, the Rental Facility and any Manufacturer Flooring Facility shall excluded from the calculation, and (iv) for the first four Fiscal Quarters from the Closing Date only, Distributions are to be normalized. Section 10.4 Accounting, Financial Statements and Other Information  While any amount owing under this Agreement or any of the other Loan Documents  remains unpaid, or the Administrative Agent or the Lenders have any obligations under this  Agreement or any of the other Loan Documents, the Obligors covenant with each Lender and the  Administrative Agent as follows:  (1) General.  The Obligors shall maintain a system of accounting established and administered in accordance with GAAP consistently applied and shall set aside on their respective books all proper reserves as GAAP shall require. (2) Monthly Reports.  The applicable Borrowers shall provide the Administrative Agent with the following reports on a monthly basis, promptly upon availability, and in any event within 30 days of the end of each month in each Fiscal Year (except December) and within forty five (45) days of the month ending after December 31st: (a) a Revolving Facility Borrowing Base Certificate with accompanying calculation in a form satisfactory to the Administrative Agent; (b) a Used Vehicle Flooring Facility Borrowing Base Certificate with accompanying Used Vehicle Flooring Borrowing Base report in a form satisfactory to the Administrative Agent; (c) a monthly Wholesale Leasing Borrowing Base Certificate attaching a monthly Wholesale Lease Management Report in a form satisfactory to the Administrative Agent; and (d) a monthly Daily Rental Borrowing Base Certificate attaching a monthly Daily Rental Management Report in a form satisfactory to the Administrative Agent. (3) Quarterly Reports.  The applicable Borrowers shall provide the Administrative Agent with the following reports on a quarterly basis (unless otherwise noted), promptly upon availability, and in any event within 45 days (unless otherwise noted) of the end of each Fiscal Quarter in each Fiscal Year: (a) quarterly internally prepared interim consolidated financial statements of Master Borrower (excluding any Non-Designated Subsidiary) together with accompanying cash flow statement (provided that cash flow statement to be delivered starting Fiscal Quarter ending September 30, 2022), for the first three 

 

 - 96 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Fiscal Quarters in each Fiscal Year (including a breakdown of sales, cost of sales  and inventory (new, used, parts/services), the outstanding Funded Debt under  each of the Credit Facilities and any other Funded Debt, breakdown of other  current assets and providing unit sales for new and used vehicles, and inventory  number of units;  (b) quarterly internally prepared interim unconsolidated financial statements of each  Borrower for the first three Fiscal Quarters in each Fiscal Year;   (c) a quarterly wholesale lease loan loss and payment delinquency report within 30  days of the end of each Fiscal Quarter, which report shall include delinquency  aging for leases included in the most recent Lease Management Report; and  (d) a Compliance Certificate for the first three Fiscal Quarters in each Fiscal Year.  (4) Annual Reports.  The Borrowers shall provide the Administrative Agent with the  following reports, promptly upon availability, and in any event within 120 days of the end of  each Fiscal Year:  (a) annual internally prepared financial statements of Master Borrower, on a  consolidated basis (but excluding any Non-Designated Subsidiary) together with  accompanying cash flow statement (including a breakdown of sales, cost of sales  and inventory (new, used, parts/services), the outstanding Funded Debt under  each of the Credit Facilities and any other Funded Debt, breakdown of other  current assets and providing unit sales for new and used vehicles ,and inventory  number of units,  (b) quarterly internally prepared interim unconsolidated financial statements of each  Borrower for the Fiscal Quarter ending December 31 in each Fiscal Year,  (c) a Compliance Certificate for the Fiscal Year, and  (d) an updated corporate organizational chart.  (5) Notice of Material Events.  The Borrowers will furnish to the Administrative Agent and  each Lender prompt written notice of the following:  (a) receipt of any notice of any investigation, litigation or proceeding by a  Governmental Authority that (i) seeks damages in excess of the Threshold  Amount, (ii) seeks injunctive relief and which would reasonably be expected to  have a Material Adverse Effect, (iii) is asserted or instituted against any Canadian  Benefit Plan, Canadian Pension Plan, its fiduciaries or its assets, and which would  reasonably be expected to have a Material Adverse Effect, (iv) alleges criminal  misconduct by any Obligor, (v) alleges the violation of any law regarding, or  seeks remedies in connection with, any Environmental Laws and which would  reasonably be expected to have a Material Adverse Effect, (vi) contests any  Taxes, fee, assessment, or other charge of a Governmental Authority in excess of  the Threshold Amount, or (vi) involves any product recall, the result of which  would reasonably be expected to have a Material Adverse Effect;  

 

- 97 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (b) any registered Lien (other than Permitted Liens) of which it becomes aware and which would reasonably be expected to have a Material Adverse Effect; and (c) any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect. Each notice delivered under this Section shall be accompanied by a statement of a  Responsible Officer of the applicable Borrower setting forth the details of the event or  development requiring such notice and any action taken or proposed to be taken with respect  thereto.  (6) Other Information.  The Obligors shall provide the Administrative Agent with such other reports and information regarding the operations, business, assets and financial condition of the Obligors as the Administrative Agent may reasonably request. Each of the financial statements required by this Section 10.4 shall set forth in comparative form  the corresponding figures for the corresponding period of the preceding fiscal period (if any), all  in reasonable detail.  ARTICLE 11– DEFAULT, ENFORCEMENT & ACCELERATION  Section 11.1 Events of Default  The occurrence of one or more of the following events or circumstances constitutes an  Event of Default under this Agreement:  (1) Non-payment of Principal.  The Borrowers fails to: (a) make when due, whether by, Demand, acceleration or otherwise, any payment of  principal required to be made by the Borrowers under this Agreement or any other  Loan Document except as described in paragraph (b) and (c) below, (b) cure any Out of Balance Condition referenced in paragraph (a) or (b) of the  definition of Out of Balance Condition, which condition shall remain unremedied  for a period of <*> days after notice from the Administrative Agent of such  failure, and (c) cure any Out of Balance Condition referenced in paragraph (c) of the definition of  Out of Balance Condition, which condition shall remain unremedied for a period  of <*> Business Day after the earlier of a Responsible Officer of an Obligor  having knowledge of the failure or an Obligor receiving written notice from the  Administrative Agent of such failure, (2) Non-payment of Interest, Fees or Other Amounts.  The Borrowers fails to make when  due, whether by Demand, acceleration or otherwise, any payment of interest, fees, costs or  any other payment under this Agreement or any other Loan Document and that failure is  not remedied within <*> days of its occurrence. (3) Breach of Covenants, etc.  Any Obligor fails to perform or observe: 

 

- 98 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (a) any term, condition, covenant or undertaking contained in Section 10.1(13),  Section 10.1(14), Section 10.2 (other than Section 10.2(17)) or Section 10.3; (b) any term, condition, covenant or undertaking contained in Section 10.2(15), shall  continue unremedied for more than <*> days after the earlier of a Responsible  Officer of an Obligor having knowledge of the failure or an Obligor receiving  written notice from the Administrative Agent of such failure; or (c) any other term, condition, covenant or undertaking contained in any Loan  Document to which it is a party which is not otherwise specifically addressed in  this Section 11.1 and that failure, if reasonably capable of being remedied, shall  continue unremedied for more than <*> days after the earlier of a Responsible  Officer of an Obligor having knowledge of the failure or an Obligor receiving  written notice from the Administrative Agent of such failure. (4) Cross-Default.  With respect to any Material Contract of any Obligor (other than under any Loan Document): (a) default occurs in the payment of any amount when due thereunder, whether by acceleration or otherwise (after giving effect to any cure period thereunder); or (b) default occurs in the performance or observance of any other obligation or condition with respect thereto and that default remains unremedied after any remedial period with respect thereto, and in each case, such default would reasonably be expected to result in, a Material Adverse Effect. (5) Representations and Warranties.  Any representation or warranty which is made by any Obligor in any Loan Document to which it is a party or which is deemed to have been made is untrue or incorrect when made or deemed to have been made in any material respect and the facts or circumstances which make such representation or warranty materially incorrect or untrue are not remedied and such representation or warranty remains materially incorrect or untrue for more than 20 days after the earlier of a Responsible Officer of an Obligor having actual knowledge of the untrue or incorrect representation or warranty, or an Obligor receiving written notice from the Administrative Agent of such untrue or incorrect representation or warranty. (6) Execution.  Any writ, distress, execution, attachment, seizure, garnishment, sequestration, extent or any similar process is issued, levied or enforced against any Obligor or any of their respective properties or assets for an amount in excess of the Threshold Amount and such writ, distress, execution, attachment, seizure, garnishment, sequestration, extent or similar process shall continue in effect and not be released, discharged or stayed within the lesser of 30 days and the period of time prescribed under Applicable Laws for the completion of the sale  of or realization against the properties or assets subject to such seizure or attachment (7) Invalidity and Contest.  This Agreement or any of the other Loan Documents, or any material provision hereof or thereof, shall at any time after execution and delivery hereof or thereof, for any reason, cease to be a legal, valid and binding obligation of any Obligor or cease to be enforceable against any Obligor in accordance with its terms or shall be declared to be null and void (and the same is not promptly effectively rectified or replaced by the Obligors upon 

 

- 99 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  becoming aware thereof), or the legality, validity, binding nature or enforceability of this  Agreement or any other Loan Document, or any provision hereof or thereof, shall be contested  by any Obligor or any Obligor shall deny that it has any further liabilities or obligations  hereunder or thereunder.  (8) Judgment.  One or more final judgments (subject to no further right of appeal) for the payment of money for an aggregate amount in excess of the Threshold Amount (excluding amounts covered by insurance to the extent the insurer has not denied coverage or a final determination denying such coverage has not been issued) is rendered against or in respect of one or more Obligors or any of their respective assets and either (i) enforcement proceedings have been commenced by a creditor upon the judgment or order, or (ii) there is any period of 30 consecutive days during which a stay of enforcement of the judgment or order, by reason of a pending appeal or otherwise, is not in effect. (9) Voluntary Proceedings.  Any Obligor: (a) institutes proceedings for substantive relief in any bankruptcy, insolvency, debt restructuring, reorganization, readjustment of debt, dissolution, liquidation, winding-up or other similar proceedings (including proceedings under the Bankruptcy and Insolvency Act (Canada), the Winding-up and Restructuring Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the incorporating statute of the relevant corporation or other similar legislation), including proceedings for the appointment of a trustee, interim receiver, receiver, receiver and manager, administrative receiver, custodian, liquidator, provisional liquidator, administrator, sequestrator or other like official with respect to the relevant corporation or all or any material part of its property or assets; (b) makes an assignment for the benefit of creditors; (c) is unable or admits in writing its inability to pay its debts as they become due or otherwise acknowledges its insolvency or commits any other act of bankruptcy or is taken to be insolvent under any applicable legislation; (d) voluntarily suspends the conduct of its business or operations; or acquiesces to, or takes any action in furtherance of, any of the foregoing.  (10) Involuntary Proceedings.  If any third party in respect of any of any Obligor: (a) makes any application under the Companies’ Creditors Arrangement Act (Canada) or similar legislation; (b) files a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act (Canada) or similar legislation; (c) institutes a winding-up proceeding under the Winding-up and Restructuring Act (Canada), any relevant incorporating statute or any similar legislation; (d) presents a petition in bankruptcy under the Bankruptcy and Insolvency Act (Canada) or any similar legislation; or 

 

- 100 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (e) files, institutes or commences any other petition, proceeding or case under any other bankruptcy, insolvency, debt restructuring, reorganization, incorporation, readjustment of debt, dissolution, liquidation, winding-up or similar law now or hereafter in effect, seeking bankruptcy, liquidation, reorganization, dissolution, winding-up, composition or readjustment of debt of any of them, the appointment of a trustee, interim receiver, receiver, receiver and manager, administrative receiver, custodian, liquidator, provisional liquidator, administrator, sequestrator or other like official for any of them, or any material part of any of their respective assets or any similar relief; and if the application, filing, proceeding, petition or case is not contested by bona fide  action on the part of the applicable Obligor and is not dismissed, stayed or withdrawn  within 30 days of commencement thereof.  (11) Creditor Action. Any secured creditor, encumbrancer or lien or, or any trustee, interim receiver, receiver, receiver and manager, administrative receiver, agent, bailiff or other similar official appointed by any secured creditor, encumbrancer or lien or, takes possession of, forecloses, seizes, retains, sells or otherwise disposes of, or otherwise proceeds to enforce security over any material assets of any Obligor or gives notice of its intention to do any of the foregoing and such notice is not revoked within 30 days after its issuance. Section 11.2 Rights upon Default and Event of Default  Upon the occurrence of a Default, the Administrative Agent shall upon the instructions of  the Required Lenders, on notice to the Borrowers, declare that the ability of the Borrowers to  make any further Borrowing under any Credit Facility shall be suspended pending the remedying  of the Default.  Upon the occurrence of an Event of Default pursuant to Section 11.1(9) or  Section 11.1(10), the Administrative Agent shall without notice to the Borrowers, and upon the  occurrence of any other Event of Default and for so long as the other Event of Default shall  continue, the Administrative Agent shall upon the instructions of the Required Lenders, do either  or both of the following with notice to Master Borrower:  (a) declare that the Commitments have expired and that the Lenders’ obligations to make Borrowings thereunder have terminated; and (b) declare the entire principal amount of all Borrowings outstanding, all unpaid accrued interest and all fees and other amounts required to be paid by the Borrowers hereunder to be immediately due and payable without the necessity of presentment for payment, notice of non-payment and of protest (all of which are hereby expressly waived) and proceed to exercise any and all rights and remedies hereunder and under any other Loan Document or otherwise permitted by law. From and after the issuance of any declaration referred to in this Section 11.2, no Lender  shall be required to honour any cheque or other instrument presented to it by the Borrowers  regardless of the date of issue or presentation.  Immediately upon receipt of a declaration under  Section 11.2(b), the Borrowers shall pay to the Administrative Agent on behalf of the Lenders all  amounts outstanding hereunder including the maximum amount payable under all outstanding  Letters of Credit which are unmatured or unexpired, which amounts shall be held by the  Administrative Agent pursuant to the provisions of this Agreement. If the Borrowers does not  

 

 - 101 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    pay any such amount so required to be paid, the applicable Lender shall have the option at any  time without notice to the Borrowers to make a Prime Loan to the Borrowers equal to that  amount, such Loan to bear interest at the rates specified in this Agreement.  The proceeds of such  Loan shall be held by the Administrative Agent in a non-interest bearing account as collateral  security for the Borrowers’ obligations under such Letters of Credit. The Borrowers shall execute  such security documents with respect to such Letters of Credit and any amounts paid or held in  respect thereof as the Administrative Agent shall reasonably require.  Section 11.3 Demand  Notwithstanding any other provision of this Agreement, all Obligations of the Borrowers  to the Lenders under the Wholesale Flooring Facility are repayable by the Borrowers to the  Administrative Agent for and on behalf of the Lenders upon demand (“Demand”). At any time,  a Lender (“Exit Lender”) may instruct the Administrative Agent to issue an Exit Notice to  Wholesale Flooring Borrowers regarding the payment of the entire principal amount of all  Borrowings then outstanding under the Wholesale Flooring Facility to such Exit Lender and all  accrued and unpaid interest thereon and all other Obligations outstanding hereunder in respect of  the Wholesale Flooring Facility owing to such Exit Lender (the “Exit Amount”), which shall  become due and payable within 120 days from the date of such Exit Notice, all without any other  notice and without presentment, protest, demand, notice of dishonour or any other demand  whatsoever (all of which are hereby expressly waived by Wholesale Flooring Borrowers).  Upon  repayment of the Exit Amount, the Wholesale Flooring Facility Limit shall be reduce by an  amount equal to the Applicable Percentage of Wholesale Flooring Facility Limit of the Exit  Lender. For greater certainty, nothing in this Agreement, including any references to a Default or  Event of Default, are intended to alter the demand nature of the Wholesale Flooring Facility.  Section 11.4 Waiver of Default  No express or implied waiver by the Administrative Agent and the Lenders or any of  them of any Default or Event of Default shall in any way be or be construed to be a waiver of  any future or subsequent Default or Event of Default.  To the extent permitted by Applicable  Law, each of the Borrowers hereby waives any rights now or thereafter conferred by statute or  otherwise which may limit or modify any of the Administrative Agent’s or the Lenders’ rights or  remedies under any Loan Document.  Each of the Borrowers acknowledges and agrees that the  exercise by the Administrative Agent or any Lender of any rights or remedies under any Loan  Document without having declared an acceleration shall not in any way alter, affect or prejudice  the right of the Administrative Agent and the Lenders to make a declaration pursuant to  Section 11.2 at any time upon the occurrence and during the continuance of an Event of Default  and, without limiting the foregoing, shall not be construed as or deemed to constitute a waiver of  any rights under Section 11.2.  ARTICLE 12– REMEDIES  Section 12.1 Remedies Cumulative  Subject to Section 11.3, for greater certainty, the rights and remedies of the  Administrative Agent and the Lenders under this Agreement and the other Loan Documents are  cumulative and are in addition to and not in substitution for any rights or remedies provided by  law or by equity.  Any single or partial exercise by the Administrative Agent or any Lender of  

 

 - 102 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    any right or remedy upon the occurrence of a Default or Event of Default shall not be deemed to  be a waiver of, or to alter, affect or prejudice any other right or remedy to which the  Administrative Agent or the Lender may be lawfully entitled as a result of the Default or Event  of Default, and any waiver by the Administrative Agent or any Lender of the strict observance  of, performance of or compliance with any term, covenant, condition or agreement herein  contained, and any indulgence granted thereby, either expressly or by conduct, shall be effective  only in the specific instance and for the purpose for which it is given and shall be deemed not to  be a waiver of any subsequent Default or Event of Default.  Section 12.2 Remedies Not Limited  The Administrative Agent on behalf of itself and the Lenders may, to the extent permitted  by Applicable Law, bring suit at law, in equity or otherwise, for any available relief or purpose  including: (a) the specific performance of any covenant or agreement contained in this  Agreement or in any other Loan Document; (b) an injunction against a violation of any of the  terms of this Agreement or any other Loan Document; (c) in aid of the exercise of any power  granted by this Agreement or any other Loan Document or by law; or (d) the recovery of any  judgment for any and all amounts due in respect of the Obligations.  Section 12.3 Sharing of Payments by Lenders  If any Lender, whether by voluntary payment or by exercising any right of setoff or  counterclaim or otherwise, obtains any payment or other reduction that might result in such  Lender receiving payment or other reduction of a proportion of the aggregate amount of its  Loans and accrued interest thereon or other obligations hereunder greater than its pro rata share  thereof as provided herein, then the Lender receiving such payment or other reduction shall  notify the Administrative Agent of such fact, and purchase (for cash at face value) participations  in the Loans and such other obligations of the other Lenders, or make such other adjustments as  shall be equitable, so that the benefit of all such payments shall be shared by the Lenders rateably  in accordance with the aggregate amount of principal and accrued interest on their respective  Loans and other amounts owing them, provided that  (a) if any such participations are purchased and all or any portion of the payment  giving rise thereto is recovered, such participations shall be rescinded and the  purchase price restored to the extent of such recovery, without interest,  (b) the provisions of this Section shall not be construed to apply to (i) any payment  made by any Obligor pursuant to and in accordance with the express terms of this  Agreement or (ii) any payment obtained by a Lender as consideration for the  assignment of or sale of a participation in any of its Loans or participations in  disbursements under Letters of Credit to any assignee or participant, other than to  any Obligor or any Affiliate of an Obligor (as to which the provisions of this  Section shall apply); and  (c) the provisions of this Section shall not be construed to apply to (i) any payment  made while no Event of Default has occurred and is continuing in respect of  obligations of the Borrowers to such Lender that do not arise under or in  connection with the Loan Documents (subject to the terms of any intercreditor  agreement entered into between such Lender and the Administrative Agent in  

 

 - 103 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    respect of a Manufacturing Flooring Facility), (ii) any payment made in respect of  an obligation that is secured by a Permitted Lien or that is otherwise entitled to  priority over the Borrowers’ obligations under or in connection with the Loan  Documents, (iii) any reduction arising from an amount owing to an Obligor upon  the termination of derivatives entered into between the Obligor and such Lender,  or (iv) any payment to which such Lender is entitled as a result of any form of  credit protection obtained by such Lender.  The Obligors or the Borrowers on behalf of itself and the other Obligors consent to the foregoing  and agree, to the extent they may effectively do so under Applicable Law, that any Lender  acquiring a participation pursuant to the foregoing arrangements may exercise against each  Obligor rights of setoff and counterclaim and similar rights of Lenders with respect to such  participation as fully as if such Lender were a direct creditor of each Obligor in the amount of  such participation.  Section 12.4 Right of Setoff  If an Event of Default has occurred and is continuing, each of the Lenders and each of  their respective Affiliates is hereby authorized at any time and from time to time to set off and  apply any and all deposits (general or special, time or demand, provisional or final, in whatever  currency) at any time held and other obligations (in whatever currency) at any time owing by  such Lender or any such Affiliate to or for the credit or the account of any Obligor against any  and all of the obligations of the Borrowers now or hereafter existing under this Agreement or any  other Loan Document to such Lender, irrespective of whether or not such Lender has made any  demand under this Agreement or any other Loan Document and although such obligations of the  Obligor may be contingent or unmatured or are owed to a branch or office of such Lender  different from the branch or office holding such deposit or obligated on such indebtedness.  The  rights of each the Lenders and their respective Affiliates under this Section are in addition to  other rights and remedies (including other rights of setoff, consolidation of accounts and  bankers’ lien) that the Lenders or their respective Affiliates may have.  Each Lender agrees to  promptly notify the Borrowers and the Administrative Agent after any such setoff and  application, but the failure to give such notice shall not affect the validity of such setoff and  application.  If any Affiliate of a Lender exercises any rights under this Section 12.4, it shall  share the benefit received in accordance with Section 12.3 as if the benefit had been received by  the Lender of which it is an Affiliate.  Section 12.5 Administrative Agent or Lender May Perform Covenants  If any of the Borrowers fails to perform any of its obligations under any covenant  contained in this Agreement or any other Loan Document, the Administrative Agent or any  Lender may (but has no obligation to), upon notice to the applicable Borrower, perform any  covenant capable of being performed by it and, if the covenant requires the payment or  expenditure of money, it may make a Loan to fund that requirement, which Loan shall be repaid  by the Borrowers on demand.  That Loan shall bear interest at a rate calculated and paid in  accordance with Article 4.  

 

- 104 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Section 12.6 Decision to Enforce Security Documents  Upon the Security Documents becoming enforceable in accordance with their terms, the  Administrative Agent shall promptly so notify each of the Lenders. Any Lender may thereafter  provide the Administrative Agent with a written request to enforce the Security Documents.  Forthwith after the receipt of such a request, the Administrative Agent shall seek the instruction  of the Required Lenders as to whether the Security Documents should be enforced and the  manner in which the Security Documents should be enforced. In seeking such instructions, the  Administrative Agent shall submit a specific proposal to the Lenders. The Administrative Agent  shall promptly notify the Lenders of all instructions and approvals of the Required Lenders. If  the Required Lenders instruct the Administrative Agent to enforce the Security Documents, each  of the Lenders agree to accelerate the Obligations owed to it, including with respect to any  Hedge Contracts made between a Lender and a Borrower, in accordance with and to the extent  permitted under such Hedge Contracts.  ARTICLE 13– THE ADMINISTRATIVE AGENT AND THE LENDERS  Section 13.1 Appointment and Authority  Each of the Lenders and the L/C Issuer hereby irrevocably appoints the Administrative  Agent to act on its behalf as the administrative agent hereunder and under the other Loan  Documents and authorizes the Administrative Agent to take such actions on its behalf and to  exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof,  together with such actions and powers as are reasonably incidental thereto.  The provisions of  this Article 13 are solely for the benefit of the Administrative Agent, the Lenders and the L/C  Issuer, and no Obligor shall have rights as a third party beneficiary of any of such provisions  (other than under Section 13.7(1), Section 13.16 and any rights of an Obligor to receive notice as  specified in this Article 13).  Section 13.2 Rights as a Lender  The Person serving as the Administrative Agent hereunder shall have the same rights and  powers in its capacity as a Lender as any other Lender and may exercise the same as though it  were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise  expressly indicated or unless the context otherwise requires, include the Person serving as the  Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may  accept deposits from, lend money to, act as the financial advisor or in any other advisory  capacity for and generally engage in any kind of business with any Obligor or any Affiliate  thereof as if such Person were not the Administrative Agent and without any duty to account to  the Lenders.  All communication between the Borrowers and any Lender in connection with this  Agreement and the other Loan Documents shall be directed through the Administrative Agent.   All notices by a Lender to the Administrative Agent shall be through the Administrative Agent’s  Branch of Account and all notices by the Administrative Agent to the Lender shall be through  the Lender’s Branch of Account.  

 

 - 105 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 13.3 Exculpatory Provisions  (1) The Administrative Agent shall not have any duties or obligations except those expressly  set forth herein and in the other Loan Documents.  Without limiting the generality of the  foregoing, the Administrative Agent:  (a) shall not be subject to any fiduciary or other implied duties, regardless of whether  a Default has occurred and is continuing;  (b) shall not have any duty to take any discretionary action or exercise any  discretionary powers, except discretionary rights and powers expressly  contemplated hereby or by the other Loan Documents that the Administrative  Agent is required to exercise as directed in writing by the Required Lenders (or  such other number or percentage of the Lenders as shall be expressly provided for  in the Loan Documents), but the Administrative Agent shall not be required to  take any action that, in its opinion or the opinion of its counsel, may expose the  Administrative Agent to liability or that is contrary to any Loan Document or  Applicable Law;  (c) shall not, except as expressly set forth herein and in the other Loan Documents,  have any duty to disclose, and shall not be liable for the failure to disclose, any  information relating to the Borrowers or any of its Affiliates that is communicated  to or obtained as the Administrative Agent or any of its Affiliates in any capacity;  and  (d) although the Administrative Agent shall promptly deliver to each of the Lenders,  at their respective Branches of Account, all documents, papers, materials and  other information as are furnished by the Borrowers to the Agent on behalf of the  Lenders under this Agreement, it shall have no other obligation to provide any  Lender with any credit or other information whatsoever with respect to the  Borrowers and shall be under no obligation to inquire as to the performance by  the Borrowers of its obligations under this Agreement or any other Loan  Document.  (2) The Administrative Agent shall not be liable for any action taken or not taken by it  (a) with the consent or at the request of the Required Lenders (or such other number or  percentage of the Lenders as is necessary, or as the Administrative Agent believes in good faith  is necessary, under the provisions of the Loan Documents) or (b) in the absence of its own gross  negligence or wilful misconduct.  The Administrative Agent shall be deemed not to have  knowledge of any Default unless and until notice describing the Default is given to the  Administrative Agent by any of the Borrowers or a Lender.  (3) Except as otherwise expressly specified in this Agreement, the Administrative Agent  shall not be responsible for or have any duty to ascertain or inquire into (a) any statement,  warranty or representation made in or in connection with this Agreement or any other Loan  Document, (b) the contents of any certificate, report or other document delivered hereunder or  thereunder or in connection herewith or therewith, (c) the financial condition of any Borrower,  (d) the performance or observance of any of the covenants, agreements or other terms or  conditions set forth herein or therein or the occurrence of any Default, (e) the validity,  

 

 - 106 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any  other agreement, instrument or document, or (f) the satisfaction of any condition specified in this  Agreement, other than to confirm receipt of items expressly required to be delivered to the  Administrative Agent.  Section 13.4 Reliance by Administrative Agent  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability  for relying upon, any notice, request, certificate, consent, statement, instrument, document or  other writing (including any electronic message, Internet or intranet posting or other distribution)  believed by it to be genuine and to have been signed, sent or otherwise authenticated by the  proper Person.  The Administrative Agent also may rely upon any statement made to it orally or  by telephone and believed by it to have been made by the proper Person, and shall not incur any  liability for relying thereon.  In determining compliance with any condition hereunder to the  making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the  satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such  condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall  have received notice to the contrary from such Lender or the L/C Issuer prior to the making of  such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with  legal counsel (who may be counsel for the Borrowers), independent accountants and other  experts selected by it, and shall not be liable for any action taken or not taken by it in accordance  with the advice of any such counsel, accountants or experts.  Section 13.5 Indemnification of Administrative Agent  Each Lender agrees to indemnify the Administrative Agent and hold it harmless (to the  extent not reimbursed by the Borrowers), rateably according to its Applicable Percentage (and  not jointly or jointly and severally) from and against any and all losses, claims, damages,  liabilities and related expenses, including the fees, charges and disbursements of any counsel,  which may be incurred by or asserted against the Administrative Agent in any way relating to or  arising out of the Loan Documents or the transactions therein contemplated.  However, no  Lender shall be liable for any portion of such losses, claims, damages, liabilities and related  expenses resulting from the Administrative Agent’s gross negligence or wilful misconduct.  Section 13.6 Delegation of Duties  The Administrative Agent may perform any and all of its duties and exercise its rights  and powers hereunder or under any other Loan Document by or through any one or more sub- agents appointed by the Administrative Agent from among the Lenders (including the Person  serving as Administrative Agent) and their respective Affiliates.  The Administrative Agent and  any such sub-agent may perform any and all of its duties and exercise its rights and powers by or  through their respective Related Parties.  The provisions of this Article and other provisions of  this Agreement for the benefit of the Administrative Agent shall apply to any such sub-agent and  to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to  their respective activities in connection with the syndication of the credit facilities provided for  herein as well as activities as Administrative Agent.  

 

 - 107 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 13.7 Replacement of Administrative Agent  (1) The Administrative Agent may at any time give notice of its resignation to the Lenders,  the L/C Issuer and the Borrowers.  Upon receipt of any such notice of resignation, the Required  Lenders shall have the right, with the prior written consent of the Master Borrower (but only if  no Event of Default has occurred and is continuing), to appoint a successor, which shall be a  Lender and having an office in Toronto, Ontario, or an Affiliate of any such Lender with an  office in Toronto.  The Administrative Agent may also be removed at any time by the Required  Lenders upon 30 days’ notice to the Administrative Agent and the Borrowers as long as the  Required Lenders, with the prior written consent of the Master Borrower (but only if no Event of  Default has occurred and is continuing), appoint and obtain the acceptance of a successor within  such 30 days, which shall be a Lender having a Commitment and having an office in Toronto, or  an Affiliate of any such Lender with an office in Toronto.  (2) If no such successor shall have been so appointed by the Required Lenders and shall have  accepted such appointment within 30 days after the retiring Administrative Agent gives notice of  its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a  successor Administrative Agent meeting the qualifications specified in Section 13.7(1), provided  that if the Administrative Agent shall notify the Borrowers and the Lenders that no qualifying  Person has accepted such appointment, then such resignation shall nonetheless become effective  in accordance with such notice and (a) the retiring Administrative Agent shall be discharged  from its duties and obligations hereunder and under the other Loan Documents (except that in the  case of any collateral security held by the Administrative Agent on behalf of the Lenders under  any of the Loan Documents, the retiring Administrative Agent shall continue to hold such  collateral security until such time as a successor Administrative Agent is appointed) and (b) all  payments, communications and determinations provided to be made by, to or through the  Administrative Agent shall instead be made by or to each Lender directly, until such time as the  Required Lenders appoint a successor Administrative Agent as provided for in Section 13.7(1).  (3) Upon a successor’s appointment as Administrative Agent hereunder, such successor shall  succeed to and become vested with all of the rights, powers, privileges and duties of the former  Administrative Agent, and the former Administrative Agent shall be discharged from all of its  duties and obligations hereunder or under the other Loan Documents (if not already discharged  therefrom as provided in Section 13.7(1)).  The fees payable by the Borrowers to a successor  Administrative Agent shall be the same as those payable to its predecessor unless otherwise  agreed between the Borrowers and such successor.  After the termination of the service of the  former Administrative Agent, the provisions of this Article 13 and of Section 15.8 shall continue  in effect for the benefit of such former Administrative Agent, its sub-agents and their respective  Related Parties in respect of any actions taken or omitted to be taken by any of them while the  former Administrative Agent was acting as Administrative Agent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Section 13.8 Non-Reliance on Administrative Agent and Other Lenders  Each of the Lenders and the L/C Issuer acknowledges that it has, independently and  without reliance upon the Administrative Agent or any other Lender or any of their Related  Parties and based on such documents and information as it has deemed appropriate, made its own  credit analysis and decision to enter into this Agreement.  Each of the Lenders and the L/C Issuer  also acknowledges that it will, independently and without reliance upon the Administrative  Agent or any other Lender or any of their Related Parties and based on such documents and  

 

 - 108 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    information as it shall from time to time deem appropriate, continue to make its own decisions in  taking or not taking action under or based upon this Agreement, any other Loan Document or  any related agreement or any document furnished hereunder or thereunder.  Section 13.9 Collective Action of the Lenders  (1) Each of the Lenders and the L/C Issuer hereby acknowledges that to the extent permitted  by Applicable Law, any collateral security and the remedies provided under the Loan Documents  to the Lenders are for the benefit of the Lenders and the L/C Issuer collectively and acting  together and not severally and further acknowledges that its rights hereunder and under any  collateral security are to be exercised not severally, but by the Administrative Agent upon the  decision of the Required Lenders (or such other number or percentage of the Lenders as shall be  expressly provided for in the Loan Documents).  Accordingly, notwithstanding any of the  provisions contained herein or in any collateral security, each of the Lenders and the L/C Issuer  hereby covenants and agrees that it shall not be entitled to take any action hereunder or  thereunder including any declaration of default hereunder or thereunder but that any such action  shall be taken only by the Administrative Agent with the prior written agreement of the Required  Lenders (or such other number or percentage of the Lenders as shall be expressly provided for in  the Loan Documents).  Each of the Lenders and the L/C Issuer hereby further covenants and  agrees that upon any such written agreement being given, it shall co-operate fully with the  Administrative Agent to the extent requested by the Administrative Agent.  Notwithstanding the  foregoing, in the absence of instructions from the Lenders and where in the sole opinion of the  Administrative Agent, acting reasonably and in good faith, the exigencies of the situation  warrant such action, the Administrative Agent may without notice to or consent of the Lenders  take such action on behalf of the Lenders and the L/C Issuer as it deems appropriate or desirable  in the interest of the Lenders.  (2) Without limiting the generality of the foregoing, the Administrative Agent shall have the  sole and exclusive right and authority to (a) act as the disbursing and collecting agent for the  Lenders and the L/C Issuer with respect to all payments and collections arising in connection  herewith and with the Security Documents; (b) execute and deliver each Loan Document and  accept delivery of each such agreement delivered by the Obligors; (c) act as collateral agent for  the Lenders and the L/C Issuer for purposes of the perfection of all security interests and Liens  created by such agreements and all other purposes stated therein; (d) manage, supervise and  otherwise deal with the Collateral; (e) take such action as is necessary or desirable to maintain  the perfection and priority of the security interests and Liens created or purported to be created  by the Security Documents; and (f) except as may be otherwise specifically restricted by the  terms hereof or of any other Loan Document, exercise all remedies given to the Administrative  Agent and the Lenders and the L/C Issuer with respect to the Collateral under the Loan  Documents relating thereto, Applicable Law or otherwise.  Section 13.10 No Other Duties, etc.  Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers or  holders of similar titles, if any, specified in this Agreement shall have any powers, duties or  responsibilities under this Agreement or any of the other Loan Documents, except in its capacity,  as applicable, as the Administrative Agent or a Lender hereunder.  

 

 - 109 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 13.11 Administrative Agent’s Clawback  (1) Funding by Lenders; Presumption by Administrative Agent.  Unless the  Administrative Agent shall have received notice from a Lender prior to the proposed date of any  advance of funds that such Lender will not make available to the Administrative Agent such  Lender’s share of such advance, the Administrative Agent may assume that such Lender has  made such share available on such date in accordance with the provisions of this Agreement  concerning funding by Lenders and may, in reliance upon such assumption, make available to  the Borrowers a corresponding amount.  In such event, if a Lender has not in fact made its share  of the applicable advance available to the Administrative Agent, then the applicable Lender shall  pay to the Administrative Agent forthwith on demand such corresponding amount with interest  thereon, for each day from and including the date such amount is made available to the  Borrowers to but excluding the date of payment to the Administrative Agent, at a rate determined  by the Administrative Agent in accordance with prevailing banking industry practice on  interbank compensation.  If such Lender pays such amount to the Administrative Agent, then  such amount shall constitute such Lender’s Loan included in such advance.  If the Lender does  not do so forthwith, the Borrowers shall pay to the Administrative Agent forthwith on demand  such corresponding amount with interest thereon at the interest rate applicable to the advance in  question.  Any payment by the Borrowers shall be without prejudice to any claim the Borrowers  may have against a Lender that has failed to make such payment to the Administrative Agent.  (2) Payments by Borrowers; Presumptions by Administrative Agent.  Unless the  Administrative Agent shall have received notice from the Borrowers prior to the date on which  any payment is due to the Administrative Agent for the account of any Lender hereunder that the  Borrowers will not make such payment, the Administrative Agent may assume that the  Borrowers have made such payment on such date in accordance herewith and may, in reliance  upon such assumption, distribute the amount due to the Lenders.  In such event, if the Borrowers  have not in fact made such payment, then each of the Lenders severally agrees to repay to the  Administrative Agent forthwith on demand the amount so distributed to such Lender with  interest thereon, for each day from and including the date such amount is distributed to it to but  excluding the date of payment to the Administrative Agent, at a rate determined by the  Administrative Agent in accordance with prevailing banking industry practice on interbank  compensation.  Section 13.12 Erroneous Payments  (a) If the Administrative Agent notifies a Lender, or any Person who has received  funds on behalf of a Lender (any such Lender or other recipient, a “Payment  Recipient”) that the Administrative Agent has determined in its sole discretion  (whether or not after receipt of any notice under Section 13.12(b)) that any funds  received by such Payment Recipient from the Administrative Agent or any of its  Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly  received by, such Payment Recipient (whether or not known to such Lender or  other Payment Recipient on its behalf) (any such funds, whether received as a  payment, prepayment or repayment of principal, interest, fees, distribution or  otherwise, individually and collectively, an “Erroneous Payment”) and demands  the return of such Erroneous Payment (or a portion thereof) (provided, that,  without limiting any other rights or remedies (whether at law or in equity), the  Administrative Agent may not make any such demand under this Section 13.12(a)  

 

- 110 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  with respect to an Erroneous Payment unless such demand is made within two (2)  days of the date of receipt of such Erroneous Payment by the applicable Payment  Recipient), such Erroneous Payment shall at all times remain the property of the  Administrative Agent and shall be segregated by the Payment Recipient and held  in trust for the benefit of the Administrative Agent, and such Lender shall (or,  with respect to any Payment Recipient who received such funds on its behalf,  shall cause such Payment Recipient to promptly, but in no event later than two (2)  Business Days thereafter, return to the Administrative Agent the amount of any  such Erroneous Payment (or portion thereof) as to which such a demand was  made, in same day funds (in the currency so received), together with interest  thereon in respect of each day from and including the date such Erroneous   Payment (or portion thereof) was received by such Payment Recipient to the date  such amount is repaid to the Administrative Agent in same day funds at the  greater of the Federal Funds Effective Rate and a rate determined by the  Administrative Agent in accordance with banking industry rules on interbank  compensation from time to time in effect. A notice of the Administrative Agent to  any Payment Recipient under this Section 13.12(a) shall be conclusive, absent  manifest error.  (b) Without limiting Section 13.12(a), each Lender, or any Person who has received funds on behalf of a Lender, hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) 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, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates), or (z) that such Lender or other such recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) in each case: (i) (A) in the case of Section 13.12(b) (x) or (y), an error shall be presumed to have been made (absent written confirmation from the Administrative Agent to the contrary) or (B) an error has been made (in the case of Section 13.12(b)(z)), in each case, with respect to such payment, prepayment or repayment; and (ii) such Lender shall (and shall cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one (1) Business Day of its knowledge of such error) notify the Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Administrative Agent  pursuant to this Section 13.12(b)(ii). (c) Each Lender hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to such Lender under any Loan Document, or otherwise payable or distributable by the Administrative Agent to such Lender 

 

 - 111 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    from any source, against any amount due to the Agent under Section 13.12(a),  Section 13.12(b) or under the indemnification provisions of this Agreement.  (d) In the event that an Erroneous Payment (or portion thereof) is not recovered by  the Administrative Agent for any reason, after demand therefor by the  Administrative Agent in accordance with Section 13.12(a), from any Lender that  has received such Erroneous Payment (or portion thereof) (and/or from any  Payment Recipient who received such Erroneous Payment (or portion thereof) on  its respective behalf) (such unrecovered amount, an “Erroneous Payment  Return Deficiency”), upon the Administrative Agent’s notice to such Lender at  any time, (i) such Lender shall be deemed to have assigned its Loans (but not its  Commitments) of the relevant Credit Facility with respect to which such  Erroneous Payment was made (the “Erroneous Payment Impacted Facility”) in  an amount equal to the Erroneous Payment Return Deficiency (or such lesser  amount as the Administrative Agent may specify) (such assignment of the Loans  (but not Commitments) of the Erroneous Payment Impacted Facility, the  “Erroneous Payment Deficiency Assignment”) at par plus any accrued and  unpaid interest (with the assignment fee to be waived by the Administrative Agent  in such instance), and is hereby (together with the Borrowers) deemed to execute  and deliver an Assignment Agreement with respect to such Erroneous Payment  Deficiency Assignment (with such modifications as are necessary, in the  Administrative Agent’s sole discretion, to ensure that only Loans, and not  Commitments, are assigned thereunder), (ii) the Administrative Agent as the  assignee Lender shall be  deemed to acquire the Erroneous Payment Deficiency  Assignment, (iii) upon such deemed acquisition, the Administrative Agent as the  assignee Lender shall become a Lender hereunder with respect to such Erroneous  Payment Deficiency Assignment and the assigning Lender shall cease to be a  Lender, hereunder with respect to such Erroneous Payment Deficiency  Assignment, excluding, for the avoidance of doubt, its obligations under the  indemnification provisions of this Agreement and its applicable Commitments  which shall survive as to such assigning Lender and (iv) the Administrative Agent  may reflect in the Register its ownership interest in the Borrowings subject to the  Erroneous Payment Deficiency Assignment. The Administrative Agent may, in its  discretion, but subject to Section 14.2 (as if it were a Lender), sell any Loans  acquired pursuant to an Erroneous Payment Deficiency Assignment and upon  receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency  owing by the applicable Lender shall be reduced by the net proceeds of the sale of  such Loan (or portion thereof), and the Administrative Agent shall retain all other  rights, remedies and claims against such Lender (and/or against any recipient that  receives funds on its respective behalf). For the avoidance of doubt, no Erroneous  Payment Deficiency Assignment will reduce the Commitments of any Lender and  such Commitments shall remain available in accordance with the terms of this  Agreement. In addition, each party hereto agrees that, except to the extent that the  Administrative Agent has sold a Loan (or portion thereof) acquired pursuant to an  Erroneous Payment Deficiency Assignment, and irrespective of whether the  Administrative Agent may be equitably subrogated, the Administrative Agent  shall be contractually subrogated to all the rights and interests of the applicable  Lender under the Loan Documents with respect to each Erroneous Payment  Return Deficiency (the “Erroneous Payment Subrogation Rights”).  

 

- 112 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (e) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrowers or any other Obligor, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from the Borrowers or any other Obligor for the purpose of making such Erroneous Payment. (f) To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counter-claim, 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 Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine (g) Each party’s obligations, agreements and waivers under this Section 13.12 shall survive the resignation or replacement of the Administrative Agent, any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments and/or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Loan Document. Section 13.13 Arrangements for Borrowings  The Administrative Agent shall give notice to each Lender promptly in writing upon  receipt by the Administrative Agent of any notice given under this Agreement that affects a  Lender.  The Administrative Agent shall advise each Lender of the amount, date and details of  each Borrowing and of each Lender’s participation in each Borrowing.  At or before 1:00 p.m.  on the Drawdown Date, each Lender will make its participation available to the Borrowers at the  Administrative Agent’s Account for Payments and, for greater certainty, Bankers’ Acceptances  shall be accepted by the Lenders at their respective Branches of Account.  Section 13.14 Arrangements for Repayment of Borrowings  All payments made by or on behalf of the Borrowers and received by the Administrative  Agent, whether before or after the exercise of any rights arising under Section 11.2, shall be paid  to each Lender in accordance with its entitlement under this Agreement.  Payment by the  Administrative Agent shall be made promptly following receipt and, in any event, the  Administrative Agent shall use its reasonable efforts to pay to each Lender at the applicable  Lender’s Branch of Account the applicable amount on the same Business Day as the amount is  received by the Administrative Agent.  Section 13.15 No Partnership  Nothing contained in this Agreement and no action taken pursuant to it shall be deemed  to constitute the Lenders a partnership, association, joint venture or other similar entity.  Section 13.16 Administrative Agent May Deal With Collateral  Each of the Lenders hereby directs, in accordance with the terms hereof, the  Administrative Agent to release any Lien held by the Administrative Agent for the benefit of the  Lenders and the L/C Issuer against:  

 

 - 113 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    (a) all of the Collateral, upon termination of the Commitments and payment and  satisfaction in full of all Loans and Obligations that the Administrative Agent has  been notified in writing are then due and payable (and, in respect of contingent  Letter of Credit Obligations, with respect to which cash collateral has been  deposited or a back-up letter of credit has been issued, in either case on terms  reasonably satisfactory to the Administrative Agent); and  (b) any part of the Collateral sold or disposed of by the Borrowers if such sale or  disposition is permitted by this Agreement (or permitted pursuant to a waiver or  consent of a transaction otherwise prohibited by this Agreement if such waiver or  consent is consented to by the Required Lenders in accordance with the terms of  this Agreement).  Each of the Lenders hereby directs the Administrative Agent to execute and deliver or  file such termination and partial release statements and do such other things as are necessary to  release Liens to be released pursuant to this Section 13.16 promptly upon the effectiveness of  any such release.  Section 13.17 Indemnity of Administrative Agent  The Administrative Agent may refrain from exercising any right, power or discretion or  taking any action to protect or enforce the rights of any Lender under this Agreement and the  Loan Documents until it has been indemnified or secured to its satisfaction against any and all  costs, losses, expenses or liabilities (including legal fees) which it would or might sustain or  incur as a result of the action or exercise.  ARTICLE 14 - SUCCESSORS AND ASSIGNS  Section 14.1 Successors and Assigns Generally  The provisions of this Agreement shall be binding upon and inure to the benefit of the  parties hereto and their respective successors and assigns permitted hereby, except that no  Obligor may assign or otherwise transfer any of its rights or obligations hereunder without the  prior written consent of the Administrative Agent and each Lender and no Lender may assign or  otherwise transfer any of its rights or obligations hereunder except (a) to an Eligible Assignee in  accordance with Section 14.2, (b) by way of participation in accordance with the provisions of  Section 14.4, or (c) by way of pledge or assignment of a security interest subject to the  restrictions of  Section 14.6 (and any other attempted assignment or transfer by any party hereto  shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to  confer upon any Person (other than the parties hereto, their respective successors and assigns  permitted hereby, Participants to the extent provided in Section 14.4 and, to the extent expressly  contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders)  any legal or equitable right, remedy or claim under or by reason of this Agreement.  Section 14.2 Assignments by Lenders  Any Lender may at any time 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 Commitment and  the Loans at the time owing to it); provided that:  

 

- 114 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (a) except if (i) an Event of Default has occurred and is continuing or (ii) in the case  of an assignment of the entire remaining amount of the assigning Lender’s  Commitment and the Loans at the time owing to it or (iii) 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 Commitment or Loan being  assigned (which for this purpose includes Loans outstanding thereunder) shall not  be less than $10,000,000, unless the Administrative Agent otherwise consents to a  lower amount (each such consent not to be unreasonably withheld or delayed); (b) each partial assignment shall be made as an assignment of a proportionate part of  all the assigning Lender’s rights and obligations under this Agreement with  respect to the Loan or the Commitment assigned; (c) any assignment must be approved by the Administrative Agent and Master  Borrower (such approval not to be unreasonably withheld or delayed), after  consultation with the Borrowers, unless: (i) the proposed assignee is itself already a Lender or an Affiliate of a Lender  or an Approved Fund with respect to a Lender; (ii) the proposed assignee is the Administrative Agent or the Issuing Bank;  or (iii) an Event of Default has occurred and is continuing; and (d) the parties to each assignment shall execute and deliver to the Administrative  Agent an Assignment and Assumption, together with a processing and recordation  fee of $<*>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 14.3, from and after the effective date specified in each Assignment and Assumption, the  Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest  assigned by such Assignment and Assumption, have the rights and obligations of a Lender under  this Agreement and the other Loan Documents, including any collateral security, and the  assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and  Assumption, be released from its obligations under this Agreement (and, in the case of an  Assignment and Assumption covering all of the assigning Lender’s rights and obligations under  this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to  the benefits of Section 4.10 and Section 15.8, and shall continue to be liable for any breach of  this Agreement by such Lender, with respect to facts and circumstances occurring prior to the  effective date of such assignment.  Any assignment or transfer by a Lender of rights or  obligations under this Agreement that does not comply with this Section shall be treated for  purposes of this Agreement as a sale by such Lender of a participation in such rights and  obligations in accordance Section 14.4.  Any payment by an assignee to an assigning Lender in  connection with an assignment or transfer shall not be or be deemed to be a repayment by the  Borrowers or a new Loan to the Borrowers.  

 

 - 115 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Section 14.3 Register  The Administrative Agent shall maintain at one of its offices in Toronto, Ontario a copy  of each Assignment and Assumption delivered to it and a register for the recordation of the  names and addresses of the Lenders, and the Commitment of, and principal amounts of the  Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).   The entries in the Register shall be conclusive, absent manifest error, 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.  Section 14.4 Participations  Any Lender may at any time, without the consent of, or notice to, the Borrowers or the  Administrative Agent, sell participations to any Person (other than a natural person, an Obligor  or any Affiliate of an Obligor) (each, 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 Commitment and/or the  Loans owing to it); provided that (a) such Lender’s obligations under this Agreement shall  remain unchanged, (b) such Lender shall remain solely responsible to the other parties hereto for  the performance of such obligations and (c) the Borrowers, 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.  Any payment by a Participant to a Lender  in connection with a sale of a participation shall not be or be deemed to be a repayment by the  Borrowers or a new Loan to the Borrowers.  Subject to Section 14.5, the Borrowers agrees that each Participant shall be entitled to the  benefits of Section 4.10 to the same extent as if it were a Lender and had acquired its interest by  assignment pursuant to Section 14.2.  To the extent permitted by law, each Participant also shall  be entitled to the benefits of Section 12.4 as though it were a Lender, provided such Participant  agrees to be subject to Section 12.3 as though it were a Lender.  Section 14.5 Limitations Upon Participant Rights  A Participant shall not be entitled to receive any greater payment under Sections 4.10 and  4.11 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 Borrowers’ 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 4.11 unless the Borrowers are  notified of the participation sold to such Participant and such Participant agrees, for the benefit of  the Borrowers, to comply with Section 4.11(5) as though it were a Lender.  Section 14.6 Certain Pledges  Any Lender may at any time pledge or assign a security interest in all or any portion of its  rights under this Agreement to secure obligations of such Lender, but no such pledge or  assignment shall release such Lender from any of its obligations hereunder or substitute any such  pledgee or assignee for such Lender as a party hereto.  

 

- 116 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  ARTICLE 15 – MISCELLANEOUS  Section 15.1 Amendments, Waivers, etc.  (1) Binding Effect.  Except as otherwise provided in this Section 15.1, no amendment, waiver, discharge or termination of any provision of this Agreement or any other Loan Document and no waiver of any breach of any provision of this Agreement or any other Loan Document and no consent to any departure by a party from any provision of this Agreement: (a) shall be binding upon the Borrowers unless it is evidenced by an instrument in writing signed by the Borrowers; nor (b) be binding upon the Administrative Agent and the Lenders unless it is approved in writing by the Administrative Agent and all the Lenders or the Required Lenders, as applicable. Notwithstanding the foregoing, any amendment, waiver, discharge or termination may be validly  effected by execution by the Administrative Agent and all the Lenders or the Required Lenders,  as applicable, of an instrument in writing without requiring the execution of that instrument by  the Borrowers, so long as the amendment, waiver, discharge or termination does not adversely  affect the rights or obligations of the Borrowers.  The Administrative Agent shall forward a copy  of the written instrument to the Borrowers as soon as practicable following the execution thereof.   The amendment, waiver or consent will be effective only in the specific instance, for the specific  purpose and for the specific length of time for which it is given.  (2) Errors.  The Administrative Agent may correct any typographical error or other error of a clerical nature in this Agreement and the other Loan Documents and substitute the corrected text in the counterparts of this Agreement and the other Loan Documents if the corrections do not modify in any manner the meaning or the interpretation of this Agreement or any other Loan Document and if the Administrative Agent gives the Borrowers not less than 5 Business Days prior notice of any correction and the Borrowers does not object in writing to such correction within a period of 5 Business Days after receipt of such notice. (3) Approval of All Lenders.  Where any amendment, waiver, discharge or termination relates to the following matters, the amendment, waiver, discharge or termination requires the approval of all Lenders (or with respect to matters that affect only one Credit Facility, all the Lenders under that Credit Facility): (a) a decrease in the rate or amount of any principal, interest or fees or any other amount payable by the Borrowers or any alteration in the currency or mode of calculation or computation thereof; (b) any extension or reduction of the time for any payments required to be made by the Borrowers; (c) other than under Section 5.2 with respect to the Agreeing Lenders, any change in any Final Maturity Date; (d) the types of Borrowings available; 

 

- 117 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  (e) other than amendments to Commitments permitted pursuant to and in accordance with Section 2.6 and Section 2.7, an increase in the Commitments of any Lender or change in the severability obligations of the Lenders; (f) an extension or reduction of the notice period required in connection with any Borrowing; (g) the definition of Required Lenders; (h) amend any of the Security Documents or release the Borrower from any Security Document, in each case, except as other permitted hereunder or in the Security Document, or release all or a substantial portion of the Collateral; (i) an assignment or transfer by the Borrowers of any of its rights and obligations under this Agreement; or (j) any provision of this Section 15.1, or of Sections 2.6, 12.3 and 12.4. Any other amendment, waiver, discharge or termination requires the approval of only the  Required Lenders, which approval, if obtained, shall be binding upon all the Lenders.   Notwithstanding the foregoing, no consent with respect to any amendment, waiver or  other modification of this Agreement shall be required of any Defaulting Lender, except  with respect to any amendment, waiver or other modification referred to in clause (a), (b)  or (e) above and then only in the event such Defaulting Lender shall be directly affected  by such amendment, waiver or other modification.  (4) Request for Approval.  If the approval of a Lender is required under this Section 15.1, the Administrative Agent shall advise the Lender in writing of the issue to be decided and, if the Administrative Agent determines in its sole discretion that it is appropriate to do so, request the Lender’s approval of a course of action proposed by the Administrative Agent.  In requesting a Lender’s approval, the Administrative Agent may establish, in its discretion acting reasonably, a deadline by which the Lender shall respond to the Administrative Agent’s request. If the Lender fails to respond by that deadline, that Lender’s failure to respond shall be conclusive evidence of the disapproval by the Lender of the course of action proposed by the Administrative Agent. The Administrative Agent may, in its sole discretion and acting reasonably, extend the deadline set by the Administrative Agent by which the Lender shall respond to the Administrative Agent’s request. (5) Amendment re Rights of Administrative Agent or L/C Issuer.  Any amendment or waiver of any provision of any Loan Document that relates to the rights or obligations of the Administrative Agent or the L/C Issuer shall require the written agreement of the Administrative Agent or the L/C Issuer in such capacities, as the case may be, thereto. Section 15.2 Waivers Effective in Specific Instance  Any waiver of any provision of this Agreement or consent to any departure by a party  from any provision of this Agreement will be effective only in the specific instance, for the  specific purpose and for the specific length of time for which it is given.  

 

- 118 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Section 15.3 No Deemed Subordination  Notwithstanding anything to the contrary contained herein (including any provision for,  reference to, or acknowledgement of, any Lien or Permitted Lien), nothing herein and no  approval by the Administrative Agent or Lenders of any Lien or Permitted Lien (whether such  approval is oral or in writing) shall be construed as or deemed to constitute a subordination by  the Administrative Agent or the Lenders of any security interest or other right or interest in or to  the Collateral or any part thereof in favour of any Lien or Permitted Lien or any holder of any  Lien or Permitted Lien.  Section 15.4 Notices: Effectiveness; Electronic Communication  (1) Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as-provided in Section 15.4(2)), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier or e-mail to the addresses or telecopier numbers specified elsewhere in this Agreement or, if to a Lender, to it at its address, e-mail address or telecopier number specified in the Register or, if to the Borrowers or an Obligor other than the Borrowers, in care of the Borrowers at: Lithia Master LP Company, LP  8885 Jane Street, Unit 2  Vaughan, Ontario L4K 2M6  Attention: Paul Mirretta-Barone  Director, Corporate Finance  E-mail: PaulBarone@lithia.com  Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall  be deemed to have been given when received; notices sent by telecopier shall be deemed to have  been given when sent (except that, if not given on a business day between 9:00 a.m. and  5:00 p.m. local time where the recipient is located, shall be deemed to have been given at  9:00 a.m. on the next business day for the recipient).  Notices delivered through electronic  communications to the extent provided in Section 15.4(2), shall be effective as provided therein.  (2) Electronic Communications.  Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e- mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender of Loans to be made or Letters of Credit to be issued if such Lender has notified the Administrative Agent that it is incapable of receiving notices by electronic communication.  The Administrative Agent or the Borrowers may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (a) notices and other communications sent  to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement  from the intended recipient (such as by the “return receipt requested” function, as available,  return e-mail or other written acknowledgement), provided that if such notice or other  

 

 - 119 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    communication is not sent during the normal business hours of the recipient, such notice or  communication shall be deemed to have been sent at the opening of business on the next  business day for the recipient, and (b) notices or communications posted to an Internet or intranet  website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail  address as described in the foregoing clause (a) of notification that such notice or communication  is available and identifying the website address therefore.  (3) Change of Address, etc.  Any party hereto may change its address, e-mail address or  telecopier number for notices and other communications hereunder by notice to the other parties  hereto.  Section 15.5 Further Assurances  The Borrowers shall from time to time promptly, upon the request of the Administrative  Agent, take such action, and execute and deliver such further documents as may be reasonably  necessary or appropriate to give effect to the provisions and intent of this Agreement.  Section 15.6 Judgment Currency  If for the purpose of obtaining judgment in any court it is necessary to convert any  amount owing or payable to the Administrative Agent or the Lenders under this Agreement from  the currency in which it is due (the “Agreed Currency”) into a particular currency (the  “Judgment Currency”), the rate of exchange applied in that conversion shall be that at which  the Administrative Agent, in accordance with its normal procedures, could purchase the Agreed  Currency with the Judgment Currency at or about noon on the Business Day immediately  preceding the date on which judgment is given.  The obligation of the Borrowers in respect of  any amount owing or payable under this Agreement to the Administrative Agent or Lenders in  the Agreed Currency shall, notwithstanding any judgment and payment in the Judgment  Currency, be satisfied only to the extent that the Administrative Agent, in accordance with its  normal procedures, could purchase the Agreed Currency with the amount of the Judgment  Currency so paid at or about noon on the next Business Day following that payment; and if the  amount of the Agreed Currency which the Administrative Agent could so purchase is less than  the amount originally due in the Agreed Currency, the Borrowers shall, as a separate obligation  and notwithstanding the  judgment or payment, indemnify the Administrative Agent and the  Lenders against any loss.  Section 15.7 Exercise of Rights, etc.  No failure to exercise, and no delay in exercising, on the part of the Administrative Agent  or any Lender, any right, remedy, power or privilege hereunder shall operate as a waiver thereof.   No single or partial exercise of any right, remedy, power or privilege shall preclude the exercise  of any other right, remedy, power or privilege.  Section 15.8 Expenses: Indemnity: Damage Waiver  (1) Costs and Expenses.  The Borrowers shall pay (a) all reasonable out-of-pocket expenses  incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges  and disbursements of counsel for the Administrative Agent, in connection with the syndication of  the credit facilities provided for herein, the preparation, negotiation, execution, delivery and  administration of this Agreement and the other Loan Documents or any amendments,  

 

 - 120 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    modifications or waivers of the provisions hereof or thereof (whether or not the transactions  contemplated hereby or thereby shall be consummated), (b) all reasonable out-of-pocket  expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or  extension of any Letter of Credit or any demand for payment thereunder and (c) all reasonable  out-of-pocket expenses incurred by the Administrative Agent, any Lender or the L/C Issuer,  including the reasonable fees, charges and disbursements of counsel, in connection with the  enforcement or protection of its rights in connection with this Agreement and the other Loan  Documents, including its rights under this Section, or in connection with the Loans made or  Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any  workout, restructuring or negotiations in respect of such Loans or Letters of Credit.  (2) Indemnification by the Borrowers.  The Borrowers shall indemnify the Administrative  Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of  any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold  each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related  expenses, including the fees, charges and disbursements of any counsel for any Indemnitee,  incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any  Obligor arising out of, in connection with, or as a result of (a) the execution or delivery of this  Agreement, any other Loan Document or any agreement or instrument contemplated hereby or  thereby, the performance or non-performance by the parties hereto of their respective obligations  hereunder or thereunder or the consummation or non-consummation of the transactions  contemplated hereby or thereby, (b) any Loan or Letter of Credit or the use or proposed use of  the proceeds therefrom (including any refusal by the L/C Issuer 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), (c) any actual or alleged presence or  release of Hazardous Materials on or from any property owned or operated by any Obligor, or  any Environmental Liability related in any way to any Obligor, or (d) 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 an Obligor and  regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not,  as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or  related expenses (x) are determined by a court of competent jurisdiction by final and non- appealable judgment to have resulted from the gross negligence or wilful misconduct of such  Indemnitee or (y) result from a claim brought by the Borrowers or any other Obligor against an  Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other  Loan Document, if the Obligor has obtained a final and nonappealable judgment in its favour on  such claim as determined by a court of competent jurisdiction, nor shall it be available in respect  of matters specifically addressed in Sections 4.10, 4.11 and 15.8(1).  (3) Reimbursement by Lenders.  To the extent that the Borrowers for any reason fails to  indefeasibly pay any amount required under Sections 15.8(1) or (2) to be paid by it to the  Administrative Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of  the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub- agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable  Percentage (determined as of the time that the applicable unreimbursed expense or indemnity  payment is sought) of such unpaid amount, provided that the unreimbursed expense or  indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by  or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its  capacity as such, or against any Related Party of any of the foregoing acting for the  

 

- 121 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity.   The obligations of the Lenders under this Section 15.8(3) are subject to the other provisions of  this Agreement concerning several liability of the Lenders.  (4) Waiver of Consequential Damages, etc.  To the fullest extent permitted by Applicable Law, the Obligors shall not assert, and hereby waive, any claim against any Indemnitee, on any theory of liability, for indirect, consequential, punitive, aggravated or exemplary damages (as opposed to direct damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby (or any breach thereof), the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby. (5) Payments.  All amounts due under this Section shall be payable promptly after demand therefor.  A certificate of the Administrative Agent or a Lender setting forth the amount or amounts owing to the Administrative Agent, Lender or a sub-agent or Related Party, as the case may be, as specified in this Section, including reasonable detail of the basis of calculation of the amount or amounts, and delivered to the Borrowers shall be conclusive absent manifest error. Section 15.9 Submission to Jurisdiction  Each Obligor irrevocably and unconditionally submits, for itself and its property, to the  nonexclusive jurisdiction of the courts of the Province of Ontario, and any appellate court from  any thereof, in any action or proceeding arising out of or relating to this Agreement or any other  Loan Document, or for recognition or enforcement of any judgment, and each of the parties  hereto irrevocably and unconditionally agrees that all claims in respect of any such action or  proceeding may be heard and determined in such court.  Each of the parties hereto agrees that a  final judgment in any such action or proceeding shall be conclusive and may be enforced in other  jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this  Agreement or in any other Loan Document shall affect any right that the Administrative Agent  or any Lender may otherwise have to bring any action or proceeding relating to this Agreement  or any other Loan Document against any Obligor or its properties in the courts of any  jurisdiction.  Section 15.10 WAIVER OF JURY TRIAL  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST  EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL  BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT  OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR  THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED  ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO  (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND 

 

- 122 - EXECUTION COPY  LEGAL_38580411.20 CREDIT AGREEMENT  THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL  WAIVERS AND CERTIFICATIONS IN THIS SECTION.  Section 15.11 Counterparts  (1) Counterparts: Integration: Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Subject to Section 15.4, this Agreement shall become effective when it has been executed by the Administrative Agent and when the Administrative Agent has received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or by sending a scanned copy by electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement. (2) Electronic Execution of Assignments.  The words “execution”, “signed”, “signature”, and words of like import in any Loan Document or in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including Parts 2 and 3 of the Personal Information Protection and Electronic Documents Act (Canada), the Electronic Commerce Act, 2000 (Ontario) and other similar federal or provincial laws based on the Uniform Electronic Commerce Act of the Uniform Law Conference of Canada or its Uniform Electronic Evidence Act, as the case may be. Section 15.12 Treatment of Certain Information: Confidentiality  (1) Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to it, its Affiliates and its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority), (c) to the extent required by Applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap, derivative, credit-linked note or similar transaction relating to the Borrowers and its obligations, (g) with the consent of the Borrowers, or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the 

 

 - 123 - EXECUTION COPY    LEGAL_38580411.20  CREDIT AGREEMENT    Administrative Agent or any Lender on a non-confidential basis from a source other than an  Obligor.  (2) For purposes of this Section, “Information” means all information received in  connection with this Agreement from any Obligor relating to any Obligor or any of its  Subsidiaries or any of their respective businesses, other than any such information that is  available to the Administrative Agent or any Lender on a non-confidential basis prior to such  receipt.  Any Person required to maintain the confidentiality of Information as provided in this  Section shall be considered to have complied with its obligation to do so if such Person has  exercised the same degree of care to maintain the confidentiality of such Information as such  Person would accord to its own confidential information.  In addition, the Administrative Agent  may disclose to any agency or organization that assigns standard identification numbers to loan  facilities such basic information describing the facilities provided hereunder as is necessary to  assign unique identifiers (and, if requested, supply a copy of this Agreement), it being  understood that the Person to whom such disclosure is made will be informed of the confidential  nature of such Information and instructed to make available to the public only such Information  as such person normally makes available in the course of its business of assigning identification  numbers.  (3) In addition, and notwithstanding anything herein to the contrary, Administrative Agent  may provide to the Loan Pricing Corporation and/or other recognized trade publishers  information concerning Borrowers and the Credit Facilities of the nature customarily provided to  the Loan Pricing Corporation and/or other recognized trade publishers of such information for  general circulation in the loan market.  (4) With the prior written consent of Master Borrower, Administrative Agent and the  Lenders may reproduce, disclose and use customary information about Borrowers (including,  without limitation, Borrowers’ name and any identifying logos) and the transactions herein  contemplated to enable Administrative Agent and/or the Lenders to publish promotional  “tombstones” and other forms of notices of the transactions contemplated herein in a manner and  in media (including, without limitation, brochures and posting by Administrative Agent and the  Lenders on their websites) as consented to by Master Borrower.  [SIGNATURE PAGES FOLLOW]  

 

EXECUTION COPY  CREDIT AGREEMENT  THE BANK OF NOVA SCOTIA,  as Administrative Agent  By:  Name:  Title:  By:  Name:  Title:  Clement Yu Director Venita Ramjattan Associate 

 

EXECUTION COPY  CREDIT AGREEMENT  THE BANK OF NOVA SCOTIA,  as a Lender and as L/C Issuer By:  Name:  Title:  By:  Name:  Title:  David Comeau Director, National Accounts Laura Gimena Director 

 

EXECUTION COPY  CREDIT AGREEMENT  BANK OF MONTREAL, as a Lender By:  Name:  Title:  By:  Name:  Title:  

 

 

 

EXECUTION COPY  CREDIT AGREEMENT  THE TORONTO-DOMINION  BANK, as a Lender By:  Name:  Title:  By:  Name:  Title:  Richard Klump   Director, Strategic Accounts, TD Auto Finance   Mike Bernard Manager Commercial Credit, TD Auto Finance 

 

EXECUTION COPY  CREDIT AGREEMENT  BMW GROUP FINANCIAL  SERVICES, a division of BMW  CANADA INC., as a Lender By:  Name:  Title:  By:  Name:  Title:  Jim Janson Director, Sales and Marketing Michael Schroeder Chief Financial Officer 

 

EXECUTION COPY  CREDIT AGREEMENT  VW CREDIT CANADA, INC. , as a  Lender By:  Name:  Title:  By:  Name:  Title:  DocuSign Envelope ID: 07CCC2EA-5392-4925-BBCB-158846ECD4FE 6/1/2022 John Shapardanov Senior Director, Sales & Marketing Manager, Commercial Credit & Risk Karl-Étienne Piché 

 

 

 

 

 

 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(1) - 1 CREDIT AGREEMENT  Schedule 1.1(1) – Accordion Agreement  Reference is made to the credit agreement made as of June 3, 2022 between, inter  alios, Lithia Master LP Company, LP together with certain of its subsidiaries, as borrowers,  The  Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to time,  (as amended, restated, supplemented, replaced and otherwise modified from time to time, the  “Credit Agreement”). Capitalized terms used but not otherwise defined herein shall have the  respective meanings assigned in the Credit Agreement.   RECITALS:  Pursuant to Section 2.6 of the Credit Agreement, the Borrowers wish to designate  the Accordion Lender defined below as a Lender under the Credit Agreement.  NOW, THEREFORE, for good and valuable consideration, the receipt and  sufficiency of which are acknowledged, the Borrowers, the Lenders, the Administrative Agent and  [●] (the “Accordion Lender”), hereby agree as follows: 1. The Credit Agreement shall, henceforth from the date of the execution and delivery of this Accordion Agreement, be read and construed as if the Accordion Lender were party to the Credit Agreement having all the rights and obligations of a Lender under the Credit Agreement having the [Commitment/Applicable Percentage of the [Revolving /Wholesale Flooring/Used Vehicle Flooring/Wholesale Leasing/Daily Rental] Facility Limit] set out in paragraph 2 below.  Accordingly all references in any Credit Documents to (a) any “Lender” shall be treated as including a reference to the Accordion Lender and (b) the Credit Agreement shall be treated as a reference to the Credit Agreement as supplemented by this Accordion Agreement to the intent that this Accordion Agreement and the Credit Agreement shall be read and construed together as one single agreement. 2. [The Commitment with respect to of the Accordion Lender shall be $[●] and Schedule 1.1(43) of the Credit Agreement shall be deemed to be amended accordingly. OR The Applicable Percentage of the [Commitment/Applicable Percentage of the [Revolving /Wholesale  Flooring/Used Vehicle Flooring/Wholesale Leasing/Daily Rental] Facility Limit]  with respect to the Accordion Lender shall be [●]% and the related principal amount of the [Commitment/Applicable Percentage of the [Revolving /Wholesale  Flooring/Used Vehicle Flooring/Wholesale Leasing/Daily Rental] Facility Limit] of the Accordion Lender shall be $[●], and Schedule 1.1(43) of the Credit Agreement shall be deemed to be amended accordingly.] 3. The Accordion Lender represents and warrants to each of the other parties to the Credit Agreement that it has been provided with a copy of the Credit Agreement. 4. The Accordion Lender irrevocably authorizes and directs the Administrative Agent, as its attorney and agent, with full power of substitution and delegation, to complete, execute and deliver on behalf of the Accordion Lender each Loan Document to be executed by it or on its behalf and each agreement, document and instrument to be executed by it or on 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(1) - 2 CREDIT AGREEMENT  its behalf pursuant to each Loan Document, and to take such action on its behalf as may be  authorized or directed pursuant to any such Loan Document.  5. This Accordion Agreement may be executed  or executed electronically in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument.  Transmission of an executed signature page of this Accordion Agreement by facsimile transmission or by e-mail in pdf format shall be as effective as delivery of a manually executed counterpart hereof. 6. This Accordion Agreement shall be governed by, and interpreted in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein. IN WITNESS WHEREOF, the parties hereto have caused this Accordion  Agreement to be executed and delivered by their respective officers thereunto duly authorized as  of the _____________ day of _______________________, ________.  LITHIA MASTER GP COMPANY, INC., IN  ITS OWN CAPACITY AND AS GENERAL  PARTNER OF LITHIA MASTER LP  COMPANY, LP  By:  Name: ● Title: ● [INSERT NAMES OF OTHER  BORROWERS]  By:  Name: ● Title: ● THE BANK OF NOVA SCOTIA,  as Administrative Agent  By:  Name: ● Title: ● [LENDERS]  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(1) - 3 CREDIT AGREEMENT  By:  Name: ● Title: ● [ACCORDION LENDER]  By:   Name: ● Title: ● 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(14) - 1 CREDIT AGREEMENT  Schedule 1.1(14) – Applicable Percentage  Facility  The Bank of  Nova Scotia  Bank of  Montreal  Royal Bank of  Canada  The Toronto- Dominion Bank  BMW Group  Financial Services,  a division of BMW  Canada Inc.   VW Credit  Canada, Inc.  Revolving  Facility  <*> <*> <*> <*> <*> <*> Wholesale  Flooring  Facility  <*> <*> <*> <*> <*> <*> Used Vehicle  Flooring  Facility   <*> <*> <*> <*> <*> <*> Wholesale  Leasing  Facility  <*> <*> <*> <*> <*> <*> 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(14) - 2 CREDIT AGREEMENT  Daily Rental  Facility  <*> <*> <*> <*> <*> <*>  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(16) - 1 CREDIT AGREEMENT  Schedule 1.1(16) – Assignment and Assumption  This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the  Effective Date set forth below and is entered into by and among [Insert name of Assignor] (the  “Assignor”), [Insert name of Assignee] (the “Assignee”) and Lithia Master LP Company, LP  (the “Master Borrower”)2.  Capitalized terms used but not defined herein shall have the meanings  given to them in the Credit Agreement (as defined below), receipt of a copy of which is hereby  acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1  attached hereto are hereby agreed to and incorporated herein by reference and made a part of this  Assignment and Assumption as if set forth herein in full.  For an agreed consideration, the Assignor hereby irrevocably sells and assigns to  the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor,  subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement,  as of the Effective Date inserted by the Administrative Agent as contemplated below (a) all of  the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and  any other documents or instruments delivered pursuant thereto to the extent related to the amount  and percentage interest identified below of all of such outstanding rights and obligations of the  Assignor under the respective facilities identified below (including without limitation any letters  of credit and guarantees included in such facilities) and (b) to the extent permitted to be assigned  under Applicable Law, all claims, suits, causes of action and any other right of the Assignor (in  its capacity as a Lender) against any Person, whether known or unknown, arising under or in  connection with the Credit Agreement, any other documents or instruments delivered pursuant  thereto or the loan-transactions governed thereby or in any way based on or related to any of the  foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory  claims and all other claims at law or in equity related to the rights and obligations sold and  assigned pursuant to clause (a) above (the rights and obligations sold and assigned pursuant to  clauses (a) and (b) above being referred to herein collectively as, the “Assigned Interest”).  Such  sale and assignment is without recourse to the Assignor and, except as expressly provided in this  Assignment and Assumption, without representation or warranty by the Assignor.  1. Assignor: 2. Assignee: [and is an Affiliate/Approved Fund of [identify  Lender]3]  3. Borrowers(s): 4. Administrative Agent: The Bank of Nova Scotia, as the administrative agent  under the Credit Agreement  5. Credit Agreement: Credit agreement dated as of June 3, 2022 among, inter  alios, Lithia Master LP Company, LP and the other entities  party thereto, as borrowers, The Bank of Nova Scotia, as  2 Master Borrower to be included as party if consent required  3  Select as applicable.  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(16) - 2 CREDIT AGREEMENT  Administrative Agent, and the other financial institutions  parties thereto, as Lenders (as further amended from time  to time, the “Credit Agreement”)  6. Assigned Interest: Facilities  Assigned  Aggregate Amount of  Commitment/Loans  for all Lenders4  Amount of  Commitment/Loans  Assigned3  Percentage Assigned  of  Commitment/Loans5  CUSIP Number  (if appl  $ $ %  $ $ %  $ $ %  7. Trade Date: ]6  [INTENTIONALLY LEFT BLANK]  4  Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective  Date.  5  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.  6  To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(16) - 3 CREDIT AGREEMENT  Effective Date:     , 20  [TO BE INSERTED BY  ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF  RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]  The terms set forth in this Assignment and Assumption are hereby agreed to:  ASSIGNOR  [NAME OF ASSIGNOR]  By:  Name:  Title:  ASSIGNEE  [NAME OF ASSIGNEE]  By:  Name:  Title:  [Consented to and] Accepted:  THE BANK OF NOVA SCOTIA,  as Administrative Agent  By:  Name:  Title:  LITHIA MASTER GP COMPANY, INC., in  its capacity and as general partner of  LITHIA MASTER LP COMPANY, LP  as Master Borrower  By:  Name:  Title:  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(16) - 4 CREDIT AGREEMENT  ANNEX 1 to Assignment and Assumption  [   ]7  STANDARD TERMS AND CONDITIONS FOR  ASSIGNMENT AND ASSUMPTION  1. Representations and Warranties. (a) Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrowers, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document. (b) Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, and (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 10.4(2), Section 10.4(3) and Section 10.4(4) thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in  respect of the Assigned Interest (including payments of principal, interest, fees and other  amounts) to the Assignee whether such amounts have accrued prior to, on or after the Effective  Date.  The Assignor and the Assignee shall make all appropriate adjustments in payments by the  7  Describe Credit Agreement at option of Administrative Agent.  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(16) - 5 CREDIT AGREEMENT  Administrative Agent for periods prior to the Effective Date or with respect to the making of this  assignment directly between themselves.  3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the  parties hereto and their respective successors and permitted assigns.  This Assignment and  Assumption may be executed in any number of counterparts, which together shall constitute one  instrument.  Delivery of an executed counterpart of a signature page of this Assignment and  Assumption by telecopy or by sending a scanned copy by electronic mail shall be effective as  delivery of a manually executed counterpart of this Assignment and Assumption.  This  Assignment and Assumption shall be governed by, and construed in accordance with, the law  governing the Credit Agreement.  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(24) - 1 CREDIT AGREEMENT  Schedule 1.1(24) – Branch of Account  Lender  The Bank of Nova Scotia  Bank of Montreal  Royal Bank of Canada  The Toronto-Dominion Bank  Branch of Account  <*> <*> <*> <*> 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(24) - 2 CREDIT AGREEMENT  BMW Group Financial Services, a  division of BMW Canada Inc.  VW Credit Canada, Inc.  <*> <*> 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(43) - 1 CREDIT AGREEMENT  Schedule 1.1(43) – Commitments  Facility  The Bank of  Nova Scotia  Bank of  Montreal  Royal Bank of  Canada  The Toronto- Dominion  Bank  BMW Group  Financial  Services, a  division of  BMW Canada  Inc.   VW Credit  Canada, Inc.  Total  Revolving  Facility  <*> <*> <*> <*> <*> <*> $100,000,000.00  Wholesale  Flooring  Facility  <*> <*> <*> <*> <*> <*> $500,000,000.00  Used  Vehicle  Flooring  Facility  <*> <*> <*> <*> <*> <*> $100,000,000.00  Wholesale  Leasing  Facility  <*> <*> <*> <*> <*> <*> $400,000,000.00  Daily Rental  Facility  <*> <*> <*> <*> <*> <*> $25,000,000.00  Total $1,125,000,000.00  

 

EXECUTION COPY  Schedule 1.1(46) – Compliance Certificate  Date:  The Bank of Nova Scotia, as Administrative Agent  <*> Attention:    E-mail:      Head, Agency Services           <*> Dear Sirs/Mesdames:  Re: Lithia Master LP Company, LP  [Fiscal Quarter/Fiscal Year] ended _________________.  I, ________________________, in my capacity as ____________________________ of  Lithia Master GP Company, Inc., the General Partner of Lithia Master LP Company, LP  (“Master Borrower”), hereby certify on behalf of the Obligors and without personal liability  that:  1. I am familiar with and have examined the provisions of the credit agreement made as of June 3, 2022 between, inter alios, Master Borrower. together with certain of its subsidiaries, as borrowers, The Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to time, (as amended, restated, supplemented, replaced and otherwise modified from time to time, the “Credit Agreement”) and have made such reasonable investigations of corporate records and reasonable inquiries of other officers and senior personnel of the Obligors as are sufficient to enable me to make an informed statement herein.  Capitalized terms used and not defined in this certificate shall have the meanings given to them in the Credit Agreement and all section references, unless stated otherwise, shall be references to sections of the Credit Agreement. 2. Based on the foregoing: (a) the representations and warranties of the Obligors set forth in the Credit Agreement, other than those expressly stated to be made as of a specific date, are true and correct as of the date hereof with the same effect as if such representations and warranties had been made on and as of the date hereof (except 

 

EXECUTION COPY  to the extent of any breach of representation and warranty that constitutes a  Default or Event of Default, a description of which is attached hereto);8  (b) no Default or Event of Default has occurred and is continuing on the date hereof [NTD: if there exists a Default or Event of Default, the officer shall set forth with reasonable detail the circumstances and the steps taken or proposed to be taken to cure or remedy the Default or Event of Default]; and (c) the covenants contained in the Credit Agreement have not been breached and I am not aware of any financial or other information which leads me to believe that any of such covenants will be breached during the next Fiscal Quarter of the Borrowers. FINANCIAL COVENANTS (Section 10.3)  3. As of the end of the Fiscal Quarter ended  (last day of  most recently ended Fiscal Quarter) the Fixed Charge Coverage Ratio is  __ : _ .  4. For the Fiscal Quarter period ended _________________(last day of most recently ended Fiscal Quarter): (a) Lease Adjusted Funded Debt is $_______________________  (b) EBITDAR is    $_______________________  The Leverage Ratio (i.e., (a) to (b)), was _______:_______.  5. Schedule “A” attached hereto sets forth financial data and computations evidencing the Obligor’s compliance with the covenants set out in paragraphs 3 and 4 this certificate, all of which data and computations are true, correct and complete. LITHIA MASTER GP COMPANY,  INC., in its capacity and as general  partner of LITHIA MASTER LP  COMPANY, LP  as Master Borrower  By:   Name:  Title:  8 Please attach replacement schedules hereto to the extent the representations and warranties are no longer true and correct.  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(59) - 1 CREDIT AGREEMENT  Schedule 1.1(59) – Daily Rental Borrowing Base Certificate  Date:  The Bank of Nova Scotia, as Administrative Agent  <*>  Attention:         E-mail: Head, Agency Services  <*> Dear Sirs/Mesdames:  Re: Lithia Master LP Company, LP  [Month] ended _________________.  I, ________________________, in my capacity as ____________________________ of  Lithia Master GP Company, Inc., the General Partner of Lithia Master LP Company, LP  (“Master Borrower”), hereby certify on behalf of Daily Rental Borrower and without personal  liability that:  1. I am familiar with and have examined the provisions of the credit agreement made as of June [3], 2022 between, inter alios, Master Borrower. together with certain of its subsidiaries, as borrowers, The Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to time, (as amended, restated, supplemented, replaced and otherwise modified from time to time, the “Credit Agreement”) and have made such reasonable investigations of corporate records and reasonable inquiries of other officers and senior personnel of the Obligors as are sufficient to enable me to make an informed statement herein.  Capitalized terms used and not defined in this certificate shall have the meanings given to them in the Credit Agreement and all section references, unless stated otherwise, shall be references to sections of the Credit Agreement. 2. The Daily Rental Borrowing Base is:$____________________. 3. The Master Borrower hereby represents and warrants that this Certificate presents fairly the Daily Rental Borrowing Base Base and the amounts set forth herein are in compliance with the provisions of the Credit Agreement. 4. As of the date of hereof the Master Borrower confirms that: (i) no Default or Event of Default has occurred that is continuing and (ii) the representations and warranties set out in Article 9 of the Credit Agreement are true and correct. 5. Schedule “A” attached hereto is the Daily Rental Lease Management Report. All of the data and computations contained in the Daily Rental Lease Management Report are true, correct and complete. LITHIA MASTER GP COMPANY,  INC., in its capacity and as general  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(59) - 2 CREDIT AGREEMENT  partner of LITHIA MASTER LP  COMPANY, LP  as Master Borrower  By:   Name:  Title:  

 

  EXECUTION COPY    LEGAL_38580411.20 1.1(126) - 1 CREDIT AGREEMENT    Schedule 1.1(126) – Joinder Agreement  BORROWER JOINDER AGREEMENT  This Borrower Joinder Agreement (“Agreement”) dated as of _______________,  202___, is entered into by and among Lithia Master LP Company, LP (the “Master Borrower”  and together with certain of its subsidiaries party to the Credit Agreement (as defined below) as  borrowers, collectively, the “Borrowers” and each a “Borrower”), by its general partner Lithia  Master GP Company, Inc. (together with the other parties to the Credit Agreement in their  capacity as general partners of the applicable Borrower, collectively, the “General Partners”)  for the Master Borrower and on behalf of the other Borrowers and applicable General Partners,  [NEW BORROWER], a [TYPE OF ENTITY] with its [chief executive office] located in the  Province of [JURISDICTION OF ORGANIZATION] (“New Borrower”), [NEW GENERAL  PARTNER], the general partner of New Borrower, a [TYPE OF ENTITY] with its [chief  executive office] located in the Province of [JURISDICTION OF ORGANIZATION] (“New  General Partner”) and The Bank of Nova Scotia, as agent (in such capacity, the “Agent”) for  the Lenders (as defined below), who are parties to the Credit Agreement.  RECITALS  A. The Borrowers, by their respective General Partners, the financial institutions  which are from time to time parties thereto (collectively, the  “Lenders” and each a “Lender”)  and the Agent, have entered into a Credit Agreement dated as of June 3, 2022 (as same may be  amended, modified, supplemented or extended from time to time and any number of substitutions,  renewals, restatements and replacements thereof or therefor, the “Credit Agreement”), pursuant  to which the Lenders may extend credit to the Revolving Borrowers, the Wholesale Flooring  Borrowers, the Used Vehicle Flooring Borrower, Wholesale Leasing Borrower and the Daily  Rental Borrower from time to time.  B. The Borrowers have executed (i) an omnibus general security agreement (the  “Security Agreement”) creating a security interest in all of the personal property, assets and  undertaking of each of the Borrowers in favour of the Agent for and on behalf of the Lenders,  subject only to Permitted Liens, (ii) an omnibus assignment of insurance (the “Assignment”)  transferring and assigning to the Agent for and on behalf of the Lenders each of the Assignors’ (as  defined therein) interests as insureds in any and all policies of insurance with respect to the  Collateral, and (iii) an omnibus unlimited guarantee and postponement of claim (the “Guarantee”)  guaranteeing the due payment and performance to the Agent for and on behalf of the Lenders of  all Obligations of the other Borrowers, each dated as of June 3, 2022.  C. It is a condition of the Credit Agreement that New Borrower grant a first priority  Lien (subject to Permitted Liens) in all of the personal property, assets and undertaking of such  New Borrower, assign and transfer its interests as insured in any and all policies of insurance, and  guarantee the Obligations of each other Borrower to the Agent and the Lenders.  D. New Borrower also wishes to become a Borrower under the Credit Agreement  under the [Revolving Facility, the Wholesale Flooring Facility, the Used Vehicle Flooring Facility,  Wholesale Leasing Facility and the Daily Rental Facility].  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(126) - 2 CREDIT AGREEMENT  E. It is a condition of the Credit Agreement that New General Partner become a Borrower under the Credit Agreement.  For valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, New Borrower and New General Partner agree as follows:  1. Joinder. New Borrower agrees that (a) it shall be a “Designated Subsidiary”, [“Daily Rental Borrower”,] [“Used Vehicle Flooring Borrower”,] [“Wholesale Flooring  Borrower”,] [“Wholesale Leasing Borrower”,] [“Revolving Borrower”,] “Borrower” and  “Obligor”, (each as defined in the Credit Agreement and the other Loan Documents), shall be a  “Debtor” (as defined in the Security Agreement), shall be an “Assignor” (as defined in the  Assignment), and shall be a “Guarantor” (as defined in the Guarantee); and (b) all references to  “Designated Subsidiary”, [“Daily Rental Borrower”,] [“Used Vehicle Flooring Borrower”,]  [“Wholesale Flooring Borrower”,] [“Wholesale Leasing Borrower”,] [“Revolving Borrower”,]  “Borrower”, “Guarantor”, “Debtor”, “Assignor” and “Obligor” in the Credit Agreement, Security  Documents, Assignment, Guarantee and other Loan Documents shall be deemed to, and are hereby  amended to, include and refer to New Borrower (as well as the other Persons to which the  applicable term refers) from and after the date hereof. New Borrower hereby consents and agrees  to all of the terms of the Credit Agreement and the other Loan Documents to which it is a party,  and by execution of this Agreement hereby agrees that from and after the date hereof it shall be a  party to and shall be bound by and liable for, each and all of the terms, restrictions, obligations,  covenants and conditions of the Credit Agreement, Guarantee, Security Agreement, Assignment  and the other Loan Documents which are applicable to a Designated Subsidiary, [“Daily Rental  Borrower”,] [“Used Vehicle Flooring Borrower”,] [“Wholesale Flooring Borrower”,] [“Wholesale  Leasing Borrower”,] [“Revolving Borrower”,] “Borrower”, “Guarantor”, “Debtor”, “Assignor”  and “Obligor”.  New General Partner acknowledges and agrees that it is a  “General Partner” under the  Credit Agreement and agrees to be bound by the Credit Agreement as if it had been an original  signatory thereto, effective as of the date hereof.  All references in the Credit Agreement and the  other Loan Documents to the term “General Partner” or “General Partners” shall be deemed to  include New General Partner.  Without limiting the generality of the foregoing, New General  Partner hereby repeats and reaffirms all covenants, agreements, representations and warranties of  the General Partners contained in the Credit Agreement and the Loan Documents to which it is a  party, in its own capacity.  2. Other Agreements. Without limiting the foregoing, New Borrower hereby: (a) assigns, pledges, and grants to Agent for its own benefit and the benefit of the Lenders, a security interest in all of its right, title, and interest in and to the Collateral (as defined in and in accordance with the Credit Agreement and Security Agreement) as security for all Obligations (as such term is defined in the Security Agreement); (b) guarantees and promises (jointly and severally with the other Guarantors) the prompt payment and performance to Agent and the Lenders, all Obligations of the other Borrowers to Agent and the Lenders in accordance with the Guarantee, (c) assigns, transfers to the Agent for its own benefit and the benefit of the Lenders, all of its interests as insured under any and all policies of insurance with respect to the Collateral), and (d) agrees that it shall be jointly and severally liable with the other Borrowers for payment and performance of all obligations of a Borrower under the Credit Agreement and the other Loan Documents to which it is a party. 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(126) - 3 CREDIT AGREEMENT  3. Representations and Warranties. Each of New Borrower and New General Partner represents and warrants to Agent and the Lenders that the execution, delivery and  performance by it of this Agreement, the Security Documents and the other Loan Documents to  which it is a party (a) are within its powers, (b) have been duly authorized by all necessary or  proper corporate, shareholder or other action, (c) do not conflict with, result in a breach or violation  of, or constitute a default under, its constating documents, any unanimous shareholders’ agreement  applicable to it or any Applicable Law, (d) do not conflict with or result in the breach or termination  of, constitute a default under, or accelerate any performance required by any Material Contract, in  each case, to the extent that such conflict, breach, termination, default or termination would  reasonably be expected to have a Material Adverse Effect, and (e) do not and will not result in the  creation of any Lien, except as set out in the Security Documents, upon any of its assets or  properties under any Material Contract.  4. Counterparts. This Agreement may be executed in any number of counterparts and by electronic delivery and by different parties and separate counterparts, each of which when  so executed shall be deemed to be an original and all of which taken together shall constitute one  and the same instrument.  Each party agrees that the electronic signatures, whether digital or  encrypted, of the parties included in this Agreement are intended to authenticate this writing and  to have the same force and effect as manual signatures. Electronic signature means any electronic  symbol or process attached to this Agreement and adopted by a party with the intent to sign this  Agreement, including facsimile or email electronic signatures. Delivery of an executed counterpart  of a signature page of this Agreement by facsimile or by sending a scanned copy by electronic  mail shall be effective as delivery of a manually executed counterpart of this Agreement.  5. Definitions and Other Interpretive Provisions. Except as otherwise defined herein, capitalized terms used herein which are defined in the Credit Agreement shall have the  meanings given to such terms therein.  [NEW BORROWER]  a [JURISDICTION] [TYPE OF  ENTITY]  [NEW GENERAL PARTNER]  a [JURISDICTION] [TYPE OF ENTITY]  By: By:  Name: Tina Miller Name: Tina Miller  Title: Authorized Agent Title: Chief Financial Officer  THE BANK OF NOVA SCOTIA,  as Administrative Agent  LITHIA MASTER GP COMPANY,  INC., an Alberta Corporation, as general  partner of LITHIA MASTER LP  COMPANY, LP  By: By:  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(126) - 4 CREDIT AGREEMENT  Name: Name:  Title: Title:  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(126) - 5 CREDIT AGREEMENT  Schedule 1.1(163) – Officer’s Certificate  OFFICER'S CERTIFICATE  (Permitted Debt - Section 10.2(3)/Permitted Distributions - Section 10.2(4)/ Permitted  Investments – Section 10.2(10)/Mandatory Prepayment (Insurance Proceeds) – Section  5.5/Permitted Dispositions – Section 10.2(1)/Permitted Expenditures – Section 10.2(11) /  Permitted Reorganization – Section 10.2(2))  [DATE]  I, ______________ , hereby certify that I am the duly appointed ________________________ of  LITHIA MASTER GP COMPANY, INC., an Alberta corporation and the General Partner of  LITHIA MASTER LP COMPANY, LP, an Alberta limited partnership (“Master Borrower”).  Capitalized terms used herein but not defined herein shall have the meanings given to them in the  Credit Agreement made as of June 3, 2022 (as amended, restated, supplemented or otherwise  modified from time to time, the “Credit Agreement”) among, inter alios, Master Borrower,  certain Subsidiaries of Master Borrower, The Bank of Nova Scotia, as Administrative Agent  for the Lenders, and the other parties thereto.  Pursuant to Section ● of the Credit Agreement, I further certify on behalf of Master Borrower  to Administrative Agent as follows:  1. [Insert description of Event]. 2. Each of the following conditions have been or will be satisfied as of the date of the [Event] (the “Event”): a. Master Borrower will be in compliance with the Financial Covenants  in the Credit Agreement both before and after giving effect to the Event. b. The Board of Directors (or other Persons exercising similar functions) of each of the sellers has not disapproved the transaction or recommended that such transaction be disapproved. [NTD: Permitted Acquisition Only] c. All representations and warranties in the Credit Agreement will be true and correct as of the date of the Event and no Default or Event of Default will have occurred and be continuing or will exist after giving effect to the Event. [Remainder of this page intentionally left blank; Signature page follows.]  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(163) - 1 CREDIT AGREEMENT  IN WITNESS WHEREOF, the undersigned has executed this Officer' s Certificate as of the  date first set forth above.  LITHIA MASTER GP COMPANY,  INC., in its capacity and as general  partner of LITHIA MASTER LP  COMPANY, LP  as Master Borrower  By:   Name:  Title:  

 

EXECUTION COPY  Schedule 1.1(186) – Revolving Borrowers  1. Lithia Master LP Company, LP. 2. Autoworks Markham, LP 3. Autoworks Woodbridge, LP 4. Canada-MC, LP 5. Guelph-S, LP 6. Lithia Canada Leasing, LP 7. Markham-B, LP 8. Markham-P, LP 9. Mississauga-B, LP 10. Motus Car Rental, LP 11. Newmarket-A, LP 12. Newmarket-V, LP 13. Richmond Hill-H, LP 14. Thornhill-H, LP 15. Vancouver-MP, LP 16. Vaughan-A, LP 17. Vaughan-P, LP 18. Vaughan-S, LP 19. Woodbridge-MC, LP 20. Woodbridge-PA, LP 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(188) - 1 CREDIT AGREEMENT  Schedule 1.1(188) – Revolving Borrowing Base Certificate  Date:  The Bank of Nova Scotia, as Administrative  Agent <*> Attention:         E-mail: Head, Agency Services <*> Dear Sirs/Mesdames:  Re: Lithia Master LP Company, LP  [Month] ended _________________.  I, ________________________, in my capacity as ____________________________ of  Lithia Master GP Company, Inc., the General Partner of Lithia Master LP Company, LP  (“Master Borrower”), hereby certify on behalf of the Revolving Borrowers and without  personal liability that:  1. I am familiar with and have examined the provisions of the credit agreement made as of June 3, 2022 between, inter alios, Master Borrower, together with certain of its subsidiaries, as borrowers,  The Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to time, (as amended, restated, supplemented, replaced and otherwise modified from time to time, the “Credit Agreement”) and have made such reasonable investigations of corporate records and reasonable inquiries of other officers and senior personnel of the Obligors as are sufficient to enable me to make an informed statement herein.  Capitalized terms used and not defined in this certificate shall have the meanings given to them in the Credit Agreement and all section references, unless stated otherwise, shall be references to sections of the Credit Agreement. 2. The following calculations as presented in the attached Exhibit “A” determine the Revolving Borrowing Base in accordance with the relevant definitions as set forth in the Credit Agreement and the other Loan Documents. 3. The Master Borrower hereby represents and warrants that this Certificate presents fairly the Revolving Borrowing Base and the amounts set forth herein are in compliance with the provisions of the Credit Agreement. 4. As of the date of hereof the Master Borrower confirms that: (i) no Default or Event of Default has occurred that is continuing and (ii) the representations and warranties set out in Article 9 of the Credit Agreement are true and correct. LITHIA MASTER GP COMPANY,  INC., in its capacity and as general  partner of LITHIA MASTER LP  

 

EXECUTION COPY  LEGAL_38580411.20 1.1(188) - 2 CREDIT AGREEMENT  COMPANY, LP  as Master Borrower  By:   Name:  Title:  

 

A. USED VEHICLE FLOORING BORROWING BASE ($100,000,000) 1 Total Used Inventory 2310 USED VEHICLE INVENTORY Less: 26100-RENTAL VEHICLES (New vehicles and Motus) F26081 - DEPR - SRV LOANER 2 Less: Vehicle Lien Payoffs  30100 - VEHICLE LIEN PAYOFF 30101-OFFSET VEHICLE LIEN PAYOFF 3 Less: Used Vehicles > 180 days old 4 Borrowing Base (Lines 1-2-3) 85% B Used Vehicle Flooring Facility Limit C Outstanding Used Vehicle Floorplan Loans and Used Vehicle Swingline Line Loans D Remaining Availability (Lesser of A4 or B, minus C) REVOLVING BORROWING BASE ($100,000,000)  A Canadian $25,000,000 non-formula unmargined amount 25,000,000    B Contracts-in-Transit (under 15 days) 1 Contracts in transit (CIT) 205 Contracts in Transit 2100 Vehicle Receivables 2 Less:  Contracts in transit > 15 days old 3 Net Eligible Contracts in Transit 100% C Eligible Parts and Service Accounts Receivables 1 Receivables for Parts and Accessories 2103 Customer Receivables Less: 24600-SUBLET REPAIRS SRV Less: 24610-SUBLET REPAIRS B/S Less: 24700-WORK IN PROCESS SRV Less: 24710-WORK IN PROCESS DET Less: 24720 - WORK IN PROCESS B/S 2 Less:  Receivables > 90 days and interco 3 Net Receivables for Parts and Accessories 80% D Eligible New Vehicles 100% E New Vehicle Inventory  HST Total Eligible New Vehicle Inventory  Used Vehicle Flooring Borrowing Base (Line 4 from USED VEHICLE FLOORING  BORROWING BASE above) F Real Property 1 Value of Eligible Real Property -  75% G Eligible Parts and Accessories Inventory 1 2 3 Parts and Accessories Inventory  Less:  payables to the manufacturers and financiers  Net Parts and Accessory Inventory 65% H Eligible Equipment 1 Office Equipment at Cost 2 Less:  Office Equipment accumulated depreciation 3 Service and Parts Equipment at Cost 4 Less:  Service and Parts Equipment accumulated depreciation 5 Net Equipment 40% I Deductions 1 Outstanding Wholesale Flooring Loans (including non-Motus S/L) and Wholesale Flooring Swing Line Loans Flooring Notes Payable  Less: aggregate amount held in Bulk Prepayment 2 Outstanding Used Vehicle Flooring Loans and Used Vehicle Flooring Swing Line Loans   3 Total Deductions J Borrowing Base (margined value of lines A+B3+C3+D+E+F1+G3+H5 minus I3)  K Revolving Limit L Outstanding Letters of Credit M Outstanding Balance on Revolver N Remaining Availability (Lesser of J or K, minus L+M) EXHIBIT A Lithia Master LP Company, LP Borrowing Base Calculation: Used Vehicle Flooring Facility and Revolving Facility As of __/__/__ 100,000,000 100%    100,000,000 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(215) - 1 CREDIT AGREEMENT  Schedule 1.1(215) – Used Vehicle Flooring Borrowing Base Certificate  Date:  The Bank of Nova Scotia, as Administrative Agent  <*>  Attention:         E-mail: Head, Agency Services <*> Dear Sirs/Mesdames:  Re: Lithia Master LP Company, LP  [Month] ended _________________.  I, ________________________, in my capacity as ____________________________ of  Lithia Master GP Company, Inc., the General Partner of Lithia Master LP Company, LP  (“Master Borrower”), hereby certify on behalf of the Used Vehicle Flooring Borrower and  without personal liability that::  1. I am familiar with and have examined the provisions of the credit agreement made as of June 3, 2022 between, inter alios, Master Borrower. together with certain of its subsidiaries, as borrowers, The Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to time, (as amended, restated, supplemented, replaced and otherwise modified from time to time, the “Credit Agreement”) and have made such reasonable investigations of corporate records and reasonable inquiries of other officers and senior personnel of the Obligors as are sufficient to enable me to make an informed statement herein.  Capitalized terms used and not defined in this certificate shall have the meanings given to them in the Credit Agreement and all section references, unless stated otherwise, shall be references to sections of the Credit Agreement. 2. The Used Vehicle Flooring Borrowing Base is:$____________________. 3. The Master Borrower hereby represents and warrants that this Certificate presents fairly the Used Vehicle Flooring Borrowing Base and the amounts set forth herein are in compliance with the provisions of the Credit Agreement. 4. As of the date of hereof the Master Borrower confirms that: (i) no Default or Event of Default has occurred that is continuing and (ii) the representations and warranties set out in Article 9 of the Credit Agreement are true and correct. 5. Schedule “A” attached hereto sets forth financial data and computations evidencing the Obligor’s compliance with the covenants set out in paragraph 2 of this certificate, all of which data and computations are true, correct and complete. 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(215) - 2 CREDIT AGREEMENT  LITHIA MASTER GP COMPANY,  INC., in its capacity and as general  partner of LITHIA MASTER LP  COMPANY, LP  as Master Borrower  By:   Name:  Title:  

 

A. USED VEHICLE FLOORING BORROWING BASE ($100,000,000) 1 Total Used Inventory 2310 USED VEHICLE INVENTORY Less: 26100-RENTAL VEHICLES (New vehicles and Motus) F26081 - DEPR - SRV LOANER 2 Less: Vehicle Lien Payoffs  30100 - VEHICLE LIEN PAYOFF 30101-OFFSET VEHICLE LIEN PAYOFF 3 Less: Used Vehicles > 180 days old 4 Borrowing Base (Lines 1-2-3) 85% B Used Vehicle Flooring Facility Limit C Outstanding Used Vehicle Floorplan Loans and Used Vehicle Swingline Line Loans D Remaining Availability (Lesser of A4 or B, minus C) REVOLVING BORROWING BASE ($100,000,000)  A Canadian $25,000,000 non-formula unmargined amount 25,000,000    B Contracts-in-Transit (under 15 days) 1 Contracts in transit (CIT) 205 Contracts in Transit 2100 Vehicle Receivables 2 Less:  Contracts in transit > 15 days old 3 Net Eligible Contracts in Transit 100% C Eligible Parts and Service Accounts Receivables 1 Receivables for Parts and Accessories 2103 Customer Receivables Less: 24600-SUBLET REPAIRS SRV Less: 24610-SUBLET REPAIRS B/S Less: 24700-WORK IN PROCESS SRV Less: 24710-WORK IN PROCESS DET Less: 24720 - WORK IN PROCESS B/S 2 Less:  Receivables > 90 days and interco 3 Net Receivables for Parts and Accessories 80% D Eligible New Vehicles 100% E New Vehicle Inventory  HST Total Eligible New Vehicle Inventory  Used Vehicle Flooring Borrowing Base (Line 4 from USED VEHICLE FLOORING  BORROWING BASE above) F Real Property 1 Value of Eligible Real Property -  75% G Eligible Parts and Accessories Inventory 1 2 3 Parts and Accessories Inventory  Less:  payables to the manufacturers and financiers  Net Parts and Accessory Inventory 65% H Eligible Equipment 1 Office Equipment at Cost 2 Less:  Office Equipment accumulated depreciation 3 Service and Parts Equipment at Cost 4 Less:  Service and Parts Equipment accumulated depreciation 5 Net Equipment 40% I Deductions 1 Outstanding Wholesale Flooring Loans (including non-Motus S/L) and Wholesale Flooring Swing Line Loans Flooring Notes Payable  Less: aggregate amount held in Bulk Prepayment 2 Outstanding Used Vehicle Flooring Loans and Used Vehicle Flooring Swing Line Loans   3 Total Deductions J Borrowing Base (margined value of lines A+B3+C3+D+E+F1+G3+H5 minus I3)  K Revolving Limit L Outstanding Letters of Credit M Outstanding Balance on Revolver N Remaining Availability (Lesser of J or K, minus L+M) EXHIBIT A Lithia Master LP Company, LP Borrowing Base Calculation: Used Vehicle Flooring Facility and Revolving Facility As of __/__/__ 100,000,000 100%    100,000,000 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(222) - 1 CREDIT AGREEMENT  Schedule 1.1(222) – Wholesale Flooring Borrowers  Guelph-S, LP   Markham-B, LP    Markham-P, LP    Mississauga-B, LP    Newmarket-A, LP    Newmarket-V, LP    Thornhill-H, LP    Vancouver-MP, LP    Vaughan-A, LP    Vaughan-P, LP    Woodbridge-MC, LP   Woodbridge-PA, LP   

 

EXECUTION COPY  LEGAL_38580411.20 1.1(232) - 1 CREDIT AGREEMENT  Schedule 1.1(232) – Wholesale Leasing Borrowing Base Certificate  Date:  The Bank of Nova Scotia, as Administrative Agent  <*> Attention:         E-mail: Head, Agency Services <*> Dear Sirs/Mesdames:  Re: Lithia Master LP Company, LP  [Month] ended _________________.  I, ________________________, in my capacity as ____________________________ of  Lithia Master GP Company, Inc., the General Partner of Lithia Master LP Company, LP  (“Master Borrower”), hereby certify on behalf of Wholesale Leasing Borrower and without  personal liability that::  1. I am familiar with and have examined the provisions of the credit agreement made as of June 3, 2022 between, inter alios, Master Borrower. together with certain of its subsidiaries, as borrowers, The Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to time, (as amended, restated, supplemented, replaced and otherwise modified from time to time, the “Credit Agreement”) and have made such reasonable investigations of corporate records and reasonable inquiries of other officers and senior personnel of the Obligors as are sufficient to enable me to make an informed statement herein.  Capitalized terms used and not defined in this certificate shall have the meanings given to them in the Credit Agreement and all section references, unless stated otherwise, shall be references to sections of the Credit Agreement.. 2. The Wholesale Leasing Borrowing Base is:$____________________. 3. The Master Borrower hereby represents and warrants that this Certificate presents fairly the Wholesale Leasing Borrowing Base Base and the amounts set forth herein are in compliance with the provisions of the Credit Agreement. 4. As of the date of hereof the Master Borrower confirms that: (i) no Default or Event of Default has occurred that is continuing and (ii) the representations and warranties set out in Article 9 of the Credit Agreement are true and correct. 5. Schedule “A” attached hereto is the Wholesale Lease Management Report. All of the data and computations contained in the Wholesale Lease Management Report are true, correct and complete. 

 

EXECUTION COPY  LEGAL_38580411.20 1.1(232) - 2 CREDIT AGREEMENT  LITHIA MASTER GP COMPANY,  INC., in its capacity and as general  partner of LITHIA MASTER LP  COMPANY, LP  as Master Borrower  By:   Name:  Title  

 

EXECUTION COPY  LEGAL_38580411.20 3.1(1)(a) - 1 CREDIT AGREEMENT  Schedule 3.1(1)(a) – Notice of Requested Borrowing  Date:  The Bank of Nova Scotia, as Administrative Agent  <*> Attn: Senior Manager  Email: <*> Dear Sirs/Mesdames:  We refer to Section 3.1(1)(a) of the credit agreement made as of June 3, 2022 between, inter  alios, Lithia Master LP Company, LP together with certain of its subsidiaries, as borrowers,   The Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to  time, (as amended, restated, supplemented, replaced and otherwise modified from time to time,  the  “Credit Agreement”).  Capitalized terms used and not defined herein have the meanings given  to them in the Credit Agreement.  We hereby confirm our request for a Borrowing under [Revolving /Wholesale  Flooring/Used Vehicle Flooring/Wholesale Leasing/Daily Rental] Facility as follows:    (a) Prime Loan for drawdown on ____________ in the amount of Cdn$______________. (b) CDOR  Loan for drawdown on ____________ in the amount of Cdn$____________ for a Contract Period of 30 days.  [We hereby confirm our request for an issue of Letters of Credit.  See attached applications]   [Insert payment instructions if payment to be made other than to applicable Borrowers’  Account]  The Borrowers hereby represent and warrant that the conditions contained in  Section 8.2 of the Credit Agreement have been satisfied and will be satisfied as of the date hereof  and before and after giving effect to the Borrowing requested herein on the applicable  Drawdown Date.  Yours truly,  [BORROWER(S)]  By: _______________________________  Name:  Title:  

 

EXECUTION COPY  LEGAL_38580411.20  3.3(3)(b) - 1 CREDIT AGREEMENT  Schedule 3.3(3)(b) – Letter of Credit Extension Request  Date:  The Bank of Nova Scotia, as Administrative Agent  <*> Attn: Senior Manager  Email: <*> Dear Sirs/Mesdames:  We refer to Section 3.3(3)(b)  of the credit agreement made as of June 3, 2022 between, inter  alios, Lithia Master LP Company, LP together with certain of its subsidiaries, as borrowers,   The Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to  time, (as amended, restated, supplemented, replaced and otherwise modified from time to time,  the  “Credit Agreement”).  Capitalized terms used and not defined herein have the meanings given  to them in the Credit Agreement.  We hereby confirm that:  (a) [we wish extension(s) of the maturity date(s) of the following Letter(s) of Credit (i) Letter of Credit No. _____________. (ii) Beneficiary ____________________________________. (iii) Amount Cdn$____________________. (iv) Expiry Date __________________________] [Repeat for each instrument to be replaced.]  (b) each such Letter of Credit will continue to be subject to the terms and conditions of any agreements applicable to that Letter of Credit.] [or] [(a) we wish to amend Letter(s) of Credit No. _________ as follows: [NTD: insert description of requested amendment(s)]] The Borrowers hereby represent and warrant that the conditions contained in Section 8.2 of  the Credit Agreement have been satisfied and will be satisfied as of the date hereof and before  and after giving effect to such Letter of Credit Extension Request.  Yours truly,  [BORROWER (S)]  

 

EXECUTION COPY  LEGAL_38580411.20  3.3(3)(b) - 2 CREDIT AGREEMENT  By: _______________________________  Name:  Title:  

 

EXECUTION COPY  LEGAL_38580411.20 3.3(11) - 1 CREDIT AGREEMENT  Schedule 3.3(11) – Existing L/Cs  Borrower Current Limit Beneficiary  Vancouver-MP, LP <*> Registrar of Motor Vehicle Sales  Authority of BC  Lithia Canada Leasing, LP <*> Registrar of Motor Vehicle Sales  Authority of BC  Lithia Master LP Company,  LP  <*> City of Markham  Lithia Master LP Company,  LP  <*> Regional Municipality of York  Lithia Master LP Company,  LP  <*> Town of Newmarket  Lithia Master LP Company,  LP  <*> Town of Newmarket  Lithia Master LP Company,  LP  <*> McLaren Automotive  

 

EXECUTION COPY  LEGAL_38580411.20 3.4 - 1 CREDIT AGREEMENT  Schedule 3.4 – Conversion Option Notice  Date:  The Bank of Nova Scotia, as Administrative Agent  <*> Attn: Senior Manager  Email: <*>  Dear Sirs/Mesdames:  We refer to Section 3.4 of the credit agreement made as of June 3, 2022 between, inter alios,  Lithia Master LP Company, LP together with certain of its subsidiaries, as borrowers,  The  Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to time,  (as amended, restated, supplemented, replaced and otherwise modified from time to time, the  “Credit Agreement”).  Capitalized terms used and not defined herein have the meanings given  to them in the Credit Agreement.  We hereby give notice of our irrevocable request for a conversion of Borrowings under  [Revolving /Wholesale Flooring/Used Vehicle Flooring/Wholesale Leasing/Daily Rental]  Facility in the amount of Cdn$   outstanding by way of [Prime Loans/CDOR  Loans] into corresponding Borrowings by way of [Prime Loans/CDOR Loans] on the    day of   ____ , 20 .  [The last day of the relevant Contract Period for the CDOR  Loans is the  day of , 20         .]   We wish to convert the following Borrowings on: ___/_____/_____.  Day   Month Year  Type of Borrowing  Outstanding  Amount to be Converted Type of Borrowing  Requested by Conversion  Prime Loans Cdn$ CDOR Loans  CDOR Loans Cdn$ Prime Loans  The new Contract Period if converting to CDOR Loans shall be 30 days.  The Borrowers hereby represent and warrant that the conditions contained in Section 8.2  of  the Credit Agreement have been satisfied and will be satisfied as of the date hereof and before  and after giving effect to such Conversion on the applicable Conversion Date.  

 

EXECUTION COPY  LEGAL_38580411.20 3.4 - 2 CREDIT AGREEMENT  Yours truly,  [BORROWER(S)]  By:   Name:  Title:  

 

EXECUTION COPY  LEGAL_38580411.20 5.6 - 1 CREDIT AGREEMENT  Schedule 5.6 – Notice of Repayment  Date:  The Bank of Nova Scotia, as Administrative Agent  <*> Attn: Senior Manager  Email: <*>  Dear Sirs/Mesdames:  We refer to Section 5.6 of the credit agreement made as of June 3, 2022 between, inter alios,  Lithia Master LP Company, LP together with certain of its subsidiaries, as borrowers, The Bank  of Nova Scotia, as Administrative Agent, and the Lenders party thereto from time to time, (as  amended, restated, supplemented, replaced and otherwise modified from time to time, the  “Credit Agreement”).  Capitalized terms used and not defined herein have the meanings given  to them in the Credit Agreement.  We hereby give you irrevocable notice that we shall repay certain of the Borrowings under  [Revolving /Wholesale Flooring/Used Vehicle Flooring/Wholesale Leasing/Daily Rental]  Facility as follows (repeat for each Borrowing to be repaid):  1. Date of repayment ________/________/________ (not less than three (3) Business Day  Month  Year Days from the date of this notice. 2. Aggregate amount of repayment of $____________________  in accordance with the following: Prime Loans of Cdn$ ______________________________  CDOR Loans of Cdn$ ______________________________  Yours truly,  [BORROWER(S)]  By: _______________________________  Name:  Title:  

 

EXECUTION COPY  LEGAL_38580411.20 5.8 - 1 CREDIT AGREEMENT  Schedule 5.8 – Notice of Cancellation of Credit Facility  Date:  The Bank of Nova Scotia, as Administrative Agent  <*> Attn: Senior Manager  Email: <*> Dear Sirs/Mesdames:  We refer to Section 5.8 of the credit agreement made as of June 3, 2022 between,  inter alios, Lithia Master LP Company, LP together with certain of its subsidiaries, as  borrowers,  The Bank of Nova Scotia, as Administrative Agent, and the Lenders party thereto  from time to time, (as amended, restated, supplemented, replaced and otherwise modified from  time to time, the “Credit Agreement”).  Capitalized terms used and not defined herein have the  meanings given to them in the Credit Agreement.  We hereby give you notice of cancellation and reduction in the amount of Cdn $____________ of the [Revolving /Wholesale  Flooring/Used Vehicle  Flooring/Wholesale Leasing/Daily Rental] Facility [Limit/Commitment] effective as at  ___________________________ [insert date, which shall be no earlier than 5 Business Days  after the date on which this Notice of Cancellation is received by the Administrative  Agent].  Following such cancellation, the [Revolving /Wholesale Flooring/Used Vehicle  Flooring/Wholesale Leasing/Daily Rental] Facility [Limit/Commitment] shall be Cdn $____________.  Yours truly,  [BORROWER(S)]  By:___________________________  Name:  Title:  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(8) - 1 CREDIT AGREEMENT  Schedule 9.1(8) – Owned Property  Nil.  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(9) - 1 CREDIT AGREEMENT  Schedule 9.1(9) – Real Property Leases  Municipal Address Lessee Lessor  1. 33 Auto Park Circle,  Woodbridge, Ontario  Woodbridge-MC, LP Lithia Canada Real Estate, Inc.  2. 4505 Dixie Road, Mississauga,  Ontario   Mississauga-B, LP Lithia Canada Real Estate, Inc.  3. 101 Auto Park Cir, Woodbridge,  ON   Woodbridge-PA, LP  Autoworks  Woodbridge, LP  Lithia Canada Leasing,  LP  Woodbridge-MC, LP  Lithia Canada Real Estate, Inc.  4. 12 Wilbert Street, Guelph,  Ontario   Guelph-S, LP Lithia Canada Real Estate, Inc.  5. 115 Auto Park Circle,  Woodbridge ON   Vaughan-A, LP Lithia Canada Real Estate, Inc.  6. 16775 Leslie St, Newmarket, ON Newmarket-A, LP Lithia Canada Real Estate, Inc.  7. 16885 Leslie St, Newmarket, ON Newmarket-V, LP Lithia Canada Real Estate, Inc.  8. 16821/16831 Leslie St,  Newmarket, ON   Newmarket-A, LP  Newmarket-V, LP  Lithia Canada Real Estate 2 Inc.  9. 1711 West 2nd Avenue,  Vancouver, BC  Lithia Canada Real  Estate, Inc.  Sublease or other  agreement with  Vancouver-MP, LP  and Woodbridge-PA,  LP to use space  David Ratner  10. 1725 West 2nd Avenue,  Vancouver, BC  Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Vancouver-MP, LP  and Woodbridge-PA,  LP to use space  David Ratner  11. 214 Courtland Avenue, Vaughan,  Ontario  Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Autoworks  Woodbridge, LP to use  space  N.H.D. Developments Limited  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(9) - 2 CREDIT AGREEMENT  12. 105 & 131 Four Valley Dr.,  Concord, ON   Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Vaughan-P, LP to use  space  Playacor Holdings Ltd.  13. 9088 Jane St, Concord, ON Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Vaughan-A, LP and  Vaughan-S, LP to use  space  Automotive Properties Limited  Partnership   14. 5539-6 St SE, Calgary, AB Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Vancouver-MP, LP  and Lithia Canada  Leasing, LP to use  space  J.K. Molnar (International) Inc.  15. 8111 Kennedy Road, Markham,  Ontario  Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Markham-B, LP to use  space  8111 Kennedy Markham Inc.  16. Unit 1, 78 Trowers Road,  Woodbridge, ON  Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Woodbridge-MC, LP  to use space  DASS Investments Holdings Inc.  17. 9001 Jane Street, Vaughan, ON Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Vaughan-A, LP to use  space  Lorwood Holdings Inc.  18. 8590 McCowan Rd., Unionville,  ON  Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Markham-P, LP to use  space  The Cadillac Fairview Corporation  Ltd.   

 

  EXECUTION COPY    LEGAL_38580411.20 9.1(9) - 3 CREDIT AGREEMENT    19.  7997 Kennedy Rd, Unionville,  ON   Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Markham-B, LP to use  space  Sub-Landlord: 2122192 Ontario  Inc.   Property Owner: 1788289 Ontario  Inc.   20.  800 Rodick Rd, Markham, ON     Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Markham-B, LP to use  space  Zoom Parking Markham   21.  71 Four Valley Dr., Concord, ON Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Vaughan-P, LP to use  space  Danaher Canada Partnerships Inc.   22.  189 Bullock Dr, Markham, ON     Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Autoworks Markham,  LP to use space  PS Canada Company Two ULC  23.  8240 Woodbine Ave, Markham,  ON  Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Markham-B, LP to use  space  Tallman Truck Centre  24.  535 Hornby St, Vancouver, BC     Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Vancouver-MP, LP to  use space  Easy Park   25.  1-89 Connie Crescent, Concord,  ON   Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Markham-P, LP,  Vaughan-P, LP, and  Vaughan-A, LP to use  space  Condor Properties Ltd.   

 

EXECUTION COPY  LEGAL_38580411.20 9.1(9) - 4 CREDIT AGREEMENT  26. 8885 Jane Street, Concord, ON  L4K 2M6  Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Richmond Hill-H, LP  Jane-Locke Properties Inc.  27. 88 Steeles Avenue West,  Thornhill, ON L4J 1A1  Lithia Canada Real  Estate, Inc.  Sub-lease or other  agreement with  Thornhill-H, LP  1306497 Ontario Inc.  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(11) - 1 CREDIT AGREEMENT  Schedule 9.1(11) – Location of Assets, Places of Business  Chief Executive Office for all Obligors: 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Registered Office for all Obligors, except  Thornhill-H, LP and Thornhill-H GP, Inc.:  Suite 4000, 421 – 7th Ave SW, Calgary,  Alberta T2P 4K9  Registered Office of Thornhill-H, LP and  Thornhill-H GP, Inc.:  8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Jurisdiction of formation of all Obligors,  except Thornhill-H, LP and Thornhill-H  GP, Inc.  Alberta  Jurisdiction of formation of Thornhill-H,  LP and Thornhill-H GP, Inc.  Ontario  Name of Obligor(s) Principle places of business and other  places of business or Asset locations  Autoworks Markham, LP 189 Bullock Dr, Markham, ON  Autoworks Markham GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Autoworks Woodbridge, LP 101 Auto Park Cir, Woodbridge, ON  214 Courtland Avenue, Vaughan, Ontario  Autoworks Woodbridge GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Canada-MC, LP 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Canada-MC GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Guelph-S, LP 12 Wilbert Street, Guelph, Ontario  Guelph-S GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Lithia Canada Leasing, LP 101 Auto Park Cir, Woodbridge, ON  5539-6 St SE, Calgary, AB  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(11) - 2 CREDIT AGREEMENT  Lithia Canada Leasing GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Lithia Master LP Company, LP 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Lithia Master GP Company, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Markham-B, LP 8111 Kennedy Road, Markham, Ontario  7997 Kennedy Rd, Unionville, ON  800 Rodick Rd, Markham, ON  8240 Woodbine Ave, Markham, ON  Markham-B GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Markham-P, LP 8590 McCowan Rd., Unionville, ON  1-89 Connie Crescent, Concord, ON Markham-P GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Mississauga-B, LP 4505 Dixie Road, Mississauga, Ontario  Mississauga-B GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Motus Car Rental, LP 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Motus Car Rental GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Newmarket-A, LP 16775 Leslie St, Newmarket, ON  16885 Leslie St, Newmarket, ON  16821/16831 Leslie St, Newmarket, ON  Newmarket-A GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Newmarket-V, LP 16885 Leslie St, Newmarket, ON  16821/16831 Leslie St, Newmarket, ON  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(11) - 3 CREDIT AGREEMENT  Newmarket-V GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Richmond Hill-H, LP Unit 1, 8885 Jane Street, Concord, Ontario  L4K 2M6  Richmond Hill-H GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Thornhill-H, LP 88 Steeles Avenue West, Thornhill, Ontario  L4J 1A1  Thornhill-H GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Vancouver-MP, LP 1711 West 2nd Avenue, Vancouver, BC  1725 West 2nd Avenue, Vancouver, BC  5539-6 St SE, Calgary, AB  535 Hornby St, Vancouver, BC  Vancouver-MP GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Vaughan-A, LP 115 Auto Park Circle, Woodbridge ON  9088 Jane St, Concord, ON  9001 Jane Street, Vaughan, ON  1-89 Connie Crescent, Concord, ON Vaughan-A GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Vaughan-P, LP 105 & 131 Four Valley Dr., Concord, ON  71 Four Valley Dr., Concord, ON  1-89 Connie Crescent, Concord, ON Vaughan-P GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Vaughan-S, LP 9088 Jane St, Concord, ON  Vaughan-S GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(11) - 4 CREDIT AGREEMENT  Woodbridge-MC, LP 33 Auto Park Circle, Woodbridge, Ontario  101 Auto Park Cir, Woodbridge, ON  Unit 1, 78 Trowers Road, Woodbridge, ON  Woodbridge-MC GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  Woodbridge-PA, LP 101 Auto Park Cir, Woodbridge, ON  1711 West 2nd Avenue, Vancouver, BC  1725 West 2nd Avenue, Vancouver, BC  Woodbridge-PA GP, Inc. 8885 Jane St Unit 2 Vaughan, Ontario L4K  2M6  

 

  EXECUTION COPY    LEGAL_38580411.20 9.1(17) - 1 CREDIT AGREEMENT    Schedule 9.1(17) – Canadian Benefit and Pension Plans  Nil.  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(18) - 1 CREDIT AGREEMENT  Schedule 9.1(18) – Labour Matters  Nil.  

 

EXECUTION COPY  LEGAL_38580411.20 9.1(20) - 1 CREDIT AGREEMENT  Schedule 9.1(20) – Corporate Organization  See Attached.  

 

Lithia Motors, Inc. Canadian Entities – Pfaff Acquisition May, 2022  LITHIA MOTORS,  INC. Lithia Canada Holding  Company, Inc.* Lithia Canada  Real Estate, Inc.* Lithia Master GP  Company, Inc.* 100% 89.9% 0.01% Lithia  Master LP  Company, LP*   *Entities formed under the laws of the Province of Alberta 89.89%100% #44645423.3 Pfaff Motors Inc. 10.1% 10.1% Lithia Canada  Real Estate 2,  Inc.* 100% **Entities formed under the laws of the Province of Ontario Mississauga- B GP, Inc.* 100% 0.01% 99.99% Mississauga -B, LP* Markham-P  GP, Inc.* 99.99%0.01% Markham- P, LP* 100% Markham-B  GP, Inc.* 100% 0.01% 99.99% Markham- B, LP Motus Car  Rental GP,  Inc.* Motus Car  Rental, LP* 100% 0.01% 99.99% Vaughan- P, LP* 0.01% 99.99%Vaughan-P  GP, Inc.* 100% Autoworks  Woodbridge  GP, Inc.* Autoworks  Woodbridge ,  LP* 100% 0.01% 99.99% Lithia  Canada  Leasing GP,  Inc.* 100% 0.01% 99.99% Lithia  Canada  Leasing, LP* Guelph-S  GP, Inc.* Guelph- S, LP* 100% 0.01% 99.99% Canada-MC  GP, Inc.* Canada- MC, LP* 100% 0.01% 99.99% Woodbridge- PA GP, Inc.* Woodbridge- PA, LP* 100% 0.01% 99.99% Vancouver- MP GP, Inc.* Vancouver -MP, LP* 100% 99.99%0.01% Woodbridge- MC GP, Inc.* 100% 0.01% 99.99% Woodbridge -MC, L P* Vaughan-S  GP, Inc.* 100% 0.01% 99.99% Vaughan- S, LP* Richmond  Hill-H GP,  Inc.* Richmond  Hill-H, LP 100% 0.01% 99.99% Vaughan-A  GP, Inc.* Vaughan- A, LP* 100% 0.01% 99.99% Newmarket- V GP, Inc.* Newmarket -V, LP* 100% 0.01% 99.99% Newmarket- A GP, Inc.* Newmarket -A, LP* 100% 0.01% 99.99% Autoworks  Markham  GP, Inc.* 100% 0.01% 99.99% Autoworks  Markham, LP*

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