UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
X
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-14733
For the Fiscal Year Ended: December 31, 2022
OR
FORM 10-K
Lithia Motors, Inc.
(Exact name of registrant as specified in its charter)
Oregon
(State or other jurisdiction of incorporation or
organization)
150 N. Bartlett Street,
Medford,
Oregon
(Address of principal executive offices)
(541) 776-6401
(Registrant’s telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
93-0572810
(I.R.S. Employer Identification No.)
97501
(Zip Code)
Title of each class
Common stock without par value
Trading Symbol(s)
LAD
Securities registered pursuant to Section 12(g) of the Act: None
Name of each exchange on which registered
The New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes X No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No X
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes X No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files). Yes X No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large
accelerated filer,” "accelerated filer,” "smaller reporting company,” and "emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
X
Non-accelerated filer
☐
Accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the
Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. X
If securities are registered pursuant to Section 12(b) of the Act, indicated by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued
financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the
relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No X
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant was approximately $7,896,163,000 computed by reference to the last sales price ($286.66) as reported by
the New York Stock Exchange for the Registrant’s common stock, as of the last business day of the Registrant’s most recently completed second fiscal quarter (June 30, 2022). As of February 24, 2023, there were
27,338,411 shares of the registrant’s common stock outstanding.
The Registrant has incorporated into Part III of Form 10-K, by reference, portions of its Proxy Statement for its 2023 Annual Meeting of Shareholders.
DOCUMENTS INCORPORATED BY REFERENCE
Item Number
PART I
Item
LITHIA MOTORS, INC.
2022 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.
Item 16.
SIGNATURES
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Management’s Discussion and Analysis of Financial Condition and Results of Operations:
Results of operations
Liquidity and capital resources
Critical accounting estimates
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Exhibits and Financial Statement Schedules
Form 10-K Summary
Page
1
7
None
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19
Not applicable
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20
21
35
39
41
42
None
42
None
Not applicable
43
43
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43
43
44
None
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Item 1. Business
PART I
Forward-Looking Statements
Certain statements in this Annual Report, including in the sections entitled "Risk Factors,” "Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
"Business” constitute forward-looking statements within the meaning of the "Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Generally, you can identify
forward-looking statements by terms such as "project,” "outlook,” "target,” "may,” "will,” "would,” "should,” "seek,” "expect,” "plan,” "intend,” "forecast,” "anticipate,” "believe,” "estimate,”
"predict,” "potential,” "likely,” "goal,” "strategy,” "future,” "maintain,” and "continue” or the negative of these terms or other comparable terms. Examples of forward-looking statements in this
Form 10-K include, among others, statements regarding:
• Future market conditions, including anticipated car and other sales levels and the supply of inventory
• Our business strategy and plans, including our achieving our 2025 Plan and related targets
• The growth, expansion and success of our network, including our finding accretive acquisitions and acquiring additional stores
• Annualized revenues from acquired stores
• The growth and performance of our Driveway e-commerce home solution and Driveway Finance Corporation ("DFC”), their synergies and other impacts on our business and our ability to
• Our capital allocations and uses and levels of capital expenditures in the future
• Expected operating results, such as improved store performance, continued improvement of selling, general and administrative expenses ("SG&A”) as a percentage of gross profit and
meet Driveway and DFC-related targets
any projections
• Our anticipated financial condition and liquidity, including from our cash and the future availability of our credit facilities, unfinanced real estate and other financing sources
• Our continuing to purchase shares under our share repurchase program
• Our compliance with financial and restrictive covenants in our credit facilities and other debt agreements
• Our programs and initiatives for employee recruitment, training, and retention
• Our strategies for customer retention, growth, market position, financial results and risk management
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are
outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the
industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this Annual Report. Therefore, you should not rely on any of these
forward-looking statements. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, the factors as
discussed in Part I, Item 1A. Risk Factors, and in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and, from time to time, in our
other filings we make with the Securities and Exchange Commission (SEC).
Any forward-looking statement made by us in this Annual Report is based only on information currently available to us and speaks only as of the date on which it is made. Except as
required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new
information, future developments or otherwise.
Business Overview
Lithia Motors, Inc. is the premier automotive retailer in North America, offering a wide selection of vehicles across global carmakers and providing a full suite of financing, leasing, repair, and
maintenance options. Purchasing and owning a vehicle is easy and hassle-free with convenient solutions offered through our comprehensive network of locations, e-commerce platforms,
and captive finance division. We deliver profitable growth through the consolidation of the largest retail sector in North America, modernizing the retail experience to be wherever, whenever
and however our consumers desire. As of December 31, 2022, we operated 296 locations representing 48 brands in two countries, across 28 U.S. states and 3 Canadian provinces. The
majority of our revenues are generated within the United States and the majority of our property and equipment is located within the United States.
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Lithia and Driveway (LAD) offers a wide array of products and services fulfilling the entire vehicle ownership lifecycle including new and used vehicles, finance and insurance products and
automotive repair and maintenance. We strive for diversification in our products, services, brands and geographic locations to reduce dependence on any one manufacturer, reduce
susceptibility to changing consumer preferences, manage market risk and maintain profitability. Our diversification, along with our operating structure, provides a resilient and nimble
business model.
Founded in 1946 and incorporated in Oregon in 1968, we completed our initial public offering in 1996.
Business Strategy
We seek to provide customers choice with a seamless, blended online and physical retail experience, broad selection and access to specialized expertise and knowledge. Our
comprehensive network enables us to provide convenient touch points for customers and provide services throughout the vehicle life cycle. We seek to increase market share and optimize
profitability by focusing on the consumer experience and applying proprietary performance measurement systems fueled by data science. Our Driveway and GreenCars brands compliment
our in-store experiences and provide convenient, simple, and transparent platforms that serve as our e-commerce home solutions and allow us to deliver differentiated, proprietary digital
experiences. Diversifying our business with Driveway Finance Corporation (DFC), our captive auto finance division, allows us to provide financing solutions for customers and diversify our
business model with an adjacent product.
Our long-term strategy to create value for our customers, employees and shareholders includes the following elements:
Driving operational excellence, innovation and diversification
LAD builds magnetic brand loyalty in our 296 stores and with Driveway, our e-commerce home delivery experience, and GreenCars, our electric vehicle learning resource and marketplace.
Operational excellence is achieved by focusing the business on convenient and transparent consumer experiences supported by proprietary data science to improve market share,
consumer loyalty, and profitability. By promoting an entrepreneurial model with our in-store experiences, we build strong businesses responsive to each of our local markets. Utilizing
performance-based action plans, we develop high-performing teams and foster manufacturer relationships.
In response to evolving consumer preferences, we invest in modernization that supports and expands our core business. These digital strategies combine our experienced, knowledgeable
workforce with our owned inventory and physical network of stores, enabling us to be agile and adapt to consumer preferences and market specific conditions. Additionally, we
systematically explore transformative adjacencies, which are identified to be synergistic and complementary to our existing business such as DFC, our captive auto loan portfolio.
Our investments in modernization are well under way and are taking hold with our teams as they provide digital shopping experiences including finance, contactless test drives and home
delivery or curbside pickup for vehicle purchases. Our people and these solutions power our national brands, overlaying our physical footprint in a way that we believe attracts a larger
population of digital consumers seeking transparent, empowered, flexible and simple buying and servicing experiences.
Our performance-based culture is geared toward an incentive-based compensation structure for a majority of our personnel. We develop pay plans that are measured based upon various
factors such as customer satisfaction, profitability and individual performance metrics. These plans serve to reward team members for creating customer loyalty, achieving store potential,
developing high-performing talent, meeting and exceeding manufacturer requirements and living our core values.
We have centralized many administrative functions to drive efficiencies and streamline store-level operations. The reduction of administrative functions at our stores allows our local
managers to focus on customer-facing opportunities to increase revenues and gross profit. Our operations are supported by regional and corporate management, as well as dedicated
training and personnel development programs which allow us to share best practices across our network and develop management talent.
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Growth through acquisition and network optimization
Our acquisition growth strategy has been successful both financially and culturally. Our disciplined approach focuses on acquiring new vehicle franchises, which operate in markets ranging
from mid-sized regional markets to metropolitan markets. Acquisition of these businesses increases our proximity to consumers throughout North America. While we target annual after tax
return of more than 15% for our acquisitions, we have averaged over a 25% return by the third year of ownership due to a disciplined approach focusing on accretive, cash flow positive
targets at reasonable valuations. In addition to being financially accretive, acquisitions aim to drive network growth that improves our ability to serve customers through vast selection,
greater density and access to customers and ability to leverage national branding and advertising.
As we focus on expanding our physical network of stores, one of the criteria we evaluate is a valuation multiple between 3x to 7x of investment in intangibles to estimated annualized
adjusted EBITDA, with various factors including location, ability to expand our network and talent considered in determining value. We also target an investment in intangibles as a
percentage of annualized revenues in the range of 15% to 30%.
During 2022, we acquired 31 stores, opened one store, and divested thirteen stores. We invested $1.1 billion, net of floor plan debt, to acquire these stores and we anticipate these
acquisitions to add nearly $3.5 billion in annualized revenues.
We regularly optimize and balance our network through strategic divestitures to ensure continued high performance. We believe our disciplined approach provides us with attractive
acquisition opportunities and expanded coast-to-coast coverage.
Thoughtful capital allocation
We manage our liquidity and available cash to support our long-term plan focused on growth through acquisitions and investments in our existing business, technology and adjacencies that
expand and diversify our business model. Our free cash flow deployment strategy targets an allocation of 65% investment in acquisitions, 25% investment in capital expenditures,
innovation, and diversification and 10% in shareholder return in the form of dividends and share repurchases. During 2022, we utilized $303.1 million for capital expenditures investing in our
existing business and paid $45.2 million in dividends. As of December 31, 2022, we had available liquidity of $1.6 billion, which was comprised of $168.1 million in cash and $1.4 billion
availability on our credit facilities. In addition, our unfinanced real estate could provide additional liquidity of approximately $0.5 billion.
Marketing
One of our core values, Earn Customers for Life, defines our market strategy by appealing to our consumers’ desire for affordability, transparency and convenience. We employ national,
regional and local brands to connect with consumers with advertising tailored to the individual brand and market. Utilizing data analysis and multi-channel communications, we strive to
attract and retain customers throughout the vehicle ownership life cycle.
With a vast selection represented by the nation’s largest vehicle inventory for sale online, we employ search engine optimization, search engine marketing, online display, re-targeting,
social advertising, traditional media and direct marketing to reach consumers. Most consumers begin their shopping, buying or selling activity on our store websites, Driveway, and
GreenCars. These 300+ online channels provide customers with simple, transparent ways to manage their vehicle ownership including: search new and used inventories, view current
pricing, apply incentives and offers, calculate payments for purchase or lease, apply for financing, buy online, sell their vehicle, schedule service appointments, schedule vehicle pick-up and
delivery, and provide us feedback about their experience. During 2022, our unique visitors increased over 80% on a same store basis.
Total advertising expense, net of manufacturer credits, was $253.6 million in 2022, $162.2 million in 2021 and $97.4 million in 2020. In 2022, we spent 83% on digital, social, listings and
owner communications, while 17% was spent on traditional media. In all of our communications, we seek to convey the promise of a positive customer experience, competitive pricing and
wide selection. We expect the portion of spending in digital channels to continue to increase as traditional media evolves to online consumption models.
Our manufacturer partners influence a significant portion of our advertising expense. Certain advertising and marketing expenditures are offset by manufacturer cooperative programs, which
require us to submit requests for reimbursement to manufacturers for qualifying advertising expenditures. These advertising credits are not tied to specific vehicles and are earned as
qualifying expenses are incurred. These reimbursements are recognized as a
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reduction of advertising expense. Manufacturer cooperative advertising credits were $46.3 million in 2022, $35.6 million in 2021 and $23.9 million in 2020.
Franchise Agreements
Each of our stores operates under a separate franchise agreement with the manufacturer of the new vehicle brand it sells.
Typical vehicle franchise agreements specify the locations within a designated market area at which the store may sell vehicles and related products and perform approved services. The
designation of the market areas and the allocation of new vehicles among stores are at the discretion of the manufacturer. Franchise agreements do not, however, guarantee exclusivity
within a specified territory.
A franchise agreement may impose requirements on the store with respect to:
• facilities and equipment;
• inventories of vehicles and parts;
• minimum working capital;
• training of personnel; and
• performance standards for market share and customer satisfaction.
Each manufacturer closely monitors compliance with these requirements and requires each store to submit monthly financial statements. Franchise agreements also grant a store the right
to use and display manufacturers’ trademarks, service marks and designs in the manner approved by each manufacturer.
We have determined the useful life of a franchise agreement is indefinite, even though certain franchise agreements are renewed after one to six years. In our experience, agreements are
routinely renewed without substantial cost and there are legal remedies to help prevent termination. Certain franchise agreements have no termination date. In addition, state franchise laws
protect franchised automotive retailers. Under certain laws, a manufacturer may not terminate or fail to renew a franchise without good cause or prevent any reasonable changes in the
capital structure or financing of a store.
Our typical franchise agreement provides for early termination or non-renewal by the manufacturer upon:
• a change of management or ownership without manufacturer consent;
• insolvency or bankruptcy of the dealer;
• death or incapacity of the dealer/manager;
• conviction of a dealer/manager or owner of certain crimes;
• misrepresentation of certain sales or inventory information to the manufacturer;
• failure to adequately operate the store;
• failure to maintain any license, permit or authorization required for the conduct of business;
• poor market share; or
• low customer satisfaction index scores.
Franchise agreements generally provide for prior written notice before a franchise may be terminated under most circumstances. We also sign master framework agreements with most
manufacturers that impose additional requirements. See Item 1A. Risk Factors.
Competition
The retail automotive business is highly competitive. Currently, there are more than 16,500 new vehicle franchise dealers in the United States, many of which are independent stores
managed by individuals, families or small retail groups. We compete primarily with other automotive retailers, both publicly- and privately-held and other used-only automotive retailers such
as CarMax, Carvana, Shift and Vroom.
Vehicle manufacturers have designated specific marketing and sales areas within which only one dealer of a vehicle brand may operate. In addition, our franchise agreements typically limit
our ability to acquire multiple dealerships of a given brand within a particular market area. Certain state franchise laws also restrict us from relocating our dealerships, or establishing new
dealerships of a particular brand, within any area that is served by another dealer with the same brand. To the extent that a market has multiple dealers of a particular brand, as certain
markets we operate in do, we are subject to significant intra-brand competition.
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We are larger and have more financial resources than most private automotive retailers with which we currently compete in the majority of our regional markets. We compete directly with
retailers with similar or greater resources in our existing metro and non-metro markets. We also compete based on dealer reputation in the various markets. If we enter other new markets,
we may face competitors that have access to greater financial resources or have strong brands. We do not have any cost advantage in purchasing new vehicles from manufacturers. We
rely on advertising and merchandising, pricing, our customer guarantees and sales model, our sales expertise, service reputation and the location of our stores to sell new vehicles.
Regulation
Automotive and Other Laws and Regulations
We operate in a highly regulated industry. A number of state and federal laws and regulations affect our business. In every state in which we operate, we must obtain various licenses to
operate our businesses, including dealer, sales and finance and insurance licenses issued by state regulatory authorities. Numerous laws and regulations govern our business, including
those relating to our sales, operations, financing, insurance, advertising and employment practices. These laws and regulations include state franchise laws and regulations, consumer
protection laws, privacy laws, escheatment laws, anti-money laundering laws and federal and state wage-hour, anti-discrimination and other employment practices laws.
Our financing activities with customers are subject to numerous federal, state and local laws and regulations. In recent years, there has been an increase in activity related to oversight of
consumer lending by the Consumer Financial Protection Bureau (CFPB), which has broad regulatory powers. The CFPB has supervisory authority over large non-bank auto finance
companies, including DFC. The CFPB can use this authority to conduct supervisory examinations to ensure compliance with various federal consumer protection laws. The CFPB does not
have direct authority over automotive dealers; however, its regulation of larger automotive finance companies and other financial institutions could affect our financing activities. Claims
arising out of actual or alleged violations of law may be asserted against us or our stores by individuals, a class of individuals, or governmental entities. These claims may expose us to
significant damages or other penalties, including revocation or suspension of our licenses to conduct store operations and fines.
The vehicles we sell are also subject to rules and regulations of various federal and state regulatory agencies.
Environmental, Health, and Safety Laws and Regulations
Our operations involve the use, handling, storage and contracting for recycling and/or disposal of materials such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints,
thinners, batteries, cleaning products, lubricants, degreasing agents, tires and fuel. Consequently, our business is subject to a complex variety of federal, state and local requirements that
regulate the environment and public health and safety.
Most of our stores use above ground storage tanks, and, to a lesser extent, underground storage tanks, primarily for petroleum-based products. Storage tanks are subject to periodic
testing, containment, upgrading and removal under the Resource Conservation and Recovery Act and its state law counterparts. Clean-up or other remedial action may be necessary in the
event of leaks or other discharges from storage tanks or other sources. In addition, water quality protection programs under the federal Water Pollution Control Act (commonly known as the
Clean Water Act), the Safe Drinking Water Act and comparable state and local programs govern certain discharges from our operations. Similarly, certain air emissions from operations,
such as auto body painting, may be subject to the federal Clean Air Act and related state and local laws. Health and safety standards promulgated by the Occupational Safety and Health
Administration of the United States Department of Labor and related state agencies also apply.
Certain stores may become a party to proceedings under the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, typically in connection with materials
that were sent to former recycling, treatment and/or disposal facilities owned and operated by independent businesses. The remediation or clean-up of facilities where the release of a
regulated hazardous substance occurred is required under CERCLA and other laws.
We incur certain costs to comply with environmental, health and safety laws and regulations in the ordinary course of our business. We do not anticipate, however, that the costs of
compliance will have a material adverse effect on our business, results of operations, cash flows or financial condition, although such outcome is possible given the nature of our operations
and the extensive environmental, public health and safety regulatory framework. We may
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become aware of minor contamination at certain of our facilities, and we conduct investigations and remediation at properties as needed. In certain cases, the current or prior property
owner may conduct the investigation and/or remediation or we have been indemnified by either the current or prior property owner for such contamination. We do not currently expect to
incur significant costs for remediation. However, we cannot provide assurance that material environmental commitments or contingencies will not arise in the future, or that they do not
already exist but are unknown to us.
Human Capital
Driven by our mission statement, "Growth Powered by People,” we place a high degree of value in each of our team members and their individual professional success. Promoting and
hiring the best talent available, defining clear expectations, providing excellent training and rewarding performance helps us build dynamic teams to serve our customers. We cultivate an
entrepreneurial, high-performance culture and strive to develop leaders from within. We continue to develop tools, training and growth opportunities that accelerate the depth of our talent.
As of December 31, 2022, we employed approximately 21,875 persons on a full-time equivalent basis in our North American network of 296 retail locations. Our total workforce was
comprised of approximately 22% female employees and approximately 49% of minorities. Our management consisted of approximately 24% females and approximately 23% minorities in
leadership positions. In both 2022 and 2021, approximately 96% of our workforce earned above minimum wage.
Some examples of our key programs and initiatives that are focused on attracting, retaining and developing our high performing workforce include:
•
AMP programs (Accelerate My Potential), which began in 2016, were initially designed with a focus on developing General Manager succession. Since 2021, the programs have
extended beyond General Manager succession and now focus on developing and better positioning high performers for multiple future leadership roles including Director, Group and
Regional Vice President as well as General Manager.
•
• DART (Data Analyst Rotational Training) started in 2020 as a rotational program designed to build data-minded, customer centric, proactive leaders who push the organization to be
the best it can be for our customers. The program gives on-the-job exposure to various departments through rotations, while providing supplemental training necessary to accelerate
individual contributors into leadership roles all while finding their best fit within the company.
Lithia Women Lead, which began in 2015, provides an avenue for women in the organization to connect, learn and develop. The program includes events throughout the year that
provide women in the organization the opportunity to network, act as role models and inspire one another’s growth.
• Culture Council, which began in 2021, is designed to promote diversity, equity and inclusion (DEI) in our workforce by identifying areas to improve, raising awareness, and
integrating DEI elements into how we operate, train and develop our teams. The Culture Council is comprised of a diverse group of executive level and non-executive level members,
working together with the common goal of ensuring our employees reflect the diversity of our customers, reinforcing our mission and culture and enhancing employee engagement.
Learning & Development is aimed to promote employee professional development through various programs including curated content paths in our Learning Center, targeted
LinkedIn Learning curriculums, tuition reimbursement programs covering up to 75% of an employee’s undergraduate or graduate tuition costs and Master Automotive Service
Excellence (ASE) training and certification and Original Equipment Manufacturer (OEM) training for our technicians.
•
We also continue to invest in and expand the roles and capabilities of our workforce to drive the development and support of our e-commerce and digital technology capabilities. We believe
there is a competitive advantage to integrating and developing individuals with these skill sets, and they are an integral part of supporting our five-year growth plan and launch of Driveway.
As our business evolves, we will remain focused on having human capital capabilities, systems and processes in place to support and align with our strategy.
Seasonality and Quarterly Fluctuations
In a stable environment, the automotive industry has generally experienced higher volumes of vehicle unit sales in the second and third quarters of each year due to consumer buying trends
and the introduction of new vehicle models and, accordingly, we expect our revenues and operating results to generally be higher during these periods. In addition, we generally experience
higher volume of luxury vehicles, which have higher average selling prices and
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gross profit per vehicle, during the fourth quarter. The timing of our acquisition activity, which varies, and ability to integrate stores into our existing cost structure has moderated this
seasonality. However, if conditions occur that weaken automotive sales, such as severe weather in the geographic areas in which our dealerships operate, war, high fuel costs, depressed
economic conditions including unemployment or weakened consumer confidence or similar adverse conditions, or if our ability to acquire stores changes, our revenues for the year may be
disproportionately adversely affected.
Available Information
We make available free of charge, on our website at www.lithiainvestorrelations.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after they are filed electronically with the
SEC. The information found on our website is not part of this Annual Report on Form 10-K. You may also obtain copies of these reports by contacting Investor Relations at 877-331-3084.
Item 1A. Risk Factors
You should carefully consider the risks described below before making an investment decision. The risks described below are not the only ones facing our company. Additional risks not
presently known to us, or that we currently deem immaterial, may also impair our business operations.
Risks Related to Our Business
The automotive retail industry is sensitive to changing economic conditions and various other factors. Our business and results of operations are substantially dependent on
new vehicle sales levels in the United States and in our particular geographic markets and the level of gross profit margins that we can achieve on our sales of new vehicles, all
of which are very difficult to predict.
Our business is heavily dependent on consumer demand and preferences. A downturn in overall levels of consumer spending may materially and adversely affect our revenues and gross
profit margins. Retail vehicle sales are cyclical and historically have experienced periodic downturns characterized by weak demand. These cycles are often dependent on general
economic conditions and consumer confidence, as well as the level of discretionary personal income and credit availability. Additionally, other economic factors, such as rising and
sustained periods of high crude oil and fuel prices, may impact consumer demand and preferences. As we operate internationally, including across 28 U.S. states and three Canadian
Provinces, changes in and the severity of economic conditions may vary by market. Economic conditions may be anemic for an extended period of time, or deteriorate in the future. This
would have a material adverse effect on our retail business, particularly sales of new and used vehicles.
The United States economy has recently experienced heightened inflationary pressures, impacting the costs of labor, fuel and other costs. Additionally, an increase in interest rates could
significantly impact new and used vehicle sales and vehicle affordability due to the direct relationship between interest rates and monthly loan payments, a critical factor for many vehicle
buyers, and the impact interest rates have on customers’ borrowing capacity and disposable income. In an inflationary environment, depending on automotive industry and other economic
conditions, we may be unable to raise prices to keep up with the rate of inflation, which would reduce our profit margins. A period of sustained inflationary and interest rate pressures could
impact our profitability.
Approximately 13.9 million, 15.1 million, and 14.6 million new vehicles were sold in the United States in 2022, 2021, and 2020, respectively. Certain industry analysts have predicted that
new vehicle sales will be approximately 14 million for 2023. If new vehicle production exceeds the rate at which new vehicles are sold, our gross profit per vehicle could be adversely affected
by this excess and any resulting changes in manufacturer incentive and marketing programs. See the risk factor "If manufacturers or distributors discontinue or change sales incentives,
warranties and other promotional programs, our business, results of operations, financial condition and cash flows may be materially adversely affected” below. Economic conditions and
the other factors described above may also materially adversely impact our sales of used vehicles, parts and repair and maintenance services, and automotive finance and insurance
products.
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Natural disasters, adverse weather conditions, and public health emergencies can disrupt our business.
Our dealerships are in states and regions in the United States and Canada in which actual or threatened natural disasters and severe weather events (such as hurricanes, earthquakes,
fires, floods, landslides, wind and/or hail storms) or other extraordinary events have in the past, and may in the future, disrupt our dealership operations and impair the value of our
dealership property. A disruption in our operations may adversely impact our business, results of operations, financial condition and cash flows. In addition to business interruption, the
automotive retailing business is subject to substantial risk of property loss due to the significant concentration of property at dealership locations. The exposure on any single claim under
our property and casualty insurance, medical insurance and workers’ compensation insurance varies based upon type of coverage. Our maximum exposure on any single claim is $5.5
million, subject to certain aggregate limit thresholds. Under our self-insurance programs, we retain various levels of aggregate loss limits, per claim deductibles and claims-handling
expenses. Costs in excess of these retained risks may be insured under various contracts with third-party insurance carriers. As of December 31, 2022, we had total reserve amounts
associated with these programs of $67.4 million.
The occurrence of regional epidemics or a global pandemic such as COVID-19 may adversely impact our business, results of operations, financial condition and cash flows. The extent to
which global pandemics impact our business going forward will depend on factors such as the duration and scope of the pandemic; governmental, business, and individuals' actions in
response to the pandemic; and the impact on economic activity, including the possibility of recession or financial market instability.
The automotive manufacturing supply chain spans the globe. As such, supply chain disruptions resulting from natural disasters, adverse weather events, or public health emergencies may
affect the flow of inventory or parts to us or our manufacturing partners. Such disruptions could have a material adverse effect on our business, financial condition, results of operations, or
cash flows.
Increasing competition among automotive retailers reduces our profit margins on vehicle sales and related businesses. Further, the use of the Internet in the car purchasing
process could materially adversely affect us.
Vehicle retailing is a highly competitive business. Our competitors include publicly and privately-owned dealerships, of which certain competitors are larger and have greater financial and
marketing resources than we have. Many of our competitors sell the same or similar makes of new and used vehicles that we offer in our markets at competitive prices. We do not have any
cost advantage in purchasing new vehicles from manufacturers due to the volume of purchases or otherwise.
Our finance and insurance business and other related businesses, which have higher margins than sales of new and used vehicles, are subject to strong competition from various financial
institutions and others.
The Internet has become a significant part of the sales process in our industry. Customers are using the Internet to compare pricing for vehicles and related finance and insurance services,
which may further reduce margins for new and used vehicles and profits for related finance and insurance services. If Internet new vehicle sales are allowed to be conducted without the
involvement of franchised dealers, our business could be materially adversely affected. In addition, other franchise groups have aligned themselves with services offered on the Internet or are
investing heavily in the development of their own Internet capabilities, which could materially adversely affect our business, results of operations, financial condition and cash flows.
Our franchise agreements do not grant us the exclusive right to sell a manufacturer’s product within a given geographic area. Our revenues or profitability could be materially adversely
affected if any of our manufacturers award franchises to others in the same markets where we operate or if existing franchised dealers increase their market share in our markets.
In addition, we may face increasingly significant competition as we strive to gain market share through acquisitions or otherwise. Our operating margins may decline over time as we
expand into markets where we do not have a leading position.
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Changes to the automotive industry and consumer views on car ownership could materially adversely affect our business, results of operations, financial condition and cash
flows.
The automotive industry is predicted to experience rapid change in the years to come, including continued increases in ride-sharing services, advances in electric vehicle production and
driverless technology. Ride-sharing services such as Uber and Lyft provide consumers with mobility options outside of the traditional car ownership and lease alternatives. Certain
manufacturers and states have declared commitments to various electric vehicle and zero emissions goals, such as the state of California’s executive order to require all new cars and
passenger trucks sold in the state to be zero-emission vehicles by 2035. The overall impact of these options on the automotive industry is uncertain, and may include lower levels of new
vehicle sales or sales through channels that do not include us.
Manufacturers continue to invest in increasing production and quality of electric vehicles, including Battery-Electric Vehicles (BEVs), Hybrid Electric Vehicles, and Plug-in Hybrid Electric
Vehicles. BEVs generally require less maintenance than traditional cars and trucks. The effects of BEVs on the automotive industry are uncertain and may include reduced parts and
service revenues, as well as changes in the level of sales of certain Finance and Insurance (F&I) products such as extended warranty and lifetime lube, oil and filter contracts.
Technological advances are also facilitating the development of driverless vehicles. The eventual timing of availability of driverless vehicles is uncertain due to regulatory requirements,
technological hurdles, and uncertain consumer acceptance of these technologies. The effect of driverless vehicles on the automotive industry is uncertain and could include changes in the
level of new and used vehicle sales, the price of new vehicles, and the role of franchised dealers, any of which could materially and adversely affect our business.
We compete in a dynamic industry, and we may invest significant resources to pursue strategies and develop new offerings that do not prove effective.
The vehicle retailing industry is experiencing significant changes as the expectations and behaviors of customers are shifting, and e-commerce and digital technology have become a more
significant part of the sales process. We have made and may continue to make significant investments to drive the development of and support of e-commerce and digital technology
capabilities, including the launch of Driveway, our e-commerce home solution, and DFC, our in-house consumer financing business. Changes or additions to our offerings may not attract or
engage our customers or prove sufficiently profitable, and may reduce confidence in our brands, expose us to increased market or legal risks, subject us to new laws and regulations, or
otherwise harm our business.
Customers may prefer other channels for vehicle sales and related finance and insurance services, because they may offer different or superior platforms, or because customers find those
platforms easier to use, faster, or more cost effective than our services. We may not successfully anticipate or keep pace with industry changes, and we have and may continue to invest
considerable financial resources, personnel, or other resources to pursue strategies that do not ultimately prove effective. A failure to capture the anticipated benefits of such investments
could harm our results of operations and financial condition.
A decline of affordable and available vehicle financing may adversely affect our vehicle sales.
A significant portion of buyers finance their vehicle purchases. The primary finance sources our customers use in connection with the purchase of a new or used vehicle are manufacturer
captive finance companies, DFC, and sub-prime lenders. These consumer vehicle financing sources rely to a certain extent on financing markets and sources to provide the capital
necessary to support their financing programs. In addition, these financing sources, including DFC, will occasionally change their loan underwriting criteria to alter the risk profile of their
loan portfolio. In the event that the cost to customers to finance vehicles becomes more expensive, due to increases in interest rates by the financing sources or their sources of capital,
lenders tighten their credit standards, or available vehicle financing declines, consumers may be unable or less willing to purchase vehicles, which could have a material adverse effect on
our business, results of operations, financial condition and cash flows.
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Adverse conditions affecting one or more key manufacturers may negatively affect our business, results of operations, financial condition and cash flows.
We depend on our manufacturers to provide a supply of vehicles which supports expected sales levels. Any event that adversely affects a manufacturer’s ability to timely deliver new
vehicles may adversely affect us by reducing our supply of popular new vehicles, leading to lower sales in our stores during those periods than would otherwise occur. For example, the
shortage of chip supply and labor disruptions in 2021 and 2022 have caused a significant constraint in the supply of new cars resulting in reduced volumes and increased gross profit
margins on retail vehicle sales. As new vehicle availability improves, volumes may improve; however, gross profit margins may be impacted. We depend on our manufacturers to deliver
high-quality, defect-free vehicles. If a manufacturer experiences quality issues, our sales and financial performance may be adversely impacted. In addition, the discontinuance of a
particular brand that is profitable to us could negatively impact our revenues and profitability.
Vehicle manufacturers would be adversely affected by economic downturns or recessions, adverse fluctuations in currency exchange rates, significant declines in the sales of their new
vehicles, increases in interest rates, declines in their credit ratings, port closures, labor strikes or similar disruptions (including within their major suppliers), supply shortages or rising raw
material costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products, product defects, vehicle recall campaigns, litigation, poor product mix
or unappealing vehicle design, or other adverse events. These and other risks could materially adversely affect any manufacturer and limit its ability to profitably design, market, produce or
distribute new vehicles, which, in turn, could materially adversely affect our business, results of operations, financial condition and cash flows.
We are subject to a concentration of risk in the event of financial distress, including potential reorganization or bankruptcy, of a major vehicle manufacturer. We purchase substantially all of
our new vehicles from various manufacturers or distributors at the prevailing prices available to all franchised dealers. Our sales volume could be materially adversely impacted by a
manufacturer’s or distributor’s inability to supply our stores with an adequate supply of vehicles.
In the event of a manufacturer or distributor bankruptcy, we could be held liable for damages related to product liability claims, intellectual property suits or other legal actions. These legal
actions are typically directed towards the vehicle manufacturer and it is customary for manufacturers to indemnify us from exposure related to any judgments associated with the claims.
However, if damages could not be collected from the manufacturer or distributor, we could be named in lawsuits and judgments could be levied against us.
Many new manufacturers are entering the automotive industry. New companies have raised capital to produce fully electric vehicles or to license battery technology to existing
manufacturers. Tesla and Rivian have demonstrated the ability to successfully introduce electric vehicles to the marketplace. Foreign manufacturers from China and India are producing
significant volumes of new vehicles and are entering the United States and selecting partners to distribute their products. Because the automotive market in the United States is mature and
the overall level of new vehicle sales may not increase in the coming years, the success of new competitors will likely be at the expense of other, established brands. This could have a
material adverse impact on our success in the future.
Federal regulations around fuel economy standards and "greenhouse gas” emissions have continued to increase. New requirements may adversely affect any manufacturer’s ability to
profitably design, market, produce and distribute vehicles that comply with such regulations. We could be adversely impacted in our ability to market and sell these vehicles at affordable
prices and in our ability to finance these inventories. These regulations could have a material adverse effect on our business, results of operations, financial condition and cash flows.
If manufacturers or distributors discontinue or change sales incentives, warranties and other promotional programs, our business, results of operations, financial condition and
cash flows may be materially adversely affected.
We depend upon the manufacturers and distributors for sales incentives, warranties and other programs that are intended to promote new vehicle sales or supplement dealer income.
Manufacturers and distributors routinely make changes to their incentive programs. Key incentive programs include:
• customer rebates;
• dealer incentives on new vehicles;
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• special financing rates on certified, pre-owned cars; and
• below-market financing on new vehicles and special leasing terms.
Our financial condition could be materially adversely impacted by a discontinuation or change in our manufacturers’ or distributors’ incentive programs. In addition, certain manufacturers
use criteria such as a dealership’s manufacturer-determined customer satisfaction index (CSI score), facility image compliance, employee training, digital marketing and parts purchase
programs as factors governing participation in incentive programs. To the extent we do not meet minimum score requirements, we may be precluded from receiving certain incentives, which
could materially adversely affect our business, results of operations, financial condition and cash flows.
Franchised automotive retailers perform factory authorized service work and sell original replacement parts on vehicles covered by warranties issued by the automotive manufacturer. For
the year ended December 31, 2022, approximately 20% of our service, body and parts revenue was for work covered by manufacturer warranties or manufacturer-sponsored maintenance
services. To the extent a manufacturer reduces the labor rates or markup of replacement parts for such warranty work, our service, body and parts sales volume could be adversely affected.
The ability of our stores to make new vehicle sales depends in large part upon the franchise agreements with manufacturers and, therefore, any disruption or change in our
relationships could impact our business.
We depend on the manufacturers to provide us with a desirable mix of new vehicles. The most popular vehicles usually produce the highest profit margins and are frequently in short supply.
If we cannot obtain sufficient quantities of the most popular models, our profitability may be adversely affected. Sales of less desirable models may reduce our profit margins.
Each of our stores operates pursuant to a franchise agreement with each of the respective manufacturers for which it serves as franchisee. Each of our stores may obtain new vehicles from
manufacturers, service vehicles, sell new vehicles, and display vehicle manufacturers’ brand only to the extent permitted under these agreements. As a result of the terms of our franchise
agreements, manufacturers exert significant control over the day-to-day operations at our stores. Such agreements contain provisions for termination or non-renewal for a variety of causes,
including service retention, facility compliance, customer satisfaction and sales and financial performance. From time to time, certain of our stores have failed to comply with certain
provisions of their franchise agreements, and we cannot ensure that our stores will be able to comply with these provisions in the future.
Our franchise agreements expire at various times, and there can be no assurances that we will be able to renew these agreements on a timely basis or on acceptable terms or at all.
Actions taken by a manufacturer to exploit its bargaining position in negotiating the terms of renewals of franchise agreements or otherwise could also have a material adverse effect on our
revenues and profitability. If a manufacturer terminates or fails to renew one or more of our significant franchise agreements or a large number of our franchise agreements, such action
could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Our franchise agreements also specify that, except in certain situations, we cannot operate a franchise by another manufacturer in the same building as the manufacturer’s franchised
store. This may require us to build new facilities at a significant cost. Moreover, our manufacturers generally require that the store meet defined image standards. These commitments could
require us to make significant capital expenditures.
Our franchise agreements do not give us the exclusive right to a given geographic area. Manufacturers may be able to establish new franchises or relocate existing franchises, subject to
applicable state franchise laws. The establishment of or relocation of franchises in our markets could have a material adverse effect on the business, financial condition and results of
operations of our stores in the market in which the action is taken.
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Our indebtedness and lease obligations could materially adversely affect our financial health, limit our ability to finance future acquisitions and capital expenditures and
prevent us from fulfilling our financial obligations. Much of our debt is secured by a substantial portion of our assets. Much of our debt has a variable interest rate component
that may significantly increase our interest costs in a rising rate environment.
Our indebtedness and lease obligations could have important consequences to us, including the following:
• limitations on our ability to make acquisitions;
• impaired ability to obtain additional financing for acquisitions, capital expenditures, working capital or general corporate purposes;
• reduced funds available for our operations and other purposes, as a larger portion of our cash flow from operations would be dedicated to the payment of principal and interest on our
indebtedness; and
• exposure to the risk of increasing interest rates as certain borrowings are, and will continue to be, at variable rates of interest.
In addition, our loan agreements and our senior note indentures contain covenants that limit our discretion with respect to business matters, including incurring additional debt, granting
additional security interests in our assets, acquisition activity, disposing of assets and other business matters. Other covenants are financial in nature, including current ratio, fixed charge
coverage and leverage ratio calculations. A breach of any of these covenants could result in a default under the applicable agreement. In addition, a default under one agreement could
result in a default and acceleration of our repayment obligations under the other agreements under the cross-default provisions in such other agreements.
We have granted a security interest in a substantial portion of our assets to certain of our lenders and other secured parties, including those under our $3.8 billion syndicated credit facility
and $1.1 billion CAD Canadian syndicated credit facility. If we default on our obligations under those agreements, the secured parties may be able to foreclose upon their security interests
and otherwise be entitled to obtain or control those assets.
Certain debt agreements contain subjective acceleration clauses based on a lender deeming itself insecure or if a "material adverse change” in our business has occurred. If these clauses
are implicated, and the lender declares that an event of default has occurred, the outstanding indebtedness would likely be immediately due and owing.
If these events were to occur, we may not be able to pay our debts or borrow sufficient funds to refinance them. Even if new financing were available, it may not be on terms acceptable to
us. As a result of this risk, we could be forced to take actions that we otherwise would not take, or not take actions that we otherwise might take, in order to comply with these
agreements.
In addition, the lenders’ obligations to make loans or other credit accommodations under certain credit agreements is subject to the satisfaction of certain conditions precedent including,
for example, the satisfaction of financial covenants and conditions and that our representations and warranties in the agreement are true and correct in all material respects as of the date of
the proposed credit extension. If any of the conditions precedent are not satisfied, we may not be able to request new loans or other credit accommodations under those credit facilities,
which could have a material adverse impact on our business, results of operations, financial condition and cash flows.
Additionally, at various times in the future, we will need to refinance portions of our debt. At the time we must refinance, the market for new debt, or our financial condition or asset
valuations, might not be favorable. It is possible that financing to replace or renew our debt may be unfavorable, which would adversely affect our financial condition and results of operations.
In certain cases, we may turn to equity or other alternative financing.
Our floor plan notes payable, credit facilities and a portion of our real estate debt are subject to variable interest rates. As of December 31, 2022, 65% of our total debt was variable rate. In
the event interest rates increase, our borrowing costs may increase substantially. Additionally, fixed rate debt that matures may be renewed at interest rates significantly higher than
current levels. As a result, this could have a material adverse impact on our business, results of operations, financial condition and cash flows. We may use interest rate derivatives to
hedge a portion of our variable rate debt, when appropriate, based upon market conditions. See Note 11 – Derivative Financial Instruments, related to current hedge activity.
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We may not be able to satisfy our debt obligations upon the occurrence of a change in control under our debt instruments.
Upon the occurrence of a change in control as defined in our credit agreement, the agent under the credit agreement will have the right to declare all outstanding obligations immediately
due and payable and to terminate the availability of future advances to us. Upon the occurrence of a change in control, as defined in the indentures governing our senior notes, the holders of
our senior notes will have the right to require us to purchase all or any part of such holders’ notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any. There can be no assurance that we would have sufficient resources available to satisfy all of our obligations under the credit agreement in the event of a change in control or
fundamental change. In the event we were unable to satisfy these obligations, it could have a material adverse impact on our business and our common stock holders. A "change in control”
as defined in our credit agreement includes, among other events, the acquisition by any person, or two or more persons acting in concert, in either case other than Lithia Holdings
Company, L.L.C., Sid DeBoer or Bryan DeBoer, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of 35% or more of the
outstanding shares of our voting stock on a fully diluted basis.
We may experience greater credit losses in DFC’s portfolio of auto loan and lease receivables than anticipated.
Customers who finance a vehicle purchase or lease a vehicle through a DFC auto loan or lease may be unable to repay the loans based on the original terms and that the fair value of the
vehicles used as collateral against the loans may not be sufficient to ensure full repayment. Credit and residual value losses are an inherent risk of our auto loan and lease portfolio and
could result in a material adverse effect on our results of operations.
We estimate an allowance for loan losses based on a variety of assumptions about DFC’s portfolio of auto loan receivables and lease receivables. Although management prepares an
estimate it believes appropriate based on available information, this allowance may not be a sufficient reserve for loan and lease losses. For example, sudden economic changes such as
an economic downturn or a change in consumer spending may result in additional losses incurred that we did not estimate in our original allowance. Losses in excess of our allowance for
losses could have a material adverse effect on our business and results of operations.
The growth and success of our DFC business is dependent upon obtaining sufficient capital to grow our auto loan portfolio.
Changes in the availability or cost of financing to support our auto loan portfolio under DFC could adversely affect our results of operations. Our auto loan portfolio is funded through a
combination of free cash flows from operations and securitized funding, including asset-backed securitization. Changes in the condition of the asset backed securitization market may
result in increased costs to access funds in the market or require us to explore new financing options to fund new auto loans. In the event that there is no alternative financing available, we
may be forced to pause our auto loan financing business for a period of time. The impact of reducing or pausing our auto loan financing business could result in a material adverse effect on
our results of operations.
Risks associated with our international operations may negatively affect our business, results of operations and financial condition.
We operate dealerships in the United States and Canada. While our operations outside of the United States currently represent a small portion of our revenue, we anticipate that our
international operations will expand. We face regulatory, operational, political and economic risks and uncertainties with respect to our international operations that may be different from
those in the United States. These risks may include, but are not limited to, the following:
fluctuations in foreign currency translations within our financial statements driven by exchange rate volatility;
inability to obtain or preserve franchise rights in the foreign countries in which we operate;
compliance with changing laws and regulations;
compliance with United States Foreign Corrupt Practices Act and other anti-corruption laws;
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• wage inflation;
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treatment of revenue from international sources and changes to tax rules, including being subject to foreign tax laws;
difficulties in managing foreign operations and dealing with different customs, practices and local regulations with which we are less familiar;
large uncertainties, timing delays and expenses associated with tariffs, labor matters, import or export licenses and other trade barriers; and
changes in a country’s economic or political conditions, including inflation, recession and interest rate fluctuations, and exposure to regional or global public health issues,
pandemics, or epidemics, such as the outbreak of the COVID-19 pandemic.
Technology and Cybersecurity Risks
Changes to the retail delivery model and increased e-commerce and omni-channel competition could adversely affect our business, results of operations, financial condition
and cash flows.
The automotive industry is beginning to experience change and disruption in the retail delivery model, including growing competition in the used vehicle market from companies with a
primarily online e-commerce business model. Competition in this market includes companies such as CarMax, Carvana, Vroom and Shift. In addition, larger traditional automotive retailers
are transforming their models to support omni-channel retail experiences, providing consumers with vehicle purchasing experiences outside of the traditional brick and mortar automotive
dealership model.
We continue to develop our own internal technology solutions to further expand the reach of our nationwide network of service and delivery points. We may face increased competition for
market share with these other delivery models and omni-channel retailers over time which could materially and adversely affect our results of operations. There can be no assurance that our
initiatives will be successful or that the amount we invest in these initiatives will result in our maintaining market share and continued or improved financial performance.
Breaches in our data security systems or in systems used by our vendor partners, including cyber-attacks or unauthorized data distribution by employees or affiliated vendors,
or disruptions to access and connectivity of our information systems could impact our operations or result in the loss or misuse of customers’ proprietary information.
Our information technology systems are important to operating our business efficiently. We employ information technology systems, including websites, that allow for the secure handling
and processing of customers’ proprietary information. The failure of our information technology systems, and those of our partner software and technology vendors, to perform as we
anticipate could disrupt our business and could expose us to a risk of loss or misuse of this information, litigation and potential liability.
Aspects of our operations are subject to privacy, data use and data security regulations, which impact the way we use and handle data. In addition, regulators are proposing and adopting
new laws or regulations that could require us to adopt certain cybersecurity and data handling practices. The changing privacy laws (e.g. California Consumer Privacy Act) create new
individual privacy rights and impose increased obligations on companies handling personal data. Additionally, our expansion into Canada subjects us to additional privacy and security
regulations which also impact the way we handle and secure data across borders.
We collect, process, and retain personally identifiable information regarding customers, associates and vendors in the normal course of our business. Our internal and third-party systems
have been and may in the future be subject to cyber-attacks, viruses, malicious software, break-ins, theft, computer hacking, phishing, employee error, or malfeasance or other security
breaches or loss of service. We invest in commercially reasonable security technology to protect our data and business processes against many of these risks. We also purchase
insurance to mitigate the potential financial impact of many of these risks. Despite the security measures we have in place, our facilities and systems, and those of our third-party service
providers, could be vulnerable to security breaches, computer viruses, lost or misplaced data, programming errors, human errors, acts of vandalism, or other events. Any security breach or
event resulting in the misappropriation, loss, or other unauthorized disclosure of confidential information, or degradation of services provided by critical business systems, whether by us
directly or our third-party service providers, could adversely affect our business operations, sales, reputation with current and potential
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customers, associates or vendors, as well as other operational and financial impacts derived from investigations, litigation, imposition of penalties or other means.
Regulatory Risks
Our dealerships and our new vehicle sales model may not be protected if state dealer laws are repealed or weakened, a manufacturer becomes bankrupt or there is a shift to
other sales models.
State and provincial dealer laws generally provide that a manufacturer may not terminate or refuse to renew a franchise agreement unless it has first provided the dealer with written notice
setting forth good cause and stating the grounds for termination or non-renewal. Certain United States state dealer laws allow dealers to file protests or petitions or attempt to comply with
the manufacturer’s criteria within the notice period to avoid the termination or non-renewal. If dealer laws are repealed in the states where we operate, manufacturers may be able to
terminate our franchises without providing advance notice, an opportunity to cure or a showing of good cause. In Canada, although laws differ by province, provincial law generally provides
that both a manufacturer and dealer each has a common law and statutory duty of good faith and fair dealing in performance and enforcement of any franchise agreement. Disputes are
generally handled through the National Automobile Dealer Arbitration Program (NADAP). If a manufacturer wished to terminate a franchise, there is no guaranty that we would win such a
dispute. Without the protection of state and provincial dealer laws, it may also be more difficult to renew our franchise agreements upon expiration or on terms acceptable to us.
As evidenced by the bankruptcy proceedings of both Chrysler and GM in 2009, state dealer laws do not afford continued protection from manufacturer terminations or non-renewal of
franchise agreements. No assurances can be given that a manufacturer will not seek protection under bankruptcy laws, or that, in this event, they will not seek to terminate franchise rights
held by us.
In addition, state dealer laws restrict the ability of vehicle manufacturers to directly enter the retail market. Manufacturer lobbying efforts and lawsuits may lead to the repeal or revision of
these laws. For example, Tesla has received a favorable ruling in certain states allowing direct to consumer sales and service. In addition, many states have recently passed or are
introducing legislation to permit direct to consumer auto sales in certain circumstances, allowing additional electric vehicle manufacturers such as Rivian to enter the market. If
manufacturers obtain the ability to directly retail vehicles in our markets, such competition could negatively impact our sales and have a material adverse effect on our business, results of
operations, financial condition and cash flows.
Certain manufacturers are moving to an agency model in other countries, whereby the consumer places an order directly with the manufacturer and names a preferred delivery dealer. The
agency model is being used by manufacturers such as Volkswagen in Germany for all EVs and Mercedes-Benz in the U.K. and other European regions. If the agency model or another
new model is implemented in the countries and regions in which we operate for the sale of electric or other vehicles, it could negatively affect our revenues, results of operations and
financial condition.
Import product restrictions, currency valuations, and foreign trade risks may impair our ability to sell foreign vehicles or parts profitably.
A significant portion of the vehicles we sell are manufactured outside of the United States, and all of the vehicles we sell include parts manufactured outside of the United States. As a
result, our operations are subject to customary risks of importing merchandise, including currency fluctuation, import duties, exchange rates, trade restrictions, work stoppages,
transportation costs, natural or man-made disasters, and general political and socioeconomic conditions in other countries. The United States or the countries from which our products are
imported, may, from time to time, impose new quotas, duties, tariffs or other restrictions, or adjust presently prevailing quotas, duties or tariffs, which may affect our operations and our
ability to purchase imported vehicles and/or parts at reasonable prices. Changes in United States trade policies, including the United States-Mexico-Canada Agreement or policies intended
to penalize foreign manufacturing or imports, and policies of foreign countries in reaction to those changes, could increase the prices we pay for some of the new vehicles and parts we sell.
Any changes that increase the costs of vehicles and parts generally, to the extent passed on to customers, could negatively affect customer demand and our revenues and profitability. If
not passed on to our customers, any cost increases will adversely affect our profitability. Any cost increase that disproportionately applies to manufacturers that sell to us could adversely
affect our business compared to other vehicle retailers.
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Our operations are subject to extensive governmental laws and regulations. If we are found to be in violation of or subject to liabilities under any of these laws, or if new laws
or regulations are enacted that adversely affect our operations, our business, operating results, and prospects could suffer.
We are subject to federal, state and local laws and regulations in the states in which we operate, such as those relating to franchising, motor vehicle sales, retail installment sales, leasing,
finance and insurance, marketing, licensing, consumer protection, consumer privacy, escheatment, anti-money laundering, environmental, vehicle emissions and fuel economy, and health
and safety. In addition, with respect to employment practices, we are subject to various laws and regulations, including complex federal, state and local wage and hour and anti-
discrimination laws. New laws and regulations are enacted on an ongoing basis. With the number of stores we operate, the number of personnel we employ and the large volume of
transactions we handle, it is possible that technical mistakes will be made. These regulations affect our profitability and require ongoing training. Current practices in stores may become
prohibited. We are responsible for ensuring that continued compliance with laws is maintained. If there are unauthorized activities, the state and federal authorities have the power to impose
civil penalties and sanctions, suspend or withdraw dealer licenses or take other actions. These actions could materially impair our activities or our ability to acquire new stores in those
states where violations occurred. Further, private causes of action on behalf of individuals or a class of individuals could result in significant damages or injunctive relief.
We may be involved in legal proceedings arising from the conduct of our business, including litigation with customers, employee-related lawsuits, class actions, purported class actions and
actions brought by or on behalf of governmental authorities. Claims arising out of actual or alleged violations of law may be asserted against us or any of our dealers by individuals, either
individually or through class actions, or by governmental entities in civil or criminal investigations and proceedings. Such actions may expose us to substantial monetary damages and legal
defense costs, injunctive relief, criminal and civil fines and penalties and damage our reputation and sales.
Our financing activities are subject to federal truth-in-lending, consumer leasing and equal credit opportunity laws and regulations, as well as state and local motor vehicle finance laws,
installment finance laws, insurance laws, usury laws and other installment sales laws and regulations. Some states regulate finance, documentation and administrative fees that may be
charged in connection with vehicle sales. In recent years, private plaintiffs and state attorneys general in the United States have increased their scrutiny of advertising, sales, and finance
and insurance activities in the sale and leasing of motor vehicles. These activities have led many lenders to limit the amounts that may be charged to customers as fee income for these
activities. If these or similar activities were to significantly restrict our ability to generate revenue from arranging financing for our customers, we could be adversely affected.
If we or any of our employees at any individual dealership violate or are alleged to violate laws and regulations applicable to them or protecting consumers generally, we could be subject to
individual claims or consumer class actions, administrative, civil or criminal investigations or actions and adverse publicity. Such actions could expose us to substantial monetary damages
and legal defense costs, injunctive relief and criminal and civil fines and penalties, including suspension or revocation of our licenses and franchises to conduct dealership operations.
Environmental laws and regulations govern, among other things, discharges into the air and water, storage of petroleum substances and chemicals, the handling and disposal of wastes and
remediation of contamination arising from spills and releases. In addition, we may also have liability in connection with materials that were sent to third-party recycling, treatment and/or
disposal facilities under federal and state statutes. These federal and state statutes impose liability for investigation and remediation of contamination without regard to fault or the legality of
the conduct that contributed to the contamination. Similar to many of our competitors, we have incurred and expect to continue to incur capital and operating expenditures and other costs
in complying with such federal and state statutes. In addition, we may be subject to broad liabilities arising out of contamination at our currently and formerly owned or operated facilities, at
locations to which hazardous substances were transported from such facilities, and at such locations related to entities formerly affiliated with us. Although for some such potential
liabilities we believe we are entitled to indemnification from other entities, we cannot assure you that such entities will view their obligations as we do or will be able or willing to satisfy
them. Failure to comply with applicable laws and regulations, or significant additional expenditures required to maintain compliance therewith, may have a material adverse effect on our
business, results of operations, financial condition, cash flows and prospects.
16
Structural and Organizational Risks
Our ability to increase revenues and profitability through acquisitions depends on our ability to acquire and successfully integrate new vehicle franchises.
The United States and Canadian vehicle industry is considered a mature industry in which minimal growth is expected in unit sales of new vehicles. Accordingly, a principal component of
our growth strategy is to make dealership acquisitions in our existing markets and in new geographic markets. Restrictions by our manufacturers and limitations on our access to capital
resources may directly or indirectly limit our ability to acquire additional dealerships. In addition, increased competition for acquisitions, including from other national, regional and local
dealership groups, and other strategic and financial buyers, some of which may have greater financial resources than us, could result in fewer acquisition opportunities for us and higher
acquisition prices in the future.
We are required to obtain consent from the applicable manufacturer prior to the acquisition of a franchised store, which typically takes 60 to 90 days. In determining whether to approve an
acquisition, a manufacturer considers factors including the number of such manufacturers’ stores currently owned, ownership of stores in contiguous markets, performance of existing
stores, frequency of acquisitions, and our financial condition. In the past, manufacturers have not consented to our purchase of franchised stores and we cannot assure you that
manufacturers will approve future acquisitions timely, if at all, which could significantly impair the execution of our acquisition strategy.
We make a substantial capital investment when we acquire dealerships. We finance acquisitions activity with cash flows from our operations, borrowings under our credit arrangements,
proceeds from our offering of senior notes, proceeds from mortgage financing and the issuance of shares of common stock. The size of our acquisition activity in recent years magnifies
risks associated with debt service obligations. These risks include potential lower earnings per share, our inability to pay dividends and potential negative impacts to the debt covenants we
negotiated under our credit agreement. In addition, issuances of equity securities could result in dilution to existing shareholders.
We face other risks commonly encountered with growth through acquisitions. These risks include, without limitation:
•
•
•
•
•
•
•
•
•
•
failing to identify suitable acquisition candidates and negotiate acceptable terms;
failing to assimilate the operations and personnel of acquired dealerships;
straining our existing systems, procedures, structures and personnel, including by disrupting our ongoing business and diverting our management resources;
failing to achieve expected performance levels;
incurring significantly higher capital expenditures and operating expenses, including incurring additional facility renovation costs or other expenses required by the manufacturer;
entering new, unfamiliar markets;
encountering undiscovered liabilities and operational difficulties at acquired dealerships;
failing to maintain uniform standards, controls and policies;
impairing relationships with employees, manufacturers and customers; and
overvaluing entities to be acquired.
Our failure to address these risks or other problems encountered in connection with our acquisitions could cause us to fail to realize the anticipated benefits of these acquisitions, cause us
to incur unanticipated liabilities and otherwise harm our business. Any of these risks, if realized, could materially and adversely affect our business, financial condition and results of
operations.
The loss of key personnel or the failure to attract additional qualified management personnel could adversely affect our operations and growth.
Our success depends to a significant degree on the efforts and abilities of our senior management. Further, we have identified Bryan B. DeBoer in most of our store franchise agreements
as the individual who controls the franchises and upon whose financial resources and management expertise the manufacturers may rely when awarding or approving the transfer of any
franchise. If we lose these key personnel, our business may suffer.
In addition, as we expand into new markets and develop our digital e-commerce solutions, we will need to hire additional managers, engineers, data scientists and other employees. The
market for qualified employees in the
17
automotive and technology-related industries is highly competitive and may subject us to increased labor costs during periods of low unemployment. The loss of the services of key
employees or the inability to attract additional qualified personnel could have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition,
the lack of qualified managers or other employees employed by potential acquisition candidates may limit our ability to consummate future acquisitions.
Risks Related to Investing in Our Common Stock
Oregon law and our Restated Articles of Incorporation may impede or discourage a takeover, which could impair the market price of our common stock.
We are an Oregon corporation, and certain provisions of Oregon law and our Restated Articles of Incorporation may have anti-takeover effects. These provisions could delay, defer or prevent
a tender offer or takeover attempt that a shareholder might consider to be in his or her best interest. These provisions may also affect attempts that might result in a premium over the
market price for the shares held by shareholders and may make removal of the incumbent management and directors more difficult, which, under certain circumstances, could reduce the
market price of our common stock.
Our issuance of preferred stock could adversely affect holders of common stock.
Our Board of Directors is authorized to issue a series of preferred stock without any action on the part of our holders of common stock. Our Board of Directors also has the power, without
shareholder approval, to set the terms of any such series of preferred stock that may be issued, including voting powers, preferences over our common stock with respect to dividends or if
we voluntarily or involuntarily dissolve or distribute our assets, and other terms. If we issue preferred stock in the future that has preference over our common stock with respect to the
payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our common stock, the rights of holders
of our common stock or the price of our common stock could be adversely affected.
Item 2. Properties
Our stores and other facilities consist primarily of vehicle showrooms, display lots, service facilities, collision repair and paint shops, supply facilities, vehicle storage lots, parking lots and
offices in two countries, across 28 U.S states and three Canadian provinces in the locations shown in the map under the Overview section of Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations. We believe our facilities are currently adequate for our needs and are in good repair. Some of our facilities do not currently meet
manufacturer image or size requirements and we are actively working to find a mutually acceptable outcome in terms of timing and overall cost. We own our corporate headquarters in
Medford, Oregon, and numerous other properties used in our operations. Certain of our owned properties are mortgaged or secured as part of commitments on our various real estate credit
facilities. As of December 31, 2022, we had outstanding mortgage debt of $580.1 million, and no amounts outstanding on our real estate credit facilities. We also lease certain properties,
providing future flexibility to relocate our retail stores as demographics, economics, traffic patterns or sales methods change. Most leases provide us the option to renew the lease for one or
more lease extension periods. We also hold certain vacant facilities and undeveloped land for future expansion.
Our corporate headquarters is LEED certified and incorporates roof-mounted solar panels to offset energy usage. Two of our stores are also LEED certified, and we have completed solar
projects at a number of others. We engage in a comprehensive feasibility analysis for solar opportunities for potential integration. Our stores also integrate energy-saving practices and
materials. This includes practices such as recycling used tires, used engine oil and used oil filters; the use of waste oil heaters and carwash reclaim systems; using biodegradable
products in our detail services and interior and exterior LED lighting. We have engaged a nationwide electric vehicle (EV) charging network to meet the changing needs of our brands, while
also looking ahead toward opportunities to support the public’s vehicle electrification needs, promoting the increasing number of EVs on the road and thereby reducing emissions.
18
Item 3. Legal Proceedings
We are party to numerous legal proceedings arising in the normal course of our business. Although we do not anticipate that the resolution of legal proceedings arising in the normal course
of business will have a material adverse effect on our business, results of operations, financial condition, or cash flows, we cannot predict this with certainty.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our common stock trades on the New York Stock Exchange under the symbol LAD. The number of shareholders of record and approximate number of beneficial holders of common stock
as of February 24, 2023 was 448 and 93,246, respectively.
Repurchases of Equity Securities
We made the following repurchases of our common stock during the fourth quarter of 2022:
For the full calendar month of
Total number of shares purchased
(2)
Average price
paid per share
Total number of shares purchased as part
of publicly announced plan
(1)
Maximum dollar value of shares that
may yet be purchased under publicly
announced plan (in thousands)
(1)
October
November
December
Total
174,657 $
44
—
174,701
198.54
198.15
—
198.49
174,657 $
—
—
174,657
51,368
501,368
501,368
501,368
(1)
(2)
On November 1, 2022, our Board of Directors approved an additional $450 million repurchase authorization of our common stock. This new authorization is in addition to the amount previously
authorized by the Board for repurchase. There is no expiration date for this share repurchase authorization.
44 shares repurchased in the fourth quarter of 2022 were related to tax withholdings on the vesting of RSUs.
19
Stock Performance Graph
The stock performance graph and table that follow compare the cumulative total stockholder return on Lithia Motors, Inc.’s common stock with the cumulative total return of the Standard &
Poor’s 500 Stock Index (S&P 500 Index), and an auto peer group index composed of Penske Automotive Group, AutoNation, Sonic Automotive, Group 1 Automotive, Asbury Automotive
Group, and CarMax for the five years ended December 31, 2022. The peer group indexes utilize the same methods of presentation and assumptions for the total return calculation as does
Lithia Motors and the S&P 500 Index. All companies in the peer group indexes are weighted in accordance with their market capitalizations.
(1)
Company/Index
Lithia Motors, Inc.
S&P 500 Index - Total Return
Auto Peer Group
187.74
156.88
172.15
The graph and table assume that $100 was invested on the last day of trading for the calendar year ended December 31, 2017 in Lithia Motors, Inc’s common stock, the S&P 500 Index, and peer
group indexes, and that all dividends were reinvested.
$100.00 $
100.00
100.00
270.67 $
191.58
226.73
265.77 $
148.85
152.48
132.36 $
125.72
127.86
68.03 $
95.62
88.62
(1)
Base Period
2017
2018
Indexed Returns for the Year Ended
2020
2021
2019
2022
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion in conjunction with Item 1. Business, Item 1A. Risk Factors, and our Consolidated Financial Statements and Notes thereto.
20
Overview
We are one of the largest automotive retailers in the United States and were ranked #158 on the Fortune 500 in 2022. As of February 24, 2023, we offered 48 brands of new vehicles and all
brands of used vehicles in 296 stores in North America and online at over 300 websites. We offer a wide range of products and services including new and used vehicles, finance and
insurance products and vehicle repair and maintenance.
21
Financial Performance
We experienced growth of revenue and gross profit in all major business lines in 2022 compared to 2021, primarily driven by increases in volume related to acquisitions, complimented by
organic growth in used vehicles, finance and insurance and service, body and parts sales. On a same store basis, new and used vehicle retail revenues and gross profits experienced
growth primarily driven by increases in average selling prices per retail unit.
Liquidity
As of December 31, 2022, we had available liquidity of $1.6 billion, which was comprised of $168.1 million in cash and $1.4 billion availability on our credit facilities and unfloored new
vehicle inventory. In addition, our unfinanced real estate could provide additional liquidity of approximately $0.5 billion. For further discussion of our liquidity, please refer to "Liquidity and
Capital Resources” below.
Segments
In the fourth quarter of 2022, we reevaluated our reporting segments based on our development and long-term strategy. The Company has experienced rapid growth in size as well as new
expansion into synergistic business lines, transforming the way the business is managed. Considering the Company’s growth, evolution of its business model, and change in Company
structure during 2022, management reevaluated its reporting segments and determined the operating segments (and reportable segments) as of December 31, 2022 are Vehicle Operations
and Financing Operations. Based on this evaluation, we reclassified Financing Operations Income for the comparative periods from the "Corporate and Other” category to conform to current
year presentation and consolidated our Domestic, Import, and Luxury segments into a new Vehicle Operations segment.
22
Vehicle Operations and Other Non-Reportable Segments
($ in millions, except per vehicle data)
Revenues
New vehicle retail
Used vehicle retail
Finance and insurance
Service, body and parts
Total revenues
Gross profit
New vehicle retail
Used vehicle retail
Finance and insurance
Service, body and parts
Total gross profit
Gross profit margins
New vehicle retail
Used vehicle retail
Finance and insurance
Service, body and parts
Total gross profit margin
Retail units sold
New vehicle retail
Used vehicle retail
Average selling price per retail unit
New vehicle retail
Used vehicle retail
$
$
$
2022
2021
Change
%
2020
Change
%
Year Ended December 31,
2022 vs. 2021
2021 vs. 2020
$
$
12,894.5
9,425.0
1,285.4
2,738.8
28,187.8
1,579.7
825.4
1,285.4
1,463.1
5,152.4
12.3 %
8.8
100.0
53.4
18.3
$
$
11,197.7
7,255.3
1,051.3
2,110.9
22,831.7
1,218.5
826.7
1,051.3
1,110.5
4,259.0
10.9 %
11.4
100.0
52.6
18.7
271,596
311,764
260,738
275,495
1,696.8
2,169.7
234.1
627.9
5,356.1
361.2
(1.3)
234.1
352.6
893.4
140 bp
-260 bp
— bp
80 bp
-40 bp
10,858
36,269
15.2 % $
29.9
22.3
29.7
23.5
29.6 % $
(0.2)
22.3
31.8
21.0
6,773.9
3,998.4
579.8
1,348.7
13,126.5
461.0
446.0
579.8
716.8
2,224.3
6.8 %
11.2
100.0
53.1
17.0
4.2 %
13.2
171,168
183,230
47,477
30,231
$
42,946
26,336
$
4,531
3,895
10.6 % $
14.8
$
$
$
$
4,423.8
3,256.9
471.5
762.2
9,705.2
757.5
380.7
471.5
393.7
2,034.7
410 bp
20 bp
— bp
-50 bp
170 bp
89,570
92,265
3,371
4,514
1,980
567
325
1,629
65.3 %
81.5
81.3
56.5
73.9
164.3 %
85.4
81.3
54.9
91.5
52.3 %
50.4
8.5 %
20.7
73.5 %
23.3
19.9
38.5
39,575
21,822
2,693
2,434
1,636
4,226
Average gross profit per retail unit
New vehicle retail
Used vehicle retail
Finance and insurance
Total vehicle
(1)
5,816
2,648
2,203
6,300
Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail
24.5 % $
(11.8)
12.3
7.6
4,673
3,001
1,961
5,855
1,143
(353)
242
445
$
$
$
(1)
Same Store Operating Data
We believe that same store comparisons are an important indicator of our financial performance. Same store measures demonstrate our ability to grow operations in our existing locations.
Therefore, we have integrated same store measures into the discussion below.
Same store measures reflect results for stores that were operating in each comparison period, and only include the months when operations occurred in both periods. For example, a store
acquired in November 2021 would be included in same store operating data beginning in December 2022, after its first complete comparable month of operations. The fourth quarter
operating results for the same store comparisons would include results for that store in only the period of December for both comparable periods.
23
2022
2021
Change
%
2021
2020
Change
%
Year Ended December 31,
2022 vs. 2021
2021 vs. 2020
$
$
$
$
10,129.1
7,886.6
1,027.2
2,232.9
22,649.1
1,231.4
674.7
1,027.2
1,205.3
4,125.2
12.2 %
8.6
100.0
54.0
18.2
$
$
10,729.8
6,997.9
1,010.7
2,032.9
21,941.2
1,175.9
798.0
1,010.7
1,069.9
4,105.4
11.0 %
11.4
100.0
52.6
18.7
(600.7)
888.7
16.5
200.0
707.9
55.5
(123.3)
16.5
135.4
19.8
120 bp
-280 bp
— bp
140 bp
-50 bp
(5.6)% $
12.7
1.6
9.8
3.2
4.7 % $
(15.5)
1.6
12.7
0.5
$
$
7,159.1
5,246.8
697.3
1,403.6
15,216.9
781.2
618.1
697.3
756.3
2,879.6
10.9 %
11.8
100.0
53.9
18.9
$
$
6,282.4
3,735.3
540.5
1,260.2
12,216.2
430.7
421.2
540.5
669.2
2,082.0
6.9 %
11.3
100.0
53.1
17.0
876.7
1,511.5
156.8
143.4
3,000.7
350.5
196.9
156.8
87.1
797.6
400 bp
50 bp
— bp
80 bp
190 bp
210,558
261,857
248,821
264,305
(38,263)
(2,448)
(15.4)%
(0.9)
163,680
198,121
157,933
169,953
5,747
28,168
($ in millions, except per vehicle
data)
Revenues
New vehicle retail
Used vehicle retail
Finance and insurance
Service, body and parts
Total revenues
Gross profit
New vehicle retail
Used vehicle retail
Finance and insurance
Service, body and parts
Total gross profit
Gross profit margins
New vehicle retail
Used vehicle retail
Finance and insurance
Service, body and parts
Total gross profit margin
Retail units sold
New vehicle retail
Used vehicle retail
Average selling price per retail
unit
New vehicle retail
Used vehicle retail
$
48,106
30,118
$
43,123
26,477
$
4,983
3,641
11.6 % $
13.8
43,738
26,483
$
Average gross profit per retail unit
New vehicle retail
Used vehicle retail
Finance and insurance
Total vehicle
(1)
4,726
3,019
1,970
5,900
Includes the sales and gross profit related to new, used retail, used wholesale and finance and insurance and unit sales for new and used retail
23.7 % $
(14.7)
10.4
4.4
1,122
(443)
204
259
5,848
2,576
2,174
6,159
4,773
3,120
1,927
5,854
$
$
$
$
(1)
$
$
39,779
21,978
2,727
2,479
1,648
4,280
3,959
4,505
2,046
641
279
1,574
24
14.0 %
40.5
29.0
11.4
24.6
81.4 %
46.7
29.0
13.0
38.3
3.6 %
16.6
10.0 %
20.5
75.0 %
25.9
16.9
36.8
New Vehicles
Under our business strategy, we believe that our new vehicle sales create incremental profit opportunities through certain manufacturer incentive programs, providing used vehicle inventory
through trade-ins, arranging of third-party financing, vehicle service and insurance contracts, future resale of used vehicles acquired through trade-in and parts and service work.
2022 vs. 2021
New vehicle revenue and gross profit grew 15.2% and 29.6%, respectively. This improvement resulted from an increase in average selling prices and unit sales due to our accelerated
growth through strategic acquisitions.
Same store new vehicle revenue was primarily impacted by a 15.4% decline in unit volume, partially offset by an increase in average selling prices of 11.6%. As the national new vehicle
market plateaus, our stores focus on improving gross profit per new vehicle sold. On a same store basis, gross profit per new vehicle increased 23.7%. Our recently acquired stores are
also focused on improving gross profit per new vehicle as total company gross profit per unit increased 24.5%.
Market demand remained high throughout 2022, with inventory levels recovering in the second half of 2022 from prior year shortages of available new vehicles for sale, resulting from certain
component shortages in the manufacturers’ supply chains. This imbalance continued to result in higher than normal average selling prices and gross profits per unit. Supply improvements
have varied by manufacturer, and are expected to continue to improve in 2023.
2021 vs. 2020
New vehicle revenues and gross profit grew 65.3% and 164.3%, respectively. These improvements resulted from our accelerated growth through strategic acquisitions and strong recovery
from the impact of the COVID-19 pandemic, driving new vehicle unit sales up 52.3%.
The increase in same store new vehicle revenues was driven by an increase in unit volume of 3.6% and an increase in average selling prices of 10.0%. On a same store basis, gross profit
per new vehicle increased 75.0%.
Used Vehicles
Our used vehicle operations provide an opportunity to generate sales to customers unable or unwilling to purchase a new vehicle, sell brands other than the store’s new vehicle franchise(s),
access additional used vehicle inventory through trade-ins and increase sales from finance and insurance products and parts and service.
Used vehicle retail sales are a strategic focus for organic growth. We offer three categories of used vehicles: manufacturer certified pre-owned (CPO) vehicles; core vehicles, which are late-
model vehicles with lower mileage; and value autos, which are vehicles with over 80,000 miles. We have established a company-wide target of achieving a per store average of 100 used
retail units per month. Strategies to achieve this target include reducing wholesale sales and selling the full spectrum of used units, from late model CPO vehicles to vehicles over ten years
old. During 2022, our stores sold an average of 91 used vehicles per store per month. This compares to 92 used vehicles per store per month in 2021 and 78 in 2020. Used vehicle
operations are generally an opportunity area for recently acquired and opened locations. As we acquired 32 and 78 locations in 2022 and 2021, respectively, this decrease in 2022 was due
to the volume of stores recently acquired still being integrated into our existing operational strategies.
25
Used vehicle demand remains high, due in part to the lower levels of new vehicle inventory available for sale. This demand resulted in higher than normal average selling prices in 2022.
2022 vs. 2021
Used vehicle revenues increased 29.9%, due to a combination of increased volume from acquisitions and organic growth in all categories of used vehicle sales at our seasoned stores.
Excluding the impact of acquisitions, on a same store basis, used vehicle revenues increased 12.7%, due to a 13.8% increase in average selling price per retail unit, partially offset by a
0.9% decrease in unit volume. The revenue increase in 2022 was driven by an increase in our core vehicles of 15.8% and supported by increases in value auto and CPO vehicle categories
of 10.8% and 6.1%, respectively. The increase in our core vehicle category includes a 0.2% increase in volume, complimented by a 15.6% increase in average selling price per vehicle.
Used vehicle gross profits decreased 0.2%, due to an 11.8% decrease in average gross profit per unit. On a same store basis, used vehicle gross profit decreased 15.5%, led by a
decrease in our core vehicles of 22.3% with additional declines in our value autos and CPO vehicle categories of 5.3% and 8.2%, respectively. The decrease in our core vehicle category
was driven by a decrease in gross profit per unit, while unit volume remained relatively flat. Gross profit per unit in our core vehicle category, which accounted for 61.5% of our used vehicle
unit sales, decreased 22.4% to $2,124. The decrease in same store gross profit in our value auto category was driven by a 7.4% decrease in gross profit per unit to $2,732. Our CPO
category experienced a decrease in unit sales of 6.7% and a decrease in gross profit per unit of 1.6% to $3,808.
2021 vs. 2020
Used vehicle revenues increased 81.5%, driven by a combination of increased volume from acquisitions and organic growth in all categories of used vehicle sales at our seasoned stores.
Excluding the impact of acquisitions, on a same store basis, used vehicle revenues increased 40.5%, due to a 16.6% increase in unit volume and a 20.5% increase in average selling price
per retail unit.
Used vehicle gross profits increased 85.4%, due to increased gross profit per unit of 23.3% and increased unit volume of 50.4%. On a same store basis, used vehicle gross profit increased
46.7%, due to an increase in average gross profit per unit of 25.9% and increased unit volume.
Third-party Finance and Insurance
We believe that arranging timely vehicle financing is an important part of providing personal transportation solutions, and we attempt to arrange financing for every vehicle we sell. We also
offer related products such as extended warranties, insurance contracts and vehicle and theft protection. Third-party extended warranty and insurance contracts yield higher profit margins
than vehicle sales and contribute significantly to our profitability.
2022 vs. 2021
Finance and insurance revenue increased 22.3%, primarily due to increased volume related to acquisitions, combined with expanded product offerings and increasing penetration rates. On
a same store basis, finance and insurance revenue increased 1.6%, to $2,174 per unit, driven by a 330 basis point increase in service contract penetration rates to 53.6%.
26
2021 vs. 2020
Finance and insurance revenue increased 81.3%, primarily due to increased volume related to acquisitions and strong recovery from the impact of the COVID-19 pandemic. On a same
store basis, finance and insurance revenue increased 29.0%, to $1,927 per unit.
Service, body and parts
We provide service, body and parts for the new vehicle brands sold by our stores, as well as service and repairs for most other makes and models. Our parts and service operations are an
integral part of our customer retention and the largest contributor to our overall profitability. Earnings from service, body and parts have historically been more resilient during economic
downturns, when owners have tended to repair their existing vehicles rather than buy new vehicles. With more late-model units in operation, continued increase of vehicles in operation from
2015 to 2019, and a plateauing new vehicle market, we believe the increased number of units in operation will continue to benefit our service, body and parts revenue in the coming years as
more late-model vehicles age, necessitating repairs and maintenance. We focus on retaining customers by offering competitively-priced routine maintenance and through our marketing
efforts.
2022 vs. 2021
Our service, body and parts revenue grew in all areas, primarily due to our strategic acquisition growth. On a same store basis, service, body and parts revenue increased 9.8%, primarily
driven by an increase in customer pay of 10.3%. Performance in parts wholesale and body shop also saw increases of 18.3% and 10.8%. Same store service, body and parts gross profit
increased 12.7%. Our gross margins continue to increase as our mix has shifted towards customer pay, which has higher margins than other service work.
2021 vs. 2020
Service, body and parts revenue grew in all areas, primarily due to acquisition growth and strong recovery from the impact of the COVID-19 pandemic. On a same store basis, service, body
and parts revenue and gross profit increased 11.4% and 13.0%, respectively.
Financing Operations
Financing Operations offers loans and leases to consumers across the full credit spectrum for both new and used vehicles through two entities, DFC and Pfaff Leasing. DFC is a captive
lender, originating loans only from stores in the United States and Driveway. Pfaff Leasing originates loans and leases from both our Canadian stores and third-party dealerships. Our stores
do not exclusively finance vehicles through DFC or Pfaff Leasing, rather originations are earned on a competitive basis with other lenders. We target growing penetration to 15% of retail
units by 2025.
Financing Operations provides an opportunity to capture additional profits, cash flows, and sales while managing our reliance on third-party finance sources. Management regularly
analyzes Financing Operations’ results by assessing profitability, the performance of the finance receivables, including trends in credit losses and delinquencies, and expenses directly
related to Financing Operations. This information is used to assess Financing Operations performance and make operating decisions, including resource allocation.
Our proprietary credit model performs a return on investment (ROI) calculation for each application, ensuring that the return obtained is appropriately balanced with the consumer’s credit
risk. On a fully discounted basis, we target earnings at least three times the net finance income earned from third party lenders (finance reserve less commissions paid) over the life of the
loan. Actual return of the loans may differ based on the changing risk profile of originations, economic conditions, and rates of recovery for charged off vehicles. During 2022, actions taken
to adjust ROI targets in the context of the uncertain macroeconomic environment, along with the acquisition of dealerships whose brands attract relatively more credit-worthy consumers,
resulted in loans and leases originated having higher weighted average credit scores and lower weighted average contract rate and front-end loan-to-values (FE LTV) than prior periods.
We typically use securitizations, warehouse facilities, and internal capital to fund loans and leases originated by our Financing Operations. Financing Operations income reflects the
interest, fee, and lease income generated by DFC and Pfaff Leasing’s portfolio of auto loan and lease receivables less the interest expense associated with the debt utilized to fund the
lending, a provision for estimated loan and lease losses, depreciation on vehicles leased via operating leases and directly-related expenses.
27
Total interest margin reflects the spread between interest, fee, and lease charges to consumers and our funding costs. Changes in the interest margin on new originations affect Financing
Operations income over time. Increases in interest rates, which affect Financing Operations’ funding costs, or other competitive pressures on consumer rates, could result in compression
in the interest margin on new originations. Changes in the provision for loan and lease losses as a percentage of ending managed receivables reflect the effect of changes in loss
experience and economic factors on our outlook for net losses expected to occur over the remaining contractual life of the loans and leases receivable.
Financing Operations income does not include any allocation of corporate overhead costs. Although Financing Operations benefits from certain overhead expenditures, we have not
allocated corporate overhead costs to Financing Operations to avoid making subjective allocation decisions. Examples of corporate overhead costs not allocated to Financing Operations
include general corporate and data processing expenses.
See Note 18 – Segments for additional information on Financing Operations income and Note 5 – Finance Receivables for information on auto loans receivable, including credit quality.
Selected Financing Operations Financial Information
($ in millions)
Interest margin:
Interest, fee, and lease income
Interest expense
Total interest margin
Provision for loan and lease losses
Financing operations (loss) income
Total average managed finance receivables
(1)
Percent of total average managed finance receivables.
DFC Portfolio Information
(1)
($ in millions)
Loan origination information
(2)
Net loans originated
Vehicle units financed
Total penetration rate
Weighted average contract rate
Weighted average credit score
(3)
Weighted average FE LTV
Weighted average term (in months)
(4)
Loan performance information
Total ending managed receivables
Total average managed receivables
Allowance for loan losses
Allowance for loan losses as a percentage of ending managed receivables
Net credit losses on managed receivables
Net credit losses as a percentage of total average managed receivables
Past due accounts as a percentage of ending managed receivables
Average recovery rate
(5)
(6)
2022
%
(1)
Year Ended December 31,
2021
%
(1)
2020
134.1
(52.2)
81.9
(44.4)
(4.0)
8.7 $
(3.4)
5.3 $
(2.9) $
(0.3) $
45.9
(4.8)
41.1
(9.4)
11.0
9.2 $
(1.0)
8.2 $
(1.9) $
2.2 $
%
(1)
11.8
(1.3)
10.5
2.5
5.5
13.9
(1.5)
12.4
3.0
6.5
1,542.6
$
501.5
$
117.9
$
$
$
$
$
$
$
$
$
2022
Year Ended December 31,
2021
2020
1,933.9
59,604
$
703.7
21,357
$
10.2 %
7.7 %
718
99.4 %
73
$
$
$
2,109.4
1,417.2
65.1
3.1 %
42.9
3.0 %
5.4 %
59.3 %
4.0 %
8.4 %
674
104.9 %
73
724.9
449.8
22.5
3.1 %
7.8
1.7 %
4.9 %
74.9 %
$
$
133.1
4,478
1.3 %
9.0 %
672
104.0 %
72
NM
NM
174.6
12.9
7.4 %
8.5
2.3 %
(1)
(2)
(3)
(4)
Excludes Pfaff Leasing Portfolio
Units financed as a percentage of total new and used vehicle retail units sold.
The credit scores represent FICO scores and reflect only receivables with obligors that have a FICO score at the time of application. For receivables with co-borrowers, the FICO score is the
primary borrower’s. FICO scores are not a significant factor in our proprietary credit model, which relies on information from credit bureaus and other application information as discussed in
Note 5 – Finance Receivables.
Front-end loan-to-value represents the ratio of the amount financed to the total collateral value, which is measured as the vehicle selling price plus applicable taxes, title and fees.
28
(5)
(6)
Past due is defined as loans that have been on the books greater than or equal to 3 months and are 30 or more days delinquent
The average recovery rate represents the average percentage of the outstanding principal balance we receive when a vehicle is repossessed and liquidated, generally at wholesale auctions.
Financing Operations income declined from 2021 to 2022 primarily due to the growth of the DFC portfolio. DFC penetration rates increased from 4.0% of retail units sold in 2021 to 10.2% in
2022. Upfront recognition of loan and lease loss provisions recorded on new originations outpaced the incremental interest income contributed by these loans and leases. Additionally,
funding costs increased at a faster pace than we were able to pass along to consumers through higher contract rates. These factors decreased net interest margin from 8.2% in 2021 to
5.3% in 2022.
The increase in net credit losses and past due accounts receivable was primarily driven by prior year delinquencies being abnormally low due to the impacts of governmental stimulus
associated with the COVID-19 pandemic.
The decline in the average recovery rate was driven by used vehicle price depreciation and the impact of a change in repossession strategy and the transition to new vendors in the fourth
quarter of 2022.
Operating Expenses
Selling, General and Administrative (SG&A)
SG&A includes salaries and related personnel expenses, advertising (net of manufacturer cooperative advertising credits), rent, facility costs, and other general corporate expenses.
($ in millions)
Personnel
Advertising
Rent
Facility costs
Gain on sale of assets
Other
Total SG&A
NM - Not meaningful
As a % of gross profit
Personnel
Advertising
Rent
Facility costs
Gain on sale of assets
Other
Total SG&A
2022
2021
Change
%
2020
Change
%
Year Ended December 31,
2022 vs. 2021
2021 vs. 2020
$
$
2,086.3 $
253.6
72.6
150.3
(66.0)
547.3
3,044.1 $
1,737.9 $
162.2
54.0
116.8
(2.3)
412.2
2,480.8 $
348.4
91.4
18.6
33.5
(63.7)
135.1
563.3
20.0 % $
56.4
34.4
28.7
32.8
22.7 % $
NM
979.7 $
97.4
41.2
81.0
(18.2)
256.8
1,437.9 $
758.2
64.8
12.8
35.8
15.9
155.4
1,042.9
2022
2021
40.5 %
4.9
1.4
2.9
(1.3)
10.7
59.1 %
40.8 %
3.8
1.3
2.7
(0.1)
9.7
58.2 %
Year Ended December 31,
2022 vs. 2021
Change
2020
2021 vs. 2020
Change
(30) bps
110
10
20
(120)
100
90 bps
44.0 %
4.4
1.9
3.6
(0.8)
11.5
64.6 %
77.4 %
66.5
31.1
44.2
60.5
72.5 %
NM
(320) bps
(60)
(60)
(90)
70
(180)
(640) bps
2022 vs. 2021
SG&A increased 22.7%, or $0.6 billion, primarily due to increased personnel costs resulting from our growth through acquisitions. Other expenses in 2022 included acquisition expenses of
$15.0 million and $4.9 million of storm related insurance charges. We also recognized a gain on the sale of stores of $66.0 million.
On a same store basis and excluding non-core charges, adjusted SG&A as a percentage of gross profit increased across all categories to 61.5% from 57.5% in the prior year.
2021 vs. 2020
SG&A increased 72.5%, or $1.0 billion, primarily due to increased personnel costs which resulted from our growth through acquisitions. Other expenses in 2021 included acquisition
expenses of $20.2 million and $5.8 million of storm related insurance charges.
29
On a same store basis and excluding non-core charges, adjusted SG&A as a percentage of gross profit decreased across all categories to 58.9% from 64.2% in the prior year.
SG&A adjusted for non-core charges was as follows:
($ in millions)
Personnel
Advertising
Rent
Facility costs
Adjusted gain on sale of assets
Adjusted other
Total adjusted SG&A
(1)
(1)
(1)
NM - Not meaningful
As a % of gross profit
Personnel
Advertising
Rent
Facility costs
Adjusted gain on sale of assets
Adjusted other
Total adjusted SG&A
(1)
(1)
(1)
2022
2021
Change
%
2020
Change
%
Year Ended December 31,
2022 vs. 2021
2021 vs. 2020
$
$
2,086.3 $
253.6
72.6
150.3
—
527.4
3,090.2 $
1,737.9 $
162.2
54.0
116.8
(2.3)
386.2
2,454.8 $
348.4
91.4
18.6
33.5
2.3
141.2
635.4
20.0 % $
56.4
34.4
28.7
36.6
25.9 % $
NM
979.7 $
97.4
41.2
81.0
(1.6)
247.7
1,445.4 $
758.2
64.8
12.8
35.8
(0.7)
138.5
1,009.4
2022
2021
40.5 %
4.9
1.4
2.9
—
10.3
60.0 %
40.8 %
3.8
1.3
2.7
(0.1)
9.1
57.6 %
Year Ended December 31,
2022 vs. 2021
Change
2020
2021 vs. 2020
Change
(30) bps
110
10
20
10
120
240 bps
44.0 %
4.4
1.9
3.6
(0.1)
11.2
65.0 %
77.4 %
66.5
31.1
44.2
55.9
69.8 %
NM
(320) bps
(60)
(60)
(90)
—
(210)
(740) bps
(1)
See "Non-GAAP Reconciliations” for more details.
Floor Plan Interest Expense and Floor Plan Assistance
We have floor plan agreements with both manufacturer-affiliated finance companies and as part of our syndicated credit facilities for certain new vehicles and vehicles that are designated for
use as service loaners. The interest rates on these floor plan notes payable commitments vary by lender and are variable rates.
2022 vs. 2021
Floor plan interest expense increased $16.5 million, primarily due to increases in new vehicle inventory levels at existing locations and growth through acquisitions. Floor plan interest
expense increased 59.1% for pre-existing locations and 29.7% related to acquisition volume. Increases in interest rates were offset by the proceeds from the termination of our zero-cost
interest rate collar. See Note 11 – Derivative Financial Instruments for more information.
2021 vs. 2020
Floor plan interest expense decreased $12.1 million, primarily due to new vehicle inventory shortages and increasing consumer demand.
Floor plan assistance is provided by manufacturers to support store financing of new vehicle inventory. Under accounting standards, floor plan assistance is recorded as a component of
new vehicle gross profit when the specific vehicle is sold. However, because manufacturers provide this assistance to offset inventory carrying costs, we believe a comparison of floor plan
interest expense to floor plan assistance is a useful measure of the efficiency of our new vehicle sales relative to stocking levels.
30
The following tables detail the carrying costs for new vehicles and include new vehicle floor plan interest net of floor plan assistance earned:
Year Ended December 31,
2022 vs. 2021
2021 vs. 2020
($ in millions)
Floor plan interest expense (new vehicles)
Floor plan assistance (included as an offset to cost of sales)
Net new vehicle carrying costs (benefit)
$
$
2022
2021
Change
%
2020
Change
%
38.8 $
(130.6)
(91.8) $
22.3 $
(120.1)
(97.8) $
16.5
(10.5)
6.0
74.0 % $
8.7
(6.1)% $
34.4 $
(72.8)
(38.4) $
(12.1)
(47.3)
(59.4)
(35.2)%
65.0
154.7
Depreciation and Amortization
Depreciation and amortization is comprised of depreciation expense related to buildings, significant remodels or improvements, furniture, tools, equipment and signage and amortization
related to non-compete agreements.
($ in millions)
Depreciation and amortization
2022
2021
Change
%
2020
Change
%
$
163.2 $
124.8 $
38.4
30.8 % $
92.3 $
32.5
35.2 %
Year Ended December 31,
2022 vs. 2021
2021 vs. 2020
Acquisition activity contributed to the increases in depreciation and amortization in 2022 compared to 2021 and in 2021 compared to 2020. We acquired approximately $236.9 million and
$559.8 million of depreciable property as part of our 2022 and 2021 acquisitions, respectively. Capital expenditures totaled $303.1 million and $260.4 million, respectively, in 2022 and 2021.
These investments increase the amount of depreciable assets. See the discussion under "Liquidity and Capital Resources” for additional information.
Operating Income
Operating income as a percentage of revenue, or operating margin, was as follows:
Operating margin
Operating margin adjusted for non-core charges
(1)
(1)
See "Non-GAAP Reconciliations” for additional information
2022
Year Ended December 31,
2021
2020
6.9 %
6.7
7.3 %
7.4
5.3 %
5.3
2022 vs. 2021
Our operating margin decreased 40 basis points compared to the prior year, driven by an increase in SG&A as a percentage of gross profit. Adjusting for non-core charges, including storm
related insurance charges and acquisition expenses, offset by a net disposal gain on sale of stores, our operating margin decreased 70 basis points.
2021 vs. 2020
Our operating margin increased 200 basis points compared to the prior year, driven by a decrease in SG&A as a percentage of gross profit and increased total gross margin. Adjusting for
non-core charges, including storm insurance charges, acquisition expenses, and asset impairments, our operating margin increased 210 basis points.
Non-Operating Expenses
Asset Impairments
Asset impairments recorded as a component of operations consist of the following:
($ in millions)
Franchise value
Goodwill
Total asset impairments
2022
Year Ended December 31,
2021
2020
$
$
— $
—
— $
1.9 $
—
1.9 $
4.4
3.5
7.9
31
Goodwill and franchise value for our reporting units are tested for impairment annually as of October 1 or more frequently when events or changes in circumstances indicate that impairment
may have occurred. We elected to perform qualitative franchise value and goodwill impairment tests as of October 1 each year. These non-cash impairment charges are included in the
"Corporate and Other” category of our segment information.
No impairment charges were recorded in 2022.
During the third quarter of 2021, there was an indication of a triggering event at a certain reporting unit. We tested the goodwill and franchise value for this location. As a result, we identified
it was more likely than not the fair values were less than the carrying amounts, and we recorded a non-cash impairment charge of $1.9 million, which was equal to the difference between
the fair value and the carrying value for franchise value. This location was subsequently sold in the fourth quarter of 2021.
In the second quarter of 2020, there were indications of a triggering event at certain reporting units. We tested the franchise value and goodwill for these locations. As a result, we identified
certain reporting units where it was more likely than not the fair values were less than the carrying amounts, and we recorded non-cash impairment charges of $4.4 million and $3.5 million,
which was equal to the difference between the fair value and the carrying value for franchise value and goodwill, respectively. One of these locations was subsequently sold in the fourth
quarter of 2020, with the remainder sold in 2021.
See Note 1 – Summary of Significant Accounting Policies, Note 4 – Property and Equipment, Note 6 – Goodwill and Franchise Value, and Note 14 – Fair Value Measurements of Notes to
Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Financial Data of this Annual Report.
Other Interest Expense
Other interest expense includes interest on debt incurred related to acquisitions, real estate mortgages, our used and service loaner vehicle inventory financing commitments, our revolving
lines of credit, and issued senior notes.
($ in millions)
Mortgage interest
Other interest
Capitalized interest
Total other interest expense
Year Ended December 31,
2022 vs. 2021
2021 vs. 2020
2022
2021
Change
%
2020
Change
%
$
$
25.9 $
105.8
(2.6)
129.1 $
24.9 $
80.5
(2.0)
103.4 $
1.0
25.3
(0.6)
25.7
4.0 % $
31.4
30.0
24.9 % $
26.2 $
47.0 $
(1.6)
71.6 $
(1.3)
33.5
(0.4)
31.8
(5.0)%
71.3
25.0
44.4 %
2022 vs. 2021
The increase in other interest expense was due to higher interest rates on our credit facilities and the full year impact of our $800 million in aggregate principal amount of 3.875% senior
notes due 2029 issued in May 2021. See also Note 9 – Credit Facilities and Long-Term Debt of Notes to Consolidated Financial Statements for additional information.
2021 vs. 2020
The increase in other interest expense was due to the issuances of $800 million in aggregate principal amount of 3.875% senior notes due 2029 in May 2021 and $550 million in aggregate
principal amount of 4.375% senior notes due 2031 in October 2020. These increases were offset by the payoff of our $300 million in aggregate principal amount of 5.250% senior notes in
August 2021.
Other (Expense) Income, Net
Other (expense) income, net primarily includes other income associated with investment income and other non-recurring transactions.
($ in millions)
Other (expense) income, net
2022
2021
Change
$
(43.2) $
(52.0) $
8.8
%
NM
2020
Change
$
61.8 $
(113.8)
%
NM
Year Ended December 31,
2022 vs. 2021
2021 vs. 2020
32
2022 vs. 2021
The improvement in other (expense) income, net was primarily due to a $39.2 million unrealized investment loss related to our investment in Shift Technologies, Inc. compared to a $66.4
million unrealized loss in the prior year. We also recognized a $16.8 million unrealized loss on foreign currency translations in 2022.
2021 vs. 2020
The decrease in other (expense) income, net was primarily due to a $66.4 million unrealized investment loss related to our investment in Shift Technologies, Inc compared to a $43.8 million
unrealized gain in the prior year. In 2021, we also recognized a $10.3 million loss on the early redemption of our $300 million principal amount 5.250% senior notes originally due 2025.
Income Tax Provision
Our effective income tax rate was as follows:
Effective income tax rate
Effective income tax rate excluding non-core items
(1)
See "Non-GAAP Reconciliations” for more details
(1)
2022
Year Ended December 31,
2021
2020
27.1 %
26.4
28.4 %
26.8
27.5 %
27.6
Our effective income tax rate was 27.1% for 2022 compared to 28.4% for 2021. Our 2022 effective income tax rate was negatively affected by a valuation allowance recorded for certain
deferred tax assets not expected to be realized. The valuation allowance impact to the 2022 effective income tax rate was less than the impact to the 2021 effective income tax rate. Our
effective income tax rate was positively affected by a reduction in the current and deferred state tax rate due to legislative updates and changing state mix.
Excluding the valuation allowance recorded during 2022, our effective income tax rate excluding non-core items for 2022 would have been 26.4%, a decrease of 40 basis points compared to
the effective income tax rate excluding non-core items for 2021.
Our effective income tax rate in 2021 was also negatively affected by a valuation allowance established for certain deferred tax assets not expected to be realized. The increase in tax rate
was offset by stock awards vesting in the current period and a reduction in the current and deferred state tax rate due to legislative updates and changing state mix.
Non-GAAP Reconciliations
Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we
review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue
reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We believe each of the non-GAAP financial measures below
improves the transparency of our disclosures, provides a meaningful presentation of our results from the core business operations because they exclude items not related to our ongoing
core business operations and other non-cash items, and improves the period-to-period comparability of our results from the core business operations. We use these measures in
conjunction with GAAP financial measures to assess our business, including our compliance with covenants in our credit facilities and in communications with our Board of Directors
concerning financial performance. These measures should not be considered an alternative to GAAP measures.
33
The following tables reconcile certain reported non-GAAP measures to the most comparable GAAP measure from our Consolidated Statements of Operations:
($ in millions, except per share amounts)
Selling, general and administrative
Operating income (loss)
Other (expense) income, net
Income (loss) before income taxes
Income tax (provision) benefit
Net income (loss)
Net income attributable to non-controlling interest
Net income attributable to redeemable non-controlling interest
Net income (loss) attributable to Lithia Motors, Inc.
Diluted earnings (loss) per share attributable to Lithia Motors, Inc.
Diluted share count
($ in millions, except per share amounts)
Asset impairment
Selling, general and administrative
Operating income
Other (expense) income, net
Income before income taxes
Income tax (provision) benefit
Net income
Net income attributable to non-controlling interest
Net income attributable to redeemable non-controlling
interest
Net income attributable to Lithia Motors, Inc.
$
$
$
Diluted earnings per share attributable to Lithia Motors, Inc. $
Diluted share count
As reported
Net disposal gain
on sale of stores
Year Ended December 31, 2022
Insurance
reserves
Investment loss
Acquisition
expenses
Adjusted
$
$
$
$
3,044.1 $
1,941.1
(43.2)
1,730.0 $
(468.4)
1,261.6
(4.8)
(5.8)
1,251.0 $
44.17 $
28.3
66.0 $
(66.0)
—
(66.0) $
19.1
(46.9)
—
—
(46.9) $
— $
—
39.2
39.2 $
—
39.2
—
—
39.2 $
$
(4.9)
4.9
—
4.9 $
(1.3)
3.6
—
—
3.6 $
$
(15.0)
15.0
—
15.0 $
(4.0)
11.0
—
—
11.0 $
3,090.2
1,895.0
(4.0)
1,723.1
(454.6)
1,268.5
(4.8)
(5.8)
1,257.9
(1.65) $
1.38 $
0.13 $
0.39 $
44.42
Year Ended December 31, 2021
Investment loss
Insurance
reserves
Acquisition
expenses
Loss on
redemption of
senior notes
Adjusted
As
reported
1.9 $
2,480.8
1,662.5
(52.0)
Asset impairment
(1.9)
—
1.9
—
$
1.9 $
(0.5)
1.4
—
—
1.4 $
1,484.8 $
(422.1)
1,062.7
(1.7)
(0.9)
1,060.1 $
36.54 $
29.0
— $
—
—
66.4
66.4 $
6.6
73.0
—
—
73.0 $
— $
— $
(5.8)
5.8
—
5.8 $
(1.6)
4.2
—
—
4.2 $
(20.2)
20.2
—
20.2 $
(5.1)
15.1
—
—
15.1 $
0.05 $
2.52 $
0.14 $
0.52 $
—
2,454.8
1,690.4
24.7
1,589.4
(425.4)
1,164.0
(1.7)
(0.9)
1,161.4
40.03
—
—
—
10.3
10.3
(2.7)
7.6
—
—
7.6
0.26
$
$
$
$
34
($ in millions, except per share
amounts)
Asset impairment
Selling, general and administrative
Operating income (loss)
Other income (expense), net
Income before income taxes
Income tax (provision) benefit
Net income attributable to Lithia
Motors, Inc.
Diluted earnings per share
attributable to Lithia Motors, Inc.
Diluted share count
$
$
$
$
648.5 $
(178.2)
470.3 $
19.53 $
24.1
As
reported
Net disposal gain
on sale of stores Asset impairment
(7.9)
—
7.9
—
16.6
(16.6)
—
— $
7.9 $
1,437.9
692.7
61.8
$
(16.6) $
4.6
(12.0) $
7.9 $
(2.3)
5.6 $
Year Ended December 31, 2020
Insurance
reserves
Investment gain
— $
—
—
(43.8)
$
(43.8)
12.1
(31.7)
$
Acquisition
expenses
— $
— $
(6.1)
6.1
—
6.1 $
(1.6)
4.5 $
(3.0)
3.0
—
3.0 $
(0.8)
2.2 $
Tax attribute
Adjusted
— $
—
—
—
— $
(0.8)
(0.8) $
—
1,445.4
693.1
18.0
605.1
(167.0)
438.1
(0.50) $
0.23 $
(1.32)
$
0.19 $
0.09 $
(0.03) $
18.19
Liquidity and Capital Resources
We manage our liquidity and capital resources in the context of our overall business strategy, continually forecasting and managing our cash, working capital balances and capital structure
to meet the short-term and long-term obligations of our business while maintaining liquidity and financial flexibility. Our free cash flow deployment strategy targets an allocation of 65%
investment in acquisitions, 25% investment in capital expenditures, innovation, and diversification and 10% in shareholder return in the form of dividends and share repurchases.
We believe we have sufficient sources of funding to meet our business requirements for the next 12 months and in the longer term. Cash flows from operations and borrowings under our
credit facilities are our main sources for liquidity. In addition to the above sources of liquidity, potential sources to fund our business strategy include financing of real estate and proceeds
from debt or equity offerings. We evaluate all of these options and may select one or more of them depending on overall capital needs and the availability and cost of capital, although no
assurances can be provided that these capital sources will be available in sufficient amounts or with terms acceptable to us.
Available Sources
Below is a summary of our immediately available funds:
($ in millions)
Cash
Available credit on the credit facilities
Total current available funds
As of December 31,
2022
2021
Change
% Change
$
$
168.1 $
1,419.4
1,587.5 $
153.0 $
1,234.7
1,387.7 $
15.1
184.7
199.8
9.9 %
15.0 %
14.4 %
Information about our cash flows, by category, is presented in our Consolidated Statements of Cash Flows. The following table summarizes our cash flows:
($ in millions)
Net cash (used in) provided by operating activities
Net cash used in investing activities
Net cash provided by financing activities
2022
Year Ended December 31,
2021
2020
$
(610.1) $
(1,329.8)
2,035.9
1,797.2 $
(2,890.4)
1,106.7
544.6
(1,605.8)
1,139.8
35
Operating Activities
Cash provided by operating activities decreased $2.4 billion in 2022 compared to 2021, primarily as a result of growth in inventory levels compared to the prior year, growth in our financing
receivables as we increase our auto loan portfolio, and growth in our business through acquisitions, partially offset by improved profitability.
Borrowings from and repayments to our syndicated credit facilities related to our new vehicle inventory floor plan financing are presented as financing activities. To better understand the
impact of changes in inventory, other assets, and the associated financing, we also consider our adjusted net cash provided by operating activities to include borrowings or repayments
associated with our new vehicle floor plan commitment and exclude the impact of our financing receivables activity.
To better understand the impact of these items, adjusted net cash provided by operating activities, a non-GAAP measure, is presented below:
($ in millions)
Net cash provided by operating activities – as reported
Add (less): Net borrowings (repayments) on floor plan notes payable: non-trade
Add: Temporary pay down of outstanding borrowings on floor plan notes payable: non-trade
Less: Borrowings on floor plan notes payable: non-trade associated with acquired new vehicle
inventory
Adjust: Financing receivables activity
Net cash provided by operating activities – adjusted
$
$
2022
2021
(610.1)
737.9
—
(116.5)
1,363.0
1,374.3 $
1,797.2 $
(685.3)
—
(355.5)
640.8
1,397.2 $
Year Ended December 31,
2022 vs. 2021
Change
2020
2021 vs. 2020
Change
(2,407.3) $
1,423.2
—
239.0
722.2
(22.9) $
544.6 $
(20.6)
113.4
(255.0)
114.1
496.5 $
1,252.6
(664.7)
(113.4)
(100.5)
526.7
900.7
Inventories are one of the most significant component of our cash flow from operations. As of December 31, 2022, our new vehicle days’ supply was 47 days, or 23 days higher than our
days’ supply as of December 31, 2021. Our days’ supply of used vehicles was 55 days, which was six days lower than our days’ supply as of December 31, 2021. We calculate days’
supply of inventory based on current inventory levels, including in-transit vehicles, and a 30-day historical cost of sales level. We have continued to focus on managing our unit mix and
maintaining an appropriate level of new and used vehicle inventory.
Investing Activities
Net cash used in investing activities totaled $1.3 billion and $2.9 billion, respectively, for 2022 and 2021. Cash flows from investing activities relate primarily to capital expenditures,
acquisition and divestiture activity and sales of property and equipment.
Below are highlights of significant activity related to our cash flows from investing activities:
($ in millions)
Capital expenditures
Cash paid for acquisitions, net of cash acquired
Proceeds from sales of stores
2022
2021
Year Ended December 31,
2022 vs. 2021
Change
2020
2021 vs. 2020
Change
$
(303.1) $
(260.4) $
(42.7) $
(167.8) $
(1,243.6)
212.1
(2,699.3)
76.3
1,455.7
135.8
(1,503.3)
57.5
(92.6)
(1,196.0)
18.8
36
Capital Expenditures
Below is a summary of our capital expenditure activities:
Many manufacturers provide assistance in the form of additional incentives or assistance if facilities meet manufacturer image standards and requirements. We expect that certain facility
upgrades and remodels will generate additional manufacturer incentive payments. Also, tax laws allowing accelerated deductions for capital expenditures reduce the overall investment
needed and encourage accelerated project timelines.
We expect to use a portion of our future capital expenditures to upgrade facilities that we recently acquired. This additional capital investment is contemplated in our initial evaluation of the
investment return metrics applied to each acquisition and is usually associated with manufacturer image standards and requirements.
If we undertake a significant capital commitment in the future, we expect to pay for the commitment out of existing cash balances, construction financing and borrowings on our credit
facilities. Upon completion of the projects, we believe we would have the ability to secure long-term financing and general borrowings from third party lenders for 70% to 90% of the amounts
expended, although no assurances can be provided that these financings will be available to us in sufficient amounts or on terms acceptable to us.
Acquisitions
Growth through acquisitions is a key component of our long-term strategy that enables us to increase our network of locations, support maintaining a diverse franchise and geographic mix
and improve our ability to serve customers through wider selection and improved proximity. Our disciplined approach focuses on acquiring new vehicle franchises that are accretive and
cash flow positive at reasonable valuations.
We are able to subsequently floor new vehicle inventory acquired as part of an acquisition; however, the cash generated by these transactions are recorded as borrowings on floor plan
notes payable, non-trade. Adjusted net cash paid for acquisitions, a non-GAAP measure, as well as certain other acquisition-related information is presented below:
($ in millions)
Number of stores acquired
Number of stores opened
Cash paid for acquisitions, net of cash acquired
Add: Borrowings on floor plan notes payable: non-trade associated with acquired new vehicle inventory
Cash paid for acquisitions, net of cash acquired – adjusted
2022
Year Ended December 31,
2021
2020
31
1
(1,243.6) $
116.5
(1,127.1) $
77
1
(2,699.3) $
355.5
(2,343.8) $
30
—
(1,503.3)
255.0
(1,248.3)
$
$
37
We evaluate potential capital investments primarily based on targeted rates of return on assets and return on our net equity investment.
Financing Activities
Adjusted net cash provided by financing activities, a non-GAAP measure, which is adjusted for borrowings and repayments on floor plan facilities: non-trade and borrowings and repayments
associated with our Financing Operations segment was as follows:
($ in millions)
Cash provided by (used in) financing activities, as reported
Add (less): Net (borrowings) repayments on floor plan notes payable: non-trade
Less: Net borrowings on non-recourse notes payable
Cash provided by financing activities, as adjusted
2022
Year Ended December 31,
2021
2020
$
$
2,035.9
(737.9)
(104.6)
1,193.4 $
1,106.7 $
685.3
(317.6)
1,474.4 $
1,139.8
20.6
—
1,160.4
Below are highlights of significant activity related to our cash flows from financing activities, excluding borrowings and repayments on floor plan notes payable: non-trade and non-recourse
notes payable, which are discussed above:
($ in millions)
Net borrowings (repayments) on lines of credit
Principal payments on long-term debt and finance lease liabilities, other
Proceeds from the issuance of long-term debt
Proceeds from the issuance of common stock
Payment of debt issuance costs
Repurchases of common stock
Dividends paid
$
2022
2021
2,023.8 $
(171.7)
113.3
36.1
(11.8)
(688.3)
(45.2)
325.4 $
(486.5)
817.4
1,136.2
(14.7)
(230.7)
(38.8)
Year Ended December 31,
2022 vs. 2021
Change
2020
2021 vs. 2020
Change
1,698.4 $
314.8
(704.1)
(1,100.1)
2.9
(457.6)
(6.4)
(110.0) $
(6.3)
606.5
790.4
(10.8)
(50.6)
(29.1)
435.4
(480.2)
210.9
345.8
(3.9)
(180.1)
(9.7)
Borrowing and Repayment Activity
During 2022, we raised net proceeds of $113.3 million through the issuance of debt, and had net borrowings of $2.0 billion on our lines of credit. These funds were primarily used for
acquisitions, share repurchases and capital expenditures.
Our debt to total capital ratio, excluding floor plan notes payable, was 49.5% at December 31, 2022 compared to 40.0% at December 31, 2021.
Equity Transactions
In November 2022, our Board of Directors authorized the repurchase of up to $450 million of our common stock. This new authorization is in addition to the amount previously authorized by
the Board for repurchase. As of December 31, 2022, we had $501.4 million available for repurchase under the program. The authority to repurchase does not have an expiration date.
During 2022, we paid dividends on our common stock as follows:
Dividend paid:
March 2022
May 2022
August 2022
November 2022
Dividend amount per share
Total amount of dividend (in millions)
$
0.35 $
0.42
0.42
0.42
We evaluate performance and make a recommendation to the Board of Directors on dividend payments on a quarterly basis.
10.3
11.9
11.6
11.4
38
Summary of Outstanding Balances on Credit Facilities and Long-Term Debt
Below is a summary of our outstanding balances on credit facilities and long-term debt:
($ in millions)
Floor plan notes payable: non-trade
Floor plan notes payable
Used and service loaner vehicle inventory financing commitments
Revolving lines of credit
Warehouse facilities
Non-recourse notes payable
Real estate mortgages
Finance lease obligations
4.625% Senior notes due 2027
4.375% Senior notes due 2031
3.875% Senior notes due 2029
Other debt
Unamortized debt issuance costs
Total debt
Outstanding as of December 31, 2022
$
Remaining Available as of December
31, 2022
1,489.4 $
627.2
877.2
927.6
930.0
422.2
580.1
56.4
400.0
550.0
800.0
16.6
(29.1)
7,647.6 $
(1)
(2)
(2),(3)
(2)
(4)
—
—
17.9
1,286.2
115.3
—
—
—
—
—
—
—
—
1,419.4
$
(1)
(2)
(3)
(4)
As of December 31, 2022, we had a $1.4 billion new vehicle floor plan commitment as part of our USB credit facility, and a $500 million CAD wholesale floorplan commitment as part of our BNS
credit facility.
The amounts available on the credit facilities are limited based on borrowing base calculations and fluctuates monthly.
Available credit is based on the borrowing base amount effective as of November 30, 2022. This amount is reduced by $38.8 million for outstanding letters of credit.
Debt issuance costs are presented on the balance sheet as a reduction from the carrying amount of the related debt liability. See Note 9 – Credit Facilities and Long-Term Debt of Notes to
Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
Contractual Obligations
Our cash requirements greater than twelve months from contractual obligations and commitments include:
Debt Obligations and Interest Payments
Refer to Note 9 – Credit Facilities and Long-Term Debt of the notes to the consolidated financial statements for further information of our obligations and the timing of expected
payments.
Contract Obligations
Refer to Note 8 – Commitments and Contingencies of the notes to the consolidated financial statements for further information of our obligations and the timing of expected
payments.
Operating and Finance Leases
Refer to Note 8 – Commitments and Contingencies of the notes to the consolidated financial statements for further information of our obligations and the timing of expected
payments.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles requires us to make certain estimates, judgments and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and reported amounts of revenues and expenses at the date of the financial
statements. Certain accounting policies require us to make difficult and subjective judgments on matters that are inherently uncertain. The following accounting policies involve critical
accounting estimates because they are particularly dependent on assumptions made by management. While we have made our best estimates based on facts and circumstances available
to us at the time, different estimates could have been used in the current period. Changes in the accounting estimates we used are reasonably likely to occur from period to period, which
may have a material impact on the presentation of our financial condition and results of operations.
Our most critical accounting estimates include those related to goodwill and franchise value, and acquisitions. We also have other key accounting policies for valuation of finance
receivables and expense accruals. However, these policies either do not meet the definition of critical accounting estimates described above or the policies are not currently material items
in our financial statements. We review our estimates, judgments and assumptions periodically and reflect the effects of revisions in the period that they are deemed to be necessary. We
believe that these estimates are reasonable. However, actual results could differ materially from these estimates.
39
Goodwill and Franchise Value
We are required to test our goodwill and franchise value for impairment at least annually on October 1, or more frequently if conditions indicate that an impairment may have occurred. Our
reporting units are individual retail automotive stores. We have the option to qualitatively or quantitatively assess goodwill for impairment and, in 2022, we evaluated our goodwill using a
qualitative assessment process. If the qualitative factors determine that it is more likely than not that the fair value of the reporting unit exceeds the carrying amount, goodwill is not
impaired. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying amount, we would further evaluate for potential impairment.
As of December 31, 2022, we had $1.5 billion of goodwill on our balance sheet associated with 265 locations. No location accounted for more than 1.8% of our total goodwill as of
December 31, 2022. The annual goodwill impairment analysis resulted in no indications of impairment in 2022, 2021 or 2020. During the second quarter of 2020, there was an indication of a
triggering event at certain locations. As a result, we identified certain locations where it was more likely than not the fair values were less than the carrying amounts, and we recorded a
non-cash impairment charge of $3.5 million.
We have determined the appropriate unit of accounting for testing franchise rights for impairment is on an individual store basis. We have the option to qualitatively or quantitatively assess
indefinite-lived intangible assets for impairment. In 2022, we evaluated our indefinite-lived intangible assets using a qualitative assessment process. If the qualitative factors determine that it
is more likely than not that the fair value of the individual store’s franchise value exceeds the carrying amount, the franchise value is not impaired, and the second step is not necessary. If
the qualitative assessment determines it is more likely than not that the fair value is less than the carrying amount, then a quantitative valuation of our franchise value is performed. An
impairment charge is recorded to the extent the fair value is less than the carrying value.
As of December 31, 2022, we had $1.9 billion of franchise value on our balance sheet associated with 265 locations. No individual location accounted for more than 3.6% of our total
franchise value as of December 31, 2022. The annual franchise value impairment analysis, which we perform as of October 1 each year, resulted in no indications of impairment in 2022,
2021, or 2020. During the third quarter of 2021, there were indications of impairment at a certain location. We tested the franchise value for this location, which resulted in an impairment
charge of $1.9 million. During the second quarter of 2020, there was an indication of a triggering event at certain locations. As a result, we identified certain reporting units where it was
more likely than not the fair values were less than the carrying amounts, and we recorded a non-cash impairment charge of $4.4 million.
We are subject to financial statement risk to the extent that our goodwill or franchise rights become impaired due to decreases in the fair value. A future decline in performance, decreases
in projected growth rates or margin assumptions or changes in discount rates could result in a potential impairment, which could have a material adverse impact on our financial position
and results of operations. Furthermore, if a manufacturer becomes insolvent, we may be required to record a partial or total impairment on the franchise value and/or goodwill related to that
manufacturer. No individual manufacturer accounted for more than 2.7% of our total franchise value and goodwill as of December 31, 2022.
See Note 1 – Summary of Significant Accounting Policies and Note 6 – Goodwill and Franchise Value of Notes to Consolidated Financial Statements included in Part II, Item 8. Financial
Statements and Supplementary Financial Data of this Annual Report.
Acquisitions
We account for acquisitions using the purchase method of accounting which requires recognition of assets acquired and liabilities assumed at fair value as of the date of the acquisition.
Determination of the estimated fair value assigned to each asset acquired or liability assumed can materially impact the net income in subsequent periods through depreciation and
amortization and potential impairment charges.
The most significant items we generally acquire in a transaction are inventory, long-lived assets, intangible franchise rights and goodwill. The fair value of acquired inventory is based on
manufacturer invoice cost and market data. We estimate the fair value of property and equipment based on a market valuation approach. Additionally, we may use a cost valuation
approach to value long-lived assets when a market valuation approach is unavailable. We apply an
40
income approach for the fair value of intangible franchise rights which discounts the projected future net cash flow using an appropriate discount rate that reflects the risks associated with
such projected future cash flow.
See Note 1 – Summary of Significant Accounting Policies and Note 16 – Acquisitions of Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements and
Supplementary Financial Data of this Annual Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks relating to market fluctuations in interest rates, foreign currency exchange rates, and equity values. We do not acquire our market risk sensitive
instruments for trading purposes.
Variable Rate Debt
Our credit facilities, other floor plan notes payable, and certain real estate mortgages are structured as variable rate debt. The interest rates on our variable rate debt are tied to either the
one-day Secured Overnight Financing Rate (SOFR), one-month Canadian Dollar Offered Rate (CDOR), or the prime rate. These debt obligations, therefore, expose us to variability in
interest payments due to changes in these rates. Certain floor plan debt is based on open-ended lines of credit tied to each individual store from the various manufacturer finance
companies.
Our variable-rate floor plan notes payable, variable rate mortgage notes payable and other credit line borrowings subject us to market risk exposure. As of December 31, 2022, we had $5.0
billion outstanding under such agreements at a weighted average interest rate of 4.1% per annum. A 10% increase in interest rates, or 40.8 basis points, would increase annual interest
expense by approximately $15.1 million, net of tax, based on amounts outstanding as of December 31, 2022.
As of December 31, 2021, we had $2.1 billion outstanding under such agreements at a weighted average interest rate of 1.43% per annum. A 10% increase in interest rates, or 14.3 basis
points, would increase annual interest expense by approximately $2.2 million, net of tax, based on amounts outstanding as of December 31, 2021.
Fixed Rate Debt
The fair value of our long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair value of fixed interest rate debt will increase as interest rates fall because we would
expect to be able to refinance for a lower rate. Conversely, the fair value of fixed interest rate debt will decrease as interest rates rise. The interest rate changes affect the fair value but do
not impact earnings or cash flows.
As of December 31, 2022, we had $2.7 billion of long-term fixed interest rate debt outstanding and recorded on the balance sheet, with maturity dates between May 28, 2023 and
December 31, 2050. Based on discounted cash flows using current interest rates for comparable debt, we have determined that the fair value of this long-term fixed interest rate debt was
approximately $2.3 billion as of December 31, 2022.
As of December 31, 2021, we had $2.5 billion of long-term fixed interest rate debt outstanding and recorded on the balance sheet, with maturity dates between April 1, 2022 and July 1,
2038. Based on discounted cash flows using current interest rates for comparable debt, we have determined that the fair value of this long-term fixed interest rate debt was approximately
$2.6 billion as of December 31, 2021.
Foreign Currency Exchange Risk
The functional currency of our Canadian subsidiaries is the CAD. Our exposure to fluctuating exchange rates relates to the effects of translating financial statements of those subsidiaries
into our reporting currency, which we do not hedge against based on our investment strategy in these foreign operations. A 10% devaluation in average exchange rates for the CAD to the
USD would have resulted in a $105.7 million and $32.3 million decrease to our revenues for the years ended December 31, 2022, and 2021, respectively.
Risk Management Policies
We assess interest rate cash flow risk by identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging
opportunities. Our policy is to manage this risk through monitoring our mix of fixed rate and variable rate debt. We currently utilize bank debt, mortgage financing, high-yield debt and
internally generated cash flows for growth and investment. We monitor our credit
41
ratings and evaluate the benefit and cost of various debt types to manage, and minimize as best as possible, our interest cost.
We maintain risk management controls to monitor interest rate cash flow attributable to both our outstanding and forecasted debt obligations, as well as our offsetting hedge positions. The
risk management controls include assessing the impact to future cash flows of changes in interest rates.
Item 8. Financial Statements and Supplementary Financial Data
The financial statements and notes thereto required by this item begin on page F-1 as listed in Item 15. Exhibits and Financial Statement Schedules of Part IV of this document.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management evaluated, with the participation and under the supervision of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our
disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is
accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required
disclosure and that such information is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected or is reasonably likely to materially affect our
internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, we used the criteria set forth in Internal
Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In accordance with guidance issued by the SEC, companies are permitted to exclude acquisitions from their final assessment of internal controls over financial reporting during the year of
the acquisition while integrating the acquired operations. Management’s evaluation of internal control over financial reporting excludes the operations of the thirty-one stores acquired in
2022, which represented 5% of consolidated total assets as of December 31, 2022 and 5% of consolidated revenues for the year ended December 31, 2022.
Based on our assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was effective.
KPMG LLP, our Independent Registered Public Accounting Firm, has issued an attestation report on our internal control over financial reporting as of December 31, 2022, which is included
in Item 8. Financial Statements and Supplementary Financial Data of this Form 10-K.
42
Item 10. Directors, Executive Officers and Corporate Governance
PART III
Information required by this item will be included in our Proxy Statement for our 2023 Annual Meeting of Shareholders and, upon filing with the SEC within 120 days of December 31, 2022,
is incorporated herein by reference.
Item 11. Executive Compensation
Information required by this item will be included in our Proxy Statement for our 2023 Annual Meeting of Shareholders and, upon filing with the SEC within 120 days of December 31, 2022,
is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Equity Compensation Plan Information
The following table summarizes equity securities authorized for issuance as of December 31, 2022.
Plan Category
Equity compensation plans approved by shareholders
Equity compensation plans not approved by shareholders
Total
Number of securities to be issued upon
exercise of outstanding options, warrants
and rights (a)
Weighted average exercise price of
outstanding options, warrants and rights
(b)
Number of securities remaining available
for future issuance under equity
compensation plans (excluding securities
reflected in column (a)) (c)
(2)
415,878 $
—
415,878 $
(1)
—
—
—
2,095,734
—
2,095,734
(1)
(2)
There is no exercise price associated with our restricted stock units.
Includes 943,888 shares available pursuant to our 2013 Amended and Restated Stock Incentive Plan and 1,151,846 shares available pursuant to our Employee Stock Purchase Plan.
The additional information required by this item will be included in our Proxy Statement for our 2023 Annual Meeting of Shareholders and, upon filing with the SEC within 120 days
of December 31, 2022, is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information required by this item will be included in our Proxy Statement for our 2023 Annual Meeting of Shareholders and, upon filing with the SEC within 120 days of December 31, 2022,
is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
Our independent registered public accounting firm is KPMG LLP, Portland, OR, Auditor Firm ID: 185.
Information required by this item will be included in our Proxy Statement for our 2023 Annual Meeting of Shareholders and, upon filing with the SEC within 120 days of December 31, 2022,
is incorporated herein by reference.
43
Item 15. Exhibits and Financial Statement Schedules
PART IV
Financial Statements and Schedules
The Consolidated Financial Statements, together with the reports thereon of KPMG LLP, Independent Registered Public Accounting Firm, are included on the pages indicated below:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Equity and Redeemable Non-controlling Interest for the years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020
Notes to Consolidated Financial Statements
There are no schedules required to be filed herewith.
Exhibit Index
The following exhibits are filed herewith. An asterisk (*) beside the exhibit number indicates the exhibits containing a management contract, compensatory plan or arrangement.
Page
F-1
F-5
F-6
F-7
F-8
F-9
F-11
Incorporated by Reference
Exhibit Number Exhibit Description
3.1
3.2
4.1
4.1.1
4.2
4.2.1
4.3
4.3.1
4.7
10.1*
10.2*
10.2.1*
10.2.2*
10.2.3*
10.3*
10.3.1*
10.3.2*
10.3.3*
10.3.4*
10.4
10.5*
10.6*
10.7*
Restated Articles of Incorporation of Lithia Motors, Inc.
Second Amended and Restated Bylaws of Lithia Motors, Inc.
Indenture, dated as of December 9, 2019, among Lithia Motors, Inc., the Guarantors and the Trustee
Form of 4.625% Senior Notes due 2027
Indenture, dated as of October 9, 2020, among Lithia Motors, Inc., the Guarantors and the Trustee
Form of 4.375% Senior Notes due 2031
Indenture, dated as of May 27, 2021, among Lithia Motors, Inc., the Guarantors and the Trustee
Form of 3.875% senior notes due 2029
Description of the Registrant’s Securities under Section 12 of the Exchange Act of 1934
Amended and Restated 2009 Employee Stock Purchase Plan
Lithia Motors, Inc. 2013 Amended and Restated Stock Incentive Plan
RSU Deferral Plan
Amendment to RSU Deferral Plan
Restricted Stock Unit (RSU) Deferral Election Form
Form of Restricted Stock Unit Agreement (2020 Performance- and Time-Vesting) (for Senior
Executives)
Form of Restricted Stock Unit Agreement (2021 Performance- and Time-Vesting) (for Senior
Executives)
Form of Restricted Stock Unit Agreement (2022 Performance- and Time-Vesting) (for Senior
Executives)
Form of Restricted Stock Unit Agreement (Performance-Vesting) for awards beginning in 2023
Form of Restricted Stock Unit Agreement (Time-Vesting) for awards beginning in 2023
Lithia Motors, Inc. Short-Term Incentive Plan
Form of Outside Director Nonqualified Deferred Compensation Agreement
Amended and Restated Split-Dollar Agreement
Form of Indemnity Agreement for each Named Executive Officer
Form
10-Q
8-K
8-K
8-K
8-K
8-K
8-K
8-K
10-K
8-K
8-K
10-K
10-K
10-K
10-K
10-K
10-K
8-K
10-K
10-K
8-K
File Number
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
Exhibit
3.1
3.2
4.1
4.1
4.1
4.1
4.1
4.1
4.7
10.1
10.1
10.3.1
10.2.2
10.2.3
10.3.3
10.3.3
10.3.3
10.1
10.20
10.17
10.1
Filing Date
07/28/21
04/25/19
12/13/19
12/13/19
10/09/20
10/09/20
05/27/21
05/27/21
02/18/22
04/25/19
05/02/13
02/24/12
03/02/15
03/02/15
02/21/20
02/19/21
02/18/22
12/22/20
03/08/06
02/22/13
05/29/09
Filed or Furnished
Herewith
X
X
44
Exhibit Number Exhibit Description
10.8*
10.9*
10.9.1*
10.9.2*
10.9.3*
10.10*
10.10.1*
10.11*
10.12*
†
10.13
10.13.1
10.13.2
††
10.13.3
††
10.13.4
††
10.14
10.14.1
10.14.2
10.14.3
10.14.4
Form of Indemnity Agreement for each non-management Director
Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan
Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan –
Notice of Discretionary Contribution Award for Sidney DeBoer
Form of Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive Plan –
Notice of Discretionary Contribution Award
Amendment to Executive Management Non-Qualified Deferred Compensation and Long-Term Incentive
Plan (Executive Management Non-Qualified Deferred Compensation and Supplemental Executive
Retirement Plan)
Transition Agreement dated September 14, 2015 between Lithia Motors, Inc. and Sidney B. DeBoer
Amendment to Transition Agreement dated January 22, 2019 between Lithia Motors, Inc. and Sidney B.
DeBoer
Director Service Agreement effective January 1, 2016 between Lithia Motors, Inc. and Sidney B.
DeBoer
Form of Employment and Change in Control Agreement dated February 4, 2016 between Lithia Motors,
Inc. and Bryan DeBoer
Fourth Amended and Restated Loan Agreement, dated April 29, 2021, among Lithia Motors, Inc., the
subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement or that thereafter
become borrowers thereunder, the lenders party thereto from time to time, and U.S. Bank National
Association.
First Amendment to Fourth Amended and Restated Loan Agreement, dated February 7, 2022, among
Lithia Motors, Inc., the subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement
or that thereafter become borrowers thereunder, the lenders party thereto from time to time, and U.S.
Bank National Association.
Second Amendment to Fourth Amended and Restated Loan Agreement, dated June 2, 2022, among
Lithia Motors, Inc., the subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement
or that thereafter become borrowers thereunder, the lenders party thereto from time to time, and U.S.
Bank National Association.
Third Amendment to Fourth Amended and Restated Loan Agreement, dated November 21, 2022, among
Lithia Motors, Inc., the subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement
or that thereafter become borrowers thereunder, the lenders party thereto from time to time, and U.S.
Bank National Association.
Fourth Amendment to Fourth Amended and Restated Loan Agreement, dated February 9, 2023, among
Lithia Motors, Inc., the subsidiaries of Lithia Motors, Inc. listed on the signature pages of the agreement
or that thereafter become borrowers thereunder, the lenders party thereto from time to time, and U.S.
Bank National Association.
Amended and Restated Loan Agreement, dated December 31, 2020, among SCFC Business Services
LLC, Driveway Finance Corporation, the lenders party thereto from time to time, and JPMorgan Chase
Bank, N.A.
Amendment No. 1 to Amended and Restated Loan Agreement, dated June 4, 2021, among SCFC
Business Services LLC, Chariot Funding LLC and JPMorgan Chase Bank, N.A.
Amendment No. 2 to Amended and Restated Loan Agreement, dated September 14, 2021, among SCFC
Business Services LLC, Chariot Funding LLC and JPMorgan Chase Bank, N.A.
Amendment No. 3 to Amended and Restated Loan Agreement, dated November 10, 2021, among SCFC
Business Services LLC, Chariot Funding LLC and JPMorgan Chase Bank, N.A.
Amendment No. 4 to Amended and Restated Loan Agreement, dated February 8, 2022, among SCFC
Business Services LLC, Chariot Funding LLC and JPMorgan Chase Bank, N.A.
Incorporated by Reference
Form
8-K
10-Q
10-K
10-K
10-K
8-K
8-K
8-K
8-K
8-K
File Number
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
001-14733
Exhibit
10.2
10.1
10.22.1
10.22.2
10.10.3
10.1
10.1
10.2
10.1
10.1
Filing Date
05/29/09
04/29/16
03/07/11
03/07/11
02/25/19
09/17/15
01/25/19
09/17/15
02/05/16
05/04/21
8-K
001-14733
10.1
06/08/22
8-K
001-14733
10.1
02/15/23
8-K
001-14733
8-K
10-Q
10-Q
10-Q
001-14733
001-14733
001-14733
001-14733
10.1
10.2
10.1
10.2
10.3
06/09/21
06/09/21
10/27/22
10/27/22
10/27/22
Filed or Furnished
Herewith
X
X
45
Exhibit Number Exhibit Description
10.14.5
10.14.6
10.14.7
10.14.8
10.15
††
10.16
21
23
31.1
31.2
32.1
32.2
101
104
Amendment No. 5 to Amended and Restated Loan Agreement, dated June 23, 2022, among SCFC
Business Services LLC, Chariot Funding LLC and JPMorgan Chase Bank, N.A.
Amendment No. 6 to Amended and Restated Loan Agreement, dated July 29, 2022, among SCFC
Business Services LLC, Chariot Funding LLC and JPMorgan Chase Bank, N.A.
Amendment No. 7 to Amended and Restated Loan Agreement, dated September 26, 2022, among SCFC
Business Services LLC, Chariot Funding LLC and JPMorgan Chase Bank, N.A.
Amendment No. 8 to Amended and Restated Loan Agreement, dated November 17, 2022, among SCFC
Business Services LLC, Chariot Funding LLC and JPMorgan Chase Bank, N.A.
Credit Agreement, dated June 3, 2022, among Lithia Master LP Company, LP, the subsidiaries of Lithia
Motors, Inc. listed on the signature pages of the agreement or that thereafter become borrowers
thereunder, Lithia Master GP Company, Inc. and the other general partners of the Borrowers, the
lenders party thereto from time to time, and The Bank of Nova Scotia.
Loan Agreement, dated November 1, 2022, among DFC Business Services, LLC, Driveway Finance
Corporation, the lenders party thereto from time to time, the agents from time to time party thereto, and
Mizuho Bank, Ltd.
Subsidiaries of Lithia Motors, Inc.
Consent of KPMG LLP, Independent Registered Public Accounting Firm
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of
1934.
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of
1934.
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of
1934 and 18 U.S.C. Section 1350.
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of
1934 and 18 U.S.C. Section 1350.
Inline XBRL Document Set for the consolidated financial statements and accompanying notes to
consolidated financial statements
Cover page formatted as Inline XBRL and contained in Exhibit 101.
Incorporated by Reference
Form
10-Q
10-Q
10-Q
File Number
001-14733
001-14733
001-14733
Exhibit
10.4
10.5
10.6
Filing Date
10/27/22
10/27/22
10/27/22
Filed or Furnished
Herewith
8-K
001-14733
10.2
06/08/22
8-K
001-14733
10.1
11/04/22
X
X
X
X
X
X
X
X
X
†
Substantially similar agreements exist between Lithia Motors, Inc. and each of Michael Cavanaugh, Marguerite Celeste, Adam Chamberlain, John Criddle, Carol Deacon, Tom Dobry, Gary Glandon,
Scott Hillier, George Hines, Christopher S. Holzshu, Edward Impert, Charles Lietz, Tina Miller, Thomas Naso, Bryan Osterhout, Ross Sherman, and David Stork. The "Cash Change in Control Benefits”
under the agreements with Michael Cavanaugh, John Criddle, Edward Impert, and Ross Sherman provide for 12 months of base salary rather than 24 months.
††
Certain confidential and immaterial terms redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
46
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: February 24, 2023
LITHIA MOTORS, INC.
Registrant
By:
/s/ Bryan B. DeBoer
Bryan B. DeBoer
Chief Executive Officer, President, Director, and Principal Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated
on February 24, 2023:
/s/ Bryan B. DeBoer
Bryan B. DeBoer
Chief Executive Officer, President, Director, and Principal Executive Officer
/s/ Tina Miller
Tina Miller
Chief Financial Officer, Senior Vice President, and Principal Accounting Officer
/s/ Sidney B. DeBoer
Sidney B. DeBoer
Chairman of the Board and Director
/s/ James E. Lentz
James E. Lentz
Director
/s/ Louis P. Miramontes
Louis P. Miramontes
Director
/s/ David J. Robino
David J. Robino
Director
/s/ Susan O. Cain
Susan O. Cain
Director
/s/ Shauna McIntyre
Shauna McIntyre
Director
/s/ Kenneth E. Roberts
Kenneth E. Roberts
Director
47
To the Stockholders and Board of Directors
Lithia Motors, Inc.:
Report of Independent Registered Public Accounting Firm
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Lithia Motors, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated
statements of operations, comprehensive income, equity and redeemable non-controlling interest, and cash flows for each of the years in the three-year period ended December 31, 2022,
and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position
of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in
conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial
reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated February 24, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based
on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be
communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we
are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the Company’s impairment tests over goodwill and franchise value
As disclosed in Note 1 and Note 5 to the consolidated financial statements, the Company had goodwill and indefinite-lived franchise value intangible assets with a book value of
$1,461 million and $1,856 million, respectively, at December 31, 2022. As described in Note 1 to the consolidated financial statements, the Company tested its goodwill and
franchise value intangibles assets for impairment using a qualitative assessment as of October 1, 2022. The qualitative annual assessment was performed at each individual store
level as of October 1, 2022 and the Company determined that no impairment existed in 2022.
We identified the assessment of the Company’s qualitative impairment tests over goodwill and franchise value for stores whose current operating results indicate a higher risk of
potential impairment as a critical
AUDITOR’S REPORT
F-1
audit matter. The tests included the evaluation of qualitative factors such as future revenue growth and profitability as well as comparable dealership sales, that required especially
subjective auditor judgment.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal
controls over the Company’s goodwill and franchise value impairment assessment processes, including controls related to the identification and development of relevant qualitative
factors. We compared key financial metrics across stores with similar demographics, including historical and future dealership level revenue growth and profitability, and evaluated
differences for potential indicators of impairments. We evaluated the Company’s intent and ability to carry out a particular course of action by evaluating the Company’s past history
of carrying out its stated intentions. Additionally, we evaluated information about recent comparable dealership sales to identify potential indicators of impairment.
/s/ KPMG LLP
We have served as the Company’s auditor since 1993.
Portland, Oregon
February 24, 2023
AUDITOR’S REPORT
F-2
To the Stockholders and Board of Directors
Lithia Motors, Inc.:
Report of Independent Registered Public Accounting Firm
Opinion on Internal Control Over Financial Reporting
We have audited Lithia Motors, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as
of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, equity and redeemable non-controlling interest, and cash flows for each of the
years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated February 24, 2023 expressed an
unqualified opinion on those consolidated financial statements.
The Company acquired thirty-one stores during 2022, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2022, all of these acquired stores’ internal control over financial reporting. The total assets of these thirty-one stores represented approximately 5% of consolidated total
assets as of December 31, 2022 and approximately 5% of consolidated revenues for the year ended December 31, 2022. Our audit of internal control over financial reporting of the Company
also excluded an evaluation of the internal control over financial reporting of these thirty-one stores.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
AUDITOR’S REPORT
F-3
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Portland, Oregon
February 24, 2023
AUDITOR’S REPORT
F-4
CONSOLIDATED BALANCE SHEETS
($ in millions)
Assets
Current assets:
Cash and restricted cash
Accounts receivable, net of allowance for doubtful accounts of $3.1 and $3.7
Inventories, net
Other current assets
Total current assets
Property and equipment, net of accumulated depreciation of $526.8 and $422.6
Operating lease right-of-use assets
Finance receivables, net of allowance for estimated losses of $69.3 and $25.0
Goodwill
Franchise value
Other non-current assets
Total assets
Liabilities and equity
Current liabilities:
Floor plan notes payable
Floor plan notes payable: non-trade
Current maturities of long-term debt
Trade payables
Accrued liabilities
Total current liabilities
Long-term debt, less current maturities
Non-recourse notes payable
Deferred revenue
Deferred income taxes
Non-current operating lease liabilities
Other long-term liabilities
Total liabilities
Redeemable non-controlling interest
Equity:
Preferred stock - no par value; authorized 15.0 shares; none outstanding
Common stock - no par value; authorized 125.0 shares; issued and outstanding 27.3 and 29.5
Additional paid-in capital
Accumulated other comprehensive loss
Retained earnings
Total stockholders’ equity - Lithia Motors, Inc.
Non-controlling interest
Total equity
Total liabilities, redeemable non-controlling interest and equity
December 31,
2022
2021
$
$
$
$
246.7 $
813.1
3,409.4
161.7
4,630.9
3,574.6
381.9
2,187.6
1,460.7
1,856.2
914.7
15,006.6 $
627.2 $
1,489.4
20.5
258.4
782.7
3,178.2
5,088.3
422.2
226.7
286.3
346.6
207.2
9,755.5
40.7
—
1,082.1
76.8
(18.0)
4,065.3
5,206.2
4.2
5,210.4
15,006.6 $
174.8
685.5
2,385.5
63.9
3,309.7
3,052.6
395.9
803.3
977.3
799.1
1,809.0
11,146.9
354.2
835.9
223.7
235.4
753.6
2,402.8
2,868.1
317.6
191.2
191.0
361.7
151.3
6,483.7
34.0
—
1,711.6
58.3
(3.0)
2,859.5
4,626.4
2.8
4,629.2
11,146.9
See accompanying notes to consolidated financial statements.
FINANCIAL STATEMENTS
F-5
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in millions, except per share amounts)
Revenues:
2022
Year Ended December 31,
2021
2020
New vehicle retail
Used vehicle retail
Used vehicle wholesale
Finance and insurance
Service, body and parts
Fleet and other
Total revenues
Cost of sales:
New vehicle retail
Used vehicle retail
Used vehicle wholesale
Service, body and parts
Fleet and other
Total cost of sales
Gross profit
Financing operations (loss) income
Asset impairments
Selling, general and administrative
Depreciation and amortization
Operating income
Floor plan interest expense
Other interest expense
Other (expense) income, net
Income before income taxes
Income tax provision
Net income
Net income attributable to non-controlling interests
Net income attributable to redeemable non-controlling interest
Net income attributable to Lithia Motors, Inc.
Basic earnings per share attributable to Lithia Motors, Inc.
Shares used in basic per share calculations
Diluted earnings per share attributable to Lithia Motors, Inc.
Shares used in diluted per share calculations
Cash dividends paid per share
$
$
$
$
$
12,894.5 $
9,425.0
1,425.2
1,285.4
2,738.8
418.9
28,187.8
11,314.8
8,599.6
1,440.6
1,275.8
404.6
23,035.4
5,152.4
(4.0)
—
3,044.1
163.2
1,941.1
(38.8)
(129.1)
(43.2)
1,730.0
(468.4)
1,261.6
(4.8)
(5.8)
1,251.0 $
44.38 $
28.2
44.17 $
28.3
1.61 $
11,197.7 $
7,255.3
957.1
1,051.3
2,110.9
259.4
22,831.7
9,979.2
6,428.6
913.7
1,000.4
250.8
18,572.7
4,259.0
11.0
1.9
2,480.8
124.8
1,662.5
(22.3)
(103.4)
(52.0)
1,484.8
(422.1)
1,062.7
(1.7)
(0.9)
1,060.1 $
36.81 $
28.8
36.54 $
29.0
1.36 $
6,773.9
3,998.4
310.9
579.8
1,348.7
114.8
13,126.5
6,313.0
3,552.4
300.2
631.9
104.7
10,902.2
2,224.3
6.5
7.9
1,437.9
92.3
692.7
(34.4)
(71.6)
61.8
648.5
(178.2)
470.3
—
—
470.3
19.74
23.8
19.53
24.1
1.22
See accompanying notes to consolidated financial statements.
FINANCIAL STATEMENTS
F-6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in millions)
Net income
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(0.7), $(1.6) and $2.0
Total other comprehensive income (loss), net of tax
Comprehensive income
Comprehensive income attributable to non-controlling interest
Comprehensive income attributable to redeemable non-controlling interest
Comprehensive income attributable to Lithia Motors, Inc.
2022
Year Ended December 31,
2021
1,261.6 $
1,062.7 $
2020
(16.8)
1.8
(15.0)
1,246.6
(4.8)
(5.8)
1,236.0 $
(1.1)
4.4
3.3
1,066.0
(1.7)
(0.9)
1,063.4 $
470.3
—
(5.6)
(5.6)
464.7
—
—
464.7
$
$
See accompanying notes to consolidated financial statements.
FINANCIAL STATEMENTS
F-7
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST
($ in millions)
Total equity, beginning balances
2022
Year Ended December 31,
2021
2020
$
4,629.2 $
2,661.5 $
1,467.7
Common stock
(1)
, beginning balances
Compensation for stock and stock option issuances and excess tax benefits from option exercises
Issuance of stock in connection with employee stock plans
Class B common stock converted to class A common stock
Repurchase of class A common stock
Equity issuances, net of issuance costs
Common stock
(1)
, ending balances
Class B common stock , beginning balances
(1)
Class B common stock converted to class A common stock
Class B common stock , ending balances
(1)
Additional paid-in capital, beginning balances
Compensation for stock and stock option issuances and excess tax benefits from option exercises
Repurchase of class A common stock
Additional paid-in capital, ending balances
Accumulated other comprehensive loss, beginning balances
Foreign currency translation adjustment
Gain (loss) on cash flow hedges, net of tax (provision) benefit of $(0.7), $(1.6) and $2.0
Accumulated other comprehensive loss, ending balances
Retained earnings, beginning balances
Adjustment to adopt ASC 326 (2020)
Net income attributable to Lithia Motors, Inc.
Dividends paid
Retained earnings, ending balances
Non-controlling interest, beginning balances
Contribution (distribution) of non-controlling interest
Net income attributable to non-controlling interest
Non-controlling interest, ending balances
Total equity, ending balances
Redeemable non-controlling interest, beginning balances
Acquired redeemable non-controlling interest
Net income attributable to redeemable non-controlling interest
Redeemable non-controlling interest, ending balances
1,711.6
22.6
36.1
—
(688.3)
—
1,082.1
—
—
—
58.3
18.5
—
76.8
(3.0)
(16.8)
1.8
(18.0)
2,859.5
—
1,251.0
(45.2)
4,065.3
2.8
(3.4)
4.8
4.2
788.2
17.8
25.9
—
(230.7)
1,110.4
1,711.6
—
—
—
41.4
16.9
—
58.3
(6.3)
(1.1)
4.4
(3.0)
1,838.2
—
1,060.1
(38.8)
2,859.5
—
1.1
1.7
2.8
20.5
11.6
13.3
0.1
(34.4)
777.1
788.2
0.1
(0.1)
—
46.0
11.6
(16.2)
41.4
(0.7)
—
(5.6)
(6.3)
1,401.8
(4.8)
470.3
(29.1)
1,838.2
—
—
—
—
$
$
$
5,210.4 $
4,629.2 $
2,661.5
34.0 $
0.8
5.8
40.7 $
— $
33.1
0.9
34.0 $
—
—
—
—
(1)
Prior to June 7, 2021, common stock was classified as Class A common stock. The Class A common stock reclassification as common stock occurred in connection with the elimination of our
classified common stock structure following the conversion of all Class B common stock to Class A common stock.
See accompanying notes to consolidated financial statements.
FINANCIAL STATEMENTS
F-8
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Asset impairments
Depreciation and amortization
Stock-based compensation
Loss on redemption of senior notes
Gain on disposal of other assets
Net disposal gain on sale of stores
Unrealized investment loss (gain)
Deferred income taxes
Amortization of operating lease right-of-use assets
(Increase) decrease (net of acquisitions and dispositions):
Trade receivables, net
Inventories
Finance receivables, net
Other assets
Increase (decrease) (net of acquisitions and dispositions):
Floor plan notes payable
Trade payables
Accrued liabilities
Other long-term liabilities and deferred revenue
Net cash (used in) provided by operating activities
Cash flows from investing activities:
Notes receivable issued
Principal payments received on notes receivable
Capital expenditures
Proceeds from sales of assets
Cash paid for other investments
Cash paid for acquisitions, net of cash acquired
Proceeds from sales of stores
Net cash used in investing activities
Cash flows from financing activities:
Borrowings (repayments) on floor plan notes payable: non-trade, net
Borrowings on lines of credit
Repayments on lines of credit
Principal payments on long-term debt and finance lease liabilities, scheduled
Principal payments on long-term debt and finance lease liabilities, other
Proceeds from issuance of long-term debt
Principal payments on non-recourse notes payable
Proceeds from issuance of non-recourse notes payable
Payment of debt issuance costs
Proceeds from issuance of common stock
Repurchase of common stock
Dividends paid
Payments of contingent consideration related to acquisitions
Other financing activities
Net cash provided by financing activities
Effect of exchange rate changes on cash and restricted cash
Increase in cash and restricted cash
Cash and restricted cash at beginning of year
Cash and restricted cash at end of year
2022
Year Ended December 31,
2021
2020
$
1,261.6 $
1,062.7 $
—
172.7
41.1
—
(0.1)
(66.0)
39.2
95.2
55.4
(131.6)
(923.0)
(1,363.0)
(138.3)
273.3
25.3
(2.3)
50.4
(610.1)
—
—
(303.1)
16.6
(11.8)
(1,243.6)
212.1
(1,329.8)
737.9
12,160.8
(10,137.0)
(51.2)
(171.7)
113.3
(193.5)
298.1
(11.8)
36.1
(688.3)
(45.2)
(7.2)
(4.4)
2,035.9
(3.0)
93.0
178.5
271.5 $
1.9
127.3
34.7
10.3
(2.5)
—
66.4
43.1
39.0
(147.1)
674.6
(640.8)
61.0
116.1
78.4
233.0
39.1
1,797.2
—
—
(260.4)
3.3
(10.3)
(2,699.3)
76.3
(2,890.4)
(685.3)
2,830.6
(2,505.2)
(32.5)
(486.5)
817.4
(26.8)
344.4
(14.7)
1,136.2
(230.7)
(38.8)
(1.4)
—
1,106.7
2.5
16.0
162.5
178.5 $
$
470.3
7.9
92.4
23.2
—
(1.7)
(16.6)
(43.4)
17.2
28.9
(113.5)
228.8
(114.1)
12.9
(204.1)
28.2
113.1
15.1
544.6
(12.5)
25.0
(167.8)
6.5
(11.2)
(1,503.3)
57.5
(1,605.8)
(20.6)
1,825.4
(1,935.4)
(29.4)
(6.3)
606.5
—
—
(10.8)
790.4
(50.6)
(29.1)
(0.3)
—
1,139.8
—
78.6
84.0
162.5
See accompanying notes to consolidated financial statements.
FINANCIAL STATEMENTS
F-9
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
($ in millions)
Reconciliation of cash and restricted cash to the consolidated balance sheets
Cash
Restricted cash from collections on auto loans receivable
Cash and restricted cash
Restricted cash on deposit in reserve accounts, included in other non-current assets
Total cash and restricted cash reported in the Consolidated Statements of Cash Flows
Supplemental cash flow information:
Cash paid during the period for interest
Cash paid during the period for income taxes, net
Floor plan debt paid in connection with store disposals
Non-cash activities:
Debt issued in connection with acquisitions
Contingent consideration in connection with acquisitions
Debt assumed in connection with acquisitions
Acquisition of finance leases in connection with acquisitions
Right-of-use assets obtained in exchange for lease liabilities
$
$
$
$
2022
Year Ended December 31,
2021
2020
168.1 $
78.6
246.7
24.8
271.5 $
209.9 $
449.3
29.5
— $
22.4
0.7
78.2
44.7
153.0 $
21.8
174.8
3.7
178.5 $
130.1 $
369.1
8.7
355.6 $
0.9
4.0
—
171.8
160.2
2.3
162.5
—
162.5
107.7
135.0
38.4
—
14.3
—
227.5
55.4
See accompanying notes to consolidated financial statements.
FINANCIAL STATEMENTS
F-10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business
We are the premier automotive retailer in North America, offering a wide selection of vehicles across global carmakers and providing a full suite of financing, leasing, repair, and
maintenance options. In 2022, we were ranked 158 on the Fortune 500. As of December 31, 2022, we operated 296 locations representing 48 brands in two countries, across 28 U.S.
states and three Canadian provinces. We offer vehicles through our comprehensive network of locations, e-commerce platforms, and captive finance division. Our "Growth Powered by
People” strategy drives us to innovate and continuously improve the customer experience, providing consumer optionality to interact wherever, whenever, and however they desire.
In the fourth quarter of 2022, we reevaluated our reporting segments based on our development and long-term strategy. Based on this evaluation, we reclassified Financing Operations
Income for the comparative periods from the "Corporate and Other” category to conform to current year presentation and consolidated our Domestic, Import, and Luxury sections into a new
Vehicle Operations segment.
Basis of Presentation
The accompanying Consolidated Financial Statements reflect the results of operations, the financial position and the cash flows for Lithia Motors, Inc. and its directly and indirectly wholly-
owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Cash and Restricted Cash
Cash is defined as cash on hand and cash in bank accounts without restrictions. Restricted cash consisted of collections of principal, interest and fee payments on auto loans receivable
that are restricted for repayment on borrowings on our securitization facilities before being unrestricted.
Accounts Receivable
Accounts receivable classifications include the following:
• Contracts in transit are receivables from various lenders for the financing of vehicles that we have arranged on behalf of the customer and are typically received within five to 10 days of
• Trade receivables are comprised of amounts due from customers, lenders for the commissions earned on financing and others for commissions earned on service contracts and
selling a vehicle.
insurance products.
• Vehicle receivables represent receivables for the portion of the vehicle sales price paid directly by the customer.
• Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims.
Receivables are recorded at invoice and do not bear interest until they are 60 days past due. The historical losses related to these balances are immaterial.The long-term portion of
accounts receivable was included as a component of other non-current assets in the Consolidated Balance Sheets. See Note 2 – Accounts Receivable.
Finance Receivables
Finance receivables consist of auto loan and lease contracts originated through our Financing Operations, which are secured by the vehicles we sell. Interest income on finance receivables
is recognized based on the contractual terms of each loan and is accrued until repayment, reaching non-accrual status, charge-off, or repossession. Direct costs associated with loan
originations are capitalized and expensed as an offset to interest income when recognized on the loans.
More than 98% of the portfolio is aged less than 60 days past due with less than 2% on non-accrual status. As of December 31, 2022, the allowance for credit losses related to auto loan
and lease receivables was $69.3 million and was included in finance receivables, net. In accordance with Topic 326, the allowance for loan losses is estimated based on our historical write-
off experience, current conditions and reasonable and supportable forecasts as well as the value of any underlying assets securing these loans and is reviewed monthly. Consideration is
given to recent delinquency trends and recovery rates. Account balances are charged against the allowance upon the
NOTES TO FINANCIAL STATEMENTS
F-11
earlier of reaching 120 days past due status, the repossession of the vehicle, or the determination that the account is uncollectible. See Note 5 – Finance Receivables.
Inventories
Inventories are valued at the lower of net realizable value or cost, using the specific identification method for new vehicles, pooled approach for used vehicles, and the lower of cost (first-in,
first-out) or market method for parts. The cost of new and used vehicle inventories includes the cost of any equipment added, reconditioning and transportation.
Manufacturers reimburse us for holdbacks, floor plan interest assistance and advertising assistance, which are reflected as a reduction in the carrying value of each vehicle purchased. We
recognize advertising assistance, floor plan interest assistance, holdbacks, cash incentives and other rebates received from manufacturers that are tied to specific vehicles as a reduction
to cost of sales as the related vehicles are sold.
Parts purchase discounts that we receive from the manufacturer are reflected as a reduction in the carrying value of the parts purchased from the manufacturer and are recognized as a
reduction to cost of goods sold as the related inventory is sold. See Note 3 – Inventories and Floor Plan Notes Payable.
Property and Equipment
Property and equipment are stated at cost and depreciated over their estimated useful lives on the straight-line basis. Leasehold improvements made at the inception of the lease or during
the term of the lease are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease.
The range of estimated useful lives is as follows:
Buildings and improvements
Service equipment
Furniture, office equipment, signs and fixtures
5 to 40 years
5 to 15 years
3 to 10 years
The cost for maintenance, repairs and minor renewals is expensed as incurred, while significant remodels and betterments are capitalized. In addition, interest on borrowings for major
capital projects, significant remodels, and betterments is capitalized. Capitalized interest becomes a part of the cost of the depreciable asset and is depreciated according to the estimated
useful lives as previously stated. For the years ended December 31, 2022, 2021 and 2020, we recorded capitalized interest of $2.6 million, $2.0 million and $1.6 million, respectively.
When an asset is retired, or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is credited or charged to income
from operations.
Leased property meeting certain criteria are recorded as finance leases. We have finance leases for certain locations, expiring at various dates through August 1, 2037. Our finance lease
right-of-use assets are included in property and equipment on our Consolidated Balance Sheets. Amortization of finance lease right-of-use assets is computed on a straight-line basis over
the term of the lease, unless the lease transfers title or it contains a bargain purchase option, in which case, it is amortized over the asset’s useful life and is included in depreciation
expense. Finance lease liabilities are recorded as the lesser of the estimated fair market value of the leased property or the net present value of the aggregated future minimum payments
and are included in current maturities of long-term debt and long-term debt on our Consolidated Balance Sheets. Interest associated with these obligations is included in other interest
expense in the Consolidated Statements of Operations. See Note 8 – Commitments and Contingencies.
Long-lived assets held and used by us are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. We consider
several factors when evaluating whether there are indications of potential impairment related to our long-lived assets, including store profitability, overall macroeconomic factors and the
impact of our strategic management decisions. If recoverability testing is performed, we evaluate assets to be held and used by comparing the carrying amount of an asset to future net
undiscounted cash flows associated with the asset, including its disposition. If such assets are considered to be impaired, the amount by which the carrying amount of the assets exceeds
the fair value of the assets is recognized as a charge to income from operations. See Note 4 – Property and Equipment.
NOTES TO FINANCIAL STATEMENTS
F-12
Goodwill
Goodwill represents the excess purchase price over the fair value of net assets acquired which is not allocable to separately identifiable intangible assets. Other identifiable intangible
assets, such as franchise rights, are separately recognized if the intangible asset is obtained through contractual or other legal right or if the intangible asset can be sold, transferred,
licensed or exchanged.
Goodwill is not amortized but tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying amount of the reporting unit more likely than not
exceeds fair value. We have the option to qualitatively or quantitatively assess goodwill for impairment. We test our goodwill for impairment on October 1 of each year. In 2022, we evaluated
our goodwill using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the fair value of the reporting unit exceeds the carrying amount,
goodwill is not impaired. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying amount, we would further evaluate for potential impairment.
See Note 6 – Goodwill and Franchise Value and Note 14 – Fair Value Measurements.
Franchise Value
We enter into agreements (franchise agreements) with our manufacturers. Franchise value represents a right received under franchise agreements with manufacturers and is identified on an
individual store basis.
We evaluated the useful lives of our franchise agreements based on the following factors:
• certain of our franchise agreements continue indefinitely by their terms;
• certain of our franchise agreements have limited terms, but are routinely renewed without substantial cost to us;
• other than franchise terminations related to the unprecedented reorganizations of Chrysler and General Motors, and allowed by bankruptcy law, we are not aware of manufacturers
terminating franchise agreements against the wishes of the franchise owners in the ordinary course of business. A manufacturer may pressure a franchise owner to sell a franchise
when the owner is in breach of the franchise agreement over an extended period of time;
• state dealership franchise laws typically limit the rights of the manufacturer to terminate or not renew a franchise;
• we are not aware of any legislation or other factors that would materially change the retail automotive franchise system; and
• as evidenced by our acquisition and disposition history, there is an active market for most automotive dealership franchises within the United States. We attribute value to the franchise
agreements acquired with the dealerships we purchase based on the understanding and industry practice that the franchise agreements will be renewed indefinitely by the
manufacturer.
Accordingly, we have determined that our franchise agreements will continue to contribute to our cash flows indefinitely and, therefore, have indefinite lives.
As an indefinite-lived intangible asset, franchise value is tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying value may exceed fair
value. The impairment test for indefinite-lived intangible assets requires the comparison of estimated fair value to carrying value. An impairment charge is recorded to the extent the fair value
is less than the carrying value. We have the option to qualitatively or quantitatively assess indefinite-lived intangible assets for impairment. We evaluated our indefinite-lived intangible assets
using a qualitative assessment process. We have determined the appropriate unit of accounting for testing franchise value for impairment is each individual store.
We test our franchise value for impairment on October 1 of each year. In 2022, we evaluated our franchise value using a qualitative assessment process. If the qualitative factors discussed
above determine that it is more likely than not that the fair value of the individual store’s franchise value exceeds the carrying amount, the franchise value is not impaired and the second
step is not necessary. If the qualitative assessment determines it is more likely than not the fair value is less than the carrying value, then a quantitative valuation of our franchise value is
performed and an impairment would be recorded. See Note 6 – Goodwill and Franchise Value and Note 14 – Fair Value Measurements.
NOTES TO FINANCIAL STATEMENTS
F-13
Variable Interest Entities and Securitization Transactions
We maintain a revolving funding program composed of warehouse facilities that we use to fund auto loans receivable originated by our Financing Operations.
We use term securitizations to provide long-term funding for most of the auto loans receivable initially funded through the warehouse facilities. In these transactions, a pool of auto loans
receivable is sold to a bankruptcy-remote, special purpose entity that, in turn, transfers the receivables to a special purpose securitization trust. The securitization trust issues asset-
backed securities, secured or otherwise supported by the transferred receivables, and the proceeds from the sale of the asset-backed securities are used to finance the securitized
receivables.
The securitization trusts established in connection with asset-backed securitization transactions are variable interest entities (VIEs). We are required to evaluate term securitization trusts
for consolidation. In our capacity as servicer, we have the power to direct the activities of the trusts that most significantly impact the economic performance of the trusts. In addition, we
have the obligation to absorb losses (subject to limitations) and the rights to receive any returns of the trusts, which could be significant. Accordingly, we are the primary beneficiary of the
trusts and are required to consolidate them.
We recognize these term securitizations as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance
sheets.
These receivables can only be used as collateral to settle obligations of the related non-recourse funding vehicles. The non-recourse funding vehicles and investors have no recourse to our
assets beyond the related receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loan receivables. We have not provided financial or other
support to the non-recourse funding vehicles that was not previously contractually required, and there are no additional arrangements, guarantees or other commitments that could require
us to provide financial support to the non-recourse funding vehicles.
See Note 2 – Accounts Receivable, Note 5 – Finance Receivables, and Note 9 – Credit Facilities and Long-Term Debt for additional information on auto loans receivable and non-recourse
notes payable.
Restricted Cash on Deposit in Reserve Accounts
The restricted cash on deposit in reserve accounts is for the benefit of holders of non-recourse notes payable, and these funds are not expected to be available to the company or its
creditors. In the event that the cash generated by the related receivables in a given period was insufficient to pay the interest, principal and other required payments, the balances on
deposit in the reserve accounts would be used to pay those amounts. Restricted cash on deposit in reserve accounts is invested in money market securities.
Advertising
We expense production and other costs of advertising as incurred as a component of selling, general and administrative expense. Additionally, manufacturer cooperative advertising credits
for qualifying, specifically-identified advertising expenditures are recognized as a reduction of advertising expense. Advertising expense and manufacturer cooperative advertising credits
were as follows:
($ in millions)
Advertising expense, gross
Manufacturer cooperative advertising credits
Advertising expense, net
2022
Year Ended December 31,
2021
2020
$
$
299.9 $
(46.3)
253.6 $
197.8 $
(35.6)
162.2 $
121.3
(23.9)
97.4
Contract Origination Costs
Contract origination commissions paid to our employees directly related to the sale of our self-insured lifetime lube, oil and filter service contracts and auto loan receivable originations are
deferred and charged to expense in proportion to the associated revenue to be recognized.
Legal Costs
We are a party to numerous legal proceedings arising in the normal course of business. We accrue for certain legal costs, including attorney fees and potential settlement claims related to
various legal proceedings that are estimable and probable. See Note 8 – Commitments and Contingencies.
NOTES TO FINANCIAL STATEMENTS
F-14
Stock-Based Compensation
Compensation costs associated with equity instruments exchanged for employee and director services are measured at the grant date, based on the fair value of the award. If there is a
performance-based element to the award, the expense is recognized based on the estimated attainment level, estimated time to achieve the attainment level and/or the vesting period.
Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. The fair value of non-vested stock awards is
based on the closing price of our common stock on the date of grant. We account for forfeitures of stock-based awards as they occur. See Note 13 – Stock-Based Compensation.
Income and Other Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities, their respective tax bases, operating loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance, if needed, reduces deferred tax assets when it
is more likely than not that some or all of the deferred tax assets will not be realized.
When there are situations with uncertainty as to the timing of the deduction, the amount of the deduction, or the validity of the deduction, we adjust our financial statements to reflect only
those tax positions that are more-likely-than-not to be sustained. Positions that meet this criterion are measured using the largest benefit that is more than 50% likely to be realized.
Interest and penalties are recorded as income tax provision in the period incurred or accrued when related to an uncertain tax position. See Note 15 – Income Taxes.
We account for all taxes assessed by a governmental authority that are directly imposed on a revenue-producing transaction (i.e., sales, use, value-added) on a net (excluded from
revenues) basis.
Concentration of Risk and Uncertainties
We purchase substantially all of our new vehicles and inventory from various manufacturers at the prevailing prices charged by auto manufacturers to all franchised dealers. Our overall
sales could be impacted by the auto manufacturers’ inability or unwillingness to supply dealerships with an adequate supply of popular models.
We depend on our manufacturers to provide a supply of vehicles which supports expected sales levels. In the event that manufacturers are unable to supply the needed level of vehicles, our
financial performance may be adversely impacted.
We depend on our manufacturers to deliver high-quality, defect-free vehicles. In the event that manufacturers experience future quality issues, our financial performance may be adversely
impacted.
We are subject to a concentration of risk in the event of financial distress, including potential reorganization or bankruptcy, of a major vehicle manufacturer. Our sales volume could be
materially adversely impacted by the manufacturers’ or distributors’ inability to supply the stores with an adequate supply of vehicles. We also receive incentives and rebates from our
manufacturers, including cash allowances, financing programs, discounts, holdbacks and other incentives. These incentives are recorded as accounts receivable in our Consolidated
Balance Sheets until payment is received. Our financial condition could be materially adversely impacted by the manufacturers’ or distributors’ inability to continue to offer these incentives
and rebates at substantially similar terms, or to pay our outstanding receivables.
We enter into franchise agreements with the manufacturers. The franchise agreements generally limit the location of the dealership and provide the auto manufacturer approval rights over
changes in dealership management and ownership. The auto manufacturers are also entitled to terminate the franchise agreement if the dealership is in material breach of the terms. Our
ability to expand operations depends, in part, on obtaining consents of the manufacturers for the acquisition of additional dealerships. See also "Goodwill” and "Franchise Value” above.
We have a variety of syndicated credit facilities with several of the included financial institutions also providing vehicle financing for certain new vehicles, vehicles that are designated for use
as service loaners and mortgage
NOTES TO FINANCIAL STATEMENTS
F-15
financing. These credit facilities are the primary source of floor plan financing for our new vehicle inventory and also provides used vehicle financing and a revolving line of credit. The terms of
the facilities extends through various dates through April 2026. At maturity, our financial condition could be materially adversely impacted if lenders are unable to provide credit that has
typically been extended to us or with terms unacceptable to us. Our financial condition could be materially adversely impacted if these providers incur losses in the future or undergo
funding limitations. See Note 9 – Credit Facilities and Long-Term Debt.
We anticipate continued organic growth and growth through acquisitions. This growth will require additional credit which may be unavailable or with terms unacceptable to us. If these
events were to occur, we may not be able to borrow sufficient funds to facilitate our growth.
Use of Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the
amounts reported in the Consolidated Financial Statements and related notes to financial statements. Changes in such estimates may affect amounts reported in future periods.
Estimates are used in the calculation of certain reserves maintained for charge-backs on estimated cancellations of service contracts; life, accident and disability insurance policies;
finance fees from customer financing contracts and uncollectible accounts receivable.
Estimates are also used in our allowance for loan and lease losses, which represents the net credit losses expected over the remaining contractual life of our finance receivables. Because
net loss performance can vary substantially over time, estimating net losses requires assumptions about matters that are uncertain. The allowance for loan and lease losses is determined
using a net loss timing curve, primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Determining the appropriateness of
the allowance for loan and lease losses requires management to exercise judgement about matters that are inherently uncertain, including the timing and distribution of net losses that
could materially affect the allowance or loan and lease losses and, therefore, net earnings.
We also use estimates in the calculation of various expenses, accruals and reserves, including anticipated losses related to workers’ compensation insurance; anticipated losses related to
self-insurance components of our property and casualty and medical insurance; self-insured lifetime lube, oil and filter service contracts; discretionary employee bonuses, the Transition
Agreement with Sidney B. DeBoer, our Chairman of the Board; warranties provided on certain products and services; legal reserves and stock-based compensation. We also make certain
estimates regarding the assessment of the recoverability of long-lived assets, indefinite-lived intangible assets and deferred tax assets.
We offer a limited warranty on the sale of most retail used vehicles. This warranty is based on mileage and time. We also offer a mileage and time based warranty on parts used in our
service repair work and on tire purchases. The cost that may be incurred for these warranties is estimated at the time the related revenue is recorded. A reserve for these warranty liabilities
is estimated based on current sales levels, warranty experience rates and estimated costs per claim. The annual activity for reserve increases and claims is immaterial. As of
December 31, 2022 and 2021, the accrued warranty balance was $0.3 million and $0.6 million, respectively.
Fair Value of Assets Acquired and Liabilities Assumed
We estimate the fair value of the assets acquired and liabilities assumed in a business combination using various assumptions. The most significant assumptions used relate to
determining the fair value of property and equipment and intangible franchise rights.
We estimate the fair value of property and equipment based on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions
involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to
value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and
economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value.
NOTES TO FINANCIAL STATEMENTS
F-16
We estimate the fair value of our franchise rights primarily using the Multi-Period Excess Earnings (MPEE) model. The forecasted cash flows used in the MPEE model contain inherent
uncertainties, including significant estimates and assumptions related to growth rates, margins, general operating expenses, and cost of capital. We use primarily internally-developed
forecasts and business plans to estimate the future cash flows that each franchise will generate. We have determined that only certain cash flows of the store are directly attributable to the
franchise rights. We estimate the appropriate interest rate to discount future cash flows to their present value equivalent taking into consideration factors such as a risk-free rate, a peer
group average beta, an equity risk premium and a small stock risk premium. Additionally, we also may use a market approach to determine the fair value of our franchise rights. These
market data points include our acquisition and divestiture experience and third-party broker estimates.
Revenue Recognition
The following describes our major product lines, which represent the disaggregation of our revenues to transactions that are similar in nature, amount, timing, uncertainties and economic
factors.
New Retail Vehicle and Used Retail Vehicle Sales
Revenue from the retail sale of a vehicle is recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been
arranged or collectibility is probable and the control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale is specified in the contract with the customer
and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in is measured at its stand-alone selling price in the
contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates are applied to the vehicle purchase price
at the time of the sale and are therefore incorporated into the price of the contract at the time of the exchange. We do not allow the return of new or used vehicles, except where mandated
by state law.
Service, Body and Parts Sales
Revenue from service, body and parts sales is recognized upon the transfer of control of the parts or service to the customer. We allow for customer returns on sales of our parts inventory
up to 30 days after the sale. Most parts returns generally occur within one to two weeks from the time of sale and are not significant.
We are the obligor on our lifetime oil contracts. Revenue is allocated to these performance obligations and is recognized over time as services are provided to the customer. The amount of
revenue recognized is calculated, net of cancellations, using an input method, which most closely depicts performance of the contracts. Our contract liability balances were $284.3 million
and $239.0 million as of December 31, 2022, and December 31, 2021, respectively; and we recognized $44.6 million and $35.0 million of revenue in the years ended December 31, 2022,
and December 31, 2021, respectively, related to our opening contract liability balances. Our contract liability balance is included in accrued liabilities and deferred revenue.
Finance and Insurance Sales
Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. As a part of the vehicle sale, we seek to arrange
financing for customers and sell a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the
obligation cannot be performed without the underlying sale of the vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our
commission is preset. A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and is estimated and recognized upon the
sale of the contract under the standard. Our contract asset balance was $12.5 million and $9.6 million as of December 31, 2022, and December 31, 2021, respectively; and is included in
trade receivables and other non-current assets.
Segment Reporting
Historically, the Company had determined that operating segments were individual store locations, which were aggregated into reportable segments of Domestic, Import, and Luxury. This
conclusion was primarily based on the chief operating decision maker’s (CODM’s) review of individual store results to assess performance and allocate resources, along with economic
similarities within Domestic, Import, and Luxury stores. In the fourth quarter of 2022, we reevaluated our reporting segments based on our development and long-term strategy. The
Company has experienced rapid growth in size as well as new expansion into synergistic business lines, transforming the way the business is managed. Considering the Company’s
growth, evolution of its business model, and change in Company
NOTES TO FINANCIAL STATEMENTS
F-17
structure during 2022, management reevaluated its reporting segments and determined the operating segments (and reportable segments) as of December 31, 2022 are Vehicle Operations
and Financing Operations. Based on this evaluation, we reclassified Financing Operations Income for the comparative periods from the "Corporate and Other” category to conform to current
year presentation and consolidated our Domestic, Import, and Luxury segments into a new Vehicle Operations segment.
We determined our operating segments based on how the CODM reviews our operating results in assessing performance and allocating resources. The Financing Operations segment
includes DFC, our captive finance company that serves as a lender for Lithia vehicle sales, and the Pfaff Leasing business acquired in 2021. The Vehicle Operations segment includes our
retail automotive, recreational vehicles (RV), and motorcycle franchises that sell new vehicles, used vehicles, parts, repair and maintenance services, and vehicle finance and insurance
products.
Corporate and other revenue and income include unallocated corporate overhead expenses, such as corporate personnel costs, and certain unallocated reserve and elimination
adjustments. Additionally, certain internal corporate expense allocations increase segment income for Corporate and other while decreasing segment income for the other operating
segments. These internal corporate expense allocations are used to increase comparability of our dealerships and reflect the capital burden a stand-alone dealership would experience.
Examples of these internal allocations include internal rent expense, internal floor plan financing charges, and internal fees charged to offset employees within our corporate headquarters
that perform certain dealership functions.
We define our chief operating decision maker (CODM) to be our Chief Executive Officer. Historical and forecasted operational performance is evaluated on a consolidated basis and by
segment by the CODM. We derive the operating results of the segments directly from our internal management reporting system. The accounting policies used to derive segment results
are substantially the same as those used to determine our consolidated results, except for the internal allocation within Corporate and other discussed above. Our CODM does not regularly
review capital expenditures on a reporting unit level. Performance measurement of each reportable segment by the CODM is based on several metrics, including earnings from operations.
The CODM uses these results, in part, to evaluate the performance of, and to allocate resources, primarily with expected inventory and working capital requirements, to each of the
reportable segments. See Note 18 – Segments.
Reclassifications
Certain reclassifications of amounts previously reported have been made to the accompanying Consolidated Financial Statements to maintain consistency and comparability between
periods presented. We reclassified certain components within our Consolidated Balance Sheets and Consolidated Statements of Cash Flows, to present activity and balances associated
with Finance Receivables and Non-Recourse Notes Payable. We also reclassified components of our Consolidated Statements of Operations to present Finance Operations Income, and to
change our presentation of segment reporting.
Recent Accounting Pronouncements
In March 2022, the FASB issued an accounting pronouncement (ASU 2022-02) related to troubled debt restructurings (TDRs) and vintage disclosures for financing receivables. The
amendments in this update eliminate the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors
made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. The
amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We plan to adopt this pronouncement and
make the necessary updates to our vintage disclosures for the interim period beginning January 1, 2023, and aside from these disclosure changes, we do not expect the amendments to
have a material effect on our financial statements.
NOTES TO FINANCIAL STATEMENTS
F-18
NOTE 2. ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
($ in millions)
Contracts in transit
Trade receivables
Vehicle receivables
Manufacturer receivables
Other receivables, current
Less: Allowance for doubtful accounts
Total accounts receivable, net
December 31,
2022
2021
$
$
432.5 $
122.6
105.4
151.9
3.8
816.2
(3.1)
813.1 $
304.9
125.5
106.6
120.5
31.7
689.2
(3.7)
685.5
The long-term components of accounts receivable and allowance for doubtful accounts were included as a component of other non-current assets in the Consolidated Balance Sheets.
NOTE 3. INVENTORIES AND FLOOR PLAN NOTES PAYABLE
The components of inventories consisted of the following:
($ in millions)
New vehicles
Used vehicles
Parts and accessories
Total inventories
December 31,
2022
2021
$
$
1,679.8 $
1,529.3
200.3
3,409.4 $
812.9
1,418.3
154.3
2,385.5
The new vehicle inventory cost is generally reduced by manufacturer holdbacks and incentives, while the related floor plan notes payable are reflective of the gross cost of the vehicle.
($ in millions)
Floor plan notes payable: non-trade
Floor plan notes payable
Total floor plan debt
December 31,
2022
2021
$
$
1,489.4 $
627.2
2,116.6 $
835.9
354.2
1,190.1
Floor Plan Notes Payable
We have floor plan agreements with manufacturer-affiliated finance companies for certain new vehicles and vehicles that are designated for use as service loaners. The interest rates on
these floor plan notes payable commitments vary by manufacturer and are variable rates, ranging up to 6.01% as of December 31, 2022. Borrowings from and repayments to manufacturer-
affiliated finance companies are classified as operating activities in the Consolidated Statements of Cash Flows.
Floor Plan Notes Payable: Non-Trade
See credit facilities discussion in Note 9 – Credit Facilities and Long-Term Debt for more information on our floor plan commitments.
NOTES TO FINANCIAL STATEMENTS
F-19
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
($ in millions)
Land
Building and improvements
Service equipment
Furniture, office equipment, signs and fixtures
Less accumulated depreciation
Construction in progress
December 31,
2022
2021
$
$
1,149.9 $
2,027.8
185.8
650.3
4,013.8
(526.8)
3,487.0
87.6
3,574.6 $
965.6
1,748.5
159.9
507.3
3,381.3
(422.6)
2,958.7
93.9
3,052.6
Long-Lived Asset Impairment Charges
We recorded no impairment charges in 2022, 2021, and 2020 associated with property and equipment. The long-lived assets were tested for recoverability and were determined to have a
carrying value exceeding their fair value.
NOTE 5. FINANCE RECEIVABLES
Our finance receivables are comprised of auto loan and lease receivables. Our auto loan receivables include amounts due from customers related to vehicle sales financed through DFC and
Pfaff Leasing, secured by the related vehicles. Lease receivables include amounts related to vehicles leased through Pfaff Leasing, also secured by the related vehicles. These amounts are
presented net of an allowance for estimated losses.
($ in millions)
Asset-backed term funding
Warehouse facilities
Other managed receivables
Total finance receivables
Less: Allowance for finance receivable losses
Finance receivables, net
December 31,
2022
2021
$
$
482.1 $
1,383.9
390.9
2,256.9
(69.3)
2,187.6 $
331.2
279.6
217.5
828.3
(25.0)
803.3
Our allowance for finance receivable losses represents the net credit losses expected over the remaining contractual life of our managed receivables. During 2022, provision expense and
net charge-offs increased primarily due to the higher volume of originations and resulting growth in the finance receivables balance. Also a contributing factor is the 3-4 month lag between
charge-off and recovery. Collectively these factors drove an overall increase in the allowance. The allowances for credit losses related to finance receivables consisted of the following
changes during the period:
($ in millions)
Allowance at beginning of period
Charge-offs
Recoveries
Provision expense
Allowance at end of period
Year Ended December 31,
2021
2022
$
$
25.0 $
(62.0)
19.1
87.2
69.3 $
12.9
(16.6)
8.8
19.9
25.0
See Note 1 – Summary of Significant Accounting Policies for additional information on the allowance for credit losses related to finance receivables.
NOTES TO FINANCIAL STATEMENTS
F-20
Ending finance receivables (principal balances) by FICO score:
1
($ in millions)
<599
600-699
700-774
775+
Total auto loan receivables
Other finance receivables
Total finance receivables
(1)
1
($ in millions)
<599
600-699
700-774
775+
Total auto loan receivables
Other finance receivables
Total finance receivables
(1)
As of December 31, 2022
Year of Origination
2022
2021
2020
Total
$
$
63.0 $
652.6
575.9
369.5
1,661.0 $
30.3 $
243.4
97.9
21.5
393.1 $
4.8 $
27.2
10.0
4.5
46.5
$
98.1
923.2
683.8
395.5
2,100.6
156.3
2,256.9
As of December 31, 2021
Year of Origination
2020
Total
2021
$
$
53.3 $
386.5
149.2
30.3
619.3 $
9.5 $
50.0
17.3
7.0
83.8
$
62.8
436.5
166.5
37.3
703.1
125.2
828.3
(1)
Includes legacy portfolio, loans that are originated with no FICO score available, and lease receivables.
NOTE 6. GOODWILL AND FRANCHISE VALUE
2
The following is a roll-forward of goodwill:
($ in millions)
Balance as of December 31, 2020 ¹
Additions through acquisitions
Reductions through divestitures
Balance as of December 31, 2021 ¹
Additions through acquisitions
3
Reductions through divestitures
Currency translation
Balance as of December 31, 2022 ¹
Vehicle Operations
Financing Operations
Consolidated
593.0 $
395.5
(11.2)
977.3
483.4
(17.9)
0.7
1,443.5 $
— $
—
—
—
17.0
—
0.2
17.2 $
593.0
395.5
(11.2)
977.3
500.4
(17.9)
0.9
1,460.7
$
$
(1)
(2)
(3)
Net of accumulated impairment losses of $299.3 million recorded during the year ended December 31, 2008.
Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $395.5 million of goodwill.
Our purchase price allocation for the 2021 acquisitions were finalized in 2022. As a result, we added $500.4 million of goodwill. Our purchase price allocation for the 2022 acquisitions are
preliminary and goodwill is not yet allocated to our segments. These amounts are included in other non-current assets until we finalize our purchase accounting. See Note 16 – Acquisitions.
The following is a roll-forward of franchise value:
($ in millions)
Balance as of December 31, 2020
Additions through acquisitions
1
Reductions through divestitures
Reductions from impairments
Balance as of December 31, 2021
Additions through acquisitions
2
Reductions through divestitures
Currency translation
Balance as of December 31, 2022
Franchise Value
350.2
459.7
(8.9)
(1.9)
799.1
1,088.4
(33.6)
2.3
1,856.2
$
$
(1)
Our purchase price allocation for the 2020 acquisitions were finalized in 2021. As a result, we added $459.7 million of franchise value.
NOTES TO FINANCIAL STATEMENTS
F-21
(2)
Our purchase price allocation for the 2021 acquisitions were finalized in 2022. As a result, we added $1,088.4 million of franchise value. Our purchase price allocation for the 2022 acquisitions are
preliminary and is not yet allocated to our segments. See Note 16 – Acquisitions.
NOTE 7. NET INVESTMENT IN OPERATING LEASES
Net investment in operating leases consists primarily of lease contracts for vehicles with individuals and business entities. Assets subject to operating leases are depreciated using the
straight-line method over the term of the lease to reduce the asset to its estimated residual value. Estimated residual values are based on assumptions for used vehicle prices at lease
termination and the number of vehicles that are expected to be returned.
Net investment in operating leases was as follows:
($ in millions)
Vehicles, at cost
Accumulated depreciation
Net investment in operating leases
(1)
(1)
December 31,
2022
2021
$
$
92.2 $
(7.6)
84.6 $
66.0
(0.9)
65.1
(1)
Vehicles, at cost and accumulated depreciation are recorded in other non-current assets, on the Consolidated Balance Sheets.
NOTE 8. COMMITMENTS AND CONTINGENCIES
Leases
We lease certain dealerships, office space, land and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for
these leases on a straight-line basis over the lease term. We have elected not to bifurcate lease and non-lease components related to leases of real property.
Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 25 or more years. The exercise of lease renewal options is at our sole
discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless
there is a transfer of title or purchase option reasonably certain of exercise.
Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
We rent or sublease certain real estate to third parties.
NOTES TO FINANCIAL STATEMENTS
F-22
The table below presents the lease-related liabilities and finance lease ROU assets recorded on the Consolidated Balance Sheets:
($ in millions)
Operating lease liabilities:
Current portion included in accrued liabilities
Noncurrent operating lease liabilities
Total operating lease liabilities
Finance lease liabilities:
Current portion included in current maturities of long-term debt
Long-term portion of lease liabilities in long-term debt
Total finance lease liabilities
Total lease liabilities
Finance lease right-of-use assets:
Total finance lease right-of-use assets
Weighted-average remaining lease term:
(1)
Operating leases
Finance leases
Weighted-average discount rate:
Operating leases
Finance leases
$
$
$
December 31,
2022
2021
$
$
$
51.7
346.6
398.3
2.0
54.4
56.4
454.7
75.9
7 years
10 years
4.31 %
4.85 %
49.0
361.7
410.7
16.3
37.3
53.6
464.3
58.7
8 years
11 years
4.12 %
2.42 %
(1)
Finance lease right-of-use assets included in property and equipment, net of accumulated depreciation.
The components of lease costs, which were included in selling, general and administrative in our Consolidated Statements of Operations, were as follows:
(1)
(2)
($ in millions)
Operating lease cost
Variable lease cost
Amortization of finance lease right-of-use assets
Interest on finance lease liabilities
Sublease income
Total lease costs
Year Ended December 31,
2021
2022
77.9 $
5.6
4.2
3.7
(7.5)
83.9 $
53.1
3.5
5.9
4.2
(6.4)
60.3
$
$
(1)
(2)
Includes short-term and month-to-month lease costs, which are immaterial.
Variable lease cost generally includes reimbursement for actual costs incurred by our lessors for common area maintenance, property taxes and insurance on leased real estate.
Rent expense, net of sublease income, for all operating leases was $41.2 million for the year ended December 31, 2020. This amount is included as a component of selling, general and
administrative expenses in our Consolidated Statements of Operations.
As of December 31, 2022, the maturities of our operating and finance lease liabilities were as follows:
($ in millions)
Year Ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total minimum lease payments
Less: present value adjustment
Total lease liabilities
$
$
Operating Lease Liabilities
Finance Lease Liabilities
70.5 $
63.7
59.7
50.2
44.6
235.6
524.3
(126.0)
398.3 $
4.6
10.2
22.2
2.9
3.0
26.9
69.8
(13.4)
56.4
NOTES TO FINANCIAL STATEMENTS
F-23
Charge-Backs for Various Contracts
We have recorded a liability of $147.6 million as of December 31, 2022 for our estimated contractual obligations related to potential charge-backs for vehicle service contracts and other
various insurance contracts that are terminated early by the customer. We estimate that the charge-backs will be paid out as follows:
Year Ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total
79.9
41.1
18.6
6.4
1.4
0.2
147.6
($ in millions)
$
$
Lifetime Lube, Oil and Filter and At Home Valet Contracts
We retain the obligation for lifetime lube, oil and filter service contracts and at home valet contracts sold to our customers and assumed the liability of certain existing lifetime lube, oil and
filter contracts. These amounts are recorded as a contract liability. At the time of sale, we defer the full sale price and recognize the revenue based on the rate we expect future costs to be
incurred. As of December 31, 2022, we had a contract liability balance of $284.9 million associated with these contracts and estimate the contract liability will be recognized as follows:
Year Ending December 31,
($ in millions)
2023
2024
2025
2026
2027
Thereafter
Total
58.5
47.0
37.5
29.8
24.0
88.1
284.9
$
$
The contract liability balance is recorded as components of deferred revenue and accrued liabilities in our Consolidated Balance Sheets.
Self-insurance Programs
We self-insure a portion of our property and casualty insurance, vehicle open lot coverage, medical insurance and workers’ compensation insurance. Third parties are engaged to assist in
estimating the loss exposure related to the self-retained portion of the risk associated with these insurances. Additionally, we analyze our historical loss and claims experience to estimate
the loss exposure associated with these programs. As of December 31, 2022 and 2021, we had liabilities associated with these programs of $67.4 million and $56.4 million, respectively,
recorded as a component of accrued liabilities and other long-term liabilities in our Consolidated Balance Sheets.
Litigation
We are party to numerous legal proceedings arising in the normal course of our business. Although we do not anticipate that the resolution of legal proceedings arising in the normal course
of business will have a material adverse effect on our business, results of operations, financial condition, or cash flows, we cannot predict this with certainty.
NOTES TO FINANCIAL STATEMENTS
F-24
NOTE 9. CREDIT FACILITIES AND LONG-TERM DEBT
Below is a summary of our outstanding balances on credit facilities and long-term debt:
($ in millions)
Long-term debt:
Used and service loaner vehicle inventory financing commitments
Revolving lines of credit
Warehouse facilities
Total lines of credit
Real estate mortgages
Finance lease obligations
4.625% Senior notes due 2027
4.375% Senior notes due 2031
3.875% Senior notes due 2029
Other debt
Total long-term debt outstanding
Less: unamortized debt issuance costs
Less: current maturities (net of current debt issuance costs)
Long-term debt, less current maturities
Maturity Dates
Various dates through Apr 2026
Various dates through Apr 2026
Various dates through Nov 2025
Various dates through Jan 2043
Various dates through Aug 2037
Dec 2027
Jan 2031
Jun 2029
Various dates through Jan 2024
Non-recourse notes payable
Various dates through Apr 2030
December 31,
2022
2021
$
$
$
877.2 $
927.6
930.0
2,734.8
580.1
56.4
400.0
550.0
800.0
16.6
5,137.9
(29.1)
(20.5)
5,088.3 $
422.2 $
500.0
129.9
90.0
719.9
592.9
53.6
400.0
550.0
800.0
1.9
3,118.3
(26.5)
(223.7)
2,868.1
317.6
Credit Facilities
US Bank Syndicated Credit Facility
On November 21, 2022, we amended our existing syndicated credit facility (USB credit facility), comprised of 20 financial institutions, including eight manufacturer-affiliated finance
companies, maturing April 29, 2026.
This USB credit facility provides for a total financing commitment of $3.75 billion, which may be further expanded, subject to lender approval and the satisfaction of other conditions, up to a
total of $4.5 billion. The allocation of the financing commitment is for up to $800 million in used vehicle inventory floorplan financing, up to $1.5 billion in revolving financing for general
corporate purposes, including acquisitions and working capital, up to $1.4 billion in new vehicle inventory floorplan financing, and up to $50 million in service loaner vehicle floorplan
financing. We have the option to reallocate the commitments under this USB credit facility, provided that the aggregate revolving loan commitment may not be more than 40% of the amount
of the aggregate commitment, and the aggregate service loaner vehicle floorplan commitment may not be more than the 3% of the amount of the aggregate commitment. All borrowings
from, and repayments to, our lending group are presented in the Consolidated Statements of Cash Flows as financing activities.
Our obligations under our USB credit facility are secured by a substantial amount of our assets, including our inventory (including new and used vehicles, parts and accessories),
equipment, accounts receivable (and other rights to payment) and our equity interests in certain of our subsidiaries. Under our USB credit facility, our obligations relating to new vehicle floor
plan loans are secured only by collateral owned by borrowers of new vehicle floor plan loans under the USB credit facility.
The interest rate on the USB credit facility varies based on the type of debt, with the rate of one-day SOFR plus a credit spread adjustment of 0.10% plus a margin of 1.10% for new vehicle
floor plan financing, 1.40% for used vehicle floor plan financing, 1.20% for service loaner floor plan financing, and a variable interest rate on the revolving financing ranging from 1.00% to
2.00% depending on our leverage ratio. The annual interest rates associated with our floor plan commitments are as follows:
Commitment
New vehicle floor plan
Used vehicle floor plan
Service loaner floor plan
Revolving line of credit
Annual Interest Rate at December 31, 2022
5.51%
5.81%
5.51%
5.41%
NOTES TO FINANCIAL STATEMENTS
F-25
Under the terms of our USB credit facility, we are subject to financial covenants and restrictive covenants that limit or restrict our incurring additional indebtedness, making investments,
selling or acquiring assets and granting security interests in our assets.
Under our USB credit facility, we are required to maintain the ratios detailed in the following table:
Debt Covenant Ratio
Fixed charge coverage ratio
Leverage ratio
Requirement
Not less than 1.20 to 1
Not more than 5.75 to 1
As of December 31, 2022
5.81 to 1
1.36 to 1
Bank of Nova Scotia Syndicated Credit Facility
On June 3, 2022, we entered into a syndicated credit agreement with The Bank of Nova Scotia as agent (BNS credit facility), comprised of six financing institutions, including two
manufacturer-affiliated finance companies.
The BNS credit facility provides for a total financing commitment of approximately $1.1 billion CAD, including a working capital revolving credit facility of up to $100 million CAD, a wholesale
flooring facility for new vehicles up to $500 million CAD, used vehicle flooring facility of up to $100 million CAD, wholesale leasing facility of up to $400 million CAD, and daily rental vehicle
facility up to $25 million CAD.
Commitment
Wholesale flooring facility
Used vehicle flooring facility
Daily rental facility
Wholesale leasing facility
Working capital revolving facility
Annual Interest Rate at December 31, 2022
5.76%
6.01%
5.96%
6.06%
6.01%
All Canadian facilities other than the wholesale flooring facility, which is a demand facility, mature on June 3, 2025. The credit agreement includes various financial and other covenants
typical of such agreements. As of December 31, 2022, we were in compliance with all such covenants.
Wells Fargo Syndicated Real Estate Facility
On November 30, 2022, we amended our existing syndicated real estate backed facility with Wells Fargo Bank, National Association, as agent (WFB credit facility), which includes eight
financial institutions, including two manufacturer affiliated finance companies, maturing July 14, 2025.
The WFB credit facility currently provides a total financing commitment of up to $216.2 million in working capital financing for general corporate purposes, including acquisitions and working
capital, collateralized by real estate and certain other assets owned by us. The interest rate on the WFB credit facility uses Daily Simple SOFR plus a credit spread adjustment of 0.10%
plus a margin ranging from 2.00%-2.50% based on our leverage ratio.
The WFB credit facility includes financial and restrictive covenants typical of such agreements, lending conditions, and representations and warranties by us. Financial covenants include
requirements to maintain minimum fixed charge coverage ratio and a maximum leverage ratio, consistent with those under our existing syndicated credit facility with U.S. Bank National
Association as administrative agent. As of December 31, 2022, no amounts were outstanding on the WFB credit facility.
Ally Real Estate Facility
On December 28, 2022, we amended our existing real estate backed facility with Ally Bank (Ally Capital in Hawaii, Mississippi, Montana and New Jersey), as lender. The credit agreement
matures on September 12, 2025 and provides for a revolving line of credit facility (Ally credit facility) of up to $300 million and is secured by real estate owned by us. The Ally credit facility
will bear interest at a rate per annum equal to the greater of 3.00% or the prime rate designated by Ally Bank, minus 40 basis points. The Ally credit facility includes financial and restrictive
covenants typical of such agreements, lending conditions, and representations and warranties. Financial covenants, including the requirements to maintain minimum fixed charge coverage
ratio and a maximum leverage ratio, consistent with those under our existing syndicated credit facility with US Bank National Association as administrative agent. The covenants restrict us
from disposing of assets and granting additional security interests. As of December 31, 2022, no amounts were outstanding on the Ally credit facility.
NOTES TO FINANCIAL STATEMENTS
F-26
JPM Warehouse facility
On November 17, 2022, we amended our existing securitization facility for our auto loan portfolio (JPM warehouse facility) with JPMorgan Chase Bank, as administrative agent and
committed lender, and Chariot Funding LLC, as conduit lender.
The JPM warehouse facility provides initial commitments for borrowings of up to $1.0 billion and matures on July 29, 2024. The interest rate on the JPM warehouse facility varies based on
JPM’s Commercial Paper rate plus 1.70%. As of December 31, 2022, we had $785.0 million drawn on the JPM warehouse facility.
Mizuho Warehouse facility
On November 1, 2022, we entered into a loan agreement, establishing a securitization facility for our auto loan portfolio (Mizuho warehouse facility), with Mizuho Bank Ltd. as administrative
agent and account bank.
The Mizuho warehouse facility provides initial commitments for borrowings of up to $500 million and matures on November 1, 2025. The interest rate on the Mizuho warehouse facility varies
based on the Daily Simple SOFR rate plus 1.30%. As of December 31, 2022, we had $145 million drawn on the Mizuho warehouse facility.
Non-Recourse Notes Payable
DFC auto loans receivable are temporarily funded through our warehouse facilities until they can be funded through non-recourse asset-backed term transactions. These non-recourse
funding vehicles are structured to legally isolate the auto loans receivable, and we would not expect to be able to access the assets of our non-recourse funding vehicles, even in
insolvency, receivership or conservatorship proceedings. Similarly, the investors in the non-recourse notes payable have no recourse to our assets beyond the related receivables, the
amounts on deposit in reserve accounts and the restricted cash from collections on auto loans receivable. We do, however, continue to have the rights associated with the interest we
retain in these non-recourse funding vehicles.
In August 2022, we issued $298.1 million in non-recourse notes payable related to the asset-backed term funding transaction. Below is a summary of outstanding non-recourse notes
payable issued:
($ in millions)
LAD Auto Receivables Trust 2021-1 Class A
LAD Auto Receivables Trust 2021-1 Class B
LAD Auto Receivables Trust 2021-1 Class C
LAD Auto Receivables Trust 2021-1 Class D
LAD Auto Receivables Trust 2022-1 Class A
LAD Auto Receivables Trust 2022-1 Class B
LAD Auto Receivables Trust 2022-1 Class C
Total non-recourse notes payable$
Senior Notes
Below is a summary of outstanding senior notes issued:
Balance as of December
31, 2022
$
Initial Principal Amount
282.8
18.3
26.0
17.2
259.7
15.5
22.9
642.4
115.0 $
18.3
26.0
17.2
207.2
15.5
23.0
422.2 $
Issuance Date
11/19/21
11/19/21
11/19/21
11/19/21
08/09/22
08/09/22
08/09/22
Interest Rate
1.30%
1.94%
2.35%
3.99%
5.21%
5.87%
6.85%
Final Distribution Date
08/17/26
11/16/26
04/15/27
11/15/29
06/15/27
09/15/27
04/15/30
($ in millions)
Principal Amount
4.625% Senior notes due 2027
4.375% Senior notes due 2031
3.875% Senior notes due 2029
Total senior notes
$400.0
550.0
800.0
$1,750.0
Earliest Redemption Date
12/15/22
10/15/25
06/01/24
% Currently
Redeemable
100%
40%
40%
Current Redemption Price
102.313%
104.375%
103.875%
Maturity Date
12/15/27
01/15/31
06/01/29
Interest Payment Dates
Jun 15, Dec 15
Jan 15, Jul 15
Jun 1, Dec 1
On August 1, 2021, we redeemed in full the aggregate $300 million principal amount of our 5.250% senior notes due 2025 at a redemption price equal to 102.625% of the principal amount
of the notes plus accrued and unpaid interest thereon. This early redemption resulted in a $10.3 million loss on extinguishment of debt, presented as a component of "Other (expense)
income, net” in our Consolidated Statement of Operations for the year ended December 31, 2021.
NOTES TO FINANCIAL STATEMENTS
F-27
Real Estate Mortgages, Finance Lease Obligations, and Other Debt
We have mortgages associated with our owned real estate. Interest rates related to this debt ranged from 3.0% to 8.0% at December 31, 2022. The mortgages are payable in various
installments through July 1, 2038. December 31, 2022, we had fixed interest rates on 71.7% of our outstanding mortgage debt.
We have finance lease obligations with some of our leased real estate. Interest rates related to this debt ranged from 2.5% to 8.5% at December 31, 2022. The leases have terms extending
through August 2037.
Our other debt includes sellers’ notes and debt associated with our Pfaff Leasing operations. The interest rates associated with our other debt ranged from 2.3% to 10.0% at December 31,
2022. This debt, which totaled $16.6 million at December 31, 2022, is due in various installments through February 28, 2029.
Future Principal Payments
The schedule of future principal payments associated with real estate mortgages, finance lease liabilities, our senior notes and other debt as of December 31, 2022 was as follows:
Year Ending December 31,
2023
2024
2025
2026
2027
Thereafter
Total principal payments
$
$
($ in millions)
26.7
74.8
74.1
49.3
473.8
1,688.9
2,387.6
This table does not include future payments related to revolving lines of credit, non-recourse notes payable, and other debt associated with our Pfaff Leasing operations.
NOTE 10. 401(K) PROFIT SHARING, DEFERRED COMPENSATION AND LONG-TERM INCENTIVE PLANS
We have a defined contribution 401(k) plan and trust covering substantially all full-time employees. The annual contribution to the plan is at the discretion of our Board of Directors.
Contributions of $29.9 million, $18.8 million, and $9.0 million were recognized for the years ended December 31, 2022, 2021 and 2020, respectively. Employees may contribute to the plan
if they meet certain eligibility requirements.
We offer a non-qualified deferred compensation and supplemental executive retirement plan (the "SERP”) to provide certain employees the ability to accumulate assets for retirement on a
tax deferred basis. We may, depending on position, also make discretionary contributions to the SERP. These discretionary contributions could vest immediately or over a period of up to
seven years based on the employee’s age. Additionally, a participant may defer a portion of his or her compensation and receive the deferred amount upon certain events, including
termination or retirement.
The following is a summary related to our SERP:
($ in millions)
Compensation expense
Total discretionary contribution
Guaranteed annual return
2022
Year Ended December 31,
2021
2020
$
$
$
$
1.1
1.0
5.00 %
$
$
1.4
0.9
5.00 %
1.2
0.9
5.00 %
As of December 31, 2022 and 2021, the balance due to participants was $63.0 million and $51.9 million, respectively, and was included as a component of other long-term liabilities in the
Consolidated Balance Sheets.
NOTE 11. DERIVATIVE FINANCIAL INSTRUMENTS
We account for derivative financial instruments by recording the fair value as either an asset or liability in our Consolidated Balance Sheets and recognize the resulting gains or losses as
adjustments to accumulated other comprehensive income (loss). We do not hold or issue derivative financial instruments for trading or speculative
NOTES TO FINANCIAL STATEMENTS
F-28
purposes. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated and qualify as cash flow hedges, the gain or loss on the
derivative instrument is reported as a component of accumulated other comprehensive loss (AOCI) in stockholders’ equity and reclassified into earnings in the same period or periods during
which the hedged transaction affects earnings. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on
hedged transactions.
To hedge the business exposure to rising interest rates on a portion of our variable rate debt, we entered into a five-year, zero-cost interest rate collar, with an aggregate notional amount of
$300 million, effective June 1, 2019. This instrument hedges interest rate risk related to a portion of our $1.6 billion of non-trade floor plan notes payable.
The table below presents the liabilities related to the zero-cost interest rate collar:
($ in millions)
Balance as of December 31, 2019
Amounts reclassified from AOCI to floorplan interest expense
Loss recorded from interest rate collar
Balance as of December 31, 2020
Amounts reclassified from AOCI to floorplan interest expense
Loss recorded from interest rate collar
Balance as of December 31, 2021
Amounts reclassified from AOCI to floorplan interest expense
Gain recorded from interest rate collar
Balance as of December 31, 2022
Accrued Liabilities
Other Long-Term
Liabilities
Other Non-Current
Assets
Total
$
$
$
(0.1)
1.8
(4.3)
(2.6)
2.8
(2.1)
(1.9)
0.7
1.2
— $
$
(0.9)
—
(5.1)
(6.0)
—
5.3
(0.7)
—
0.7
— $
— $
—
—
—
—
—
—
(2.7)
2.7
— $
(1.0)
1.8
(9.4)
(8.6)
2.8
3.2
(2.6)
(2.0)
4.6
—
We also entered into four other, immaterial and offsetting, derivative arrangements that do not qualify for hedge accounting. These are related to a securitization facility, effective October 2,
2020 and June 15, 2021. We purchased and sold offsetting interest rate caps, all of which are 5-years long with notional amounts totaling $298 million. As of December 31, 2022, the
balance in all four agreements was an offsetting $22.1 million and was located in other current assets and accrued liabilities, respectively.
See Note 14 – Fair Value Measurements for information on the fair value of the derivative contracts.
NOTE 12. EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST
Common Stock
The shares of common stock are not convertible into any other series or class of our securities. Holders of common stock are entitled to one vote for each share held of record.
Repurchases of Common Stock
Repurchases of our common stock occurred under repurchase authorizations granted by our Board of Directors and related to shares withheld as part of the vesting of restricted stock units
(RSUs).
On November 1, 2022, our Board of Directors approved an additional $450 million repurchase authorization of our common stock. This new authorization is in addition to the amount
previously authorized by the Board for repurchase. Share repurchases under our authorization were as follows:
Share repurchase authorization
Repurchases Occurring in 2022
Shares
Average Price
Cumulative Repurchases as of December 31, 2022
Shares
Average Price
2,428,850 $
276.42
6,904,781 $
173.59
As of December 31, 2022, we had $501.4 million available for repurchases pursuant to our share repurchase authorization.
In addition, during 2022, we repurchased 56,911 shares at an average price of $296.86 per share, for a total of $16.9 million, related to tax withholdings associated with the vesting of RSUs.
The repurchase of shares related to
NOTES TO FINANCIAL STATEMENTS
F-29
tax withholdings associated with stock awards does not reduce the number of shares available for repurchase as approved by our Board of Directors.
The following is a summary of our repurchases in the years ended December 31, 2022, 2021 and 2020:
Shares repurchased pursuant to repurchase authorizations
Total purchase price ($ in millions)
Average purchase price per share
Shares repurchased in association with tax withholdings on the vesting of RSUs
Dividends
We declared and paid dividends on our common stock as follows:
Quarter declared
2020
First quarter
Second quarter
Third quarter
Fourth quarter
2021
First quarter
Second quarter
Third quarter
Fourth quarter
2022
First quarter
Second quarter
Third quarter
Fourth quarter
2022
Year Ended December 31,
2021
2020
$
$
2,428,850
671.4 $
276.42 $
56,911
756,883
214.8 $
283.75 $
54,318
563,953
46.1
81.71
30,620
Dividend amount per
share
Total amount of
dividends paid
($ in millions)
$
$
$
0.30 $
0.30
0.31
0.31
0.31 $
0.35
0.35
0.35
0.35 $
0.42
0.42
0.42
7.0
6.8
7.1
8.2
8.2
9.3
10.6
10.6
10.3
11.9
11.6
11.4
ATM Equity Offering Agreement
On July 24, 2020, we entered into an ATM Equity Offering Sales Agreement with BofA Securities, Inc. and Jefferies LLC acting as sales agents and/or principals and Bank of America,
N.A. and Jefferies LLC acting as forward purchasers, pursuant to which we may offer and sell, from time to time through the sales agents, shares of our common stock, no par value, having
an aggregate gross sales price of up to $400.0 million. To date, no sales have been made under the program.
SM
Redeemable Non-controlling Interest
On August 30, 2021, we expanded into Canada through a partnership with Toronto-based Pfaff Automotive Partners. As part of the acquisition, we were granted the right to purchase (Call
Option), and granted Pfaff Automotive a right to sell (Put Option), the remaining interest after a three-year period, with a purchase price based on Pfaff’s pro rata share of assets at the date
of exercise of the Call or Put Option, as applicable. The redeemable non-controlling interest is classified as mezzanine equity in the accompanying Consolidated Balance Sheets. The non-
controlling interest is adjusted each reporting period for income (loss) attributable to the non-controlling interest and any adjustments in fair value.
NOTE 13. STOCK-BASED COMPENSATION
2009 Employee Stock Purchase Plan
The 2009 Employee Stock Purchase Plan (the "2009 ESPP”) allows for the issuance of 3.0 million shares of our common stock. The 2009 ESPP is intended to qualify as an "Employee
Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended, and is administered by the Compensation Committee of the Board of Directors.
NOTES TO FINANCIAL STATEMENTS
F-30
Eligible employees are entitled to defer up to 10% of their base pay for the purchase of stock, up to $25,000 of fair market value of our common stock annually. The purchase price is equal
to 85% of the fair market value at the end of the purchase period.
Following is information regarding our 2009 ESPP:
Year Ended December 31,
Shares purchased pursuant to 2009 ESPP
Weighted average per share price of shares purchased
Weighted average per share discount from market value for shares purchased
As of December 31,
Shares available for purchase pursuant to 2009 ESPP
$
$
2022
157,507
218.59
38.57
2022
1,151,846
Compensation expense related to our 2009 ESPP is calculated based on the 15% discount from the per share market price on the date of grant.
2013 Stock Incentive Plan
Our 2013 Stock Incentive Plan, as amended, (the "2013 Plan”) allows for the grant of a total of 3.8 million shares in the form of stock appreciation rights, qualified stock options,
nonqualified stock options, restricted share awards and restricted stock unit awards (RSUs) to our officers, key employees, directors and consultants. The 2013 Plan is administered by the
Compensation Committee of the Board of Directors and permits accelerated vesting of outstanding awards upon the occurrence of certain changes in control. As of December 31, 2022,
943,888 shares of common stock were available for future grants. As of December 31, 2022, there were no stock appreciation rights, qualified stock options, nonqualified stock options or
restricted share awards outstanding.
Restricted Stock Unit Awards
RSU grants vest over a period of time up to four years from the date of grant. RSU activity was as follows:
Balance, December 31, 2021
Granted
Vested
Forfeited
Balance, December 31, 2022
RSUs
Weighted average per share grant
date fair value
466,860 $
138,420
(147,441)
(41,961)
415,878
159.85
294.32
110.77
164.88
224.00
We granted 18,080 time-vesting RSUs to members of our Board of Directors and employees in 2022. Each grant entitles the holder to receive shares of our common stock upon vesting. A
portion of the RSUs vest over four years, beginning on the second anniversary of the grant date, for employees and vests quarterly for our Board of Directors, over their service period.
Certain key employees were granted 120,340 performance and time-vesting RSUs in 2022. Of these, 48,979 shares were earned based on attaining various target levels of operational
performance. Based on the levels of performance achieved in 2022, a weighted average attainment level of 50.9% for these RSUs was met. These RSUs will vest over four years from the
grant date.
Stock-Based Compensation
As of December 31, 2022, unrecognized stock-based compensation related to outstanding, but unvested RSUs was $16.5 million, which will be recognized over the remaining weighted
average vesting period of 2.4 years.
NOTES TO FINANCIAL STATEMENTS
F-31
Certain information regarding our stock-based compensation was as follows:
Year Ended December 31,
Per share intrinsic value of non-vested stock granted
Weighted average per share discount for compensation expense recognized under the 2009 ESPP
Fair value of non-vested stock that vested during the period ($ in millions)
Stock-based compensation recognized in Consolidated Statements of Operations, as a component of selling, general and administrative
expense ($ in millions)
Tax benefit recognized in Consolidated Statements of Operations ($ in millions)
Cash received from options exercised and shares purchased under all share-based arrangements ($ in millions)
Tax deduction realized related to stock options exercised ($ in millions)
$
2022
2021
2020
294.32 $
38.57
110.8
41.1
12.4
34.4
43.7
312.83 $
50.58
107.5
34.7
11.9
29.6
41.8
130.89
22.97
108.5
23.2
3.7
14.8
13.6
NOTE 14. FAIR VALUE MEASUREMENTS
Factors used in determining the fair value of our financial assets and liabilities are summarized into three broad categories:
•
•
•
Level 1 - quoted prices in active markets for identical securities;
Level 2 - other significant observable inputs, including quoted prices for similar securities, interest rates, prepayment spreads, credit risk; and
Level 3 - significant unobservable inputs, including our own assumptions in determining fair value.
We determined the carrying value of accounts receivable, trade payables, accrued liabilities, finance receivables, and short-term borrowings approximate their fair values because of the
nature of their terms and current market rates of these instruments. We believe the carrying value of our variable rate debt approximates fair value.
We have investments primarily consisting of our investment in Shift Technologies, Inc. (Shift), a San Francisco-based digital retail company. Shift has a readily determinable fair value
following Shift going public in a reverse-merger deal with Insurance Acquisition, a special purpose acquisition company, in the fourth quarter of 2020. We calculated the fair value of this
investment using quoted prices for the identical asset (Level 1) and recorded the fair value as part of other non-current assets. An additional component of our investment in Shift consists of
shares in escrow subject to release upon certain market conditions being met. The fair value of this component of our investment in Shift is measured using observable Level 2 market
expectations at each measurement date and is recorded as part of other non-current assets. For the year ended December 31, 2022, we recognized a $39.2 million unrealized investment
loss related to Shift, which was recorded as a component of other (expense) income, net, compared to a $66.4 million unrealized investment loss for the year ended December 31, 2021.
We have fixed rate debt primarily consisting of amounts outstanding under our senior notes, non-recourse notes payable, and real estate mortgages. We calculated the estimated fair value
of the senior notes using quoted prices for the identical liability (Level 1). The fair value of non-recourse notes payable are measured using observable Level 2 market expectations at each
measurement date. The calculated estimated fair values of the fixed rate real estate mortgages and finance lease liabilities use a discounted cash flow methodology with estimated current
interest rates based on a similar risk profile and duration (Level 2). The fixed cash flows are discounted and summed to compute the fair value of the debt.
We have derivative instruments consisting of an offsetting set of interest rate caps. The fair value of derivative assets and liabilities are measured using observable Level 2 market
expectations at each measurement date and is recorded as other current assets, current liabilities and other long-term liabilities in the Consolidated Balance Sheets. See Note 11 –
Derivative Financial Instruments for more details regarding our derivative contracts.
Nonfinancial assets such as goodwill, franchise value, or other long-lived assets are measured and recorded at fair value during a business combination or when there is an indicator of
impairment. We evaluate our goodwill and franchise value using a qualitative assessment process. If the qualitative factors determine that it is more likely than not that the carrying value
exceeds the fair value, we would further evaluate for potential impairment using a quantitative assessment. The quantitative assessment estimates fair values using unobservable (Level 3)
inputs by discounting expected future cash flows of the store. The forecasted cash flows contain inherent uncertainties, including significant estimates and assumptions related to growth
rates, margins, working capital requirements, and
NOTES TO FINANCIAL STATEMENTS
F-32
cost of capital, for which we utilize certain market participant-based assumptions we believe to be reasonable. We estimate the value of other long-lived assets that are recorded at fair
value on a non-recurring basis on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or
comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived
assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic
obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. Real
estate appraisers’ and brokers’ valuations are typically developed using one or more valuation techniques including market, income and replacement cost approaches. Because these
valuations contain unobservable inputs, we classified the measurement of fair value of long-lived assets as Level 3.
There were no changes to our valuation techniques during the year ended December 31, 2022.
Below are our assets and liabilities that are measured at fair value on a recurring basis:
($ in millions)
Investments
Shift Technologies, Inc.
Derivatives
Derivative assets
Derivative liabilities
Fixed rate debt
(1)
4.625% Senior notes due 2027
4.375% Senior notes due 2031
3.875% Senior notes due 2029
Non-recourse notes payable
Real estate mortgages and other debt
(1)
Excluding unamortized debt issuance cost
No impairment charges were recorded in 2022.
2022
2021
As of December 31
Carrying Value
Level 1
Level 2
Level 3
Carrying
Value
Level 1
Level 2
Level 3
$
1.8 $
1.8 $
— $
— $
40.9 $
40.4 $
0.5 $
22.1
22.1
400.0
550.0
800.0
422.2
489.0
—
—
364.0
448.3
656.0
—
—
22.1
22.1
—
—
—
411.8
399.0
—
—
—
—
—
—
—
6.4
8.9
400.0
550.0
800.0
317.6
477.6
—
—
420.0
583.0
815.0
—
—
6.4
8.9
—
—
—
316.8
488.7
—
—
—
—
—
—
—
—
During the third quarter of 2021, we recognized asset impairments of $1.9 million related to the franchise value associated with certain dealership locations indicating carrying values less
than fair values. These locations were subsequently sold in the fourth quarter of 2021.
In the second quarter of 2020, we recognized asset impairments of $4.4 million and $3.5 million related to the franchise value and goodwill, respectively, associated with certain dealership
locations indicating carrying values less than fair values. Certain of these locations were subsequently sold in the fourth quarter of 2020, with the remainder sold in 2021.
NOTES TO FINANCIAL STATEMENTS
F-33
NOTE 15. INCOME TAXES
Income Tax Provision
The income tax provision was as follows:
($ in millions)
Current:
Federal
State
Foreign
Deferred:
Federal
State
Foreign
Total
2022
Year Ended December 31,
2021
2020
$
$
269.2 $
105.5
(0.9)
373.8
73.4
13.5
7.7
94.6
468.4 $
266.2 $
111.6
1.2
379.0
38.2
3.8
1.1
43.1
422.1 $
108.9
50.3
—
159.2
17.6
1.4
—
19.0
178.2
At December 31, 2022, we had income taxes receivable of $33.6 million included as a component of other current assets in our Consolidated Balance Sheets. At December 31, 2021, we
had income taxes payable of $43.0 million included as a component of accrued liabilities in our Consolidated Balance Sheets.
The reconciliation between amounts computed using the federal income tax rate of 21% and our income tax provision is shown in the following tabulation:
($ in millions)
Federal tax provision at statutory rate
State taxes, net of federal income tax benefit
Non-deductible items
Permanent differences related to stock compensation
Net change in valuation allowance
General business credits
Foreign Rate Differential
Other
Income tax provision
2022
Year Ended December 31,
2021
2020
363.3 $
76.9
5.0
(2.4)
25.0
(2.6)
1.4
1.8
468.4 $
311.7 $
85.4
4.8
(2.6)
25.3
(2.3)
0.5
(0.7)
422.1 $
136.2
40.4
2.8
(0.5)
0.5
(1.3)
—
0.1
178.2
$
$
NOTES TO FINANCIAL STATEMENTS
F-34
Deferred Taxes
Individually significant components of the deferred tax assets and (liabilities) are presented below:
($ in millions)
Deferred tax assets:
Deferred revenue and cancellation reserves
Allowances and accruals, including state tax carryforward amounts
Lease liability
Credits and other
Net operating losses
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Inventories
Goodwill
Property and equipment, principally due to differences in depreciation
Right of use asset
Prepaid expenses and other
Total deferred tax liabilities
Total
December 31,
2022
2021
$
$
126.6 $
71.3
103.2
5.1
27.9
(51.4)
282.7
(39.2)
(157.7)
(233.0)
(99.0)
(40.1)
(569.0)
(286.3) $
95.3
69.1
107.6
1.8
3.7
(26.4)
251.1
(20.1)
(112.3)
(185.9)
(103.7)
(20.1)
(442.1)
(191.0)
We consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future
taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities (including the impact of available
carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment.
As of December 31, 2022, we had a $51.4 million valuation allowance recorded associated with our deferred tax assets. Of the total valuation allowance, $34.0 million relates to our
investment in Shift Technologies Inc. (Shift) and $17.4 million relates to state net operating losses generated in current and previous years. The Shift valuation allowance increased $9.7
million in the current year as a result of reduction in Shift valuation during the year, the benefit of which is not expected to be realized. The state NOL valuation allowance increased $15.3
million in the current year as a result of losses incurred, the benefits of which are not expected to be realized.
As of December 31, 2022, we had state net operating loss (NOL) carryforward amounts totaling approximately $17.4 million, tax effected, with expiration dates through 2042. We believe
that it is more likely than not that the benefit from certain state NOL carryforward amounts will not be realized. In recognition of this risk, we have recorded a valuation allowance of $17.4
million on the deferred tax assets relating to these state NOL carryforwards as discussed above. As of December 31, 2022, we had Canadian net operating loss (NOL) carryforward
amounts totaling $10.5 million, tax effected, with expiration dates through 2042.
We have taken the position that we intend to indefinitely reinvest the earnings of our Canadian subsidiaries to ensure there is sufficient working capital to expand operations in Canada.
Accordingly, we have not recorded a deferred tax liability related to foreign withholding taxes on approximately $72.9 million of undistributed earnings of these Canadian subsidiaries as of
December 31, 2022. Approximately $3.6 million of tax would be payable upon the remittance of these undistributed earnings.
Unrecognized Tax Benefits
The following is a reconciliation of our unrecognized tax benefits for December 31, 2022, 2021, and 2020:
($ in millions)
Balance, December 31, 2020
Increase related to tax positions taken - current year
Balance, December 31, 2021
Increase related to tax positions taken - current year
Balance, December 31, 2022
NOTES TO FINANCIAL STATEMENTS
0.2
0.1
0.3
0.3
0.6
$
$
F-35
Open tax years at December 31, 2022 included the following:
Federal
States (30)
Canada
NOTE 16. ACQUISITIONS
2019 - 2022
2018 - 2022
2021 - 2022
In 2022, we completed the following acquisitions:
In January 2022, John L. Sullivan Chevrolet, John L. Sullivan Chrysler Dodge Jeep Ram, and Roseville Toyota in California.
In March 2022, Sahara Chrysler Dodge Jeep Ram, Desert 215 Superstore, and Jeep Only in Nevada.
In May 2022, Sisley Honda in Canada.
In June 2022, Esserman International Volkswagen & Acura in Florida.
In June 2022, Henderson Hyundai Superstore in Nevada.
In June 2022, Lehman Auto Group in Florida.
In July 2022, Elk Grove Ford in California.
In September 2022, Wilde Honda, Wilde Subaru, Wilde Chrysler Dodge Jeep Ram, Wilde Toyota, and Wilde East Towne Honda in Wisconsin.
In October 2022, Seattle Airstream Adventures and Spokane Airstream Adventures in Washington.
In October 2022, Portland Airstream Adventures and Ultimate Airstream Adventures in Oregon.
In October 2022, Bay Area Airstream Adventures and South Bay Airstream Adventures in California.
In October 2022, Boise Airstream Adventures in Idaho.
In November 2022, Meador Chrysler Dodge Jeep Ram in Texas.
In December 2022, Denver Exotics in Colorado.
In December 2022, Glenn's Freedom Chrysler Jeep Dodge Ram in Kentucky.
Revenue and operating income contributed by the 2022 acquisitions subsequent to the date of acquisition were as follows:
($ in millions)
Revenue
Operating income
Year Ended December 31,
2022
$
1,404.0
66.9
In 2021, we completed the following acquisitions:
In February 2021, Fields Chrysler Jeep Dodge Ram and Land Rover Orlando in Florida.
In March 2021, Fink Auto Group in Florida.
In March 2021, Avondale Nissan in Arizona.
In April 2021, The Suburban Collection in Michigan.
In April 2021, Planet Honda in New Jersey.
In May 2021, Superstore Auto Group in Nevada.
In May 2021, Center BMW and Center Acura in California.
In June 2021, Southwest Kia Group in Arizona.
In June 2021, Herrin-Gear Toyota in Mississippi.
In June 2021, Michael’s Subaru and Michael’s Toyota in Washington.
In July 2021, Koby Subaru in Alabama.
In August 2021, Rock Honda in California.
In August 2021, Pfaff Automotive Partners in Canada.
In September 2021, Curry Honda in Georgia.
In September 2021, Orange Coast Chrysler Dodge Jeep Ram Fiat in California.
In November 2021, Coral Springs Audi and Fort Lauderdale Audi in Florida.
In November 2021, Pfaff Harley-Davidson in Canada.
In December 2021, Elder Ford of Tampa in Florida.
In December 2021, Elder Ford of Troy and Elder Ford of Romeo in Michigan.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
NOTES TO FINANCIAL STATEMENTS
F-36
All acquisitions were accounted for as business combinations under the acquisition method of accounting. The results of operations of the acquired stores are included in our Consolidated
Financial Statements from the date of acquisition.
The following tables summarize the consideration paid for the acquisitions and the preliminary amount of identified assets acquired and liabilities assumed as of the acquisition date:
Year Ended December 31,
2021
2022
($ in millions)
Cash paid, net of cash acquired
Contingent consideration
Redeemable non-controlling interest
Debt issued
Total consideration transferred
($ in millions)
Trade receivables, net
Inventories
Franchise value
Goodwill
Property and equipment
Other assets
Floor plan notes payable
Debt and finance lease obligations
Other liabilities
Total net assets acquired and liabilities assumed
$
$
$
$
1,240.8 $
3.9
—
—
1,244.7 $
Year Ended December 31,
2021
2022
0.2 $
228.3
63.7
30.1
379.9
639.1
(0.7)
(78.5)
(17.4)
1,244.7 $
2,697.5
—
33.1
356.0
3,086.6
1.3
626.2
—
—
767.5
1,726.2
(4.0)
—
(30.6)
3,086.6
The purchase price allocations for the 2022 acquisitions are preliminary as we have not obtained all of the detailed information to finalize the opening balance sheet related to real estate
purchased, leases assumed and the allocation of franchise value to each reporting unit. Management has recorded the purchase price allocations based on the information that is currently
available.
We expect substantially all of the goodwill related to acquisitions completed in 2022 to be deductible for federal income tax purposes.
The purchase price allocations for the 2021 acquisitions were finalized in 2022, including amounts posted to contingent consideration, real estate, franchise value, and goodwill, reducing
the amounts posted to "Other assets” shown in the table above.
We account for franchise value as an indefinite-lived intangible asset. We recognized $15.0 million and $20.2 million, respectively, in acquisition related expenses as a component of
selling, general and administrative expenses in the Consolidated Statements of Operations in 2022 and 2021, respectively.
The following unaudited pro forma summary presents consolidated information as if the acquisitions had occurred on January 1 of the year:
($ in millions, except for per share amounts)
Revenue
Net income
Basic net income per share
Diluted net income per share
$
Year Ended December 31,
2021
2022
29,748.1 $
1,338.2
47.47
47.25
26,200.5
1,236.9
42.95
42.64
These amounts have been calculated by applying our accounting policies and estimates. The results of the acquired stores have been adjusted to reflect the following: depreciation on a
straight-line basis over the expected lives for property, plant and equipment; accounting for inventory on a specific identification method; and recognition of interest expense for real estate
financing related to stores where we purchased the facility. No non-recurring pro forma adjustments directly attributable to the acquisitions are included in the reported pro forma revenues
and earnings.
NOTES TO FINANCIAL STATEMENTS
F-37
NOTE 17. NET INCOME PER SHARE OF COMMON STOCK
We compute net income per share using the two-class method. Under this method, basic net income per share is computed using the weighted average number of common shares
outstanding during the period excluding common shares underlying equity awards that are unvested or subject to forfeiture. Diluted net income per share is computed using the weighted
average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the common shares issuable upon the net
exercise of stock options and unvested RSUs and is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net income per
share of Class A common stock assumed the conversion of Class B common stock, while the diluted net income per share of Class B common stock did not assume the conversion of
those shares.
Prior to June 7, 2021, our common stock was classified as Class A common stock. The Class A common stock reclassification as common stock occurred pursuant to an amendment
and restatement of our Articles of Incorporation in connection with the elimination of our classified common stock structure following the conversion of all Class B common stock to Class A
common stock. Prior to the reclassification, except with respect to voting and transfer rights, the rights of the holders of our Class A and Class B common stock were identical. Under our
Articles of Incorporation, the Class A and Class B common stock shared equally in any dividends, liquidation proceeds or other distribution with respect to our common stock and the
Articles of Incorporation can only be amended by a vote of the shareholders. Additionally, Oregon law provides that amendments to our Articles of Incorporation that would adversely alter
the rights, powers or preferences of a given class of stock, must be approved by the class of stock adversely affected by the proposed amendment. As a result, the undistributed earnings
for each year were allocated based on the contractual participation rights of the Class A and Class B Common shares as if the earnings for the year had been distributed. Because the
liquidation and dividend rights were identical, the undistributed earnings were allocated on a proportionate basis.
Following is a reconciliation of net income and weighted average shares used for our basic earnings per share (EPS) and diluted EPS:
($ in millions, except for per share amounts)
Net income from continuing operations applicable to common stockholders
Reallocation of distributed net income due to conversion of class B to class A common shares
outstanding
Conversion of class B common shares into class A common shares
Net income attributable to Lithia Motors, Inc. and applicable to common stockholders - diluted
$
$
Weighted average common shares outstanding – basic
Conversion of class B common shares into class A common shares
Effect of employee stock purchases and restricted stock units on weighted average common
shares
Weighted average common shares outstanding – diluted
2022
Common stock
Year Ended December 31,
2021
2020
Class A
Class B
Class A
Class B
1,251.0 $
1,059.5 $
—
—
1,251.0 $
—
0.6
1,060.1 $
28.2
—
0.1
28.3
28.8
—
0.2
29.0
0.6 $
—
—
0.6 $
—
—
—
—
460.9 $
0.6
8.8
470.3 $
23.3
0.5
0.3
24.1
Basic earnings per share attributable to Lithia Motors, Inc.
$
Diluted earnings per share attributable to Lithia Motors, Inc.
$
The effects of antidilutive securities on Class A and Class B common stock were evaluated for the years ended 2022, 2021, and 2020 and were determined to be immaterial.
44.38 $
44.17 $
36.81 $
36.54 $
36.81 $
36.54 $
19.74 $
19.53 $
9.4
—
—
9.4
0.5
—
—
0.5
19.74
19.53
NOTE 18. SEGMENTS
We operate in two reportable segments: Vehicle Operations and Financing Operations. Our Vehicle Operations consists of all aspects of our auto merchandising and service operations,
excluding financing provided by our
NOTES TO FINANCIAL STATEMENTS
F-38
Financing Operations. Our Financing Operations segment provides financing to customers buying and leasing retail vehicles from our Vehicle Operations.
All other remaining unallocated corporate overhead expenses and internal charges are reported under "Corporate and Other”. Asset information by segment is not utilized for purposes of
assessing performance or allocating resources and, as a result, such information has not been presented.
Certain financial information on a segment basis is as follows:
($ in millions)
Vehicle operations revenue
Vehicle operations gross profit
Floor plan interest expense
Vehicle operations selling, general and administrative
Vehicle operations income
Financing operations interest margin:
Interest, fee, and lease income
Interest expense
Total interest margin
Selling, general and administrative
Total pre-provision income
Provision for loan and lease losses
Depreciation and amortization
Financing operations (loss) income
Total segment income for reportable segments
Corporate and other
Depreciation and amortization
Other interest expense
Other income (expense), net
Income before income taxes
NOTE 19. SUBSEQUENT EVENTS
2022
Year Ended December 31,
2021
2020
$
28,187.8 $
22,831.7 $
13,126.5
5,154.3
(38.8)
(3,260.0)
1,855.5
134.1
(52.2)
81.9
(32.0)
49.9
(44.4)
(9.5)
(4.0)
4,263.9
(22.3)
(2,568.0)
1,673.6
45.9
(4.8)
41.1
(18.2)
22.9
(9.4)
(2.5)
11.0
1,851.6
1,684.5
213.9
(163.2)
(129.1)
(43.2)
1,730.0 $
80.4
(124.8)
(103.4)
(52.0)
1,484.8 $
$
2,225.0
(34.4)
(1,559.6)
631.0
13.9
(1.5)
12.4
(8.9)
3.5
3.0
—
6.5
637.4
113.2
(92.3)
(71.6)
61.8
648.5
US Bank Syndicated Credit Facility
On February 9, 2023, we entered into a Fourth Amendment to our Fourth Amended and Restated Loan Agreement with U.S. Bank National Association as agent for the lenders, and each
of the lenders party to the agreement, as lenders. Among other changes, the Fourth Amendment increases the total financing commitment from $3.75 billion to $4.5 billion, which may be
further expanded, subject to lender approval and the satisfaction of other conditions, up to a total of $5.5 billion.
NOTES TO FINANCIAL STATEMENTS
F-39
Performance Equity Award - Senior Executives
LITHIA MOTORS, INC.
RESTRICTED STOCK UNIT AGREEMENT
(Performance)
This Restricted Stock Unit Agreement ("Agreement”) is entered into pursuant to the 2013 Amended and Restated Stock Incentive Plan (the "Plan”) adopted by the Board of Directors
and shareholders of Lithia Motors, Inc., an Oregon corporation (the "Company”), as amended from time to time. Unless otherwise defined herein, capitalized terms in this Agreement
have the meanings given to them in the Plan. Any inconsistency between this Agreement and the terms and conditions of the Plan will be resolved in favor of the Plan.
"Recipient” [ ]
Number of Restricted Stock Units ("RSUs”) [ ]
"Date of Grant” [ ]
1.
GRANT OF RESTRICTED STOCK UNIT AWARD
1.1 The Grant. The Company hereby awards to Recipient, and Recipient hereby accepts, the RSUs specified above on the terms and conditions set forth in this Agreement and
the Plan (the "Award”). Each RSU represents the right to receive one share of Common Stock of the Company (a "Share”) on an applicable Settlement Date, as defined in Section 1.3
of this Agreement, subject to the terms of this Agreement and the Plan.
1.2 Forfeiture; Vesting; Clawback.
(a) Forfeiture. The RSUs are subject to forfeiture determined in accordance with the performance measures, targets and methodology set forth in Exhibit A to this Agreement.
(b) Vesting. Any RSUs not forfeited ("Earned RSUs”) will vest according to the schedule set forth in Exhibit A, subject to the conditions set forth in this Agreement and the Plan,
and to the continued employment of Recipient with the Company or any Subsidiary through the applicable vesting date(s) (the "Vesting Date”). The RSUs, the Shares issued upon
vesting of the RSUs and any proceeds received upon the sale of the Shares are subject to recovery by the Company as specified in Section 1.2(c) and Section 1.5 of this Agreement.
(c) Clawback. The Award is subject to the Company’s recoupment ("clawback”) policy as adopted by the Committee, as it may be amended from time to time by the Committee
or the Board in its discretion.
1.3 Settlement of Earned RSUs. There is no obligation for the Company to make payments or distributions with respect to RSUs except, subject to the terms and conditions of
this Agreement, the issuance of Shares to settle vested RSUs after the applicable Vesting Date. The Company’s issuance of one Share for each vested Earned RSU ("Settlement”)
may be subject to such conditions, restrictions and contingencies as the Committee shall determine. Unless receipt of the Shares is validly deferred pursuant to the RSU Deferral Plan
effective January 1, 2013, as amended, and except as otherwise provided in any Amended Employment and Change in Control Agreement between the Company and Recipient (as the
same may be amended and/or restated from time to time), Earned RSUs shall be settled as soon as practicable after the applicable Vesting Date (each date of Settlement, a
"Settlement Date”), but in no event later than March 15 of the calendar year following the calendar year in which the Vesting Date occurs. Notwithstanding the foregoing, the
payment dates set forth in this Section 1.3 have been specified for the purpose of complying with the short-term deferral exception under Section 409A of the Internal Revenue Code of
1986 (the "Code”), and to the extent payments are made during the periods permitted under Code Section 409A (including applicable periods before or after the specified payment dates
set
1
Performance Equity Award - Senior Executives
forth in this Section 1.3), the Company shall be deemed to have satisfied its obligations under the Plan and shall be deemed not to be in breach of its payment obligations hereunder.
1.4 Termination of Recipient’s Employment.
(a) Voluntary or Involuntary Termination. Except as otherwise provided in this Section 1.4, if Recipient’s employment with the Company or any Subsidiary terminates as a result
of a voluntary or involuntary termination, all outstanding unvested RSUs (whether or not determined to be Earned RSUs) shall immediately be forfeited. Recipient shall not be treated as
terminating employment if Recipient is on an approved leave of absence.
(b) Death, Disability or Retirement. If Recipient’s employment with the Company or any Subsidiary terminates as a result of Recipient’s death, disability or retirement, RSUs
shall be earned and vest as set forth in Exhibit A. Notwithstanding anything in this Agreement to the contrary, in no event will any Settlement occur prior to the applicable Vesting Date,
and any unsettled RSUs shall be forfeited without consideration immediately upon breach of any of the following conditions: compliance with non-solicit, non-compete, non-
disparagement restrictive covenants and/or any other agreements that were signed while employed during vesting period.
1.5 Treatment of Award Upon Breach of Restrictive Covenants or Misconduct.
(a) Breach of Restrictive Covenants. The vesting and receipt of benefits under the Award are specifically conditioned on Recipient’s compliance with the covenants set forth in
Section 5 of this Agreement (the "Restrictive Covenants”) and any other restrictive covenants, including noncompetition covenants, and/or any other agreements that were signed
while employed during vesting period. To the extent allowed by and consistent with applicable law, and in addition to any remedy provided in Section 1.2(c), Section 1.5(b) or Section 5.6
of this Agreement, if at any time that Recipient has materially breached any of the Restrictive Covenants, any unvested or unsettled portion of the Award shall be immediately and
automatically canceled without any payment or right of payment of consideration by the Company. The Committee has the sole discretion to determine whether Recipient breached the
Restrictive Covenants.
(b) Misconduct. If at any time (including after receipt of a request for delivery of vested shares) the Committee reasonably believes that Recipient has committed an act of
misconduct as described in this Section 1.5(b), and in addition to any remedy provided in Section 1.2(c), Section 1.5(a) or Section 5.6 of this Agreement, the Committee may suspend
Recipient’s right to receive delivery of vested shares under the Award pending a determination of whether an act of misconduct has been committed by Recipient. For purposes of this
Section 1.5(b), acts of misconduct shall mean (i) an act of embezzlement, fraud, dishonesty, breach of fiduciary duty, breach of Company written polices (including without limitations,
those relating to workplace harassment), or violation of securities laws involving the Company, any of its Subsidiaries or any entity or person with whom the Company or any of its
Subsidiaries does business, (ii) nonpayment of any obligation to the Company or any Subsidiary, (iii) any conduct and/or breach of Company policy that results in reputational harm to the
Company and (iv) any similar conduct that materially and adversely impacts or reflects on the Company. If Recipient is accused of engaging in any such misconduct to which this
Section 1.5(b) applies, Recipient shall be provided the opportunity to explain Recipient’s conduct in writing within five business days of notice of the misconduct by the Company. Any
determination by the Committee as to whether or not Recipient did engage in misconduct within the meaning of this Section 1.5(b) shall be final, conclusive and binding on all interested
parties. If the Committee determines that Recipient engaged in misconduct, any unvested or unsettled portion of the Award shall be immediately canceled without any payment of
consideration by the Company. If the Committee determines that Recipient did not engage in misconduct, the Company shall immediately give effect to any request for delivery of vested
shares received prior to or during any period of suspension and complete Settlement in accordance with Section 1.3 of this Agreement. The Company shall not have any liability to
Recipient for any loss which Recipient may have sustained as a result of any delay in delivering Shares as a result of any suspension.
2.
REPRESENTATIONS AND COVENANTS OF RECIPIENT
2
Performance Equity Award - Senior Executives
2.1 No Representations by or on Behalf of the Company. Recipient is not relying on any representation, warranty or statement made by the Company or any agent, employee
or officer, director, shareholder or other controlling person of the Company regarding the RSUs or this Agreement.
2.2 Tax Considerations. The Company has advised Recipient to seek Recipient’s own tax and financial advice with regard to the federal and state tax considerations resulting
from Recipient’s receipt of the Award, the vesting of the Award and Recipient’s receipt of the Shares upon Settlement of the vested portion of the Award. Recipient understands that
the Company, to the extent required by law, will report to appropriate taxing authorities the payment to Recipient of compensation income upon the grant, vesting and/or Settlement of
RSUs under the Award and Recipient shall be solely responsible for the payment of all federal and state taxes resulting from such grant, vesting and/or Settlement.
2.3 Agreement to Enter into Lock-Up Agreement with an Underwriter. Recipient understands and agrees that whenever the Company undertakes a firmly underwritten
public offering of its securities, Recipient will, if requested to do so by the managing underwriter in such offering, enter into an agreement not to sell or dispose of any securities of the
Company owned or controlled by Recipient, including any of the RSUs or the Shares, provided that such restriction will not extend beyond 12 months from the effective date of the
registration statement filed in connection with such offering.
3.
GENERAL RESTRICTIONS OF TRANSFERS OF RSUS
3.1 No Transfers of RSUs. Recipient agrees for himself or herself and his or her executors, administrators and other successors in interest that none of the RSUs, nor any interest
therein, may be voluntarily or involuntarily sold, transferred, assigned, donated, pledged, hypothecated or otherwise disposed of, gratuitously or for consideration.
3.2 Award Adjustments. The number of RSUs granted under this Award shall, at the discretion of the Committee, be subject to adjustment under the Plan in the event the
outstanding shares of Common Stock are hereafter increased, decreased, changed into or exchanged for a different number or kind of shares of Common Stock or for other securities of
the Company or of another corporation, by reason of any reorganization, merger, consolidation, reclassification, stock split up, combination of shares of Common Stock, or dividend
payable in shares of Common Stock or other securities of the Company. If Recipient receives any additional RSUs pursuant to the Plan, such additional (or other) RSUs shall be deemed
granted hereunder and shall be subject to the same restrictions and obligations on the RSUs as originally granted as imposed by this Agreement.
3.3 Invalid Transfers. Any disposition of the RSUs other than in strict compliance with the provisions of this Agreement shall be void.
4.
PAYMENT OF TAX WITHHOLDING AMOUNTS. To the extent the Company is responsible for withholding income taxes, Recipient must pay to the Company or make
adequate provision for the payment of all Tax Withholding. If any RSUs are scheduled to vest during a period in which trading is not permitted under the Company’s insider trading
policy, to satisfy the Tax Withholding requirement, Recipient irrevocably elects to settle the Tax Withholding obligation by the Company withholding a number of Shares otherwise
deliverable upon vesting having a market value sufficient to satisfy the statutory minimum tax withholding of Recipient. If the Company later determines that additional Tax Withholding
was or has become required beyond any amount paid or provided for by Recipient, Recipient will pay such additional amount to the Company immediately upon demand by the
Company. If Recipient fails to pay the amount demanded, the Company may withhold that amount from other amounts payable by the Company to Recipient.
5. RESTRICTIVE COVENANTS
5.1 Non-Solicitation of Lithia Employees. Except as may be consented to in writing by the Company, throughout Recipient’s employment and during the 24-month period
following the date of Recipient’s termination of employment by the Company or by Recipient regardless of the reason therefore (the "Termination Date”), Recipient will not, directly or
indirectly, employ or offer employment to, or assist or be affiliated with any other person in employing, any persons employed by
3
Performance Equity Award - Senior Executives
the Company or any Subsidiary in a manager or higher position ("Managers”), and will not, either directly or indirectly, solicit, induce, recruit or encourage any Managers to leave their
employment, attempt to solicit, induce, recruit or encourage any Managers to leave their employment, or cause or encourage any person to directly or indirectly solicit, induce, recruit or
encourage Managers to leave their employment, either for him or herself or for any other person or entity, unless such person has not been employed by the Company or any of its
subsidiaries for at least six months.
For purposes of this paragraph, the terms "solicit, induce, recruit and encourage” means direct and indirect communications of any kind and nature, directed specifically to
an individual for the purpose of causing the person to leave their employment with the Company, but does not include general advertisement or notice of job opportunities within an
industry. For purposes of the Agreement, the term "affiliated with” includes Recipient’s ownership of 3% or more of the equity of any person, lending money to any person, or serving
as an executive officer, director, manager or consultant to any person.
5.2 No Disparagement. Recipient shall not take any action or make any statement that disparages the Company, its operation, business, or reputation, or any of its officers or
directors, or their reputation, and shall not encourage or induce any third parties to disparage such persons ("Disparaging Acts”) throughout Recipient’s employment and for three years
following the Termination Date. "Disparaging Acts” means any statement, communication or publication, oral or written, regardless of whether such statement, communication or
publication is true, made about such persons or their reputation, that is vilifying and/or derogatory in nature and that reasonably would be expected to result in a negative perception of
such person, or that otherwise may have a material adverse effect on such person or their reputation.
5.3 Disclosure of Confidential Information. During Recipient’s employment with the Company, Recipient will have access to and become familiar with certain proprietary and
confidential information of the Company and its Subsidiaries not known to the public generally, or by its actual or potential competitors ("Confidential Information”). Recipient
acknowledges that such information constitutes valuable, special, and unique assets of the Company’s business, even though such information may not be of a technical nature and may
not be protected under trade secret or related laws.
"Confidential Information” includes any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to research, strategic and
marketing plans, product plans, products, services, markets, processes, policies, financial or other business information disclosed to, or discovered by, Recipient either directly or
indirectly, during Recipient’s employment with the Company. Recipient further understand that Confidential Information does not include any of the foregoing items which has become
publicly known and made generally available through no wrongful act or omission of his/her or of others who were under confidentiality obligations as to the item or items involved or
improvements or new versions thereof.
Recipient will not, without the prior written approval from an authorized officer of the Company, directly or indirectly (i) reveal, report, publish, disclose or transfer any
Confidential Information, other than information that constitutes "trade secrets” under applicable state law ("Company Trade Secrets”), to any person, firm, corporation or entity, or (ii)
use any Confidential Information for any purpose or for the benefit of any person, firm, corporation or entity. Further, for so long as such information remains Company Trade Secrets
under applicable state laws, Recipient shall not, without the prior written approval from an authorized officer of the Company, directly or indirectly (i) reveal, report, publish, disclose or
transfer any information that constitutes Company Trade Secrets to any person, firm, corporation or entity, or (ii) use any of the Company Trade Secrets for any purpose or for the
benefit of any person, firm, corporation or entity.
Nothing in this Agreement will be construed to prohibit Recipient from filing a charge, complaint, or report with, or otherwise communicating with, providing information to, or
cooperating, or participating with any investigation or proceeding by or before the Equal Employment Opportunity Commission, the U.S. Department of Labor, the National Labor
Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state or local government agency or commission.
Furthermore, in accordance with the Defend Trade Secrets Act of 2016, 18 U.S.C. Section 1833(b), Recipient shall not be held criminally or civilly liable under any federal or state trade
secret law for the disclosure of a trade secret that: (i) is made in confidence to a federal,
4
Performance Equity Award - Senior Executives
state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
5 . 4 Creative Work. Recipient agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by Recipient during employment with the Company, regardless of when or where such work or work product was produced, constitutes
work made for hire, all rights of which are owned by the Company. Recipient hereby assigns to the Company all rights, title, and interest, whether by way of copyrights, trade secret,
trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.
5.5 Return of Property. If and when Recipient ceases for any reason to be employed by the Company, Recipient must return to the Company all keys, pass cards, identification
cards and any other property of the Company. At the same time, Recipient also must return to the Company all originals and copies (whether in hard copy, electronic or other form) of
any documents, drawings, notes, memoranda, designs, devices, diskettes, tapes, manuals, and specifications which constitute proprietary information or material of the Company. The
obligations in this paragraph include the return of documents and other materials that may be in Recipient’s desk at work, Recipient’s car or place of residence, or in any other location
under Recipient’s control.
5.6 Injunctive Relief. Recipient acknowledges that it may be impossible to measure in money the damages that will accrue to the Company if Recipient fails to observe the
Restrictive Covenants; therefore, in addition to any action at law for damages, and in addition to the remedy provided in Section 1.2(c) or Section 1.5 of this Agreement, the Restrictive
Covenants may be enforced by an injunction to prohibit the restricted activity or as allowed by law. Recipient hereby waives the claim or defense that an adequate remedy at law is
available to the Company. Nothing set forth herein shall prohibit the Company from pursuing all remedies available to it.
5.7 Reasonableness. The Company and Recipient agree that the Restrictive Covenants are reasonable both as to time and as to area. The Company and Recipient additionally
agree (i) that the Restrictive Covenants are necessary for the protection of the Company’s business and goodwill; (ii) that the Restrictive Covenants are not any greater than are
reasonably necessary to secure the Company’s business and goodwill; and (iii) that the degree of injury to the public due to the loss of the service and skill of Recipient or the restrictions
placed upon Recipient’s opportunity to make a living with Recipient’s skills upon enforcement of said restraints, does not and will not warrant non-enforcement of said restraints. The
Company and Recipient agree that if any portion of the Restrictive Covenants is adjudged unreasonably broad, then the Company and Recipient authorize said court or arbitrator to
narrow same so as to make it reasonable, given all relevant circumstances, and to enforce the same. The Company and Recipient agree that if any one provision of this Section 5 is not
enforceable, the remaining sections will be enforceable and that in any event, even if a Restrictive Covenant was found to be unenforceable, the termination, cancellation and forfeiture
provisions in Section 1.5 will nonetheless be applied as the continuation of an Award for service to the Company is dependent on all of Recipient’s agreements in this Section 5.
6. MISCELLANEOUS PROVISIONS
6.1 Amendment and Modification. Except as otherwise provided by the Plan, this Agreement may be amended, modified and supplemented only by written agreement of all
of the parties hereto.
6.2 Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by Recipient without the prior written consent of the Company.
6.3 Governing Law. To the extent not preempted by federal law, this Agreement and the rights and obligations of the parties hereunder shall be governed by and construed in
accordance with the
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Performance Equity Award - Senior Executives
internal laws of the State of Oregon applicable to the construction and enforcement of contracts wholly executed in Oregon by residents of Oregon and wholly performed in Oregon.
Any action or proceeding brought by any party hereto shall be brought only in a state or federal court of competent jurisdiction located in the County of Multnomah in the State of
Oregon and all parties hereto hereby submit to the in personal jurisdiction of such court for purposes of any such action or procedure.
6.4 Arbitration. The parties agree to submit any dispute arising under this Agreement to final, binding, private arbitration in Portland, Oregon. This includes not only disputes about
the meaning or performance of this Agreement, but disputes about its negotiation, drafting or execution. The dispute will be determined by a single arbitrator in accordance with the then-
existing rules of arbitration procedure of Multnomah County, Oregon Circuit Court, except that there shall be no right of de novo review in Circuit Court and the arbitrator may charge
his or her standard arbitration fees rather than the fees prescribed in the Multnomah County Circuit Court arbitration procedures. The proceeding will be commenced by the filing of a
civil complaint in Multnomah County Circuit Court and a simultaneous request for transfer to arbitration. The parties expressly agree that they may choose an arbitrator who is not on the
list provided by the Multnomah County Circuit Court Arbitration Department, but if they are unable to agree upon the single arbitrator within 10 days of receipt of the Arbitration
Department list, they will ask the Arbitration Department to make the selection for them. The arbitrator will have full authority to determine all issues, including arbitrability; to award any
remedy, including permanent injunctive relief; and to determine any request for costs and expenses in accordance with Section 6.5 of this Agreement. The arbitrator’s award may be
reduced to final judgment in Multnomah County Circuit Court. The complaining party shall bear the arbitration expenses and may seek their recovery if it prevails. Notwithstanding any
other provision of this Agreement, an aggrieved party may seek a temporary restraining order or preliminary injunction in Multnomah County Circuit Court to preserve the status quo
during the arbitration proceeding.
6.5 Attorney Fees. If any suit, action or proceeding is instituted in connection with any controversy arising out of this Agreement or the enforcement of any right hereunder, the
prevailing party will be entitled to recover, in addition to costs, such sums as the court or arbitrator may adjudge reasonable as attorney fees, including fees on any appeal.
6.6 Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not constitute a part hereof.
6.7 Entire Agreement. This Agreement and the Plan embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein and
supersedes all prior written or oral communications or agreements all of which are merged herein. There are no restrictions, promises, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein.
6.8 No Waiver. No waiver of any provision of this Agreement or any rights or obligations of any party hereunder shall be effective, except pursuant to a written instrument signed
by the party or parties waiving compliance, and any such waiver shall be effective only in the specific instance and for the specific purpose stated in such writing.
6.9 Severability of Provisions. In the event that any provision hereof is found invalid or unenforceable pursuant to judicial decree or decision, the remainder of this Agreement
shall remain valid and enforceable according to its terms.
6.10 Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise set forth herein, this Agreement shall be
construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.
The Committee shall have the final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be final,
binding and conclusive upon Recipient and his or her legal representative in respect to any questions arising under the Plan or this Agreement.
6.11 Notices. All notices or other communications pursuant to this Agreement shall be in writing and shall be deemed duly given if delivered personally or by courier service, or if
mailed by
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Performance Equity Award - Senior Executives
certified mail, return receipt requested, prepaid and addressed to the Company executive offices to the attention of the Corporate Secretary, or if to Recipient, to the address maintained
by the personnel department, or such other address as such party shall have furnished to the other party in writing.
6.12 Acceptance of Agreement. Unless Recipient notifies the Corporate Secretary in writing within 14 days after the Date of Grant that Recipient does not wish to accept this
Agreement, Recipient will be deemed to have accepted this Agreement and will be bound by the terms of this Agreement and the Plan.
6.13 No Right of Employment. Nothing contained in the Plan or this Agreement shall be construed as giving Recipient any right to be retained, in any position, as an employee of
the Company or any Subsidiary.
[Remainder of this page left blank intentionally.]
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Performance Equity Award - Senior Executives
Recipient and the Company have executed this Agreement effective as of the Date of Grant.
RECIPIENT
Signature
Type or Print Name:
Social Security Number:
COMPANY LITHIA MOTORS, INC.
By: _____________________________________
Name:
Title:
* Please take the time to read and understand this Agreement. If you have any specific questions or do not fully understand any of the provisions, please contact
stockinfo@lithia.
8
(Executive, Time-vesting)
LITHIA MOTORS, INC.
RESTRICTED STOCK UNIT AGREEMENT
(Time-vesting)
This Restricted Stock Unit Agreement ("Agreement”) is entered into pursuant to the 2013 Amended and Restated Stock Incentive Plan (the "Plan”) adopted by the Board of Directors
and shareholders of Lithia Motors, Inc., an Oregon corporation (the "Company”), as amended from time to time. Unless otherwise defined herein, capitalized terms in this Agreement
have the meanings given to them in the Plan. Any inconsistency between this Agreement and the terms and conditions of the Plan will be resolved in favor of the Plan.
"Recipient” [ ]
Number of Restricted Stock Units ("RSUs”) [ ]
"Date of Grant” [ ]
1.
GRANT OF RESTRICTED STOCK UNIT AWARD
1.1 The Grant. The Company hereby awards to Recipient, and Recipient hereby accepts, the RSUs specified above on the terms and conditions set forth in this Agreement and
the Plan (the "Award”). Each RSU represents the right to receive one share of Common Stock of the Company (a "Share”) on an applicable Settlement Date, as defined in Section 1.3
of this Agreement, subject to the terms of this Agreement and the Plan.
1.2 Vesting; Clawback. Subject to the continued employment of Recipient with the Company or any Subsidiary, the RSUs (rounded to the nearest whole RSU) shall vest on the
dates set forth in the table below (each, a "Vesting Date”). The RSUs, the Shares issued upon vesting of the RSUs and any proceeds received upon the sale of the Shares are subject
to recovery by the Company as specified in Section 1.2(a) and Section 1.5 of this Agreement
Vesting Date
January 1, [ ]
January 1, [ ]
January 1, [ ]
Vesting of
Award
33%
33%
34%
Vested RSUs
(a) Clawback. The Award is subject to the Company’s recoupment ("clawback”) policy as adopted by the Committee, as it may be amended from time to time by the Committee
or the Board in its discretion.
1.3 Settlement of RSUs. There is no obligation for the Company to make payments or distributions with respect to RSUs except, subject to the terms and conditions of this
Agreement, the issuance of Shares to settle vested RSUs after the applicable Vesting Date. The Company’s issuance of one Share for each vested RSU ("Settlement”) may be
subject to such conditions, restrictions and contingencies as the Committee shall determine. Unless receipt of the Shares is validly deferred pursuant to the RSU Deferral Plan effective
January 1, 2012, as amended, and except as otherwise provided in any Amended Employment and Change in Control Agreement between the Company and Recipient (as the same may
be amended and/or restated from time to time), RSUs shall be settled as soon as practicable after the applicable Vesting Date (each date of Settlement, a "Settlement Date”), but in no
event later than March 15 of the calendar year following the calendar year in which the Vesting Date occurs. Notwithstanding the foregoing, the payment dates set forth in this Section
1.3 have been specified for the purpose of complying with the short-term deferral exception under Section 409A of the Internal Revenue Code of 1986 (the "Code”), and to the extent
payments are made during the periods permitted under Code
1
(Executive, Time-vesting)
Section 409A (including applicable periods before or after the specified payment dates set forth in this Section 1.3), the Company shall be deemed to have satisfied its obligations under
the Plan and shall be deemed not to be in breach of its payment obligations hereunder.
1.4 Termination of Recipient’s Employment.
(a) Voluntary or Involuntary Termination. Except as otherwise provided in this Section 1.4, if Recipient’s employment with the Company or any Subsidiary terminates as a result
of a voluntary or involuntary termination, all outstanding unvested RSUs shall immediately be forfeited. Recipient shall not be treated as terminating employment if Recipient is on an
approved leave of absence.
(b) Death. If Recipient’s employment with the Company or any Subsidiary terminates as a result of Recipient’s death that occurs on or after January 1, 20[ ], RSUs shall continue
to vest as scheduled in Section 1.2 of this Agreement.
(c) Disability. If Recipient becomes Disabled while employed by the Company or a Subsidiary, RSUs shall continue to vest as scheduled in Section 1.2 of this Agreement for so
long as Recipient remains Disabled.
(d) Qualified Retirement. If Recipient terminates employment due to a Qualified Retirement that occurs at least one year from January 1, 20[ ], RSUs shall continue to vest as
scheduled in Section 1.2 of this Agreement. A "Qualified Retirement” means Recipient voluntarily terminates employment on or after such time as the Recipient’s has attained at least
fifty-five (55) years of age and Recipient has completed a minimum of 10 years of Service, subject to the determination of the Committee in its sole discretion that Recipient voluntarily
terminated employment to retire.
Notwithstanding anything in this Agreement to the contrary, in no event will any Settlement occur prior to the applicable Vesting and any unsettled RSUs shall be forfeited without
consideration immediately upon the breach of any of the following conditions: compliance with non-solicit, non-compete, non-disparagement restrictive covenants and/or any other
agreements that were signed while employed during vesting period.
1.5 Treatment of Award Upon Breach of Restrictive Covenants or Misconduct.
(a) Breach of Restrictive Covenants. The vesting and receipt of benefits under the Award are specifically conditioned on Recipient’s compliance with the covenants set forth in
Section 5 of this Agreement (the "Restrictive Covenants”) and any other restrictive covenants, including noncompetition covenants, and/or any other agreements that were signed
while employed during vesting period. To the extent allowed by and consistent with applicable law, and in addition to any remedy provided in Section 1.2(a), Section 1.5(b) or Section 5.6
of this Agreement, if at any time that Recipient has materially breached any of the Restrictive Covenants, any unvested or unsettled portion of the Award shall be immediately and
automatically canceled without any payment or right of payment of consideration by the Company. The Committee has the sole discretion to determine whether Recipient breached the
Restrictive Covenants.
(b) Misconduct. If at any time (including after receipt of a request for delivery of vested shares) the Committee reasonably believes that Recipient has committed an act of
misconduct as described in this Section 1.5(b), and in addition to any remedy provided in Section 1.2(a), Section 1.5(a) or Section 5.6 of this Agreement, the Committee may suspend
Recipient’s right to receive delivery of vested shares under the Award pending a determination of whether an act of misconduct has been committed by Recipient. For purposes of this
Section 1.5(b), acts of misconduct shall mean (i) an act of embezzlement, fraud, dishonesty, breach of fiduciary duty, breach of Company written polices (including without limitations,
those relating to workplace harassment), or violation of securities laws involving the Company, any of its Subsidiaries or any entity or person with whom the Company or any of its
Subsidiaries does business, (ii) nonpayment of any obligation to the Company or any Subsidiary, (iii) any conduct and/or breach of Company policy that results in reputational harm to the
Company and (iv) any similar conduct that materially and adversely impacts or reflects on the Company. If Recipient is accused of engaging in any such misconduct to which this
Section 1.5(b) applies, Recipient shall be provided the
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(Executive, Time-vesting)
opportunity to explain Recipient’s conduct in writing within five business days of notice of the misconduct by the Company. Any determination by the Committee as to whether or not
Recipient did engage in misconduct within the meaning of this Section 1.5(b) shall be final, conclusive and binding on all interested parties. If the Committee determines that Recipient
engaged in misconduct, any unvested or unsettled portion of the Award shall be immediately canceled without any payment of consideration by the Company. If the Committee
determines that Recipient did not engage in misconduct, the Company shall immediately give effect to any request for delivery of vested shares received prior to or during any period of
suspension and complete Settlement in accordance with Section 1.3 of this Agreement. The Company shall not have any liability to Recipient for any loss which Recipient may have
sustained as a result of any delay in delivering Shares as a result of any suspension.
2.
REPRESENTATIONS AND COVENANTS OF RECIPIENT
2.1 No Representations by or on Behalf of the Company. Recipient is not relying on any representation, warranty or statement made by the Company or any agent, employee
or officer, director, shareholder or other controlling person of the Company regarding the RSUs or this Agreement.
2.2 Tax Considerations. The Company has advised Recipient to seek Recipient’s own tax and financial advice with regard to the federal and state tax considerations resulting
from Recipient’s receipt of the Award, the vesting of the Award and Recipient’s receipt of the Shares upon Settlement of the vested portion of the Award. Recipient understands that
the Company, to the extent required by law, will report to appropriate taxing authorities the payment to Recipient of compensation income upon the grant, vesting and/or Settlement of
RSUs under the Award and Recipient shall be solely responsible for the payment of all federal and state taxes resulting from such grant, vesting and/or Settlement.
2.3 Agreement to Enter into Lock-Up Agreement with an Underwriter. Recipient understands and agrees that whenever the Company undertakes a firmly underwritten
public offering of its securities, Recipient will, if requested to do so by the managing underwriter in such offering, enter into an agreement not to sell or dispose of any securities of the
Company owned or controlled by Recipient, including any of the RSUs or the Shares, provided that such restriction will not extend beyond 12 months from the effective date of the
registration statement filed in connection with such offering.
3.
GENERAL RESTRICTIONS OF TRANSFERS OF RSUS
3.1 No Transfers of RSUs. Recipient agrees for himself or herself and his or her executors, administrators and other successors in interest that none of the RSUs, nor any interest
therein, may be voluntarily or involuntarily sold, transferred, assigned, donated, pledged, hypothecated or otherwise disposed of, gratuitously or for consideration.
3.2 Award Adjustments. The number of RSUs granted under this Award shall, at the discretion of the Committee, be subject to adjustment under the Plan in the event the
outstanding shares of Common Stock are hereafter increased, decreased, changed into or exchanged for a different number or kind of shares of Common Stock or for other securities of
the Company or of another corporation, by reason of any reorganization, merger, consolidation, reclassification, stock split up, combination of shares of Common Stock, or dividend
payable in shares of Common Stock or other securities of the Company. If Recipient receives any additional RSUs pursuant to the Plan, such additional (or other) RSUs shall be deemed
granted hereunder and shall be subject to the same restrictions and obligations on the RSUs as originally granted as imposed by this Agreement.
3.3 Invalid Transfers. Any disposition of the RSUs other than in strict compliance with the provisions of this Agreement shall be void.
4.
PAYMENT OF TAX WITHHOLDING AMOUNTS. To the extent the Company is responsible for withholding income taxes, Recipient must pay to the Company or make
adequate provision for the payment of all Tax Withholding. If any RSUs are scheduled to vest during a period in which trading is not permitted under the Company’s insider trading
policy, to satisfy the Tax Withholding requirement, Recipient irrevocably elects to settle the Tax Withholding obligation by the Company withholding a number of Shares otherwise
deliverable upon vesting having a market value sufficient to
3
(Executive, Time-vesting)
satisfy the statutory minimum tax withholding of Recipient. If the Company later determines that additional Tax Withholding was or has become required beyond any amount paid or
provided for by Recipient, Recipient will pay such additional amount to the Company immediately upon demand by the Company. If Recipient fails to pay the amount demanded, the
Company may withhold that amount from other amounts payable by the Company to Recipient.
5. RESTRICTIVE COVENANTS
5.1 Non-Solicitation of Lithia Employees. Except as may be consented to in writing by the Company, throughout Recipient’s employment and during the 24-month period
following the date of Recipient’s termination of employment by the Company or by Recipient regardless of the reason therefore (the "Termination Date”), Recipient will not, directly or
indirectly, employ or offer employment to, or assist or be affiliated with any other person in employing, any persons employed by the Company or any Subsidiary in a manager or higher
position ("Managers”), and will not, either directly or indirectly, solicit, induce, recruit or encourage any Managers to leave their employment, attempt to solicit, induce, recruit or
encourage any Managers to leave their employment, or cause or encourage any person to directly or indirectly solicit, induce, recruit or encourage Managers to leave their employment,
either for him or herself or for any other person or entity, unless such person has not been employed by the Company or any of its subsidiaries for at least six months.
For purposes of this paragraph, the terms "solicit, induce, recruit and encourage” means direct and indirect communications of any kind and nature, directed specifically to
an individual for the purpose of causing the person to leave their employment with the Company, but does not include general advertisement or notice of job opportunities within an
industry. For purposes of the Agreement, the term "affiliated with” includes Recipient’s ownership of 3% or more of the equity of any person, lending money to any person, or serving
as an executive officer, director, manager or consultant to any person.
5.2 No Disparagement. Recipient shall not take any action or make any statement that disparages the Company, its operation, business, or reputation, or any of its officers or
directors, or their reputation, and shall not encourage or induce any third parties to disparage such persons ("Disparaging Acts”) throughout Recipient’s employment and for three years
following the Termination Date. "Disparaging Acts” means any statement, communication or publication, oral or written, regardless of whether such statement, communication or
publication is true, made about such persons or their reputation, that is vilifying and/or derogatory in nature and that reasonably would be expected to result in a negative perception of
such person, or that otherwise may have a material adverse effect on such person or their reputation.
5.3 Disclosure of Confidential Information. During Recipient’s employment with the Company, Recipient will have access to and become familiar with certain proprietary and
confidential information of the Company and its Subsidiaries not known to the public generally, or by its actual or potential competitors ("Confidential Information”). Recipient
acknowledges that such information constitutes valuable, special, and unique assets of the Company’s business, even though such information may not be of a technical nature and may
not be protected under trade secret or related laws.
"Confidential Information” includes any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to research, strategic and
marketing plans, product plans, products, services, markets, processes, policies, financial or other business information disclosed to, or discovered by, Recipient either directly or
indirectly, during Recipient’s employment with the Company. Recipient further understand that Confidential Information does not include any of the foregoing items which has become
publicly known and made generally available through no wrongful act or omission of his/her or of others who were under confidentiality obligations as to the item or items involved or
improvements or new versions thereof.
Recipient will not, without the prior written approval from an authorized officer of the Company, directly or indirectly (i) reveal, report, publish, disclose or transfer any
Confidential Information, other than information that constitutes "trade secrets” under applicable state law ("Company Trade Secrets”), to any person, firm, corporation or entity, or (ii)
use any Confidential Information for any purpose or for the benefit of any person, firm, corporation or entity. Further, for so long as such information remains
4
(Executive, Time-vesting)
Company Trade Secrets under applicable state laws, Recipient shall not, without the prior written approval from an authorized officer of the Company, directly or indirectly (i) reveal,
report, publish, disclose or transfer any information that constitutes Company Trade Secrets to any person, firm, corporation or entity, or (ii) use any of the Company Trade Secrets for
any purpose or for the benefit of any person, firm, corporation or entity.
Nothing in this Agreement will be construed to prohibit Recipient from filing a charge, complaint, or report with, or otherwise communicating with, providing information to, or
cooperating, or participating with any investigation or proceeding by or before the Equal Employment Opportunity Commission, the U.S. Department of Labor, the National Labor
Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state or local government agency or commission.
Furthermore, in accordance with the Defend Trade Secrets Act of 2016, 18 U.S.C. Section 1833(b), Recipient shall not be held criminally or civilly liable under any federal or state trade
secret law for the disclosure of a trade secret that: (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for
the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under
seal.
5 . 4 Creative Work. Recipient agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software,
patents, trademarks, and copyrights developed by Recipient during employment with the Company, regardless of when or where such work or work product was produced, constitutes
work made for hire, all rights of which are owned by the Company. Recipient hereby assigns to the Company all rights, title, and interest, whether by way of copyrights, trade secret,
trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.
5.5 Return of Property. If and when Recipient ceases for any reason to be employed by the Company, Recipient must return to the Company all keys, pass cards, identification
cards and any other property of the Company. At the same time, Recipient also must return to the Company all originals and copies (whether in hard copy, electronic or other form) of
any documents, drawings, notes, memoranda, designs, devices, diskettes, tapes, manuals, and specifications which constitute proprietary information or material of the Company. The
obligations in this paragraph include the return of documents and other materials that may be in Recipient’s desk at work, Recipient’s car or place of residence, or in any other location
under Recipient’s control.
5.6 Injunctive Relief. Recipient acknowledges that it may be impossible to measure in money the damages that will accrue to the Company if Recipient fails to observe the
Restrictive Covenants; therefore, in addition to any action at law for damages, and in addition to the remedy provided in Section 1.2(a) or Section 1.5 of this Agreement, the Restrictive
Covenants may be enforced by an injunction to prohibit the restricted activity or as allowed by law. Recipient hereby waives the claim or defense that an adequate remedy at law is
available to the Company. Nothing set forth herein shall prohibit the Company from pursuing all remedies available to it.
5.7 Reasonableness. The Company and Recipient agree that the Restrictive Covenants are reasonable both as to time and as to area. The Company and Recipient additionally
agree (i) that the Restrictive Covenants are necessary for the protection of the Company’s business and goodwill; (ii) that the Restrictive Covenants are not any greater than are
reasonably necessary to secure the Company’s business and goodwill; and (iii) that the degree of injury to the public due to the loss of the service and skill of Recipient or the restrictions
placed upon Recipient’s opportunity to make a living with Recipient’s skills upon enforcement of said restraints, does not and will not warrant non-enforcement of said restraints. The
Company and Recipient agree that if any portion of the Restrictive Covenants is adjudged unreasonably broad, then the Company and Recipient authorize said court or arbitrator to
narrow same so as to make it reasonable, given all relevant circumstances, and to enforce the same. The Company and Recipient agree that if any one provision of this Section 5 is not
enforceable, the remaining sections will be enforceable and that in any event, even if a Restrictive Covenant was found to be unenforceable, the termination, cancellation and forfeiture
provisions in Section 1.5 will nonetheless be applied as the continuation of an Award for service to the Company is dependent on all of Recipient’s agreements in this Section 5.
5
(Executive, Time-vesting)
6. MISCELLANEOUS PROVISIONS
6.1 Amendment and Modification. Except as otherwise provided by the Plan, this Agreement may be amended, modified and supplemented only by written agreement of all
of the parties hereto.
6.2 Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by Recipient without the prior written consent of the Company.
6.3 Governing Law. To the extent not preempted by federal law, this Agreement and the rights and obligations of the parties hereunder shall be governed by and construed in
accordance with the internal laws of the State of Oregon applicable to the construction and enforcement of contracts wholly executed in Oregon by residents of Oregon and wholly
performed in Oregon. Any action or proceeding brought by any party hereto shall be brought only in a state or federal court of competent jurisdiction located in the County of Multnomah
in the State of Oregon and all parties hereto hereby submit to the in personal jurisdiction of such court for purposes of any such action or procedure.
6.4 Arbitration. The parties agree to submit any dispute arising under this Agreement to final, binding, private arbitration in Portland, Oregon. This includes not only disputes about
the meaning or performance of this Agreement, but disputes about its negotiation, drafting or execution. The dispute will be determined by a single arbitrator in accordance with the then-
existing rules of arbitration procedure of Multnomah County, Oregon Circuit Court, except that there shall be no right of de novo review in Circuit Court and the arbitrator may charge
his or her standard arbitration fees rather than the fees prescribed in the Multnomah County Circuit Court arbitration procedures. The proceeding will be commenced by the filing of a
civil complaint in Multnomah County Circuit Court and a simultaneous request for transfer to arbitration. The parties expressly agree that they may choose an arbitrator who is not on the
list provided by the Multnomah County Circuit Court Arbitration Department, but if they are unable to agree upon the single arbitrator within 10 days of receipt of the Arbitration
Department list, they will ask the Arbitration Department to make the selection for them. The arbitrator will have full authority to determine all issues, including arbitrability; to award any
remedy, including permanent injunctive relief; and to determine any request for costs and expenses in accordance with Section 6.5 of this Agreement. The arbitrator’s award may be
reduced to final judgment in Multnomah County Circuit Court. The complaining party shall bear the arbitration expenses and may seek their recovery if it prevails. Notwithstanding any
other provision of this Agreement, an aggrieved party may seek a temporary restraining order or preliminary injunction in Multnomah County Circuit Court to preserve the status quo
during the arbitration proceeding.
6.5 Attorney Fees. If any suit, action or proceeding is instituted in connection with any controversy arising out of this Agreement or the enforcement of any right hereunder, the
prevailing party will be entitled to recover, in addition to costs, such sums as the court or arbitrator may adjudge reasonable as attorney fees, including fees on any appeal.
6.6 Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not constitute a part hereof.
6.7 Entire Agreement. This Agreement and the Plan embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein and
supersedes all prior written or oral communications or agreements all of which are merged herein. There are no restrictions, promises, warranties, covenants or undertakings, other than
those expressly set forth or referred to herein.
6.8 No Waiver. No waiver of any provision of this Agreement or any rights or obligations of any party hereunder shall be effective, except pursuant to a written instrument signed
by the party or parties waiving compliance, and any such waiver shall be effective only in the specific instance and for the specific purpose stated in such writing.
6
(Executive, Time-vesting)
6.9 Severability of Provisions. In the event that any provision hereof is found invalid or unenforceable pursuant to judicial decree or decision, the remainder of this Agreement
shall remain valid and enforceable according to its terms.
6.10 Incorporation by Reference, Etc. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise set forth herein, this Agreement shall be
construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.
The Committee shall have the final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be final,
binding and conclusive upon Recipient and his or her legal representative in respect to any questions arising under the Plan or this Agreement.
6.11 Notices. All notices or other communications pursuant to this Agreement shall be in writing and shall be deemed duly given if delivered personally or by courier service, or if
mailed by certified mail, return receipt requested, prepaid and addressed to the Company executive offices to the attention of the Corporate Secretary, or if to Recipient, to the address
maintained by the personnel department, or such other address as such party shall have furnished to the other party in writing.
6.12 Acceptance of Agreement. Unless Recipient notifies the Corporate Secretary in writing within 14 days after the Date of Grant that Recipient does not wish to accept this
Agreement, Recipient will be deemed to have accepted this Agreement and will be bound by the terms of this Agreement and the Plan.
6.13 No Right of Employment. Nothing contained in the Plan or this Agreement shall be construed as giving Recipient any right to be retained, in any position, as an employee of
the Company or any Subsidiary.
[Remainder of this page left blank intentionally.]
7
(Executive, Time-vesting)
Recipient and the Company have executed this Agreement effective as of the Date of Grant.
RECIPIENT
Signature
Type or Print Name:
Social Security Number:
COMPANY LITHIA MOTORS, INC.
By: _____________________________________
Name:
Title:
* Please take the time to read and understand this Agreement. If you have any specific questions or do not fully understand any of the provisions, please contact
stockinfo@lithia.
8
Exe c ut i on Ve r s i on 39211237. v17 FI RST AM ENDM ENT TO FOURTH AM ENDED AND RESTATED LOAN AGREEM ENT Thi s Fi r s t Am e ndm e nt t o Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt ( t hi s " Am e ndm e nt ” ) , da t e d a s of Fe br ua r y 7, 2022, i s e nt e r e d i nt o a m ong Li t hi a M ot or s , I nc . , a n Or e gon c or por a t i on ( t he " Com pa ny” ) , e a c h of t he Subs i di a r i e s of t he Com pa ny l i s t e d on t he s i gna t ur e pa ge s of t hi s Am e ndm e nt ( t oge t he r wi t h t he Com pa ny, e a c h a " Bor r owe r ” a nd a ny t wo or m or e " Bor r owe r s ” ) , t he Le nde r s unde r t he Loa n Agr e e m e nt de s c r i be d be l ow t ha t a r e s i gna t or i e s t o t hi s Am e ndm e nt , a nd U. S. Ba nk Na t i ona l As s oc i a t i on, a s Age nt f or t he Le nde r s ( i n s uc h c a pa c i t y, " Age nt ” ) . R E C I T A L S: A. The Com pa ny, c e r t a i n of i t s Subs i di a r i e s , t he Le nde r s a nd Age nt ha ve e nt e r e d i nt o a Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt da t e d a s of Apr i l 29, 2021 ( a s m a y be a m e nde d, r e s t a t e d, s uppl e m e nt e d or ot he r wi s e m odi f i e d, t he " Loa n Agr e e m e nt ” ) . Ca pi t a l i z e d t e r m s not ot he r wi s e de f i ne d he r e i n s ha l l ha ve t he m e a ni ngs gi ve n t o s uc h t e r m s i n t he Loa n Agr e e m e nt . B. The
Com pa ny ha s r e que s t e d t ha t t he Age nt a nd t he Le nde r s a gr e e t o t he a m e ndm e nt s t o t he Loa n Agr e e m e nt s e t f or t h he r e i n. C. The Le nde r s t ha t a r e s i gna t or i e s t o t hi s Am e ndm e nt , c ons t i t ut i ng t he Re qui r e d Le nde r s unde r t he Loa n Agr e e m e nt , ha ve a gr e e d t o t he a m e ndm e nt s t o t he Loa n Agr e e m e nt s e t f or t h he r e i n, a s m or e pa r t i c ul a r l y a s s e t f or t h he r e i n. For va l ua bl e c ons i de r a t i on, t he r e c e i pt a nd s uf f i c i e nc y of whi c h a r e he r e by a c knowl e dge d, t he pa r t i e s a gr e e a s f ol l ows : 1. De f i ni t i ons . Se c t i on 1. 1 of t he Loa n Agr e e m e nt i s a m e nde d by a ddi ng t he de f i ni t i ons of " Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ” , " Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on” , " Ca na di a n Subs i di a r y I nde bt e dne s s ” , " Fi na nc e d Ent i t y” , " Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r y” , " St oc khol de r s ’ Equi t y” a nd " Tr a de - i n Li e n” , t o be de f i ne d a s f ol l ows : " Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ” m e a ns ( a ) a ny a c c ount s r e c e i va bl e , m or t ga ge r e c e i va bl e s , l oa n r e c e i va bl e s , e qui pm e nt , r oya l t y, f r a nc hi s e f e e , l i c e ns e f e e , pa t e nt or ot he r r e ve nue s t r e a m s a nd ot he r r i ght s t o
pa ym e nt or r e l a t e d a s s e t s a nd t he pr oc e e ds t he r e of a nd a ny s e c ur i t i e s ba c ke d by s uc h a s s e t s a nd ( b) a l l c ol l a t e r a l s e c ur i ng s uc h r e c e i va bl e or a s s e t s , a l l c ont r a c t s a nd c ont r a c t r i ght s , gua r a nt e e s or ot he r obl i ga t i ons i n r e s pe c t of s uc h r e c e i va bl e or a s s e t , l oc kbox a c c ount s a nd r e c or ds wi t h r e s pe c t t o s uc h a c c ount or a s s e t a nd a ny ot he r a s s e t c us t om a r i l y t r a ns f e r r e d ( or i n r e s pe c t of whi c h s e c ur i t y i nt e r e s t s a r e
- 2 - 39211237. v17 c us t om a r i l y gr a nt e d) t oge t he r wi t h a c c ount s or a s s e t s i n c onne c t i on wi t h a s e c ur i t i z a t i on or r e c e i va bl e s a l e t r a ns a c t i on. " Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on” m e a ns one or m or e t r a ns a c t i ons pur s ua nt t o whi c h ( i ) Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s or i nt e r e s t s t he r e i n a r e s ol d or t r a ns f e r r e d t o or f i na nc e d by one or m or e Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r i e s , a nd ( i i ) s uc h Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r i e s f i na nc e ( or r e f i na nc e ) t he i r a c qui s i t i on of s uc h Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s or i nt e r e s t s t he r e i n, or t he f i na nc i ng t he r e of , by s e l l i ng or bor r owi ng a ga i ns t Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ( i nc l udi ng c ondui t a nd wa r e hous e f i na nc i ngs ) a nd a ny he dgi ng a gr e e m e nt s e nt e r e d i nt o i n c onne c t i on wi t h s uc h Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ; pr ovi de d, t ha t r e c our s e t o t he Com pa ny or a ny Subs i di a r y ( ot he r t ha n t he Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r i e s ) i n c onne c t i on wi t h s uc h t r a ns a c t i ons s ha l l be l i m i t e d t o t he e xt e nt c us t om a r y ( a s de t e r m i ne d
by t he Com pa ny i n good f a i t h) f or s i m i l a r t r a ns a c t i ons i n t he a ppl i c a bl e j ur i s di c t i ons ( i nc l udi ng, t o t he e xt e nt a ppl i c a bl e , i n a m a nne r c ons i s t e nt wi t h t he de l i ve r y of a " t r ue s a l e ” / " a bs ol ut e t r a ns f e r ” opi ni on wi t h r e s pe c t t o a ny t r a ns f e r by t he Com pa ny or a ny Subs i di a r y ( ot he r t ha n a Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r y) ) . " Ca na di a n Subs i di a r y I nde bt e dne s s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 10( p) . " Fi na nc e d Ent i t y” m e a ns , a t a ny t i m e , a Pe r s on t ha t owns a ny a s s e t s t ha t a r e i nc l ude d i n a ny of t he Re vol vi ng Loa n Bor r owi ng Ba s e , t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e or t he Us e d Ve hi c l e Bor r owi ng Ba s e a t s uc h t i m e . " Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r y” m e a ns a di r e c t or i ndi r e c t Subs i di a r y of t he Com pa ny e s t a bl i s he d i n c onne c t i on wi t h a Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on, a nd whi c h i s or ga ni z e d i n a m a nne r ( a s de t e r m i ne d by t he Com pa ny i n good f a i t h) i nt e nde d t o r e duc e t he l i ke l i hood t ha t i t woul d be s ubs t a nt i ve l y c ons ol i da t e d wi t h t he Com pa ny or a ny Subs i di a r y t he r e of i n t he e ve nt t he Com pa ny or a ny
s uc h Subs i di a r y be c om e s s ubj e c t t o a pr oc e e di ng unde r t he U. S. Ba nkr upt c y Code ( or ot he r i ns ol ve nc y l a w) . " St oc khol de r s ’ Equi t y” m e a ns , a s of a ny da t e of de t e r m i na t i on, t he c ons ol i da t e d s t oc khol de r s ’ e qui t y of t he Com pa ny de t e r m i ne d i n a c c or da nc e wi t h GAAP. " Tr a de - i n Li e n” m e a ns , wi t h r e s pe c t t o a Us e d Ve hi c l e t ha t a c us t om e r t r a de d i n t o t he Com pa ny or a ny Subs i di a r y t he r e of , a ny s e c ur i t y i nt e r e s t i n s uc h Us e d Ve hi c l e out s t a ndi ng a t t he t i m e s uc h Us e d Ve hi c l e wa s t r a de d, t ha t s e c ur e s a ny i nde bt e dne s s or obl i ga t i on t o a ny Pe r s on i nc ur r e d by s uc h c us t om e r , i nc l udi ng but not l i m i t e d t o a m ount s owi ng t o a ny hol de r of a ny l i e n or s e c ur i t y i nt e r e s t i n a Us e d Ve hi c l e a t t he t i m e i t i s t r a de d i n t o a ny De a l e r s hi p.
- 3 - 39211237. v17 2. De f i ni t i ons . Se c t i on 1. 1 of t he Loa n Agr e e m e nt i s a m e nde d by a m e ndi ng a nd r e s t a t i ng t he de f i ni t i ons of " Ca na di a n De a l e r s hi p” , " De a l e r s hi p” , " Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e ” , " El i gi bl e Ve hi c l e ” , " Exc l ude d Pr ope r t y” , " Gua r a nt or ” , " Pe r m i t t e d Dua l Subs i di a r y Gua r a nt y” , " Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s ” , " Pe r m i t t e d Ne w De a l e r s hi p” , " Pe r m i t t e d Re s t r i c t i ons ” , " Re vol vi ng Loa n Bor r owi ng Ba s e ” , " Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e ” , " Us e d Ve hi c l e Bor r owi ng Ba s e ” a nd " Ve hi c l e ” i n t he i r e nt i r e t y wi t h t he f ol l owi ng, r e s pe c t i ve l y: " Ca na di a n De a l e r s hi p” m e a ns a De a l e r s hi p whos e pr i m a r y bus i ne s s i s t he r e t a i l s a l e s or r e t a i l s a l e a nd l e a s e of ne w a nd/ or us e d a ut om obi l e s , t r uc ks a nd/ or m ot or c yc l e s i n Ca na da . " De a l e r s hi p” m e a ns a Subs i di a r y of t he Com pa ny whos e pr i m a r y bus i ne s s i s t he r e t a i l s a l e s or r e t a i l s a l e a nd l e a s e of ne w a nd/ or us e d a ut om obi l e s , t r uc ks a nd/ or m ot or c yc l e s i n t he Uni t e d St a t e s of Am e r i c a or i n Ca na da . " Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e ” m e a ns , wi t h r e s pe c t t o a ny Dua l
Subs i di a r y, t he da t e t ha t s uc h Dua l Subs i di a r y be gi ns t o f i na nc e ne w Ve hi c l e s of a ny Re m ove d Fr a nc hi s e , us e d a nd/ or s e r vi c e l oa ne r Ve hi c l e s t hr ough Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s a s pe r m i t t e d by Se c t i ons 6. 19 a nd 13. 16. " El i gi bl e Ve hi c l e ” m e a ns a n a ut om obi l e , t r uc k or m ot or c yc l e wi t h a gr os s ve hi c l e we i ght of no m or e t ha n 16, 000 pounds , whi c h s a t i s f i e s t he f ol l owi ng r e qui r e m e nt s : ( a ) The ve hi c l e i s owne d by a De a l e r s hi p, s ubj e c t t o a pe r f e c t e d s e c ur i t y i nt e r e s t i n f a vor of t he Age nt , a nd f r e e of a ny t i t l e de f e c t s , l i e ns , s e c ur i t y i nt e r e s t s , l e a s e s , ba i l m e nt s , c ons i gnm e nt s or ot he r i nt e r e s t s of a ny Pe r s on ot he r t ha n Age nt , e xc e pt a s a gr e e d by t he Age nt i n wr i t i ng. ( b) Unl e s s t he ve hi c l e i s a De m o, or i s i n t r a ns i t f r om t he s e l l e r , i t i s l oc a t e d a t l oc a t i ons whi c h t he De a l e r s hi ps di s c l os e d t o t he Age nt a nd whi c h a r e a c c e pt a bl e t o t he Age nt . I f t he ve hi c l e i s i n t r a ns i t f r om a s e l l e r , t he n upon r e c e i pt by a De a l e r s hi p i t wi l l be l oc a t e d a t one of s uc h l oc a t i ons . ( c ) The ve hi c l e i s he l d f or s a l e or l e a s e i n t he or di na r y c our s e of a
De a l e r s hi p’ s bus i ne s s . ( d) The ve hi c l e i s unda m a ge d a nd of good a nd m e r c ha nt a bl e qua l i t y. ( e ) The ve hi c l e i s ot he r wi s e a c c e pt a bl e t o t he Age nt . " Exc l ude d Pr ope r t y” m e a ns a ny of ( a ) a ny Equi t y I nt e r e s t s i n a ny De a l e r s hi p, a ny Ca na di a n Subs i di a r y ( e xc e pt a ny Ca na di a n Subs i di a r y t ha t i s a Fi na nc e d Ent i t y) a nd, t o t he e xt e nt pr ohi bi t e d by a ny m a nuf a c t ur e r of Ve hi c l e s , a ny Subs i di a r y of t he Com pa ny t ha t i s t he hol de r of f i ve pe r c e nt ( 5% ) or m or e of t he Equi t y I nt e r e s t s i n a ny De a l e r s hi p; ( b) a ny r e a l e s t a t e or i nt e r e s t i n r e a l e s t a t e ,
- 4 - 39211237. v17 i nc l udi ng a l e a s e or r e nt s t he r e unde r , a nd a ny i m pr ove m e nt s a nd f i xt ur e s , unl e s s a ny of t he f or e goi ng c ons t i t ut e El i gi bl e Re a l Pr ope r t y; ( c ) a ny vot i ng s t oc k of a ny di r e c t Subs i di a r y of a ny Loa n Pa r t y t ha t i s a c ont r ol l e d f or e i gn c or por a t i on ( a s de f i ne d i n Se c t i on 957 of t he I nt e r na l Re ve nue Code ( a " CFC” ) ) i n e xc e s s of 65% of t he t ot a l c om bi ne d vot i ng powe r of a l l c l a s s e s of s t oc k of s uc h CFC t ha t a r e e nt i t l e d t o vot e ( wi t hi n t he m e a ni ng of Se c t i on 1. 956- 2( c ) ( 2) of t he Tr e a s ur y Re gul a t i ons ) , t o t he e xt e nt t he pl e dge of a gr e a t e r pe r c e nt a ge woul d r e a s ona bl y be e xpe c t e d t o r e s ul t i n m a t e r i a l a dve r s e t a x c ons e que nc e s t o a ny Bor r owe r , a s r e a s ona bl y de t e r m i ne d i n good f a i t h by t he Bor r owe r s ; ( d) a ny l e a s e , l i c e ns e or ot he r a gr e e m e nt or c ont r a c t or a ny pr ope r t y s ubj e c t t o a pur c ha s e m one y s e c ur i t y i nt e r e s t , Li e n s e c ur i ng a Ca pi t a l i z e d Le a s e Obl i ga t i on or s i m i l a r a r r a nge m e nt , i n e a c h c a s e pe r m i t t e d t o be i nc ur r e d unde r t hi s Agr e e m e nt , t o t he e xt e nt t ha t a gr a nt of a s e c ur i t y i nt e r e s t t he r e i n woul d r e qui r e a c ons e nt not
obt a i ne d or vi ol a t e or i nva l i da t e s uc h l e a s e , l i c e ns e , a gr e e m e nt or c ont r a c t or pur c ha s e m one y a r r a nge m e nt , Ca pi t a l i z e d Le a s e Obl i ga t i on or s i m i l a r a r r a nge m e nt or c r e a t e a r i ght of t e r m i na t i on i n f a vor of a ny ot he r pa r t y t he r e t o ( ot he r t ha n t he Com pa ny or a n Af f i l i a t e of t he Com pa ny) , i n e a c h c a s e a f t e r gi vi ng e f f e c t t o t he a ppl i c a bl e a nt i - a s s i gnm e nt pr ovi s i ons of t he Uni f or m Com m e r c i a l Code ( " UCC” ) a nd ot he r Appl i c a bl e La w a nd ot he r t ha n pr oc e e ds a nd r e c e i va bl e s t he r e of ; ( e ) a ny Uni t e d St a t e s i nt e nt - t o- us e Tr a de m a r k a ppl i c a t i ons t o t he e xt e nt t ha t , a nd s ol e l y dur i ng t he pe r i od i n whi c h, t he gr a nt , a t t a c hm e nt or e nf or c e m e nt of a s e c ur i t y i nt e r e s t t he r e i n woul d, unde r a ppl i c a bl e f e de r a l l a w, i m pa i r t he r e gi s t r a bi l i t y of s uc h a ppl i c a t i ons or t he va l i di t y or e nf or c e a bi l i t y of r e gi s t r a t i ons i s s ui ng f r om s uc h a ppl i c a t i ons ; ( f ) a ny a s s e t or pr ope r t y t o t he e xt e nt t ha t t he gr a nt of a s e c ur i t y i nt e r e s t i s pr ohi bi t e d by Appl i c a bl e La w or r e qui r e s a c ons e nt not obt a i ne d of a ny Gove r nm e nt a l Aut hor i t y pur s ua nt t o s uc h a ppl i c a bl e l a w, r ul e or
r e gul a t i on, i n e a c h c a s e a f t e r gi vi ng e f f e c t t o t he a ppl i c a bl e a nt i - a s s i gnm e nt pr ovi s i ons of t he UCC a nd ot he r Appl i c a bl e La w a nd ot he r t ha n pr oc e e ds a nd r e c e i va bl e s t he r e of ; pr ovi de d, howe ve r , t ha t " Exc l ude d Pr ope r t y” s ha l l not i nc l ude a ny pr oc e e ds , pr oduc t s , s ubs t i t ut i ons or r e pl a c e m e nt s of a ny Exc l ude d Pr ope r t y ( unl e s s s uc h pr oc e e ds , pr oduc t s , s ubs t i t ut i ons or r e pl a c e m e nt s woul d c ons t i t ut e Exc l ude d Pr ope r t y) . " Gua r a nt or ” m e a ns e a c h Subs i di a r y whi c h a t a ny t i m e e xe c ut e s a Gua r a nt y of t he Re vol vi ng Loa n Obl i ga t i ons , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons f or t he be ne f i t of t he Age nt a nd t he Le nde r s , i t be i ng unde r s t ood t ha t ( a ) a Subs i di a r y s ha l l c e a s e t o be a Gua r a nt or f r om a nd a f t e r t he t i m e ( i f e ve r ) t he Loa n Doc um e nt s pe r m i t t he r e l e a s e of s uc h Gua r a nt y a nd s uc h Subs i di a r y a nd t he Age nt e xe c ut e a nd de l i ve r a Loa n Pa r t y Te r m i na t i on Agr e e m e nt a nd ( b) e a c h pr e s e nt a nd f ut ur e Subs i di a r y of t he Com pa ny, ot he r t ha n ( i ) Ca na di a n Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s a nd ( i i ) Exc l ude d
Subs i di a r i e s , s ha l l be or be c om e a Gua r a nt or . " Pe r m i t t e d Dua l Subs i di a r y Gua r a nt y” m e a ns , wi t h r e s pe c t t o a ny Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s pr ovi de d by a ny Dua l Subs i di a r y Le nde r , t he gua r a nt y of s uc h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s by ( a ) t he Com pa ny or ( b) a ny Dua l Subs i di a r y t ha t ope r a t e s one or m or e de a l e r s hi ps a t whi c h ne w
- 5 - 39211237. v17 Ve hi c l e , us e d Ve hi c l e or s e r vi c e l oa ne r Ve hi c l e Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s i s pr ovi de d by s uc h Dua l Subs i di a r y Le nde r . " Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s ” m e a ns I nde bt e dne s s ( i nc l udi ng Pe r m i t t e d Dua l Subs i di a r y Gua r a nt i e s but e xc l udi ng I nde bt e dne s s pr ovi de d pur s ua nt t o t hi s Agr e e m e nt ) i nc ur r e d f r om t i m e t o t i m e by a ny Dua l Subs i di a r y c ons i s t i ng of f l oor pl a n f i na nc i ng f or ne w Ve hi c l e s , us e d Ve hi c l e s or s e r vi c e l oa ne r Ve hi c l e s pr ovi de d by f i na nc i a l i ns t i t ut i ons or m a nuf a c t ur e r - a f f i l i a t e d f i na nc e c om pa ni e s ( " Dua l Subs i di a r y Le nde r s ” ) t o s uc h Dua l Subs i di a r i e s , pr ovi de d t ha t e a c h Re qui r e d I nt e r c r e di t or Count e r pa r t y wi t h r e s pe c t t o s uc h I nde bt e dne s s i s a pa r t y t o a nd bound by a n I nt e r c r e di t or Agr e e m e nt . " Pe r m i t t e d Ne w De a l e r s hi p” m e a ns a De a l e r s hi p ( a ) ( i ) 100% ( or i f t he Com pa ny i s not pe r m i t t e d t o hol d 100% of s uc h Equi t y I nt e r e s t s be c a us e of l i m i t a t i ons i m pos e d by t he r e l e va nt m a nuf a c t ur e r 's f r a nc hi s e a gr e e m e nt , a t l e a s t 80% ) of t he Equi t y I nt e r e s t s of whi c h a r e owne d, di r e c t l y or i ndi r e c t l y by t he
Com pa ny or ( i i ) t ha t i s a M i nor i t y De a l e r Subs i di a r y, ( b) whi c h i s or ga ni z e d t o own a nd ope r a t e a ne wl y e s t a bl i s he d a ut om obi l e or m ot or c yc l e de a l e r s hi p poi nt , a nd ( c ) wi t h r e s pe c t t o whi c h t he Loa n Pa r t i e s ha ve c om pl i e d wi t h t he r e qui r e m e nt s of Se c t i on 12. 17. " Pe r m i t t e d Re s t r i c t i ons ” m e a ns r e s t r i c t i ons on t he a bi l i t y of a ny Subs i di a r y t o de c l a r e or pa y a ny di vi de nd or m a ke ot he r di s t r i but i ons , or t o a dva nc e or l oa n f unds or t r a ns f e r a s s e t s , t o t he Com pa ny or a ny ot he r Subs i di a r y, t o bor r ow m one y f r om t he Com pa ny or a ny ot he r Subs i di a r y, t o gr a nt Li e ns on t he a s s e t s of s uc h Subs i di a r y, t o s e c ur e t he Obl i ga t i ons or t he Gua r a nt or Obl i ga t i ons or t o gua r a nt y t he Obl i ga t i ons : ( a ) a s s e t f or t h on t he Di s c l os ur e Sc he dul e on t he Cl os i ng Da t e , i nc l udi ng r e s t r i c t i ons i m pos e d by e xi s t i ng Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng a r r a nge m e nt s ; ( b) pur s ua nt t o m odi f i c a t i ons t o Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng a r r a nge m e nt s i n e f f e c t on t he Cl os i ng Da t e , pr ovi de d t ha t s uc h m odi f i c a t i ons a r e not m a t e r i a l l y m or e r e s t r i c t i ve ; ( c ) pur s ua nt t o
Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng a r r a nge m e nt s wi t h a ny Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r ot he r t ha n a Pe r s on whi c h i s a n Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r on t he Cl os i ng Da t e ; ( d) a ppl i c a bl e t o a Pe r s on a t t he t i m e s uc h Pe r s on be c om e s a Subs i di a r y a nd not c r e a t e d i n c ont e m pl a t i on of s uc h a n e ve nt ; ( e ) r e s ul t i ng f r om m a nuf a c t ur e r - i m pos e d m odi f i c a t i ons t o a ny Fr a nc hi s e Agr e e m e nt ; ( f ) i m pos e d by Appl i c a bl e La w; ( g) a s s e t f or t h i n t he or ga ni z a t i ona l doc um e nt s of a Loa n Pa r t y a nd c ons i s t i ng of r e qui r e m e nt s f or di r e c t or , m a na ge r , s ha r e hol de r or m e m be r a ppr ova l ; ( h) a s s e t f or t h i n a ny doc um e nt r e l a t i ng t o Funde d De bt pe r m i t t e d unde r Se c t i ons 13. 10( o) , ( p) or ( s ) , but onl y t o t he e xt e nt a ppl i c a bl e t o Si l o Subs i di a r i e s , Ca na di a n Subs i di a r i e s ( ot he r t ha n a ny Ca na di a n Subs i di a r y t ha t i s a Fi na nc e d Ent i t y) or Dua l Subs i di a r i e s a nd t o t he e xt e nt s uc h r e s t r i c t i on doe s not di r e c t l y or i ndi r e c t l y pr ohi bi t a ny Si l o Subs i di a r y, Ca na di a n Subs i di a r y ( t ha t i s a Fi na nc e d Ent i t y) or Dua l Subs i di a r y f r om gua r a nt yi ng, or i m pos e a ny
r e s t r i c t i on on t he a bi l i t y of a ny Si l o Subs i di a r y, Ca na di a n Subs i di a r y ( t ha t i s a Fi na nc e d Ent i t y) or Dua l Subs i di a r y t o gua r a nt y, t he Obl i ga t i ons ; ( i ) a s s e t f or t h i n a ny doc um e nt r e l a t i ng t o Addi t i ona l Funde d De bt pe r m i t t e d unde r Se c t i on
- 6 - 39211237. v17 13. 10( l ) or Ca na di a n Subs i di a r y I nde bt e dne s s , i n e a c h c a s e onl y t o t he e xt e nt s uc h r e s t r i c t i on doe s not di r e c t l y or i ndi r e c t l y pr ohi bi t a ny Subs i di a r y f r om gua r a nt yi ng, or i m pos e a ny r e s t r i c t i on on t he a bi l i t y of a ny Subs i di a r y t o gua r a nt y, t he Obl i ga t i ons ; ( j ) a s s e t f or t h i n a ny doc um e nt r e l a t i ng t o I nde bt e dne s s pe r m i t t e d unde r Se c t i on 13. 10( d) ; ( k) on or wi t h r e s pe c t t o a ny Exc l ude d Subs i di a r y; or ( l ) i n c onne c t i on wi t h a ny Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on; pr ovi de d s uc h r e s t r i c t i ons a r e l i m i t e d t o obl i gor s of Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i ons a nd do not i nc l ude a ny Fi na nc e d Ent i t y. " Re vol vi ng Loa n Bor r owi ng Ba s e ” m e a ns , a s of a ny da t e of de t e r m i na t i on: ( a ) a n a m ount e qua l t o t he s um , wi t hout dupl i c a t i on, on s uc h da t e of : ( i ) 100% of t he a m ount s ( e xc l udi ng c om m i s s i ons i nc l ude d i n c l a us e ( b) of t he de f i ni t i on of El i gi bl e Re c e i va bl e s ) owi ng t o t he De a l e r s hi ps i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t , whi c h a r e owe d t o t he De a l e r s hi ps by f i na nc i a l
i ns t i t ut i ons or f i na nc e c om pa ni e s whi c h a r e not Af f i l i a t e s of a ny Loa n Pa r t y f or t he pur c ha s e by s uc h i ns t i t ut i ons of r e t a i l i ns t a l l m e nt c ont r a c t s a nd l e a s e s a r i s i ng f r om t he s a l e or l e a s e of Ne w Ve hi c l e s a nd Us e d Ve hi c l e s ( c ont r a c t s i n t r a ns i t ) , whi c h ha ve not r e m a i ne d unpa i d f or m or e t ha n 15 da ys . ( i i ) 80% of t he a m ount of El i gi bl e Re c e i va bl e s . ( i i i ) 100% of t he s um of t he m a nuf a c t ur e r ’ s or di s t r i but or ’ s i nvoi c e s ( i nc l udi ng f r e i ght , a dve r t i s i ng a nd hol dba c ks ) f or El i gi bl e Ne w Ve hi c l e s . ( i v) 100% of t he a m ount of t he Us e d Ve hi c l e Bor r owi ng Ba s e . ( v) 75% of t he Va l ue of El i gi bl e Re a l Pr ope r t y; pr ovi de d, t ha t t hi s c om pone nt of t he Re vol vi ng Loa n Bor r owi ng Ba s e s ha l l not a t a ny t i m e e xc e e d 25% of t he l e s s e r of ( x) t he Re vol vi ng Loa n Bor r owi ng Ba s e a nd ( y) t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt . ( vi ) 65% of ( A) t he ne t book va l ue of t he i nve nt or y of t he Com pa ny a nd i t s Subs i di a r i e s c ons i s t i ng of ne w pa r t s a nd a c c e s s or i e s i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t ; m i nus ( B) t he unpa i d a c qui s i t i on c os t owe d
t o s e l l e r s or f i na nc e r s of s uc h i nve nt or y. ( vi i ) 40% of ( A) t he ne t book va l ue of e qui pm e nt ( e xc l udi ng f i xt ur e s , a i r c r a f t , a nd Se r vi c e Loa ne r Ve hi c l e s ) of t he Com pa ny a nd i t s Subs i di a r i e s i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t , m i nus ( B) t he pr i nc i pa l a m ount of i nde bt e dne s s or obl i ga t i ons t o a ny Pe r s on ( ot he r t ha n t he Obl i ga t i ons ) whi c h i s s e c ur e d by s uc h e qui pm e nt .
- 7 - 39211237. v17 ( b) M i nus , t he s um of t he t he n out s t a ndi ng a ggr e ga t e pr i nc i pa l ba l a nc e of ( i ) Ne w Ve hi c l e Fl oor pl a n Loa ns l e s s t he s um of t he a ggr e ga t e a m ount he l d i n t he PR Ac c ount s , i n a n a m ount up t o $200, 000, 000, ( i i ) Ne w Ve hi c l e Swi ng Li ne Loa ns , ( i i i ) Us e d Ve hi c l e Fl oor pl a n Loa ns , ( i v) Us e d Ve hi c l e Swi ng Li ne Loa ns a nd ( v) Pa r i Pa s s u Funde d De bt . Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y i n t hi s Agr e e m e nt , t he a m ount s s e t f or t h i n c l a us e s ( a ) ( i ) t hr ough ( a ) ( vi i ) a bove s ha l l e xc l ude a l l r e c e i va bl e s , Ve hi c l e s , r e a l pr ope r t y, i nve nt or y, e qui pm e nt a nd ot he r pr ope r t y a nd a s s e t s of a ny Si l o Subs i di a r y, pr ovi de d i n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d Ve hi c l e Bor r owi ng Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000. " Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e ” m e a ns , a s of a ny da t e of de t e r m i na t i on, a n a m ount e qua l t o t he s um , wi t hout dupl i c a t i on, on s uc h da t e of 85% of t he ne t book va l ue of El i gi bl e Se r vi c e
Loa ne r Ve hi c l e s , pr ovi de d i n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d Ve hi c l e Bor r owi ng Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000. " Us e d Ve hi c l e Bor r owi ng Ba s e ” m e a ns , a s of a ny da t e of de t e r m i na t i on, t he a m ount e qua l t o ( a ) 85% m ul t i pl i e d by ( b) t he a m ount de t e r m i ne d, wi t hout dupl i c a t i on, a s f ol l ows : ( a ) t he a ggr e ga t e ne t book va l ue of t he Us e d Ve hi c l e i nve nt or y of t he Com pa ny a nd i t s Subs i di a r i e s ; m i nus ( b) t he a ggr e ga t e ne t book va l ue of s uc h Us e d Ve hi c l e s i n whi c h t he Age nt doe s not ha ve a pe r f e c t e d, f i r s t - pr i or i t y s e c ur i t y i nt e r e s t ( i nc l udi ng ( i ) Us e d Ve hi c l e s owne d by a ny Si l o Subs i di a r y a nd ( i i ) Us e d Ve hi c l e s owne d by a ny Dua l Subs i di a r y wi t h r e s pe c t t o whi c h t he Age nt doe s not ha ve a pe r f e c t e d, f i r s t - pr i or i t y s e c ur i t y i nt e r e s t ( ot he r t ha n Us e d Ve hi c l e s s ubj e c t t o Tr a de - i n Li e ns ) ) ; m i nus ( c ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l a m ount of i nde bt e dne s s s e c ur e d by Tr a de - i n Li e ns ; m i nus ( d) t he a ggr e ga t e
ne t book va l ue of s uc h Us e d Ve hi c l e s t ha t a r e not ot he r wi s e El i gi bl e Ve hi c l e s . Not wi t hs t a ndi ng t he f or e goi ng, i n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d Ve hi c l e Bor r owi ng Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000. " Ve hi c l e ” m e a ns a n a ut om obi l e , t r uc k, va n, m ot or c yc l e , or ot he r m ot or ve hi c l e .
- 8 - 39211237. v17 3. Addi t i on of Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps . Se c t i on 2. 5( a ) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( a ) I f , on or a f t e r t he Cl os i ng Da t e , a ny ne w De a l e r s hi p ( ot he r t ha n a Ca na di a n De a l e r s hi p, Dua l Subs i di a r y or Si l o Subs i di a r y) i s e s t a bl i s he d or a ny e xi s t i ng De a l e r s hi p ( ot he r t ha n a Ca na di a n De a l e r s hi p, Dua l Subs i di a r y or Si l o Subs i di a r y) r e qui r e s f i na nc i ng f or i t s Ne w Ve hi c l e s , t he Com pa ny s ha l l de l i ve r t o t he Age nt a wr i t t e n not i c e s pe c i f yi ng t he na m e of t he a ddi t i ona l Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p, t he pr opos e d De a l e r s hi p Loa n Li m i t f or s uc h De a l e r s hi p, t he a ppl i c a bl e m a nuf a c t ur e r s t o be f i na nc e d f or s uc h De a l e r s hi p a nd a ny ot he r i nf or m a t i on r e que s t e d by t he Age nt . Upon a ppr ova l by t he Age nt , e s t a bl i s hm e nt of a De a l e r s hi p Loa n Li m i t a nd, i f a ppl i c a bl e , De a l e r s hi p Loa n Subl i m i t ( s ) , a nd s a t i s f a c t i on of t he r e qui r e m e nt s i n Se c t i on 9. 3, s uc h De a l e r s hi p s ha l l be c om e a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p a nd e nt i t l e d t o f i na nc e El i gi bl e Ne w Ve hi c l e s he r e unde r . For pur pos e s of c l a r i f i c a t i on, no
De a l e r s hi p ( ot he r t ha n a Ca na di a n De a l e r s hi p, Dua l Subs i di a r y, Si l o Subs i di a r y or a De a l e r s hi p t ha t i s f i na nc i ng i t s Ne w Ve hi c l e s wi t h t he pr oc e e ds of I nde bt e dne s s pe r m i t t e d unde r Se c t i ons 13. 10( o) or ( s ) ) s ha l l i nc ur a ny i nde bt e dne s s t o f i na nc e Ne w Ve hi c l e s , e xc e pt f or Ne w Ve hi c l e Fl oor pl a n Loa ns unde r t hi s Agr e e m e nt , wi t hout t he c ons e nt of t he Age nt a nd t he Le nde r s . 4. Pur pos e of Us e d Ve hi c l e Fl oor pl a n Loa ns Se c t i on 3. 1. 2 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: 3. 1. 2 Pur pos e of Us e d Ve hi c l e Fl oor pl a n Loa ns . The Us e d Ve hi c l e Fl oor pl a n Bor r owe r s ha l l us e t he pr oc e e ds of t he Us e d Ve hi c l e Fl oor pl a n Loa ns t o f i na nc e Us e d Ve hi c l e s owne d by a De a l e r s hi p a nd t o r e f i na nc e Us e d Ve hi c l e Swi ng Li ne Loa ns . Us e d Ve hi c l e Fl oor pl a n Loa ns t o a ny Ca na di a n De a l e r s hi p, or t o a ny De a l e r s hi p or Subs i di a r y t ha t i s l oc a t e d i n or doe s f i na nc i ng of Us e d Ve hi c l e s i n Ca na da , m us t be a ppr ove d i n a dva nc e by a l l Le nde r s . 5. Pr i nc i pa l Pa ym e nt Upon Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e . Se c t i on 3. 3. 5 of t he Loa n Agr e e m e nt i s a m e nde d by
i ns e r t i ng a ne w c l a us e ( d) a t t he e nd t he r e of , whi c h ne w c l a us e ( d) s ha l l r e a d a s f ol l ows : ( d) Pr i nc i pa l Pa ym e nt Upon Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e . I f t he Com pa ny de s i gna t e s a Subs i di a r y a s a Dua l Subs i di a r y i n a c c or da nc e wi t h Se c t i on 6. 19, t he n t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r s ha l l r e pa y e a c h Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n a nd e a c h Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n wi t h r e s pe c t t o a ny Se r vi c e Loa ne r Ve hi c l e t ha t i s s ubs e que nt l y f i na nc e d by Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s i m m e di a t e l y upon t he Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e .
- 9 - 39211237. v17 6. De s i gna t i on of Dua l Subs i di a r i e s . The f i r s t pa r a gr a ph of Se c t i on 6. 19 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: The Com pa ny m a y de s i gna t e a ny Subs i di a r y a s a " Dua l Subs i di a r y” i n or de r t o f i na nc e ( x) ne w Ve hi c l e s onl y or ( y) ne w Ve hi c l e s a nd us e d a nd/ or s e r vi c e l oa ne r Ve hi c l e s t hr ough Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s s o l ong a s : 7. De s i gna t i on of Dua l Subs i di a r i e s . Se c t i on 6. 19( b) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( b) t he Com pa ny ha s ( x) de l i ve r e d not i c e of s uc h r e que s t t o t he Age nt , ( y) e xe c ut e d a nd de l i ve r e d a c knowl e dge m e nt s ( i n f or m a nd s ubs t a nc e r e a s ona bl y a c c e pt a bl e t o t he Age nt ) of s uc h Dua l Subs i di a r y’ s c ont i nui ng Obl i ga t i ons unde r t he Loa n Doc um e nt s ( i nc l udi ng pur s ua nt t o t he Gua r a nt y a nd a ny ot he r Col l a t e r a l Doc um e nt s ) a s r e que s t e d by t he Age nt a nd ( z ) pr e pa i d a l l out s t a ndi ng Loa ns wi t h r e s pe c t t o s uc h r e de s i gna t i on a s r e qui r e d by Se c t i on 2. 1. 5( d) , Se c t i on 3. 1. 5( d) , Se c t i on 3. 3. 5( d) a nd ot he r wi s e c om pl i e d wi t h Se c t i on 13. 16 8. De s i gna t i on of Dua l
Subs i di a r i e s . Se c t i on 6. 19( e ) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( e ) I f t he a ppl i c a bl e Dua l Subs i di a r y wi l l f i na nc e a ny Us e d Ve hi c l e s wi t h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s or wi l l gr a nt a Li e n i n a ny Us e d Ve hi c l e t o a Dua l Subs i di a r y Le nde r , t he Com pa ny s ha l l ha ve pr ovi de d t o t he Age nt a Us e d Ve hi c l e Loa n Bor r owi ng Ba s e Ce r t i f i c a t e a s of t he da t e of a nd a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y a nd de duc t i on of a l l Us e d Ve hi c l e s of s uc h Dua l Subs i di a r y f r om t he Us e d Ve hi c l e Bor r owi ng Ba s e ; 9. De s i gna t i on of Dua l Subs i di a r i e s . Se c t i on 6. 19( f ) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( f ) I f t he a ppl i c a bl e Dua l Subs i di a r y wi l l f i na nc e a ny Se r vi c e Loa ne r Ve hi c l e s wi t h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s or wi l l gr a nt a Li e n i n a ny Se r vi c e Loa ne r Ve hi c l e t o a Dua l Subs i di a r y Le nde r , t he Com pa ny s ha l l ha ve pr ovi de d t o t he Age nt a Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e a s of t he da t e of a nd a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on of s uc h
Subs i di a r y a s a Dua l Subs i di a r y a nd de duc t i on of a l l Se r vi c e Loa ne r Ve hi c l e s of s uc h Dua l Subs i di a r y f r om t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e ; 10. Col l a t e r a l . Se c t i on 8. 1. 1 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: 8. 1. 1 Col l a t e r a l . Al l pr e s e nt a nd f ut ur e Loa ns , Le t t e r s of Cr e di t , Obl i ga t i ons , Gua r a nt or Obl i ga t i ons , a nd Pe r m i t t e d Swa p Obl i ga t i ons of t he Loa n Pa r t i e s t o t he Age nt a nd t he Le nde r s unde r t hi s Agr e e m e nt a nd t he ot he r Loa n
- 10 - 39211237. v17 Doc um e nt s s ha l l be , s ubj e c t t o e a c h I nt e r c r e di t or Agr e e m e nt ( onc e e f f e c t i ve ) , s e c ur e d by a pe r f e c t e d s e c ur i t y i nt e r e s t , s ubj e c t onl y t o Pe r m i t t e d Li e ns , i n t he pr ope r t y de s c r i be d i n t he Col l a t e r a l Doc um e nt s ( c ol l e c t i ve l y, " Col l a t e r a l ” ) ; i nc l udi ng, wi t hout l i m i t a t i on, t he f ol l owi ng pr ope r t y of t he Com pa ny a nd a l l of i t s pr e s e nt a nd f ut ur e Subs i di a r i e s ( e xc e pt Pe r s ons t ha t ( x) a r e not Fi na nc e d Ent i t i e s or ( y) a r e Exc l ude d Subs i di a r i e s , Si l o Subs i di a r i e s or Ca na di a n Subs i di a r i e s ) , whe t he r now owne d or e xi s t i ng or he r e a f t e r a c qui r e d a nd whe r e ve r l oc a t e d, a nd a l l pr oduc t s a nd pr oc e e ds t he r e of : ( a ) Al l i nve nt or y ( i nc l udi ng, wi t hout l i m i t a t i on, a l l pa r t s i nve nt or y, a l l Ve hi c l e s of wha t e ve r m a ke , m ode l a nd de s c r i pt i on, t r a de i ns , r e pos s e s s i ons a nd i nve nt or y he l d f or di s pl a y or de m ons t r a t i on pur pos e s ) ; e qui pm e nt ( ot he r t ha n f i xt ur e s ) ; i nve s t m e nt pr ope r t y; s t oc k; pa r t ne r s hi p i nt e r e s t s ; m e m be r s hi p i nt e r e s t s ; s e c ur i t i e s ( c e r t i f i c a t e d or unc e r t i f i c a t e d) ; s e c ur i t y e nt i t l e m e nt s ; s e c ur i t i e s a c c ount s ; a c c ount s ; i ns t r um e nt s ;
doc um e nt s ; pr om i s s or y not e s ; c ha t t e l pa pe r ( i nc l udi ng e l e c t r oni c a nd t a ngi bl e c ha t t e l pa pe r ) ; pa ym e nt i nt a ngi bl e s ; ge ne r a l i nt a ngi bl e s ; de pos i t a c c ount s ; c ont r a c t r i ght s a nd ot he r r i ght s t o pa ym e nt ; pe r s ona l pr ope r t y l e a s e s ; r e ba t e s , c r e di t s , f a c t or y hol dba c ks , i nc e nt i ve pa ym e nt s a nd ot he r pa ym e nt s f r om a ny m a nuf a c t ur e r , f a c t or y or di s t r i but or . ( b) Al l a t t a c hm e nt s , a c c e s s i ons , a c c e s s or i e s , t ool s , pa r t s , s uppl i e s , i nc r e a s e s a nd a ddi t i ons t o, a nd a l l r e pl a c e m e nt s of , a nd s ubs t i t ut i ons f or a ny pr ope r t y de s c r i be d i n t hi s Se c t i on 8. 1. 1; a l l pr oduc t s , pr oduc e , a nd s uppor t i ng obl i ga t i ons of a ny of t he pr ope r t y de s c r i be d i n t hi s Se c t i on 8. 1. 1; a l l pr oc e e ds ( i nc l udi ng i ns ur a nc e pr oc e e ds ) of a ny of t he pr ope r t y de s c r i be d i n t hi s Se c t i on 8. 1. 1; a nd a l l r e c or ds a nd da t a r e l a t i ng t o a ny of t he pr ope r t y de s c r i be d i n t hi s Se c t i on 8. 1. 1, whe t he r i n t he f or m of a wr i t i ng, phot ogr a ph, m i c r of i l m , m i c r of i c he , or e l e c t r oni c m e di a , t oge t he r wi t h a l l r i ght , t i t l e a nd i nt e r e s t of t he Com pa ny a nd e a c h Subs i di a r y i n a nd t o a l l c om put e r s of t wa r e r e qui r e d t o
ut i l i z e , c r e a t e , m a i nt a i n, a nd pr oc e s s a ny s uc h r e c or ds or da t a on e l e c t r oni c m e di a . Not wi t hs t a ndi ng t he f or e goi ng, t he Ne w Ve hi c l e Fl oor pl a n Loa n Obl i ga t i ons s ha l l be s e c ur e d onl y by t he Col l a t e r a l owne d by t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s . For t he a voi da nc e of doubt a nd not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y s e t f or t h i n t hi s Agr e e m e nt or a ny Se c ur i t y Doc um e nt , t he t e r m " Col l a t e r a l ” a s us e d i n t hi s Agr e e m e nt a nd i n t he Se c ur i t y Doc um e nt s s ha l l not i nc l ude a ny Exc l ude d Pr ope r t y. 11. Le ve r a ge Ra t i o. The de f i ni t i on of " Le ve r a ge Ra t i o” i n Se c t i on 11. 1. 3 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: " Le ve r a ge Ra t i o” m e a ns , a s of t he l a s t da y of a ny f i s c a l qua r t e r , t he r a t i o f or t he Com pa ny a nd i t s Subs i di a r i e s on a c ons ol i da t e d ba s i s of : ( a ) ( i ) t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Funde d De bt ( m i nus t he s um of ( A) unr e s t r i c t e d c a s h a nd c a s h e qui va l e nt s pl us ( B) a ny a m ount s he l d i n t he PR Ac c ount s pl us ( C) a ny a m ount s he l d i n a c c ount s e s t a bl i s he d by Dua l Subs i di a r i e s or Si l o Subs i di a r i e s a s a n of f s e t t o
f l oor pl a n not e s pa ya bl e ( or i nt e r e s t t he r e on) ; pr ovi de d t ha t t he a ggr e ga t e r e duc t i on f or a l l of t he f or e goi ng c l a us e s ( A) t hr ough
- 11 - 39211237. v17 ( C) s ha l l not e xc e e d $200, 000, 000) , m i nus ( i i ) t he s um of t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns , Ne w Ve hi c l e Swi ng Li ne Loa ns , Us e d Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , pr i nc i pa l a m ount of a ny Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng, Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( o) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( p) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( r ) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt not gua r a nt e e d by t he Com pa ny) , a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( s ) of Se c t i on 13. 10 a nd, wi t hout dupl i c a t i on, Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( f ) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt t he unde r l yi ng i nde bt e dne s s t ha t i s gua r a nt e e d c ons t i t ut e s f l oor pl a n f i na nc i ng) , pl us ( i i i ) s i x t i m e s r e nt a l or l e a s e e xpe ns e f or t he
M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e ; t o ( b) ( i ) Pr o For m a EBI TDAR f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e ( i t be i ng unde r s t ood a nd a gr e e d t ha t Pr o For m a EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e m a y not be i nc l ude d i n t hi s c a l c ul a t i on t o t he e xt e nt t ha t i t r e s ul t s i n a n a nnua l i z e d i nc r e a s e of m or e t ha n 10% i n t he Com pa ny’ s c ons ol i da t e d EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e pr i or t o s uc h a dj us t m e nt , unl e s s t he Com pa ny pr ovi de s t o t he Age nt a nd t he Re qui r e d Le nde r s t he s uppor t i ng c a l c ul a t i ons f or s uc h a dj us t m e nt a nd s uc h ot he r i nf or m a t i on a s t he y m a y r e a s ona bl y r e que s t t o de t e r m i ne t he a c c ur a c y of s uc h c a l c ul a t i ons ) , m i nus ( i i ) i nt e r e s t e xpe ns e wi t h r e s pe c t t o t he Ne w Ve hi c l e Fl oor pl a n Loa ns , Ne w Ve hi c l e Swi ng Li ne Loa ns , Us e d Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( o) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( p) of
Se c t i on 13. 10 ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( r ) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt not gua r a nt e e d by t he Com pa ny) , a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( s ) of Se c t i on 13. 10, i n e a c h c a s e f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e . 12. Fi na nc i a l I nf or m a t i on. Se c t i on 11. 2. 1 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: 11. 2. 1 As s oon a s a va i l a bl e a nd i n a ny e ve nt wi t hi n 120 da ys a f t e r t he e nd of e a c h Fi s c a l Ye a r of t he Com pa ny, t he For m 10( k) f or t he Com pa ny a nd i t s Subs i di a r i e s a s f i l e d wi t h t he Se c ur i t i e s a nd Exc ha nge Com m i s s i on, i nc l udi ng f i na nc i a l s t a t e m e nt s c e r t i f i e d by i nde pe nde nt publ i c a c c ount a nt s of r e c ogni z e d na t i ona l s t a ndi ng whi c h a r e r e a s ona bl y a c c e pt a bl e t o t he Age nt ( wi t hout a " goi ng c onc e r n” or l i ke qua l i f i c a t i on or e xc e pt i on a nd wi t hout a ny qua l i f i c a t i on or e xc e pt i on a s t o t he s c ope of s uc h a udi t a nd wi t hout a ny ot he r m a t e r i a l qua l i f i c a t i on or e xc e pt i on) t o t he e f f e c t t ha t s uc h f i na nc i a l s t a t e m e nt s pr e s e nt f a i r l y i n
a l l m a t e r i a l r e s pe c t s t he f i na nc i a l c ondi t i on a nd r e s ul t s of ope r a t i ons of t he Com pa ny a nd i t s Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r Subs i di a r i e s ) on a c ons ol i da t e d ba s i s i n a c c or da nc e wi t h GAAP c ons i s t e nt l y a ppl i e d.
- 12 - 39211237. v17 13. Fi na nc e d Ent i t i e s . A ne w Se c t i on 12. 21 s ha l l be a dde d t o t he Loa n Agr e e m e nt a nd s ha l l r e a d a s f ol l ows : 12. 21 Fi na nc e d Ent i t i e s . Not wi t hs t a ndi ng a ny ot he r pr ovi s i on of t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt , t he Com pa ny a nd e a c h Subs i di a r y t he r e of t ha t i s a Fi na nc e d Ent i t y s ha l l pl e dge Col l a t e r a l pur s ua nt t o Se c t i on 8. 1 a t a l l t i m e s t ha t i t i s a Fi na nc e d Ent i t y, s ubj e c t t o t he e xc e pt i ons wi t h r e s pe c t t o Dua l Subs i di a r i e s c ont a i ne d i n Se c t i on 13. 16, a nd s ha l l be a Gua r a nt or , pr ovi de d i f a ny s uc h Pe r s on c e a s e s t o be a Fi na nc e d Ent i t y a nd i s no l onge r r e qui r e d t o be a Gua r a nt or pur s ua nt t o t he t e r m s of t hi s Agr e e m e nt , i t s a s s e t s s ha l l not be i nc l ude d i n a ny of t he Re vol vi ng Loa n Bor r owi ng Ba s e , t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e or t he Us e d Ve hi c l e Bor r owi ng Ba s e . 14. Li e ns . Se c t i on 13. 3( q) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( q) Li e ns on a s s e t s of , or Equi t y I nt e r e s t s i n, Ca na di a n Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s a nd pr oc e e ds t he r e of s e c ur i ng Ca na di a n Subs i di a r y
I nde bt e dne s s . 15. Li e ns . A ne w Se c t i on 13. 3( x) i s a dde d t o t he Loa n Agr e e m e nt t o r e a d a s f ol l ows : ( x) Li e ns s e c ur i ng obl i ga t i ons a r i s i ng i n c onne c t i on wi t h c r e di t c a r d pr oc e s s i ng s e r vi c e s , m e r c ha nt c a r d pr oc e s s i ng s e r vi c e s a nd s i m i l a r s e r vi c e s or a r r a nge m e nt s i n t he or di na r y c our s e of bus i ne s s . 16. Li e ns . A ne w Se c t i on 13. 3( y) i s a dde d t o t he Loa n Agr e e m e nt t o r e a d a s f ol l ows : ( y) Li e ns gr a nt e d by Pe r s ons t ha t a r e not Fi na nc e d Ent i t i e s but a r e pa r t i e s t o a Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on a r i s i ng i n c onne c t i on wi t h s uc h Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on. 17. Li e ns . The l a s t pa r a gr a ph of Se c t i on 13. 3 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: Not wi t hs t a ndi ng t he f or e goi ng, e xc e pt f or Li e ns i n f a vor of t he Age nt , t he r e s ha l l not be a ny Li e ns on a ny of t he c a pi t a l s t oc k or ot he r Equi t y I nt e r e s t s of a ny Subs i di a r y e xc e pt f or ( 1) c a pi t a l s t oc k or Equi t y I nt e r e s t s owne d, di r e c t l y or i ndi r e c t l y, by a Pe r s on ot he r t ha n t he Com pa ny or a ny Subs i di a r y whe r e s uc h owne r s hi p i s ot he r wi s e pe r m i t t e d by
t hi s Agr e e m e nt or ( 2) c a pi t a l s t oc k or Equi t y I nt e r e s t s of Ca na di a n Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s a nd pr oc e e ds t he r e of i f , but onl y i f , t he Li e ns de s c r i be d i n t hi s c l a us e ( 2) do not s e c ur e a ny obl i ga t i ons ot he r t ha n Ca na di a n Subs i di a r y I nde bt e dne s s .
- 13 - 39211237. v17 18. Re s t r i c t e d Pa ym e nt s . Se c t i on 13. 4 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: 13. 4 Re s t r i c t e d Pa ym e nt s . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o ( a ) de c l a r e or pa y, or a gr e e t o de c l a r e or pa y, or s e t a s i de f unds f or t he pa ym e nt , di r e c t l y or i ndi r e c t l y of , a ny Re s t r i c t e d Pa ym e nt , or ( b) pa y or a gr e e t o pa y or s e t a s i de f unds t o pa y a ny m a na ge m e nt f e e s or s i m i l a r f e e s i n t he c a s e of t he Com pa ny, t o a ny di r e c t or i ndi r e c t Af f i l i a t e t he r e of , or i n t he c a s e of a ny ot he r Loa n Pa r t y, t o a ny di r e c t or i ndi r e c t owne r of i t s Equi t y I nt e r e s t s or a ny di r e c t or i ndi r e c t Af f i l i a t e t he r e of , e xc e pt ( c ) ( i ) Subs i di a r i e s of t he Com pa ny m a y m a ke Re s t r i c t e d Pa ym e nt s or pa ym e nt s of s uc h f e e s t o t he Com pa ny or t o a ny ot he r Loa n Pa r t y, ( i i ) t he Com pa ny m a y r e a c qui r e s ha r e s f r om e l i gi bl e pa r t i c i pa nt s i n i t s s t oc k i nc e nt i ve pl a ns , a s r e qui r e d unde r t he t e r m s of t he pl a ns t o pe r m i t c a s hl e s s e xe r c i s e a nd t e nde r of s ha r e s t o m e e t wi t hhol di ng obl i ga t i ons f or i nc om e t a x
pur pos e s a nd ( i i i ) a ny Subs i di a r y m a y m a ke di vi de nds or di s t r i but i ons t o t he hol de r s of i t s Equi t y I nt e r e s t s t ha t a r e not Loa n Pa r t i e s s o l ong a s , i f a ny Loa n Pa r t y i s a hol de r of s uc h Equi t y I nt e r e s t s , s uc h Loa n Pa r t y r e c e i ve s a t l e a s t i t s pr o r a t a s ha r e of s uc h di vi de nds or di s t r i but i ons . Not wi t hs t a ndi ng t he f or e goi ng, a nd s o l ong a s no De f a ul t or Eve nt of De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng or woul d e xi s t a f t e r gi vi ng e f f e c t t he r e t o, ( w) e a c h M i nor i t y De a l e r m a y m a ke di s t r i but i ons t o a ny of i t s M i nor i t y De a l e r Pa r t ne r s , ( x) t he Com pa ny or a ny Subs i di a r y m a y a c qui r e , f r om t i m e t o t i m e , a ny Equi t y I nt e r e s t s i n a ny M i nor i t y De a l e r , di r e c t l y or i ndi r e c t l y, f r om a M i nor i t y De a l e r Pa r t ne r , ( y) t he Com pa ny m a y pa y di vi de nds on i t s c a pi t a l s t oc k, a nd ( z ) t he Com pa ny m a y r e pur c ha s e s ha r e s of i t s c a pi t a l s t oc k. 19. Loa ns a nd I nve s t m e nt s . Se c t i on 13. 6( c ) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( c ) ( i ) I nve s t m e nt s m a de by a ny Ca na di a n Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y i n a ny ot he r Ca na di a n Subs i di a r y
a nd ( i i ) I nve s t m e nt s m a de by t he Com pa ny or a ny Subs i di a r y ( ot he r t ha n a Ca na di a n Subs i di a r y) pr ovi de d t ha t t he a ggr e ga t e a m ount of s uc h I nve s t m e nt s unde r t hi s c l a us e ( c ) ( i i ) doe s not e xc e e d t hi r t y pe r c e nt ( 30% ) of St oc khol de r s ’ Equi t y ( m e a s ur e d a s of t he da t e s uc h I nve s t m e nt i s m a de ba s e d upon t he m os t r e c e nt l y de l i ve r e d f i na nc i a l s t a t e m e nt s ) ; 20. Loa ns a nd I nve s t m e nt s . Se c t i on 13. 6( s ) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( s ) ( i ) I nve s t m e nt s m a de s ol e l y by one or m or e Ca na di a n Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s i n c onne c t i on wi t h a ny Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on a nd ( i i ) I nve s t m e nt s m a de s ol e l y by one or m or e DFC Subs i di a r i e s . 21. Type of Bus i ne s s . Se c t i on 13. 8 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng:
- 14 - 39211237. v17 Se c t i on 13. 8 Type of Bus i ne s s . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o ( i ) e nga ge i n a ny l i ne of bus i ne s s di f f e r e nt f r om t hos e l i ne s of bus i ne s s c onduc t e d by t he Com pa ny a nd i t s Subs i di a r i e s on t he da t e he r e of , whi c h s ha l l be de e m e d t o i nc l ude m ot or c yc l e de a l e r s hi ps , or a ny bus i ne s s s ubs t a nt i a l l y r e l a t e d or i nc i de nt a l t he r e t o or ( i i ) e xc e pt a s a r e s ul t of t r a ns a c t i ons pe r m i t t e d by Se c t i ons 13. 1, i nt e r r upt or c e a s e t o e nga ge i n, f or a t i m e de e m e d m a t e r i a l by t he Age nt , a ny m a t e r i a l por t i on of i t s bus i ne s s a c t i vi t i e s or ope r a t i ons . 22. I nde bt e dne s s . Se c t i on 13. 10( f ) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( f ) Uns e c ur e d gua r a nt e e s by t he Com pa ny of , a nd uns e c ur e d c obor r owe r obl i ga t i ons of t he Com pa ny i n r e s pe c t of , ( i ) Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng obl i ga t i ons of De a l e r s hi ps t o Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r s , ( i i ) de bt of a ny Subs i di a r y whi c h i s pe r m i t t e d unde r Se c t i on 13. 10( d) , ( i i i ) ope r a t i ng l e a s e s of i t s Subs i di a r i e s a nd M i nor i t y
De a l e r Af f i l i a t e s , ( i v) e xt e ns i ons of c r e di t t o a M i nor i t y De a l e r Af f i l i a t e , a l l pr oc e e ds of whi c h a r e us e d t o pur c ha s e Ne w Ve hi c l e s or Se r vi c e Loa ne r Ve hi c l e s t o be he l d by t he M i nor i t y De a l e r Af f i l i a t e f or s a l e a nd/ or l e a s e i n t he or di na r y c our s e of bus i ne s s , ( v) obl i ga t i ons of De a l e r s hi ps t o m a nuf a c t ur e r s or di s t r i but or s of Ne w Ve hi c l e s unde r Se l l e r Agr e e m e nt s a nd ( vi ) I nde bt e dne s s whi c h i s pe r m i t t e d unde r Se c t i on 13. 10( o) , ( p) a nd ( s ) ; pr ovi de d, t ha t , f or t he a voi da nc e of doubt , t hi s c l a us e ( f ) s ha l l not be de e m e d t o pr ohi bi t t he pr ovi s i on by t he Com pa ny of ot he r uns e c ur e d gua r a nt e e s t ha t a r e pe r m i t t e d unde r ot he r c l a us e s of t hi s Se c t i on 13. 10. 23. I nde bt e dne s s . Se c t i on 13. 10( p) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( p) Funde d De bt of Ca na di a n Subs i di a r i e s ( i ) t ha t a r e not Fi na nc e d Ent i t i e s a nd ( i i ) not s e c ur e d by a ny a s s e t s of t he Com pa ny or a ny Subs i di a r y ot he r t ha n ( 1) a s s e t s of Ca na di a n Subs i di a r i e s ot he r t ha n Fi na nc e d Ent i t i e s a nd/ or ( 2) a pl e dge by t he Com pa ny or a ny Subs i di a r y of Equi t y I nt e r e s t s i n a
Ca na di a n Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y ( " Ca na di a n Subs i di a r y I nde bt e dne s s ” ) . 24. I nde bt e dne s s . Se c t i on 13. 10( r ) of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: ( r ) Funde d De bt i nc ur r e d by a ny ( i ) DFC Subs i di a r y a nd not s e c ur e d by a ny a s s e t s of t he Com pa ny or a ny Subs i di a r y ot he r t ha n a s s e t s of a DFC Subs i di a r y ( " DFC I nde bt e dne s s ” ) or ( i i ) Funde d De bt i nc ur r e d by a ny Ca na di a n Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y i n c onne c t i on wi t h a ny Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on a nd not s e c ur e d by a ny a s s e t s of t he Com pa ny or a ny Subs i di a r y ot he r t ha n one or m or e Ca na di a n Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s ; pr ovi de d t ha t no Loa n Pa r t y ot he r t ha n t he Com pa ny a nd one or m or e DFC Subs i di a r i e s or s uc h Ca na di a n Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s i nvol ve d i n s uc h Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on
- 15 - 39211237. v17 Tr a ns a c t i on ha s a ny obl i ga t i on ( c ont i nge nt or ot he r wi s e ) wi t h r e s pe c t t o s uc h Funde d De bt . 25. Dua l Subs i di a r i e s . Se c t i on 13. 16 of t he Loa n Agr e e m e nt i s de l e t e d a nd r e pl a c e d wi t h t he f ol l owi ng: Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o be c om e a Dua l Subs i di a r y unl e s s ( i ) e a c h Re qui r e d I nt e r c r e di t or Count e r pa r t y ha s de l i ve r e d t o t he Age nt a n I nt e r c r e di t or Agr e e m e nt , or a j oi nde r a gr e e m e nt t o a n e xi s t i ng I nt e r c r e di t or Agr e e m e nt , ( i i ) no Ne w Ve hi c l e s of a ny s uc h Dua l Subs i di a r y s ha l l be f i na nc e d by t he Ne w Ve hi c l e Fl oor pl a n Fa c i l i t y, ( i i i ) pr i or t o t he t i m e of de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y, a l l out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Loa ns wi t h r e s pe c t t o s uc h Subs i di a r y s ha l l ha ve be e n r e pa i d, ( i v) wi t h r e s pe c t t o a ny Dua l Subs i di a r y t ha t wi l l obt a i n Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s c ons i s t i ng of f l oor pl a n f i na nc i ng f or us e d Ve hi c l e s , no Us e d Ve hi c l e s s ha l l be f i na nc e d by t he Us e d Ve hi c l e Fl oor pl a n Fa c i l i t y, a nd pr i or t o t he t i m e of de s i gna t i on of s uc h Subs i di a r y a s a
Dua l Subs i di a r y, a l l out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Loa ns wi t h r e s pe c t t o s uc h Subs i di a r y s ha l l ha ve be e n r e pa i d, ( v) wi t h r e s pe c t t o a ny Dua l Subs i di a r y t ha t wi l l obt a i n Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s c ons i s t i ng of f l oor pl a n f i na nc i ng f or s e r vi c e l oa ne r Ve hi c l e s , no Se r vi c e Loa ne r Ve hi c l e s s ha l l be f i na nc e d by t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Fa c i l i t y, a nd pr i or t o t he t i m e of de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y, a l l out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns wi t h r e s pe c t t o s uc h Subs i di a r y s ha l l ha ve be e n r e pa i d, a nd ( vi ) t he Com pa ny ha s c om pl i e d wi t h a l l r e qui r e m e nt s s e t f or t h i n Se c t i on 6. 19 a nd t hi s Se c t i on 13. 16. Not wi t hs t a ndi ng t he f or e goi ng, t hi s Se c t i on 13. 16 s ha l l not t a ke e f f e c t unt i l t he Age nt ( w) ha s r e c e i ve d a dul y e xe c ut e d I nt e r c r e di t or Agr e e m e nt , i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt , ( x) t he e xi s t i ng UCC- 1 f i na nc i ng s t a t e m e nt s f or a ny Dua l Subs i di a r i e s s ha l l ha ve be e n a m e nde d, wi t hout l i m i t a t i on, t o r e m ove Ne w Ve hi c l e s a nd/ or Us e d Ve hi c l e s , a s a ppl i c a bl e , f r om t he
c ol l a t e r a l de s c r i pt i on, i n e a c h c a s e , i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt a nd s uc h Ne w Ve hi c l e s a nd/ or Us e d Ve hi c l e s , t oge t he r wi t h pr oc e e ds s ha l l be r e l e a s e d a s Col l a t e r a l a nd Se c t i on 16. 16 s ha l l a ppl y t he r e t o, ( y) ne w UCC- 1 f i na nc i ng s t a t e m e nt s ha ve be e n f i l e d na m i ng e a c h Dua l Subs i di a r y a s de bt or a nd t he a ppl i c a bl e Dua l Subs i di a r y Le nde r a s s e c ur e d pa r t y, i n e a c h c a s e , i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt a nd ( z ) t he Age nt ha s r e c e i ve d a ny a ddi t i ona l doc um e nt a t i on r e que s t e d by t he Age nt i n i t s s ol e di s c r e t i on. The Le nde r s pa r t y he r e t o he r e by c ons e nt t o t he Age nt e nt e r i ng i nt o e a c h I nt e r c r e di t or Agr e e m e nt ( a nd a ny j oi nde r or s uppl e m e nt t he r e of ) on or a f t e r t he Cl os i ng Da t e on be ha l f of t he Le nde r s . 26. Exhi bi t s . Exhi bi t B- 1, Exhi bi t B- 2 a nd Exhi bi t C t o t he Loa n Agr e e m e nt a r e he r e by a m e nde d a nd r e s t a t e d i n t he i r e nt i r e t y i n t he f or m s s e t out on Anne x A he r e t o. 27. Condi t i on Pr e c e de nt . The e f f e c t i ve ne s s of t hi s Am e ndm e nt i s s ubj e c t t o r e c e i pt by Age nt of e xe c ut e d or i gi na l s of t hi s Am e ndm e nt s i gne d by Age nt , e a c h
Bor r owe r , e a c h Gua r a nt or , a nd t he Re qui r e d Le nde r s .
- 16 - 39211237. v17 28. Re a f f i r m a t i on; Re l e a s e . By s i gni ng t hi s Am e ndm e nt or t he a t t a c he d Ac knowl e dgm e nt : 28. 1 Ea c h Loa n Pa r t y a f f i r m s t ha t t he r e pr e s e nt a t i ons a nd wa r r a nt i e s i n e a c h of t he e xi s t i ng Loa n Doc um e nt s a r e t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s a s of t he da t e he r e of ( e xc e pt t ha t s uc h r e pr e s e nt a t i ons a nd wa r r a nt i e s t ha t s pe a k a s of a s pe c i f i e d da t e or pe r i od of t i m e s ha l l be t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s onl y a s of s uc h da t e or pe r i od of t i m e ) , a nd a gr e e t ha t ( i ) e xc e pt a s a m e nde d pr e vi ous l y or i n c onne c t i on he r e wi t h, e a c h Loa n Doc um e nt i s va l i d a nd e nf or c e a bl e i n a c c or da nc e wi t h i t s t e r m s ( e xc e pt a s m a y be l i m i t e d by ba nkr upt c y, i ns ol ve nc y, r e or ga ni z a t i on, m or a t or i um , f r a udul e nt t r a ns f e r or s i m i l a r l a ws r e l a t i ng t o or l i m i t i ng c r e di t or s ’ r i ght s ge ne r a l l y or by e qui t a bl e pr i nc i pl e s ) a nd ( i i ) s uc h Loa n Pa r t y ha s no c l a i m s , de f e ns e s , s e t of f s , c ount e r c l a i m s or c l a i m s f or r e c oupm e nt a ga i ns t Age nt , t he Le nde r s , t he ot he r I nde m ni f i e d Pe r s ons or t he i nde bt e dne s s a nd obl i ga t i ons r e pr e s e nt e d by t he Not e s ,
Gua r a nt i e s , Col l a t e r a l Doc um e nt s a nd ot he r Loa n Doc um e nt s . 28. 2 Ea c h Loa n Pa r t y he r e by r e l e a s e s , a c qui t s , a nd f or e ve r di s c ha r ge s Age nt , e a c h Le nde r , t he i r r e s pe c t i ve pa r e nt c or por a t i ons , a f f i l i a t e s , s ubs i di a r i e s , s uc c e s s or s , a s s i gns , of f i c e r s , di r e c t or s , e m pl oye e s , a ge nt s , a t t or ne ys a nd a dvi s or s ( c ol l e c t i ve l y, " I nde m ni f i e d Pe r s ons ” ) , a nd e a c h of t he m , of a nd f r om a ny a nd a l l l i a bi l i t y, c l a i m s , de m a nds , da m a ge s , a c t i ons , c a us e s of a c t i on, de f e ns e s , c ount e r c l a i m s , s e t of f s , or c l a i m s f or r e c oupm e nt of wha t s oe ve r na t ur e , whe t he r known or unknown, f r om t he be gi nni ng of t i m e t o t he da t e of t hi s Am e ndm e nt , whe t he r i n c ont r a c t or t or t or ot he r wi s e , a r i s i ng di r e c t l y or i ndi r e c t l y f r om , or i n a ny wa y r e l a t e d t o t he Loa n Agr e e m e nt , t hi s Am e ndm e nt , t he Not e s , Col l a t e r a l Doc um e nt s a nd t he ot he r Loa n Doc um e nt s , a ny ot he r i nde bt e dne s s or obl i ga t i ons of a ny Loa n Pa r t y t o Age nt or a ny one or m or e of t he Le nde r s or t o t he r e l a t i ons hi p be t we e n a ny Loa n Pa r t y a nd Age nt , a ny Le nde r , or t he I nde m ni f i e d Pe r s ons . 29. Re f e r e nc e s . On a nd a f t e r t he
e f f e c t i ve da t e of t hi s Am e ndm e nt , a l l r e f e r e nc e s i n t he Loa n Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s t o t he Loa n Agr e e m e nt s ha l l be de e m e d t o r e f e r t o t he Loa n Agr e e m e nt a s a m e nde d he r e by. 30. Re pr e s e nt a t i ons a nd W a r r a nt i e s . By s i gni ng t hi s Am e ndm e nt or t he a t t a c he d Ac knowl e dgm e nt , e a c h Loa n Pa r t y r e pr e s e nt s a nd wa r r a nt s t o Age nt a nd t he Le nde r s a s f ol l ows : 30. 1 Aut hor i z a t i on. ( a ) I t ha s a l l r e qui s i t e powe r a nd a ut hor i t y t o e nt e r i nt o t hi s Am e ndm e nt a nd t o c a r r y out t he t r a ns a c t i ons c ont e m pl a t e d by, a nd pe r f or m i t s obl i ga t i ons unde r , t he Loa n Agr e e m e nt a s a m e nde d by t hi s Am e ndm e nt ( t he " Am e nde d Agr e e m e nt ” ) , ( b) i t s e xe c ut i on, de l i ve r y a nd pe r f or m a nc e of t hi s Am e ndm e nt a nd t he ot he r Loa n Doc um e nt s t o be e xe c ut e d, de l i ve r e d or pe r f or m e d by i t ha ve be e n dul y a ut hor i z e d by a l l ne c e s s a r y e nt i t y a c t i on, do not r e qui r e t he a ppr ova l of a ny gove r nm e nt a l a ge nc y or ot he r Pe r s on, do not c ont r a ve ne a ny l a w, r e gul a t i on, r ul e , or de r , or r e s t r i c t i on of a ny Gove r nm e nt a l Body bi ndi ng on i t or i t s a r t i c l e s of i nc or por a t i on or ot he r
or ga ni z a t i ona l doc um e nt s , a nd do not c ont r a ve ne t he pr ovi s i ons of or c ons t i t ut e a de f a ul t unde r a ny a gr e e m e nt or i ns t r um e nt t o whi c h i t i s a pa r t y or by whi c h i t m a y be bound or a f f e c t e d, a nd ( c ) t hi s Am e ndm e nt ha s be e n dul y e xe c ut e d a nd de l i ve r e d by e a c h Loa n Pa r t y a nd t hi s Am e ndm e nt a nd t he Am e nde d Agr e e m e nt a r e t he l e ga l l y va l i d a nd bi ndi ng obl i ga t i ons of e a c h Loa n Pa r t y, e nf or c e a bl e a ga i ns t s uc h Loa n Pa r t y i n a c c or da nc e wi t h t he i r
- 17 - 39211237. v17 r e s pe c t i ve t e r m s , e xc e pt a s m a y be l i m i t e d by ba nkr upt c y, i ns ol ve nc y, r e or ga ni z a t i on, m or a t or i um , f r a udul e nt t r a ns f e r or s i m i l a r l a ws r e l a t i ng t o or l i m i t i ng c r e di t or s ’ r i ght s ge ne r a l l y or by e qui t a bl e pr i nc i pl e s . 30. 2 Abs e nc e of De f a ul t . No De f a ul t or Eve nt of De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng or wi l l e xi s t a f t e r gi vi ng e f f e c t t o t he t r a ns a c t i ons c ont e m pl a t e d by t hi s Am e ndm e nt . 31. Expe ns e s . Bor r owe r s s ha l l pa y a l l r e a s ona bl e c os t s , f e e s a nd e xpe ns e s ( i nc l udi ng wi t hout l i m i t a t i on, r e a s ona bl e a t t or ne y f e e s of Age nt ’ s c ouns e l ) i nc ur r e d by Age nt i n c onne c t i on wi t h t he pr e pa r a t i on, ne got i a t i on, e xe c ut i on, a nd de l i ve r y of t hi s Am e ndm e nt a nd a ny ot he r doc um e nt r e qui r e d t o be f ur ni s he d he r e wi t h. 32. Re c i t a l s . The Re c i t a l s a r e he r e by i nc or por a t e d he r e i n. 33. Count e r pa r t s . Thi s Am e ndm e nt m a y be e xe c ut e d i n a ny num be r of c ount e r pa r t s , e a c h of whi c h s ha l l be de e m e d t o be a n or i gi na l , a nd a l l of s a i d c ount e r pa r t s t a ke n t oge t he r s ha l l be de e m e d t o c ons t i t ut e but one doc um e nt . 34. Di s c l os ur e . Unde r Or e gon l a w, m os t
a gr e e m e nt s , pr om i s e s a nd c om m i t m e nt s m a de by a l e nde r c onc e r ni ng l oa ns a nd ot he r c r e di t e xt e ns i ons whi c h a r e not f or pe r s ona l , f a m i l y or hous e hol d pur pos e s or s e c ur e d s ol e l y by t he bor r owe r ’ s r e s i de nc e m us t be i n wr i t i ng, e xpr e s s c ons i de r a t i on a nd be s i gne d by t he l e nde r t o be e nf or c e a bl e . [ Si gna t ur e pa ge s f ol l ow]
FI RST AM ENDM ENT 39211237. v17 DCH M OTORS LLC DCH NANUET LLC DCH NY M OTORS LLC DCH OXNARD 1521 I M PORTS I NC. DCH RI VERSI DE- S, I NC. DCH TEM ECULA I M PORTS LLC DCH TEM ECULA M OTORS LLC DCH TORRANCE I M PORTS I NC. FARM I NGTON HI LLS I M PORTS, LLC FARM I NGTON HI LLS- CJ D, LLC FARM I NGTON HI LLS- H, LLC FARM I NGTON HI LLS- N, LLC FARM I NGTON HI LLS- T, LLC FERNDALE- BG, LLC FREEHOLD NI SSAN LLC FRI SCO- K, I NC. GARDEN CI TY- CJ D, LLC HOUSTON- A, I NC. HOUSTON- H, I NC. HOUSTON- I , I NC. HUTCHI NS EUGENE NI SSAN, I NC. HUTCHI NS I M PORTED M OTORS, I NC. KATY- H, I NC. KNOXVI LLE- CJ D, LLC LAD CARSON- N, LLC LAD M I SSI ON VI EJ O- J LR, I NC. LAD- AU, LLC LAD- M B, LLC LAD- N, LLC LAD- P, LLC LAD- T, LLC LAD- V, LLC LAUDERDALE- A, LLC LBM P, LLC LEAGUE CI TY- H, I NC LGPAC, I NC. LI THI A ACDM , I NC. LI THI A ANCHORAGE- C, LLC LI THI A ANCHORAGE- H, LLC LI THI A BAI ERL- S, LLC LI THI A BRYAN TEXAS, I NC. LI THI A BUFFALO- A, LLC LI THI A CCTF, I NC.
FI RST AM ENDM ENT 39211237. v17 LI THI A CDH, I NC. LI THI A CI M R, I NC. LI THI A CJ DO, I NC. LI THI A CJ DSA, I NC. LI THI A CJ DSF, I NC. LI THI A CM , I NC. LI THI A CO, I NC. LI THI A CRATER LAKE- M , I NC. LI THI A CSA, I NC. LI THI A DE, I NC. LI THI A DES M OI NES- VW , LLC LI THI A DM I D, I NC. LI THI A DODGE OF TRI - CI TI ES, I NC. LI THI A FRESNO, I NC. LI THI A HAM I LTON- H, LLC LI THI A HAZLETON- H, LLC LI THI A HDM , I NC. LI THI A HGF, I NC. LI THI A HM I D, I NC. LI THI A I M PORTS OF ANCHORAGE, I NC. LI THI A J EF, I NC. LI THI A KLAM ATH, I NC. LI THI A KLAM ATH- T, I NC. LI THI A LSGF, I NC. LI THI A M BDM , I NC. LI THI A M EDFORD HON, I NC. LI THI A M I DDLETOW N- L, LLC LI THI A M OON- S, LLC LI THI A M OON- V, LLC LI THI A M ORGANTOW N- CJ D, LLC LI THI A M ORGANTOW N- S, LLC LI THI A M TLM , I NC. LI THI A NA, I NC. LI THI A NC, I NC. LI THI A ND ACQUI SI TI ON CORP. #3 LI THI A ND ACQUI SI TI ON CORP. #4 LI THI A NDM , I NC. LI THI A NF, I NC. LI THI A OF ABI LENE, LLC LI THI A OF ANCHORAGE, I NC. LI THI A OF BEND #1, LLC LI THI A OF BEND #2, LLC LI THI A OF BENNI NGTON – 2, LLC
FI RST AM ENDM ENT 39211237. v17 LI THI A OF BENNI NGTON – 3, LLC LI THI A OF BENNI NGTON – 4, LLC LI THI A OF BI LLI NGS I I LLC LI THI A OF BI LLI NGS, I NC. LI THI A OF CLEAR LAKE, LLC LI THI A OF DES M OI NES, I NC. LI THI A OF EUREKA, I NC. LI THI A OF FAI RBANKS, I NC. LI THI A OF GREAT FALLS, I NC. LI THI A OF HELENA, I NC. LI THI A OF HONOLULU- A, I NC. LI THI A OF HONOLULU- BGM CC, LLC LI THI A OF HONOLULU- V, LLC LI THI A OF KI LLEEN, LLC LI THI A OF LODI , I NC. LI THI A OF M AUI - H, LLC LI THI A OF M I SSOULA I I , LLC LI THI A OF M I SSOULA, I NC. LI THI A OF POCATELLO, I NC. LI THI A OF PORTLAND I , LLC LI THI A OF PORTLAND, LLC LI THI A OF ROBSTOW N, LLC LI THI A OF ROSEBURG, I NC. LI THI A OF SANTA ROSA, I NC. LI THI A OF SEATTLE, I NC. LI THI A OF SOUTH CENTRAL AK, I NC. LI THI A OF STOCKTON, I NC. LI THI A OF STOCKTON- V, I NC. LI THI A OF TF, I NC. LI THI A OF TROY, LLC LI THI A OF UTI CA – 1, LLC LI THI A OF UTI CA – 3, LLC LI THI A OF UTI CA – 4, LLC LI THI A OF W ALNUT CREEK, I NC. LI THI A OF W ASI LLA, LLC LI THI A OF YORKVI LLE – 1, LLC LI THI A OF YORKVI LLE – 2, LLC LI THI A OF YORKVI LLE – 3, LLC LI THI A OF YORKVI LLE – 4, LLC LI THI A OF YORKVI LLE
– 5, LLC LI THI A ORCHARD PARK- H, LLC LI THI A PARAM US- M , LLC LI THI A PI TTSBURGH- S, LLC
FI RST AM ENDM ENT 39211237. v17 LI THI A RAM SEY- B, LLC LI THI A RAM SEY- L, LLC LI THI A RAM SEY- M , LLC LI THI A RAM SEY- T, LLC LI THI A RENO SUB- HYUN, I NC. LI THI A RENO- CJ , LLC LI THI A RENO- VW , LLC LI THI A SALM I R, I NC. LI THI A SEA P, I NC. LI THI A SEASI DE, I NC. LI THI A SOC, I NC. LI THI A SPOKANE- B, LLC LI THI A SPOKANE- S, LLC LI THI A TA, I NC. LI THI A TO, I NC. LI THI A TR, I NC. LI THI A VAUDM , I NC. LI THI A W EXFORD- H, LLC LLL SALES CO LLC LM BB, LLC LM BP, LLC LM OP, LLC LOS ANGELES- M , I NC. M ESQUI TE- K, I NC. M I SSI ON HI LLS- H, I NC. M OBI LE- S, LLC NEW PORT RI CHEY- V, LLC NOVI - I , LLC ORLANDO- J LR, LLC PARAM US W ORLD M OTORS LLC PHI LADELPHI A- F, LLC PHOENI X- T, I NC. PLYM OUTH- C, LLC ROCKW ALL- H, I NC. ROCKW ALL- K, I NC. ROSEVI LLE- C, I NC ROSEVI LLE- K, I NC ROSEVI LLE- T, I NC ROUND ROCK- K, I NC. SACRAM ENTO- L, I NC. SALEM - B, LLC SALEM - H, LLC SALEM - V, LLC
Am e r i c a n Honda Fi na nc e Cor por a t i on, a s Le nde r By: - - ? J / f v/ ? t L l e {� Na m e : M a t t he w W e i t z e � Ti t l e : __ _. _. D'- '- - F . . . . Sc . . . . LM . . . . . a . . . . . o . . . . a " " 'g� e . . . . r ___ _ [ LI THI A M OTORS - FOURTH AM ENDED AND REST A TED LOAN AGREEM ENT]
BM W FI NANCI AL SERVI CES NA, LLC, a s Le nde r � By: '/ ' _, . - - f f e Na m e : t om Rum f ol a Ti t l e : Ge ne r a l M a na ge r Cr e di t By: _) ____. - - - Na m e : Al e x Ca l c a s ol a Ti t l e : Cr e di t M a na ge r FI RST AM ENDM ENT
VW CREDI T, I NC. , a s Le nde r - : By· c t � � Na � e : Robb e r Tn Ti t l e : Se ni or M a na ge r Com m e r c i a l Cr e di t FI RST AM ENDM ENT
PNC BANK, NATI ONAL ASSOCI ATI ON, a s Le nde r Na m e : us t i n Guhe r r e z Ti t l e : Vi c e Pr e s i de nt FI RST AM ENDM ENT
BM O HARRI S BANK, N. A. , a s Le nde r By: - f . L. - f : f . : : ; ! : : : - - b� � +: - - Na m e : \ - - 1- l i =- - =- - - =� � � . . : : : , . - Ti t l e : � � � � � L_� � - =1. . . f l r . . � FI RST AM ENDM ENT
J PM ORGAN CHASE BANK, N. A. , a s Le nde r By: - =" - ='=r '½ - - - r F- - - - - Na m e : - . . . . : : : . . . . , 6- L. . =: . . __; =: ; . _. , ___ __ _ Ti t l e : Exe t i ve Di r e c t or FI RST AM ENDM ENT
TRUI ST BANK ( f or m e r l y known a s Br a nc h Ba nki ng a nd Tr us t Com pa ny) , a s Le nde r By: _t - - - - - - - - , , J - 2� , � f j - - _· _ Na m e : J . Ca r l f s Na va r r e t e Ti t l e : Di r e c t or FI RST AM ENDM ENT
FI RST AM ENDM ENT NI SSAN M OTOR ACCEPTANCE COM PANY LLC, a s Le nde r By: Na m e : Todd Voor hi e s Ti t l e : Sr . M a na ge r , Com m e r c i a l Cr e di t
FI RST AM ENDM ENT Conf i de nt i a l SANTANDER BANK, N. A. , a s Le nde r By: Na m e : Ti t l e :
TOYOTA M OTOR CREDI T CORPORA By: - - L- ++� � . . . : : : . . _- 1=- - . . . . . t , t ; ; ; ; ; _ Na m e : - " 'L===- - - - =- ===='- - - - - Ti t l e : Na t i ona l Ac c ount s M a na ge r FI RST AM ENDM ENT
THE HUNTI NGTON NATI ONAL BANK, a s Le nde r By: � O) s ha f Na m e : M i c ha e l Ha l l Ti t l e : Se ni or Vi c e Pr e s i de nt FI RST AM ENDM ENT
I nt e r na l By; . : : ; : ; . . - , , : : ; . . . __ : . __: . __ - - - - " - - - - - r - - 1<- Na m e : Edwa r d A. Pa l e k, J r . Ti t l e : Vi c e Pr e s i de nt , M a r ke t Cr e di t M a na ge r I I FI RST AM ENDM ENT
CAPI TAL ONE, N. A. a s Le nde r By: L/ #f � - = Na m €: J e f f Edge Ti t l e : SVP [ LI THI A M OTORS - FOURTH AM . El l " 'DED AND RESTATED LOAN AGREEM ENT]
M & T Ba nk, a s Le nde r By: � / 1£d� N_a m e Kt t � T Ti t l e : - � - - - - - l '- - - - - - - FI RST AM ENDM ENT
W ELLS FARGO BANK, NA, a s Le nde r By: L� � Na m e : Er i c Sc ot t Ful l e r Ti t l e : Se ni or Vi c e Pr e s i de nt - - - - - =- ==- =- - - '- - =- " - - =- - =- - =- ==- ===- - - - FI RST AM ENDM ENT
FI RST AM ENDM ENT M ERCEDES- BENZ FI NANCI AL SERVI CES USA LLC, a s Le nde r By: Na m e : Ti t l e :
BANK OF AM ERI CA, NA, a s Le nde r ' FI RST AM ENDM ENT
HYUNDAI CAPI TAL AM ERI CA, a s Le nde r FI RST AM ENDM ENT
FI RST AM ENDM ENT 39211237. v17 ACKNOW LEDGM ENT AND CONSENT OF GUARANTORS Ea c h unde r s i gne d Gua r a nt or he r e by a c knowl e dge s , c ons e nt s , a nd a gr e e s t o a l l t e r m s a nd c ondi t i ons of t he f or e goi ng Am e ndm e nt . 797 VALLEY STREET LLC ANN ARBOR- B, LLC ANN ARBOR- CC, LLC ANN ARBOR- CJ D, LLC ANN ARBOR- M , LLC AUSTI N- H, I NC. AUSTI N- KI , I NC. AVONDALE- N, I NC. BAI ERL AUTO PARTS, LLC BAI ERL AUTOM OTI VE CORPORATI ON BAI ERL CHEVROLET, I NC. BAI ERL HOLDI NG, LLC BEND- CDJ R, LLC BEND- N, LLC CADI LLAC OF PORTLAND LLOYD CENTER, LLC CAM P AUTOM OTI VE, I NC. CARBONE AUTO BODY, LLC CENTENNI AL- HY, LLC CLEAR LAKE- I , I NC. CLI NTON- C, LLC CORAL SPRI NGS- A, LLC COSTA M ESA- CJ D, I NC. CRANBERRY AUTOM OTI VE, I NC. DAH CHONG HONG CA TRADI NG LLC DAH CHONG HONG TRADI NG CORPORATI ON DALLAS COLLI SI ON, I NC. DALLAS- H, I NC. DALLAS- K, I NC. DALLAS- T, I NC. DARON M OTORS LLC DCH ( OXNARD) I NC. DCH AUTO GROUP ( USA) I NC. DCH BLOOM FI ELD LLC DCH CA LLC DCH CALABASAS- A, LLC DCH CALI FORNI A I NVESTM ENTS LLC DCH CALI FORNI A M OTORS I NC. DCH DEL NORTE, I NC.
FI RST AM ENDM ENT 39211237. v17 DCH DM S NJ , LLC DCH ESSEX I NC. DCH FI NANCI AL NJ , LLC DCH FREEHOLD LLC DCH HOLDI NGS LLC DCH I NVESTM ENTS I NC. ( NEW J ERSEY) DCH I NVESTM ENTS I NC. ( NEW YORK) DCH KOREAN I M PORTS LLC DCH M AM ARONECK LLC DCH M I SSI ON VALLEY LLC DCH M ONM OUTH LLC DCH M ONTCLAI R LLC DCH M OTORS LLC DCH NANUET LLC DCH NORTH AM ERI CA I NC. DCH NY M OTORS LLC DCH OXNARD 1521 I M PORTS I NC. DCH RI VERSI DE- S, I NC. DCH SI M I VALLEY I NC. DCH SUPPORT SERVI CES, LLC DCH TEM ECULA I M PORTS LLC DCH TEM ECULA M OTORS LLC DCH THOUSAND OAKS- F, I NC. DCH TL HOLDI NGS LLC DCH TL NY HOLDI NGS LLC DCH TORRANCE I M PORTS I NC. DRI VEW AY M OTORS, LLC FARM I NGTON HI LLS I M PORTS, LLC FARM I NGTON HI LLS- CJ D, LLC FARM I NGTON HI LLS- H, LLC FARM I NGTON HI LLS- N, LLC FARM I NGTON HI LLS- T, LLC FERNDALE COLLI SI ON, LLC FERNDALE- BG, LLC FERNDALE- F, LLC FH COLLI SI ON, LLC FLORI DA SS, LLC FREEHOLD NI SSAN LLC FRI SCO- K, I NC. FUSE AUTO SALES, LLC GARDEN CI TY- CJ D, LLC GREENCARS, I NC. HOUSTON- A, I NC.
FI RST AM ENDM ENT 39211237. v17 HOUSTON- H, I NC. HOUSTON- I , I NC. HUTCHI NS EUGENE NI SSAN, I NC. HUTCHI NS I M PORTED M OTORS, I NC. KATY- H, I NC. KNOXVI LLE- CJ D, LLC LA M OTORS HOLDI NG, LLC LAD ADVERTI SI NG, I NC. LAD CARSON- N, LLC LAD M I SSI ON VI EJ O- J LR, I NC. LAD M OBU, I NC. LAD- AU, LLC LAD- M B, LLC LAD- N, LLC LAD- P, LLC LAD- T, LLC LAD- V, LLC LAS VEGAS- G, LLC LAS VEGAS- HY, LLC LATHAM FORD- F, LLC LAUDERDALE- A, LLC LBM P, LLC LEAGUE CI TY- H, I NC. LFKF, LLC LGPAC, I NC. LI THI A ACDM , I NC. LI THI A AI RCRAFT, I NC. LI THI A ANCHORAGE- C, LLC LI THI A ANCHORAGE- H, LLC LI THI A ARM ORY GARAGE, LLC LI THI A AUCTI ON & RECON, LLC LI THI A AUTO SERVI CES, I NC. LI THI A BA HOLDI NG, I NC. LI THI A BAI ERL- S, LLC LI THI A BNM , I NC. LI THI A BRYAN TEXAS, I NC. LI THI A BUFFALO- A, LLC LI THI A CCTF, I NC. LI THI A CDH, I NC. LI THI A CI M R, I NC. LI THI A CJ DO, I NC. LI THI A CJ DSA, I NC. LI THI A CJ DSF, I NC.
FI RST AM ENDM ENT 39211237. v17 LI THI A CM , I NC. LI THI A CO, I NC. LI THI A CRATER LAKE- F, I NC. LI THI A CRATER LAKE- M , I NC. LI THI A CSA, I NC. LI THI A DE, I NC. LI THI A DES M OI NES- VW , LLC LI THI A DM , I NC. LI THI A DM I D, I NC. LI THI A DODGE OF TRI - CI TI ES, I NC. LI THI A EATONTOW N- F, LLC LI THI A FI NANCI AL CORPORATI ON LI THI A FLCC, LLC LI THI A FLORI DA HOLDI NG, I NC. LI THI A FM F, I NC. LI THI A FORD OF BOI SE, I NC. LI THI A FRESNO, I NC. LI THI A HAM I LTON- H, LLC LI THI A HAZLETON- H, LLC LI THI A HDM , I NC. LI THI A HGF, I NC. LI THI A HM I D, I NC. LI THI A HPI , I NC. LI THI A I DAHO FALLS- F, I NC. LI THI A I M PORTS OF ANCHORAGE, I NC. LI THI A J EF, I NC. LI THI A KLAM ATH, I NC. LI THI A KLAM ATH- T, I NC. LI THI A LBGGF, I NC. LI THI A LHGF, I NC. LI THI A LSGF, I NC. LI THI A M BDM , I NC. LI THI A M c M URRAY- C, LLC LI THI A M EDFORD HON, I NC. LI THI A M I CHI GAN HOLDI NG, I NC. LI THI A M I DDLETOW N- L, LLC LI THI A M M F, I NC. LI THI A M ONROEVI LLE- A, LLC LI THI A M ONROEVI LLE- C, LLC LI THI A M ONROEVI LLE- F, LLC LI THI A M OON- S, LLC LI THI A M OON- V, LLC LI THI A M ORGANTOW N- CJ D, LLC
FI RST AM ENDM ENT 39211237. v17 LI THI A M ORGANTOW N- F, LLC LI THI A M ORGANTOW N- S, LLC LI THI A M OTORS SUPPORT SERVI CES, I NC. LI THI A M TLM , I NC. LI THI A NA, I NC. LI THI A NC, I NC. LI THI A ND ACQUI SI TI ON CORP. #1 LI THI A ND ACQUI SI TI ON CORP. #3 LI THI A ND ACQUI SI TI ON CORP. #4 LI THI A NDM , I NC. LI THI A NF, I NC. LI THI A NORTHEAST REAL ESTATE, LLC LI THI A NORTHW EST REAL ESTATE, LLC LI THI A OF ABI LENE, LLC LI THI A OF ANCHORAGE, I NC. LI THI A OF BEND #1, LLC LI THI A OF BEND #2, LLC LI THI A OF BENNI NGTON – 1, LLC LI THI A OF BENNI NGTON – 2, LLC LI THI A OF BENNI NGTON – 3, LLC LI THI A OF BENNI NGTON – 4, LLC LI THI A OF BI LLI NGS I I LLC LI THI A OF BI LLI NGS, I NC. LI THI A OF CASPER, LLC LI THI A OF CLEAR LAKE, LLC LI THI A OF CORPUS CHRI STI , I NC. LI THI A OF DES M OI NES, I NC. LI THI A OF EUREKA, I NC. LI THI A OF FAI RBANKS, I NC. LI THI A OF GREAT FALLS, I NC. LI THI A OF HELENA, I NC. LI THI A OF HONOLULU- A, I NC. LI THI A OF HONOLULU- BGM CC, LLC LI THI A OF HONOLULU- F, LLC LI THI A OF HONOLULU- V, LLC LI THI A OF KI LLEEN, LLC LI THI A OF LODI , I NC. LI THI A OF M AUI - H, LLC LI THI A OF M I SSOULA I I , LLC LI THI A OF
M I SSOULA I I I , I NC. LI THI A OF M I SSOULA, I NC. LI THI A OF POCATELLO, I NC. LI THI A OF PORTLAND I , LLC
FI RST AM ENDM ENT 39211237. v17 LI THI A OF PORTLAND, LLC LI THI A OF ROBSTOW N, LLC LI THI A OF ROSEBURG, I NC. LI THI A OF SANTA ROSA, I NC. LI THI A OF SEATTLE, I NC. LI THI A OF SOUTH CENTRAL AK, I NC. LI THI A OF SPOKANE I I , I NC. LI THI A OF SPOKANE, I NC. LI THI A OF STOCKTON, I NC. LI THI A OF STOCKTON- V, I NC. LI THI A OF TF, I NC. LI THI A OF TROY, LLC LI THI A OF UTI CA – 1, LLC LI THI A OF UTI CA – 2, LLC LI THI A OF UTI CA – 3, LLC LI THI A OF UTI CA – 4, LLC LI THI A OF W ALNUT CREEK, I NC. LI THI A OF W ASI LLA, LLC LI THI A OF YORKVI LLE – 1, LLC LI THI A OF YORKVI LLE – 2, LLC LI THI A OF YORKVI LLE – 3, LLC LI THI A OF YORKVI LLE – 4, LLC LI THI A OF YORKVI LLE – 5, LLC LI THI A ORCHARD PARK- H, LLC LI THI A PARAM US- M , LLC LI THI A PI TTSBURGH- S, LLC LI THI A RAM SEY- B, LLC LI THI A RAM SEY- L, LLC LI THI A RAM SEY- M , LLC LI THI A RAM SEY- T, LLC LI THI A REAL ESTATE, I NC. LI THI A RENO SUB- HYUN, I NC. LI THI A RENO- CJ , LLC LI THI A RENO- VW , LLC LI THI A ROSE- FT, I NC. LI THI A SALM I R, I NC. LI THI A SEA P, I NC. LI THI A SEASI DE, I NC. LI THI A SOC, I NC. LI THI A SPOKANE- B, LLC LI THI A SPOKANE- S, LLC LI THI A SSP, LLC LI THI A TA, I NC.
FI RST AM ENDM ENT 39211237. v17 LI THI A TENNESSEE HOLDI NG, I NC. LI THI A TO, I NC. LI THI A TR, I NC. LI THI A UNI ONTOW N- C, LLC LI THI A VA REAL ESTATE, LLC LI THI A VAUDM , I NC. LI THI A VF, I NC. LI THI A VI RGI NI A HOLDI NG, I NC. LI THI A W EXFORD- H, LLC LLL SALES CO LLC LM BB, LLC LM BP, LLC LM OP, LLC LOS ANGELES- M , I NC. LSTAR, LLC M EDFORD I NSURANCE, LLC M ESQUI TE- K, I NC. M I LFORD DCH, I NC. M I SSI ON HI LLS- H, I NC. M OBI LE- S, LLC NEW PORT RI CHEY- H, LLC NEW PORT RI CHEY- V, LLC NORTHLAND FORD I NC. NOVI - I , LLC ORLANDO- J LR, LLC PA REAL ESTATE, LLC PA SUPPORT SERVI CES, LLC PARAM US COLLI SI ON, LLC PARAM US W ORLD M OTORS LLC PERSONALI ZED M ARKETI NG, LLC PHI LADELPHI A- F, LLC PHOENI X- T, I NC. PLYM OUTH- C, LLC RAM SEY HOLDI NGCO, I NC. REDW OOD- HY, LLC RFA HOLDI NGS, LLC ROCKW ALL- H, I NC. ROCKW ALL- K, I NC. ROSEVI LLE- C, I NC. ROSEVI LLE- K, I NC. ROSEVI LLE- T, I NC ROUND ROCK- K, I NC. SACRAM ENTO- L, I NC.
FI RST AM ENDM ENT 39211237. v17 SALEM - B, LLC SALEM - H, LLC SALEM - V, LLC. SAN FRANCI SCO- B, I NC. SANFORD- CJ D, LLC SHARLENE REALTY LLC SHERM AN OAKS- A, I NC. SHERM AN OAKS- AC, I NC. SHERM AN OAKS- B, I NC. SHI FT PORTLAND, LLC STERLI NG HEI GHTS- F, LLC STERLI NG- BM , LLC STERLI NG- RLM , LLC SUBURBAN AUTO AGENCY, LLC TAM PA- F, LLC TAM PA- H, LLC THOUSAND OAKS- S, I NC. TN REAL ESTATE, LLC TROY COLLI SI ON, LLC TROY EXOTI CS, LLC TROY- A, LLC TROY- BG, LLC TROY- C, LLC TROY- CJ D, LLC TROY- F, LLC TROY- H, LLC TROY- I , LLC TROY- J LR, LLC TROY- M , LLC TROY- N, LLC TROY- S, LLC TROY- T, LLC TROY- V, LLC TROY- VW , LLC TUSTI N M OTORS I NC. UNI ON- H, LLC URBANDALE- S, LLC VALENCI A- A, I NC. VAN NUYS- C, I NC. VAN NUYS- H, I NC. VAN NUYS- L, I NC. VAN NUYS- T, I NC. W ASHI NGTON- F, LLC
ANNEX A 39211237. v17 Exhi bi t B- 1
Pa ge 6 – Exhi bi t B- 1 – Us e d Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 EXHI BI T B- 1 USED VEHI CLE BORROW I NG BASE CERTI FI CATE Thi s Us e d Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e ( " Bor r owi ng Ba s e Ce r t i f i c a t e ” ) i s e xe c ut e d a nd de l i ve r e d by Li t hi a M ot or s , I nc . ( t he " Com pa ny” ) on be ha l f of i t s e l f a nd i t s Subs i di a r i e s t o U. S. Ba nk Na t i ona l As s oc i a t i on, a s Age nt ( i n s uc h c a pa c i t y, " Age nt ” ) pur s ua nt t o t he r e qui r e m e nt s of Se c t i on 11. 2. 6 of t he Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt da t e d a s of Apr i l 29, 2021, be t we e n t he Com pa ny, c e r t a i n of i t s Subs i di a r i e s , t he Le nde r s whi c h a r e f r om t i m e t o t i m e pa r t i e s t he r e t o, a nd Age nt ( a s a m e nde d t o da t e , t he " Loa n Agr e e m e nt ” ) . Any c a pi t a l i z e d t e r m s us e d he r e i n a nd not de f i ne d he r e i n s ha l l ha ve t he m e a ni ngs gi ve n t o s uc h t e r m s i n t he Loa n Agr e e m e nt . Thi s Bor r owi ng Ba s e Ce r t i f i c a t e i s pr e pa r e d a s of ___________________ ( " Ca l c ul a t i on Da t e ” ) . At t a c he d a r e t he c a l c ul a t i ons s howi ng t he s t a t us of t he Us e d Ve hi c l e Bor r owi ng Ba s e a s of t he Ca l c ul a t i on Da t e . Thi s Bor r owi ng Ba s e Ce r t i f i c a t e ha s be e n
pr e pa r e d i n a c c or da nc e wi t h t he r e qui r e m e nt s of t he Loa n Agr e e m e nt a nd t he i nf or m a t i on c ont a i ne d t he r e i n i s t r ue , a c c ur a t e a nd c om pl e t e a s of t he Ca l c ul a t i on Da t e . Thi s Bor r owi ng Ba s e Ce r t i f i c a t e i s e xe c ut e d on ________________________. LI THI A M OTORS, I NC. By: Na m e : Ti t l e :
Pa ge 7 – Exhi bi t B- 1 – Us e d Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 Us e d Ve hi c l e Bor r owi ng Ba s e Ca l c ul a t i on10 Va l ue of Col l a t e r a l Adva nc e Ra t e % M a r gi ne d Va l ue A. Us e d Ve hi c l e Bor r owi ng Ba s e 1. Aggr e ga t e ne t book va l ue of t he Us e d Ve hi c l e i nve nt or y $ 2. Le s s a ggr e ga t e ne t book va l ue of s uc h Us e d Ve hi c l e s i n whi c h t he Age nt doe s not ha ve a pe r f e c t e d, f i r s t - pr i or i t y s e c ur i t y i nt e r e s t $ 3. Le s s a ggr e ga t e out s t a ndi ng pr i nc i pa l a m ount of i nde bt e dne s s s e c ur e d by Tr a de - i n Li e ns 4. Le s s a ggr e ga t e ne t book va l ue of s uc h Us e d Ve hi c l e s t ha t a r e not ot he r wi s e El i gi bl e Ve hi c l e s $ $ 5. Us e d Ve hi c l e Bor r owi ng Ba s e ( l i ne s 1 - 2 – 3 - 4) $ 85% $ B. Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns $ C. Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt $ D. Ne t Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt ( C – B) $ E. Ne t Us e d Ve hi c l e Bor r owi ng Ba s e ( A. 4 – B) $ 10 I n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d
Ve hi c l e Bor r owi ng Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000.
ANNEX A 39211237. v17 Exhi bi t B- 2
Pa ge 8 – Exhi bi t B- 2 – Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 EXHI BI T B- 2 SERVI CE LOANER VEHI CLE BORROW I NG BASE CERTI FI CATE Thi s Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e ( " Bor r owi ng Ba s e Ce r t i f i c a t e ” ) i s e xe c ut e d a nd de l i ve r e d by Li t hi a M ot or s , I nc . ( t he " Com pa ny” ) on be ha l f of i t s e l f a nd i t s Subs i di a r i e s t o U. S. Ba nk Na t i ona l As s oc i a t i on, a s Age nt ( i n s uc h c a pa c i t y, " Age nt ” ) pur s ua nt t o t he r e qui r e m e nt s of Se c t i on 11. 2. 8 of t he Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt da t e d a s of Apr i l 29, 2021, be t we e n t he Com pa ny, c e r t a i n of i t s Subs i di a r i e s , t he Le nde r s whi c h a r e f r om t i m e t o t i m e pa r t i e s t he r e t o, a nd Age nt ( a s a m e nde d t o da t e , t he " Loa n Agr e e m e nt ” ) . Any c a pi t a l i z e d t e r m s us e d he r e i n a nd not de f i ne d he r e i n s ha l l ha ve t he m e a ni ngs gi ve n t o s uc h t e r m s i n t he Loa n Agr e e m e nt . Thi s Bor r owi ng Ba s e Ce r t i f i c a t e i s pr e pa r e d a s of ___________________ ( " Ca l c ul a t i on Da t e ” ) . At t a c he d a r e t he c a l c ul a t i ons s howi ng t he s t a t us of t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e a s of t he Ca l c ul a t i on Da t e .
Thi s Bor r owi ng Ba s e Ce r t i f i c a t e ha s be e n pr e pa r e d i n a c c or da nc e wi t h t he r e qui r e m e nt s of t he Loa n Agr e e m e nt a nd t he i nf or m a t i on c ont a i ne d t he r e i n i s t r ue , a c c ur a t e a nd c om pl e t e a s of t he Ca l c ul a t i on Da t e . Thi s Bor r owi ng Ba s e Ce r t i f i c a t e i s e xe c ut e d on ________________________. LI THI A M OTORS, I NC. By: Na m e : Ti t l e :
Pa ge 9 – Exhi bi t B- 2 – Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ca l c ul a t i on11 Va l ue of Col l a t e r a l Adva nc e Ra t e % M a r gi ne d Va l ue A. Tot a l Se r vi c e Loa ne r Ve hi c l e i nve nt or y $_____________ B. M i nus : Si l o De a l e r s hi p Se r vi c e Loa ne r s $ C. M i nus : Se r vi c e Loa ne r Ve hi c l e i nve nt or y f i na nc e d wi t h Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng $ D. M i nus : Se r vi c e Loa ne r Ve hi c l e i nve nt or y i n s e r vi c e > 15 m ont hs . $ E. Tot a l El i gi bl e Se r vi c e Loa ne r Ve hi c l e ( A- B- C- D) $ F. Se r vi c e Loa ne r Ve hi c l e s Bor r owi ng Ba s e a t 85% ( E x 85% ) $ G. M i nus : Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns $ H. Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt $ I . Ne t Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt ( H- G) $ J . Ne t Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e ( F- G) $ 11 I n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d Ve hi c l e Bor r owi ng
Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000.
ANNEX A 39211237. v17 Exhi bi t C
Pa ge 10 – Exhi bi t C – Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 EXHI BI T C REVOLVI NG LOAN BORROW I NG BASE CERTI FI CATE Thi s Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e ( " Bor r owi ng Ba s e Ce r t i f i c a t e ” ) i s e xe c ut e d a nd de l i ve r e d by Li t hi a M ot or s , I nc . ( t he " Com pa ny” ) on be ha l f of i t s e l f a nd i t s Subs i di a r i e s t o U. S. Ba nk Na t i ona l As s oc i a t i on, a s Age nt ( i n s uc h c a pa c i t y, " Age nt ” ) pur s ua nt t o t he r e qui r e m e nt s of Se c t i on 11. 2. 7 of t he Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt da t e d a s of Apr i l 29, 2021, be t we e n t he Com pa ny, c e r t a i n of i t s Subs i di a r i e s , t he Le nde r s whi c h a r e f r om t i m e t o t i m e pa r t i e s t he r e t o, a nd Age nt ( a s a m e nde d t o da t e , t he " Loa n Agr e e m e nt ” ) . Any c a pi t a l i z e d t e r m s us e d he r e i n a nd not de f i ne d he r e i n s ha l l ha ve t he m e a ni ngs gi ve n t o s uc h t e r m s i n t he Loa n Agr e e m e nt . Thi s Bor r owi ng Ba s e Ce r t i f i c a t e i s pr e pa r e d a s of ________________ ( " Ca l c ul a t i on Da t e ” ) . At t a c he d a r e t he c a l c ul a t i ons s howi ng t he s t a t us of t he Re vol vi ng Loa n Bor r owi ng Ba s e a s of t he Ca l c ul a t i on Da t e . Thi s Bor r owi ng Ba s e Ce r t i f i c a t e ha s be e n
pr e pa r e d i n a c c or da nc e wi t h t he r e qui r e m e nt s of t he Loa n Agr e e m e nt a nd t he i nf or m a t i on c ont a i ne d t he r e i n i s t r ue , a c c ur a t e a nd c om pl e t e a s of t he Ca l c ul a t i on Da t e . Thi s Bor r owi ng Ba s e Ce r t i f i c a t e i s e xe c ut e d on __________________. LI THI A M OTORS, I NC. By: Na m e : Ti t l e :
Pa ge 11 – Exhi bi t C – Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 Re vol vi ng Loa n Bor r owi ng Ba s e Ca l c ul a t i on12 Va l ue of Col l a t e r a l Adva nc e Ra t e % M a r gi ne d Va l ue Col l a t e r a l Type A. Cont r a c t s i n Tr a ns i t : Cont r a c t s i n Tr a ns i t ( CI T) $__________ Le s s CI T a ge d > 15 da ys $__________ Ne t El i gi bl e Cont r a c t s i n Tr a ns i t ( l i ne s 1 – 2) $__________ 100% $_____________ B. El i gi bl e Re c e i va bl e s : 1. Re c e i va bl e s f or Pa r t s a nd Ac c e s s or i e s a nd Se r vi c e $__________ 2. Le s s : Re c e i va bl e s f or Pa r t s a nd Ac c e s s or i e s > 60 da ys pa s t due $__________ 3. Ne t Re c e i va bl e s f or Pa r t s a nd Ac c e s s or i e s ( l i ne s 1- 2) $__________ 4. Fi na nc e Re c e i va bl e s $__________ 5. Le s s : Fi na nc e Re c e i va bl e s Age d > 90 da ys $__________ 6. Ne t Fi na nc e Re c e i va bl e s ( l i ne s 4- 5) $__________ 7. Fa c t or y Re c e i va bl e s $__________ 8. Le s s : Fa c t or y Re c e i va bl e s Age d > 90 da ys $__________ 9. Ne t Fa c t or y Re c e i va bl e s ( l i ne s 7- 8) $__________ 12 I n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d
Ve hi c l e Bor r owi ng Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000.
Pa ge 12 – Exhi bi t C – Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 10. Tot a l El i gi bl e Re c e i va bl e s ( l i ne s 3 + 6 + 9) $__________ 80% $_____________ C. El i gi bl e Ne w Ve hi c l e s $__________ 100% $_____________ D. Us e d Ve hi c l e Bor r owi ng Ba s e $__________ 100% $_____________ E. Re a l Pr ope r t y 1. Va l ue of El i gi bl e Re a l Pr ope r t y $__________ 75% $_____________ 2. M a xi m um Re vol vi ng Loa n Bor r owi ng Ba s e [ ( m a r gi ne d va l ue of l i ne s A. 3 + B. 10 + C + D + F. 3 + G. 6 – H. 4) / . 75] $__________ 3. Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt $__________ 4. 25% of t he l e s s e r of l i ne 2 or l i ne 3 $__________ 5. Le s s e r of l i ne 4 or l i ne 1 $_____________ F. Pa r t s a nd Ac c e s s or i e s 1. Pa r t s a nd Ac c e s s or i e s $__________ 2. Le s s : unpa i d a c qui s i t i on c os t s owe d t o s e l l e r s or f i na nc i e r s of s uc h i nve nt or y $__________ 3. Ne t Pa r t s a nd Ac c e s s or y I nve nt or y ( l i ne s 1- 2) $__________ 65% $_____________
Pa ge 13 – Exhi bi t C – Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 G. Equi pm e nt ( e xc l udi ng a i r c r a f t ) 1. Of f i c e Equi pm e nt a t Cos t $__________ 2. Le s s : Of f i c e Equi pm e nt a c c um ul a t e d de pr e c i a t i on $__________ 3. Se r vi c e a nd Pa r t s Equi pm e nt a t Cos t $__________ 4. Le s s : Se r vi c e a nd Pa r t s Equi pm e nt a c c um ul a t e d de pr e c i a t i on $__________ 5. Le s s de bt s e c ur e d by a bove Of f i c e , Se r vi c e a nd Pa r t s Equi pm e nt $__________ 6. Ne t Equi pm e nt ( l i ne s 1 – 2 + 3 – 4 – 5) $__________ 40% $_____________ H. De duc t i ons 1. Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns l e s s t he s um of t he a ggr e ga t e a m ount he l d i n t he PR Ac c ount s , i n a n a m ount up t o $200, 000, 000 $__________ 2. Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns $__________
Pa ge 14 – Exhi bi t C – Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e 110550643. 2 0063724- 00082 3. Pa r i Pa s s u Funde d De bt $__________ 4. Tot a l De duc t i ons ( l i ne s 1 + 2+3) $__________ $_____________ I . Re vol vi ng Loa n Bor r owi ng Ba s e ( m a r gi ne d va l ue of l i ne s A. 3 + B. 10 + C + D + E. 5 + F. 3 + G. 6 m i nus H. 4) $_____________ J . Out s t a ndi ng Re vol vi ng a nd Re vol vi ng Swi ng Li ne Loa ns $_____________ K. Out s t a ndi ng Le t t e r s of Cr e di t $_____________ L. Re s e r ve Am ount $_____________ M . Tot a l Out s t a ndi ng ( l i ne s J + K + L) $_____________ N. Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt $_____________ O. Ne t Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt ( N – M ) $_____________ P. Ne t Re vol vi ng Loa n Bor r owi ng Ba s e ( I – M ) $_____________
EXECUTI ON VERSI ON 45290519v4 THI RD AM ENDM ENT TO FOURTH AM ENDED AND RESTATED LOAN AGREEM ENT Thi s Thi r d Am e ndm e nt t o Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt ( t hi s " Am e ndm e nt ” ) , da t e d a s of Nove m be r 21, 2022, i s e nt e r e d i nt o a m ong Li t hi a M ot or s , I nc . , a n Or e gon c or por a t i on ( t he " Com pa ny” ) , e a c h of t he Subs i di a r i e s of t he Com pa ny l i s t e d on t he s i gna t ur e pa ge s of t hi s Am e ndm e nt ( t oge t he r wi t h t he Com pa ny, e a c h a " Bor r owe r ” a nd a ny t wo or m or e " Bor r owe r s ” ) , t he Le nde r s unde r t he Loa n Agr e e m e nt de s c r i be d be l ow t ha t a r e s i gna t or i e s t o t hi s Am e ndm e nt , a nd U. S. Ba nk Na t i ona l As s oc i a t i on, a s Age nt f or t he Le nde r s ( i n s uc h c a pa c i t y, " Age nt ” ) . R E C I T A L S: A. The Com pa ny, c e r t a i n of i t s Subs i di a r i e s , t he Le nde r s a nd Age nt ha ve e nt e r e d i nt o a Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt da t e d a s of Apr i l 29, 2021 ( a s a m e nde d by t ha t c e r t a i n Fi r s t Am e ndm e nt t o Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt , da t e d a s of Fe br ua r y 7, 2022, t ha t c e r t a i n Se c ond Am e ndm e nt t o Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt , da t e d a s of J une 2,
2022 a nd a s m a y be f ur t he r a m e nde d, r e s t a t e d, s uppl e m e nt e d or ot he r wi s e m odi f i e d, t he " Loa n Agr e e m e nt ” ) . Ca pi t a l i z e d t e r m s not ot he r wi s e de f i ne d he r e i n s ha l l ha ve t he m e a ni ngs gi ve n t o s uc h t e r m s i n t he Loa n Agr e e m e nt . B. The Com pa ny ha s r e que s t e d t ha t t he Age nt a nd t he Le nde r s a gr e e t o t he a m e ndm e nt s t o t he Loa n Agr e e m e nt s e t f or t h he r e i n. C. The Le nde r s t ha t a r e s i gna t or i e s t o t hi s Am e ndm e nt , c ons t i t ut i ng t he Re qui r e d Le nde r s unde r t he Loa n Agr e e m e nt , ha ve a gr e e d t o t he a m e ndm e nt s t o t he Loa n Agr e e m e nt s e t f or t h he r e i n. For va l ua bl e c ons i de r a t i on, t he r e c e i pt a nd s uf f i c i e nc y of whi c h a r e he r e by a c knowl e dge d, t he pa r t i e s a gr e e a s f ol l ows : 1. Am e ndm e nt s t o t he Loa n Agr e e m e nt . Fr om a nd a f t e r t he da t e he r e of ( t he " Thi r d Am e ndm e nt Ef f e c t i ve Da t e ” ) : 1. 1 t he Loa n Agr e e m e nt i s a m e nde d pur s ua nt t o t hi s Am e ndm e nt t o de l e t e t he s t r i c ke n t e xt ( i ndi c a t e d t e xt ua l l y i n t he s a m e m a nne r a s t he f ol l owi ng e xa m pl e : s t r i c ke n t e xt ) a nd t o a dd t he doubl e - unde r l i ne d t e xt ( i ndi c a t e d t e xt ua l l y i n t he s a m e m a nne r a s t he f ol l owi ng e xa m pl e :
doubl e - unde r l i ne d t e xt ) a s s e t f or t h i n t he pa ge s of t he Loa n Agr e e m e nt a t t a c he d a s Anne x A t o t hi s Am e ndm e nt ; 1. 2 Exhi bi t A t o t he Loa n Agr e e m e nt i s he r e by a m e nde d by de l e t i ng s uc h e xhi bi t i n i t s e nt i r e t y a nd r e pl a c i ng i t wi t h Exhi bi t A a t t a c he d he r e t o; 1. 3 Exc e pt a s s e t f or t h i n c l a us e 1. 2 a bove , a l l ot he r Exhi bi t s t o t he Loa n Agr e e m e nt s ha l l not be a m e nde d, m odi f i e d, s uppl e m e nt e d or ot he r wi s e a f f e c t e d. - 2 - 45290519v4 2. Condi t i on Pr e c e de nt . The e f f e c t i ve ne s s of t hi s Am e ndm e nt i s s ubj e c t t o r e c e i pt by Age nt of e xe c ut e d or i gi na l s of t hi s Am e ndm e nt s i gne d by Age nt , e a c h Bor r owe r , e a c h Gua r a nt or , a nd t he Re qui r e d Le nde r s . 3. Re a f f i r m a t i on; Re l e a s e . By s i gni ng t hi s Am e ndm e nt or t he a t t a c he d Ac knowl e dgm e nt : 3. 1 Ea c h Loa n Pa r t y a f f i r m s t ha t t he r e pr e s e nt a t i ons a nd wa r r a nt i e s i n e a c h of t he e xi s t i ng Loa n Doc um e nt s a r e t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s a s of t he da t e he r e of ( e xc e pt t ha t s uc h r e pr e s e nt a t i ons a nd wa r r a nt i e s t ha t s pe a k a s of a s pe c i f i e d da t e or pe r i od of t i m e s ha l l be t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s
onl y a s of s uc h da t e or pe r i od of t i m e ) , a nd a gr e e t ha t ( i ) e xc e pt a s a m e nde d pr e vi ous l y or i n c onne c t i on he r e wi t h, e a c h Loa n Doc um e nt i s va l i d a nd e nf or c e a bl e i n a c c or da nc e wi t h i t s t e r m s ( e xc e pt a s m a y be l i m i t e d by ba nkr upt c y, i ns ol ve nc y, r e or ga ni z a t i on, m or a t or i um , f r a udul e nt t r a ns f e r or s i m i l a r l a ws r e l a t i ng t o or l i m i t i ng c r e di t or s ’ r i ght s ge ne r a l l y or by e qui t a bl e pr i nc i pl e s ) a nd ( i i ) s uc h Loa n Pa r t y ha s no c l a i m s , de f e ns e s , s e t of f s , c ount e r c l a i m s or c l a i m s f or r e c oupm e nt a ga i ns t Age nt , t he Le nde r s , t he ot he r I nde m ni f i e d Pe r s ons or t he i nde bt e dne s s a nd obl i ga t i ons r e pr e s e nt e d by t he Not e s , Gua r a nt i e s , Col l a t e r a l Doc um e nt s a nd ot he r Loa n Doc um e nt s . 3. 2 Ea c h Loa n Pa r t y he r e by r e l e a s e s , a c qui t s , a nd f or e ve r di s c ha r ge s Age nt , e a c h Le nde r , t he i r r e s pe c t i ve pa r e nt c or por a t i ons , a f f i l i a t e s , s ubs i di a r i e s , s uc c e s s or s , a s s i gns , of f i c e r s , di r e c t or s , e m pl oye e s , a ge nt s , a t t or ne ys a nd a dvi s or s ( c ol l e c t i ve l y, " I nde m ni f i e d Pe r s ons ” ) , a nd e a c h of t he m , of a nd f r om a ny a nd a l l l i a bi l i t y, c l a i m s , de m a nds , da m a ge s , a c t i ons , c a us e s of
a c t i on, de f e ns e s , c ount e r c l a i m s , s e t of f s , or c l a i m s f or r e c oupm e nt of wha t s oe ve r na t ur e , whe t he r known or unknown, f r om t he be gi nni ng of t i m e t o t he da t e of t hi s Am e ndm e nt , whe t he r i n c ont r a c t or t or t or ot he r wi s e , a r i s i ng di r e c t l y or i ndi r e c t l y f r om , or i n a ny wa y r e l a t e d t o t he Loa n Agr e e m e nt , t hi s Am e ndm e nt , t he Not e s , Col l a t e r a l Doc um e nt s a nd t he ot he r Loa n Doc um e nt s , a ny ot he r i nde bt e dne s s or obl i ga t i ons of a ny Loa n Pa r t y t o Age nt or a ny one or m or e of t he Le nde r s or t o t he r e l a t i ons hi p be t we e n a ny Loa n Pa r t y a nd Age nt , a ny Le nde r , or t he I nde m ni f i e d Pe r s ons . 3. 3 Thi s Am e ndm e nt i s not a nova t i on of t he Loa n Agr e e m e nt or of a ny c r e di t f a c i l i t y or gua r a nt y pr ovi de d t he r e unde r or i n r e s pe c t t he r e of . Not wi t hs t a ndi ng t ha t t he c ove r pa ge of t he Am e nde d Cr e di t Agr e e m e nt i s da t e d " a s of Apr i l 29, 2021” a nd Se c t i on 9. 01 of t he Loa n Agr e e m e nt a t t a c he d he r e t o c ont a i ns t hos e c ondi t i ons whi c h we r e a ppl i c a bl e t o t he i ni t i a l Cl os i ng Da t e of Apr i l 29, 2021, t he c ha nge s t o t he Loa n Agr e e m e nt e f f e c t e d by t hi s Am e ndm e nt s ha l l be e f f e c t i ve a s
of t he s a t i s f a c t i on t o t he c ondi t i ons e f f e c t i ve ne s s s e t f or t h i n Se c t i on 2 of t hi s Am e ndm e nt . The s i gna t ur e pa ge s c ont a i ne d m a y be l e f t of f of t he Loa n Agr e e m e nt a t t a c he d he r e t o. 4. Re f e r e nc e s . On a nd a f t e r t he e f f e c t i ve da t e of t hi s Am e ndm e nt , a l l r e f e r e nc e s i n t he Loa n Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s t o t he Loa n Agr e e m e nt s ha l l be de e m e d t o r e f e r t o t he Loa n Agr e e m e nt a s a m e nde d he r e by. 5. Re pr e s e nt a t i ons a nd W a r r a nt i e s . By s i gni ng t hi s Am e ndm e nt or t he a t t a c he d Ac knowl e dgm e nt , e a c h Loa n Pa r t y r e pr e s e nt s a nd wa r r a nt s t o Age nt a nd t he Le nde r s a s f ol l ows :
- 3 - 45290519v4 5. 1 Aut hor i z a t i on. ( a ) I t ha s a l l r e qui s i t e powe r a nd a ut hor i t y t o e nt e r i nt o t hi s Am e ndm e nt a nd t o c a r r y out t he t r a ns a c t i ons c ont e m pl a t e d by, a nd pe r f or m i t s obl i ga t i ons unde r , t he Loa n Agr e e m e nt a s a m e nde d by t hi s Am e ndm e nt ( t he " Am e nde d Agr e e m e nt ” ) , ( b) i t s e xe c ut i on, de l i ve r y a nd pe r f or m a nc e of t hi s Am e ndm e nt a nd t he ot he r Loa n Doc um e nt s t o be e xe c ut e d, de l i ve r e d or pe r f or m e d by i t ha ve be e n dul y a ut hor i z e d by a l l ne c e s s a r y e nt i t y a c t i on, do not r e qui r e t he a ppr ova l of a ny gove r nm e nt a l a ge nc y or ot he r Pe r s on, do not c ont r a ve ne a ny l a w, r e gul a t i on, r ul e , or de r , or r e s t r i c t i on of a ny Gove r nm e nt a l Body bi ndi ng on i t or i t s a r t i c l e s of i nc or por a t i on or ot he r or ga ni z a t i ona l doc um e nt s , a nd do not c ont r a ve ne t he pr ovi s i ons of or c ons t i t ut e a de f a ul t unde r a ny a gr e e m e nt or i ns t r um e nt t o whi c h i t i s a pa r t y or by whi c h i t m a y be bound or a f f e c t e d, a nd ( c ) t hi s Am e ndm e nt ha s be e n dul y e xe c ut e d a nd de l i ve r e d by e a c h Loa n Pa r t y a nd t hi s Am e ndm e nt a nd t he Am e nde d Agr e e m e nt a r e t he l e ga l l y va l i d a nd bi ndi ng
obl i ga t i ons of e a c h Loa n Pa r t y, e nf or c e a bl e a ga i ns t s uc h Loa n Pa r t y i n a c c or da nc e wi t h t he i r r e s pe c t i ve t e r m s , e xc e pt a s m a y be l i m i t e d by ba nkr upt c y, i ns ol ve nc y, r e or ga ni z a t i on, m or a t or i um , f r a udul e nt t r a ns f e r or s i m i l a r l a ws r e l a t i ng t o or l i m i t i ng c r e di t or s ’ r i ght s ge ne r a l l y or by e qui t a bl e pr i nc i pl e s . 5. 2 Abs e nc e of De f a ul t . No De f a ul t or Eve nt of De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng or wi l l e xi s t a f t e r gi vi ng e f f e c t t o t he t r a ns a c t i ons c ont e m pl a t e d by t hi s Am e ndm e nt . 5. 3 Ea c h of t he r e pr e s e nt a t i ons a nd wa r r a nt i e s m a de by a ny Loa n Pa r t y i n or pur s ua nt t o t he Loa n Doc um e nt s a r e t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s on a nd a s of t he Thi r d Am e ndm e nt Ef f e c t i ve Da t e , e xc e pt t o t he e xt e nt s uc h r e pr e s e nt a t i ons a nd wa r r a nt i e s e xpr e s s l y r e l a t e t o a n e a r l i e r da t e , i n whi c h c a s e s uc h r e pr e s e nt a t i ons a nd wa r r a nt i e s a r e t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s a s of s uc h e a r l i e r da t e ( e xc e pt t ha t , i n e a c h c a s e , a ny r e pr e s e nt a t i on a nd wa r r a nt y t ha t i s qua l i f i e d a s t o " m a t e r i a l i t y” or " M a t e r i a l Adve r s e Ef f e c t ” a r e t r ue a nd c or r e c t i n a l l
r e s pe c t s ) . 6. Expe ns e s . Bor r owe r s s ha l l pa y a l l r e a s ona bl e c os t s , f e e s a nd e xpe ns e s ( i nc l udi ng wi t hout l i m i t a t i on, r e a s ona bl e a t t or ne y f e e s of Age nt ’ s c ouns e l ) i nc ur r e d by Age nt i n c onne c t i on wi t h t he pr e pa r a t i on, ne got i a t i on, e xe c ut i on, a nd de l i ve r y of t hi s Am e ndm e nt a nd a ny ot he r doc um e nt r e qui r e d t o be f ur ni s he d he r e wi t h. 7. Re c i t a l s . The Re c i t a l s a r e he r e by i nc or por a t e d he r e i n. 8. Count e r pa r t s . Thi s Am e ndm e nt m a y be e xe c ut e d i n a ny num be r of c ount e r pa r t s , e a c h of whi c h s ha l l be de e m e d t o be a n or i gi na l , a nd a l l of s a i d c ount e r pa r t s t a ke n t oge t he r s ha l l be de e m e d t o c ons t i t ut e but one doc um e nt . 9. Di s c l os ur e . Unde r Or e gon l a w, m os t a gr e e m e nt s , pr om i s e s a nd c om m i t m e nt s m a de by a l e nde r c onc e r ni ng l oa ns a nd ot he r c r e di t e xt e ns i ons whi c h a r e not f or pe r s ona l , f a m i l y or hous e hol d pur pos e s or s e c ur e d s ol e l y by t he bor r owe r ’ s r e s i de nc e m us t be i n wr i t i ng, e xpr e s s c ons i de r a t i on a nd be s i gne d by t he l e nde r t o be e nf or c e a bl e . 10. Gove r ni ng La w. THI S AM ENDM ENT SHALL BE GOVERNED BY, AND CONSTRUED I N ACCORDANCE W I TH, THE LAW S OF THE
STATE OF OREGON. - 4 - 45290519v4 [ Si gna t ur e pa ge s f ol l ow]
THI RD AM ENDM ENT DCH M I SSI ON VALLEY LLC DCH M ONM OUTH LLC DCH M ONTCLAI R LLC DCH M OTORS LLC DCH NANUET LLC DCH NY M OTORS LLC DCH OXNARD 1521 I M PORTS I NC. DCH RI VERSI DE- S, I NC. DCH TEM ECULA I M PORTS LLC DCH TEM ECULA M OTORS LLC DCH TORRANCE I M PORTS I NC. DESERT- CJ D, LLC DORAL- A, LLC DORAL- K, LLC DORAL- VW , LLC FARM I NGTON HI LLS I M PORTS, LLC FARM I NGTON HI LLS- CJ D, LLC FARM I NGTON HI LLS- H, LLC FARM I NGTON HI LLS- N, LLC FARM I NGTON HI LLS- T, LLC FERNDALE- BG, LLC FLORI DA CI TY- H, LLC FONTANA- H, I NC. FORT W ORTH- CJ D, LLC FREEHOLD NI SSAN LLC FRI SCO- K, I NC. GARDEN CI TY- CJ D, LLC HOUSTON- A, I NC. HOUSTON- H, I NC. HOUSTON- I , I NC. HUTCHI NS EUGENE NI SSAN, I NC. HUTCHI NS I M PORTED M OTORS, I NC. J ACKSON- T, LLC KATY- H, I NC. KNOXVI LLE- CJ D, LLC LAD CARSON- N, LLC LAD M I SSI ON VI EJ O- J LR, I NC. LAD- AU, LLC LAD- M B, LLC LAD- N, LLC LAD- P, LLC LAD- T, LLC LAD- V, LLC
THI RD AM ENDM ENT LAS VEGAS- CJ D, LLC LAS VEGAS- J , LLC LAUDERDALE- A, LLC LBM P, LLC LEAGUE CI TY- H, I NC LGPAC, I NC. LI THI A ACDM , I NC. LI THI A ANCHORAGE- C, LLC LI THI A ANCHORAGE- H, LLC LI THI A BAI ERL- S, LLC LI THI A BRYAN TEXAS, I NC. LI THI A CDH, I NC. LI THI A CI M R, I NC. LI THI A CJ DO, I NC. LI THI A CJ DSA, I NC. LI THI A CJ DSF, I NC. LI THI A CM , I NC. LI THI A CO, I NC. LI THI A CRATER LAKE- M , I NC. LI THI A CSA, I NC. LI THI A DE, I NC. LI THI A DES M OI NES- VW , LLC LI THI A DM I D, I NC. LI THI A DODGE OF TRI - CI TI ES, I NC. LI THI A FRESNO, I NC. LI THI A HAM I LTON- H, LLC LI THI A HAZLETON- H, LLC LI THI A HDM , I NC. LI THI A HGF, I NC. LI THI A HM I D, I NC. LI THI A I M PORTS OF ANCHORAGE, I NC. LI THI A J EF, I NC. LI THI A KLAM ATH, I NC. LI THI A KLAM ATH- T, I NC. LI THI A M BDM , I NC. LI THI A M EDFORD HON, I NC. LI THI A M I DDLETOW N- L, LLC LI THI A M OON- S, LLC LI THI A M OON- V, LLC LI THI A M ORGANTOW N- CJ D, LLC LI THI A M ORGANTOW N- S, LLC LI THI A M TLM , I NC. LI THI A NA, I NC. THI RD AM ENDM ENT LI THI A NC, I NC. LI THI A ND ACQUI SI TI ON CORP. #3 LI THI A NDM , I NC. LI THI A NF, I NC. LI THI A OF ANCHORAGE, I NC. LI THI A OF BEND #1, LLC
LI THI A OF BEND #2, LLC LI THI A OF BENNI NGTON – 2, LLC LI THI A OF BENNI NGTON – 3, LLC LI THI A OF BENNI NGTON – 4, LLC LI THI A OF BI LLI NGS I I LLC LI THI A OF BI LLI NGS, I NC. LI THI A OF DES M OI NES, I NC. LI THI A OF EUREKA, I NC. LI THI A OF FAI RBANKS, I NC. LI THI A OF GREAT FALLS, I NC. LI THI A OF HELENA, I NC. LI THI A OF HONOLULU- A, I NC. LI THI A OF HONOLULU- BGM CC, LLC LI THI A OF HONOLULU- V, LLC LI THI A OF KI LLEEN, LLC LI THI A OF LODI , I NC. LI THI A OF M AUI - H, LLC LI THI A OF M I SSOULA I I , LLC LI THI A OF M I SSOULA, I NC. LI THI A OF POCATELLO, I NC. LI THI A OF PORTLAND I , LLC LI THI A OF PORTLAND, LLC LI THI A OF ROBSTOW N, LLC LI THI A OF ROSEBURG, I NC. LI THI A OF SEATTLE, I NC. LI THI A OF SOUTH CENTRAL AK, I NC. LI THI A OF STOCKTON, I NC. LI THI A OF STOCKTON- V, I NC. LI THI A OF TF, I NC. LI THI A OF TROY, LLC LI THI A OF UTI CA – 3, LLC LI THI A OF UTI CA – 4, LLC LI THI A OF W ALNUT CREEK, I NC. LI THI A OF W ASI LLA, LLC LI THI A OF YORKVI LLE – 1, LLC LI THI A OF YORKVI LLE – 2, LLC LI THI A OF YORKVI LLE – 3, LLC
THI RD AM ENDM ENT LI THI A OF YORKVI LLE – 4, LLC LI THI A OF YORKVI LLE – 5, LLC LI THI A ORCHARD PARK- H, LLC LI THI A PARAM US- M , LLC LI THI A PI TTSBURGH- S, LLC LI THI A RAM SEY- B, LLC LI THI A RAM SEY- L, LLC LI THI A RAM SEY- M , LLC LI THI A RAM SEY- T, LLC LI THI A RENO SUB- HYUN, I NC. LI THI A RENO- CJ , LLC LI THI A RENO- VW , LLC LI THI A SALM I R, I NC. LI THI A SEA P, I NC. LI THI A SEASI DE, I NC. LI THI A SOC, I NC. LI THI A SPOKANE- B, LLC LI THI A SPOKANE- S, LLC LI THI A TA, I NC. LI THI A TO, I NC. LI THI A TR, I NC. LI THI A VAUDM , I NC. LI THI A W EXFORD- H, LLC LLL SALES CO LLC LM BB, LLC LM BP, LLC LM OP, LLC LOS ANGELES- M , I NC. M ADI SON- H, I NC. M ESQUI TE- K, I NC. M I AM I GARDENS- BG, LLC M I AM I GARDENS- M , LLC M I AM I GARDENS- S, LLC M I SSI ON HI LLS- H, I NC. M OBI LE- S, LLC NEW PORT RI CHEY- V, LLC NOVI - I , LLC ORLANDO- J LR, LLC PARAM US W ORLD M OTORS LLC PHI LADELPHI A- F, LLC PHOENI X- T, I NC. PLYM OUTH- C, LLC ROCKW ALL- H, I NC. THI RD AM ENDM ENT ROCKW ALL- K, I NC. ROSEVI LLE- C, I NC ROSEVI LLE- K, I NC ROSEVI LLE- T, I NC ROUND ROCK- K, I NC. SACRAM ENTO- L, I NC. SALEM - B, LLC SALEM - H, LLC SALEM - V, LLC SAN
FRANCI SCO- B, I NC. SANFORD- CJ D, LLC SHARLENE REALTY LLC SHERM AN OAKS- A, I NC. SHERM AN OAKS- AC, I NC. SHERM AN OAKS- B, I NC. STERLI NG- BM , LLC STERLI NG- RLM , LLC TAM PA- H, LLC THOUSAND OAKS- S, I NC. TROY EXOTI CS, LLC TROY- BG, LLC TROY- C, LLC TROY- CJ D, LLC TROY- H, LLC TROY- I , LLC TROY- J LR, LLC TROY- M , LLC TROY- N, LLC TROY- S, LLC TROY- T, LLC TROY- V, LLC TROY- VW , LLC TUSTI N M OTORS I NC. UNI ON- H, LLC URBANDALE- S, LLC VALENCI A- A, I NC. VAN NUYS- C, I NC. VAN NUYS- H, I NC. VAN NUYS- L, I NC. VAN NUYS- T, I NC. W AUKESHA- H, I NC. W AUKESHA- S, I NC. W AUKESHA- CJ D, I NC.
THI RD AM ENDM ENT NI SSAN M OTOR ACCEPTANCE CORPORATI ON, a s Le nde r By: Na m e : Ti t l e : Sr . M a na ge r , De a l e r Cr e di t Todd Voor hi e s
VW CREDI T, I NC. , a s Le nde r By: Na m e : Ti t l e : THI RD AM ENDM ENT Robb Ne r di n Se ni or M a na ge r , Com m e r c i a l Cr e di t
THI RD AM ENDM ENT TRUI ST BANK, a s Le nde r By: Na m e : J ohn P. W of f or d Ti t l e : Aut hor i z e d Of f i c e r BM O HARRI S BANK N. A. , a s Le nde r By: ~ Nm ne ~~ c ho~ Ti t l e : Di r e c t or TuI RD AM ENDM ENT
THI RD AM ENDM ENT ACKNOW LEDGM ENT AND CONSENT OF GUARANTORS Ea c h unde r s i gne d Gua r a nt or he r e by a c knowl e dge s , c ons e nt s , a nd a gr e e s t o a l l t e r m s a nd c ondi t i ons of t he f or e goi ng Am e ndm e nt . 797 VALLEY STREET LLC ANN ARBOR- B, LLC ANN ARBOR- CC, LLC ANN ARBOR- CJ D, LLC ANN ARBOR- M , LLC AUSTI N- H, I NC. AUSTI N- KI , I NC. AVONDALE- N, I NC. BAI ERL AUTO PARTS, LLC BAI ERL AUTOM OTI VE CORPORATI ON BAI ERL CHEVROLET, I NC. BAI ERL HOLDI NG, LLC BEND- CDJ R, LLC BEND- N, LLC BELLEVUE- S, LLC BELLEVUE- T, LLC CADI LLAC OF PORTLAND LLOYD CENTER, LLC CAM P AUTOM OTI VE, I NC. CARBONE AUTO BODY, LLC CENTENNI AL- HY, LLC CHAM BLEE- H, LLC CLEAR LAKE- I , I NC. CLI NTON- C, LLC CORAL SPRI NGS- A, LLC COSTA M ESA- CJ D, I NC. CRANBERRY AUTOM OTI VE, I NC. DAH CHONG HONG CA TRADI NG LLC DAH CHONG HONG TRADI NG CORPORATI ON DALLAS COLLI SI ON, I NC. DALLAS- H, I NC. DALLAS- K, I NC. DALLAS- T, I NC. DARON M OTORS LLC DCH ( OXNARD) I NC. DCH AUTO GROUP ( USA) I NC. DCH BLOOM FI ELD LLC DCH CA LLC DCH CALABASAS- A, LLC THI RD AM ENDM ENT DCH CALI FORNI A I NVESTM ENTS LLC DCH CALI FORNI A M OTORS I NC. DCH DEL NORTE, I NC. DCH DM S
NJ , LLC DCH ESSEX I NC. DCH FI NANCI AL NJ , LLC DCH FREEHOLD LLC DCH HOLDI NGS LLC DCH I NVESTM ENTS I NC. ( NEW J ERSEY) DCH I NVESTM ENTS I NC. ( NEW YORK) DCH KOREAN I M PORTS LLC DCH M AM ARONECK LLC DCH M I SSI ON VALLEY LLC DCH M ONM OUTH LLC DCH M ONTCLAI R LLC DCH M OTORS LLC DCH NANUET LLC DCH NORTH AM ERI CA I NC. DCH NY M OTORS LLC DCH OXNARD 1521 I M PORTS I NC. DCH RI VERSI DE- S, I NC. DCH SUPPORT SERVI CES, LLC DCH TEM ECULA I M PORTS LLC DCH TEM ECULA M OTORS LLC DCH THOUSAND OAKS- F, I NC. DCH TL HOLDI NGS LLC DCH TL NY HOLDI NGS LLC DCH TORRANCE I M PORTS I NC. DESERT- CJ D, LLC DORAL- A, LLC DORAL- G, LLC DORAL- HY, LLC DORAL- K, LLC DORAL- VW , LLC DRI VEW AY M OTORS, LLC ELK GROVE- F, I NC. FARM I NGTON HI LLS I M PORTS, LLC FARM I NGTON HI LLS- CJ D, LLC FARM I NGTON HI LLS- H, LLC FARM I NGTON HI LLS- N, LLC FARM I NGTON HI LLS- T, LLC FERNDALE COLLI SI ON, LLC FERNDALE- BG, LLC
THI RD AM ENDM ENT FERNDALE- F, LLC FH COLLI SI ON, LLC FLORI DA CI TY- H, LLC FLORI DA SS, LLC FONTANA- H, I NC. FORT W ORTH- CJ D, LLC FREEHOLD NI SSAN LLC FRI SCO- K, I NC. FUSE AUTO SALES, LLC GARDEN CI TY- CJ D, LLC GREENCARS, I NC. HENDERSON- HY, LLC HOUSTON- A, I NC. HOUSTON- H, I NC. HOUSTON- I , I NC. HUTCHI NS EUGENE NI SSAN, I NC. HUTCHI NS I M PORTED M OTORS, I NC. J ACKSON- T, LLC KATY- H, I NC. KNOXVI LLE- CJ D, LLC LA M OTORS HOLDI NG, LLC LAD ADVERTI SI NG, I NC. LAD CARSON- N, LLC LAD M I SSI ON VI EJ O- J LR, I NC. LAD M OBU, I NC. LAD- AU, LLC LAD- F, I NC. LAD- M B, LLC LAD- N, LLC LAD- P, LLC LAD- T, LLC LAD- V, LLC LAS VEGAS- CJ D, LLC LAS VEGAS- J , LLC LAS VEGAS- G, LLC LAS VEGAS- HY, LLC LATHAM FORD- F, LLC LAUDERDALE- A, LLC LBM P, LLC LEAGUE CI TY- H, I NC. LFKF, LLC LGPAC, I NC. LI THI A ACDM , I NC. THI RD AM ENDM ENT LI THI A AI RCRAFT, I NC. LI THI A ANCHORAGE- C, LLC LI THI A ANCHORAGE- H, LLC LI THI A ARM ORY GARAGE, LLC LI THI A AUCTI ON & RECON, LLC LI THI A AUTO SERVI CES, I NC. LI THI A BA HOLDI NG, I NC. LI THI A BAI ERL- S, LLC LI THI A BNM , I NC. LI THI A BRYAN TEXAS, I NC. LI THI A CDH, I NC. LI THI A CI M R, I NC. LI THI A
CJ DO, I NC. LI THI A CJ DSA, I NC. LI THI A CJ DSF, I NC. LI THI A CM , I NC. LI THI A CO, I NC. LI THI A CRATER LAKE- F, I NC. LI THI A CRATER LAKE- M , I NC. LI THI A CSA, I NC. LI THI A DE, I NC. LI THI A DES M OI NES- VW , LLC LI THI A DM , I NC. LI THI A DM I D, I NC. LI THI A DODGE OF TRI - CI TI ES, I NC. LI THI A EATONTOW N- F, LLC LI THI A FI NANCI AL CORPORATI ON LI THI A FLCC, LLC LI THI A FLORI DA HOLDI NG, I NC. LI THI A FM F, I NC. LI THI A FORD OF BOI SE, I NC. LI THI A FRESNO, I NC. LI THI A HAM I LTON- H, LLC LI THI A HAZLETON- H, LLC LI THI A HDM , I NC. LI THI A HGF, I NC. LI THI A HM I D, I NC. LI THI A HPI , I NC. LI THI A I DAHO FALLS- F, I NC. LI THI A I M PORTS OF ANCHORAGE, I NC. LI THI A J EF, I NC. LI THI A KLAM ATH, I NC. LI THI A KLAM ATH- T, I NC.
THI RD AM ENDM ENT LI THI A LBGGF, I NC. LI THI A LHGF, I NC. LI THI A M BDM , I NC. LI THI A M c M URRAY- C, LLC LI THI A M EDFORD HON, I NC. LI THI A M I CHI GAN HOLDI NG, I NC. LI THI A M I DDLETOW N- L, LLC LI THI A M ONROEVI LLE- A, LLC LI THI A M ONROEVI LLE- C, LLC LI THI A M ONROEVI LLE- F, LLC LI THI A M OON- S, LLC LI THI A M OON- V, LLC LI THI A M ORGANTOW N- CJ D, LLC LI THI A M ORGANTOW N- F, LLC LI THI A M ORGANTOW N- S, LLC LI THI A M OTORS SUPPORT SERVI CES, I NC. LI THI A M TLM , I NC. LI THI A NA, I NC. LI THI A NC, I NC. LI THI A ND ACQUI SI TI ON CORP. #1 LI THI A ND ACQUI SI TI ON CORP. #3 LI THI A NDM , I NC. LI THI A NF, I NC. LI THI A NORTHEAST REAL ESTATE, LLC LI THI A NORTHW EST REAL ESTATE, LLC LI THI A OF ANCHORAGE, I NC. LI THI A OF BEND #1, LLC LI THI A OF BEND #2, LLC LI THI A OF BENNI NGTON – 1, LLC LI THI A OF BENNI NGTON – 2, LLC LI THI A OF BENNI NGTON – 3, LLC LI THI A OF BENNI NGTON – 4, LLC LI THI A OF BI LLI NGS I I LLC LI THI A OF BI LLI NGS, I NC. LI THI A OF CASPER, LLC LI THI A OF CORPUS CHRI STI , I NC. LI THI A OF DES M OI NES, I NC. LI THI A OF EUREKA, I NC. LI THI A OF FAI RBANKS, I NC. LI THI A OF GREAT FALLS, I NC. LI THI A OF HELENA, I NC.
LI THI A OF HONOLULU- A, I NC. LI THI A OF HONOLULU- BGM CC, LLC THI RD AM ENDM ENT LI THI A OF HONOLULU- F, LLC LI THI A OF HONOLULU- V, LLC LI THI A OF KI LLEEN, LLC LI THI A OF LODI , I NC. LI THI A OF M AUI - H, LLC LI THI A OF M I SSOULA I I , LLC LI THI A OF M I SSOULA I I I , I NC. LI THI A OF M I SSOULA, I NC. LI THI A OF POCATELLO, I NC. LI THI A OF PORTLAND I , LLC LI THI A OF PORTLAND, LLC LI THI A OF ROBSTOW N, LLC LI THI A OF ROSEBURG, I NC. LI THI A OF SEATTLE, I NC. LI THI A OF SOUTH CENTRAL AK, I NC. LI THI A OF SPOKANE I I , I NC. LI THI A OF SPOKANE, I NC. LI THI A OF STOCKTON, I NC. LI THI A OF STOCKTON- V, I NC. LI THI A OF TF, I NC. LI THI A OF TROY, LLC LI THI A OF UTI CA – 2, LLC LI THI A OF UTI CA – 3, LLC LI THI A OF UTI CA – 4, LLC LI THI A OF W ALNUT CREEK, I NC. LI THI A OF W ASI LLA, LLC LI THI A OF YORKVI LLE – 1, LLC LI THI A OF YORKVI LLE – 2, LLC LI THI A OF YORKVI LLE – 3, LLC LI THI A OF YORKVI LLE – 4, LLC LI THI A OF YORKVI LLE – 5, LLC LI THI A ORCHARD PARK- H, LLC LI THI A PARAM US- M , LLC LI THI A PI TTSBURGH- S, LLC LI THI A RAM SEY- B, LLC LI THI A RAM SEY- L, LLC LI THI A RAM SEY- M , LLC LI THI A RAM SEY- T, LLC LI THI A REAL ESTATE, I NC.
LI THI A RENO SUB- HYUN, I NC. LI THI A RENO- CJ , LLC LI THI A RENO- VW , LLC LI THI A ROSE- FT, I NC.
THI RD AM ENDM ENT LI THI A SALM I R, I NC. LI THI A SEA P, I NC. LI THI A SEASI DE, I NC. LI THI A SOC, I NC. LI THI A SPOKANE- B, LLC LI THI A SPOKANE- S, LLC LI THI A SSP, LLC LI THI A TA, I NC. LI THI A TENNESSEE HOLDI NG, I NC. LI THI A TO, I NC. LI THI A TR, I NC. LI THI A UNI ONTOW N- C, LLC LI THI A VA REAL ESTATE, LLC LI THI A VAUDM , I NC. LI THI A VI RGI NI A HOLDI NG, I NC. LI THI A W EXFORD- H, LLC LLL SALES CO LLC LM BB, LLC LM BP, LLC LM OP, LLC LOS ANGELES- M , I NC. LSTAR, LLC M ADI SON- H, I NC. M EDFORD I NSURANCE, LLC M ESQUI TE- K, I NC. M I AM I GARDENS- BG, LLC M I AM I GARDENS- G, LLC M I AM I GARDENS- HY, LLC M I AM I GARDENS- M , LLC M I AM I GARDENS- S, LLC M I SSI ON HI LLS- H, I NC. M OBI LE- S, LLC NEW PORT RI CHEY- H, LLC NEW PORT RI CHEY- V, LLC NORTHLAND FORD I NC. NOVI - I , LLC ORLANDO- J LR, LLC PA REAL ESTATE, LLC PA SUPPORT SERVI CES, LLC PARAM US COLLI SI ON, LLC PARAM US W ORLD M OTORS LLC PERSONALI ZED M ARKETI NG, LLC PHI LADELPHI A- F, LLC THI RD AM ENDM ENT PHOENI X- T, I NC. PLYM OUTH- C, LLC RAM SEY HOLDI NGCO, I NC. REDW OOD- HY, LLC RFA HOLDI NGS, LLC ROCKW ALL- H, I NC. ROCKW ALL- K, I NC. ROSEVI LLE- C, I NC.
ROSEVI LLE- K, I NC. ROSEVI LLE- T, I NC ROUND ROCK- K, I NC. SACRAM ENTO- L, I NC. SALEM - B, LLC SALEM - H, LLC SALEM - V, LLC. SAN FRANCI SCO- B, I NC. SANFORD- CJ D, LLC SHARLENE REALTY LLC SHERM AN OAKS- A, I NC. SHERM AN OAKS- AC, I NC. SHERM AN OAKS- B, I NC. SHI FT PORTLAND, LLC STERLI NG HEI GHTS- F, LLC STERLI NG- BM , LLC STERLI NG- RLM , LLC SUBURBAN AUTO AGENCY, LLC TAM PA- F, LLC TAM PA- H, LLC THOUSAND OAKS- S, I NC. TN REAL ESTATE, LLC TROY COLLI SI ON, LLC TROY EXOTI CS, LLC TROY- A, LLC TROY- BG, LLC TROY- C, LLC TROY- CJ D, LLC TROY- F, LLC TROY- H, LLC TROY- I , LLC TROY- J LR, LLC TROY- M , LLC TROY- N, LLC TROY- S, LLC
- 4 - 45290519v4 [ Si gna t ur e pa ge s f ol l ow]
ANNEX A Am e nde d Loa n Agr e e m e nt [ s e e a t t a c he d] . Exe c ut i on Ve r s i on Conf or m e d t hr ough Fi r s t Am e ndm e nt t o Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt Conf or m e d t hr ough Se c ond Am e ndm e nt t o Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt Conf or m e d t hr ough Thi r d Am e ndm e nt t o Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt De a l CUSI P 53679VAB62 Ne w Ve hi c l e Fl oor pl a n Fa c i l i t y CUSI P 53679VAD2 Us e d Ve hi c l e Fl oor pl a n Fa c i l i t y CUSI P 53679VAC4 Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Fa c i l i t y CUSI P 53679VAE0 Re vol vi ng Li ne of Cr e di t Fa c i l i t y CUSI P 53679VAB6 FOURTH AM ENDED AND RESTATED LOAN AGREEM ENT Am ong LI THI A M OTORS, I NC. , CERTAI N OF I TS SUBSI DI ARI ES, THE LENDERS PARTY HERETO FROM TI M E TO TI M E, a nd U. S. BANK NATI ONAL ASSOCI ATI ON, a s Adm i ni s t r a t i ve Age nt a nd Age nt a nd J PM or ga n Cha s e Ba nk, N. A. , Toyot a M ot or Cr e di t Cor por a t i on, M e r c e de s - Be nz Fi na nc i a l Se r vi c e s USA LLC, a nd Ba nk of Am e r i c a , N. A, a s Co- Syndi c a t i on Age nt s U. S. Ba nk Na t i ona l As s oc i a t i on, J . P. M or ga n Se c ur i t i e s LLC a nd Toyot a M ot or Cr e di t Cor por a t i on, As Co- Le a d Ar r a nge r s a nd J oi nt
Bookr unne r s 3971574945289837v13 115525625. 4 0063724- 00082
Am e r i c a n Honda Fi na nc e Cor por a t i on a nd TD Ba nk, N. A. , a s Co- Doc um e nt a t i on Age nt s Da t e d a s of Apr i l 29, 2021 2 115525625. 4 0063724- 00082 TABLE OF CONTENTS ARTI CLE 1 DEFI NI TI ONS AND I NTERPRETI VE PROVI SI ONS 1 1. 1 De f i ne d Te r m s 1 1. 2 Di vi s i ons 46 1. 3 Ot he r I nt e r pr e t i ve Pr ovi s i ons . 46 1. 4 Ra t e s 4748 1. 5 Li m i t e d Condi t i on Ac qui s i t i on. 48 ARTI CLE 2 NEW VEHI CLE FLOORPLAN LI NE OF CREDI T 49 2. 1 Ne w Ve hi c l e Fl oor pl a n Loa ns . 4950 2. 2 Ne w Ve hi c l e Swi ng Li ne Loa ns . 52 2. 3 Te r m s Appl i c a bl e t o Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns . 56 2. 4 Ne w Ve hi c l e Fl oor pl a n Bor r owe r s . 58 2. 5 Addi t i on of Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps 6364 ARTI CLE 3 USED VEHI CLE FLOORPLAN AND SERVI CE LOANER VEHI CLE FLOORPLAN LI NE OF CREDI T 6566 3. 1 Us e d Ve hi c l e Fl oor pl a n Loa ns . 66 3. 2 Us e d Ve hi c l e Swi ng Li ne Loa ns . 69 3. 3 Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns . 7273 3. 4 Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . 7576 ARTI CLE 4 REVOLVI NG LI NE OF CREDI T 79 4. 1 Re vol vi ng Loa ns . 79 4. 2 Re vol vi ng Swi ng Li ne Loa ns . 8283 ARTI CLE 5 LETTERS OF CREDI T 85 5. 1 Le t t e r of Cr e di t
Com m i t m e nt 8586 5. 2 Exi s t i ng Le t t e r s of Cr e di t 8586 5. 3 LC Agr e e m e nt s 8586 5. 4 Expi r y Da t e 86 5. 5 Re que s t s f or Le t t e r s of Cr e di t 86 5. 6 Pa r t i c i pa t i on i n Le t t e r s of Cr e di t 8687 5. 7 Pa ym e nt s 87 5. 8 Te r m s Sa t i s f a c t or y t o LC I s s ue r 8788 5. 9 Obl i ga t i ons Abs ol ut e 8788 5. 10 Le t t e r of Cr e di t Fe e s . 8889 5. 11 LC Col l a t e r a l Ac c ount 8889 5. 12 Bor r owe r I nde m ni f i c a t i on 89 5. 13 Le nde r s ’ I nde m ni f i c a t i on 8990 ARTI CLE 6 CERTAI N ADDI TI ONAL PROVI SI ONS 90 6. 1 I nt e r e s t . 90 6. 2 Evi de nc e of De bt 9091 6. 3 Bor r owi ng Pr oc e dur e . 91 6. 4 Obl i ga t i ons Se ve r a l 9192 6. 5 Non- Re c e i pt of Funds by t he Age nt 9192 115525625. 4 0063724- 00082
6. 6 Aut hor i z a t i on 92 6. 7 I nt e r e s t a nd Fe e Ba s i s 9293 6. 8 M e t hod of Pa ym e nt 93 6. 9 Pa ym e nt by Aut om a t i c De bi t 93 6. 10 La t e Cha r ge s 9394 6. 11 Li m i t a t i on of I nt e r e s t 9394 6. 12 I nc r e a s e Opt i on. 9495 6. 13 Aut hor i z a t i on 9596 6. 14 De f a ul t i ng Le nde r s . 9596 6. 15 Re pl a c e m e nt of Le nde r 99 6. 16 Pe r Annum Fe e 99100 6. 17 Re a l l oc a t i on of Com m i t m e nt s . 99100 6. 18 Ext e ns i on of Com m i t m e nt s . 101 6. 19 De s i gna t i on of Dua l Subs i di a r i e s . 102103 6. 20 Er r one ous Pa ym e nt s 104 ARTI CLE 7 YI ELD PROTECTI ON; TAXES 105106 7. 1 Yi e l d Pr ot e c t i on 105106 7. 2 Cha nge s i n Ca pi t a l Ade qua c y Re gul a t i ons 106107 7. 3 Ava i l a bi l i t y of Type s of Adva nc e s ; Ade qua c y of I nt e r e s t Ra t e 107 7. 4 Ta xe s . 109 7. 5 Se l e c t i on of Le ndi ng I ns t a l l a t i on; M i t i ga t i on Obl i ga t i ons ; Le nde r St a t e m e nt s ; Sur vi va l of I nde m ni t y 113 ARTI CLE 8 SECURI TY AND GUARANTI ES 113 8. 1 Se c ur i t y. 113 8. 2 Gua r a nt i e s 114115 ARTI CLE 9 CONDI TI ONS PRECEDENT 115 9. 1 I ni t i a l Condi t i ons Pr e c e de nt 115 9. 2 Condi t i ons Pr e c e de nt t o Ea c h Cr e di t Ext e ns i on 117 9. 3 Condi t i ons Pr e c e de nt t o I ni t i a l Adva nc e t o a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r
118 9. 4 Re a l Pr ope r t y Condi t i ons 118119 ARTI CLE 10 REPRESENTATI ONS AND W ARRANTI ES 120 10. 1 Exi s t e nc e a nd St a ndi ng 120 10. 2 Aut hor i z a t i on a nd Va l i di t y 120 10. 3 Conf l i c t ; Gove r nm e nt Cons e nt 120121 10. 4 Fi na nc i a l St a t e m e nt s 121 10. 5 M a t e r i a l Adve r s e Ef f e c t 121 10. 6 Ta xe s 121 10. 7 Li t i ga t i on 121 10. 8 Subs i di a r i e s a nd Af f i l i a t e s 121122 10. 9 ERI SA 122 10. 10 Ac c ur a c y of I nf or m a t i on 122 10. 11 Re gul a t i on U 122 10. 12 M a t e r i a l Agr e e m e nt s 122123 i i 115525625. 4 0063724- 00082 10. 13 Com pl i a nc e wi t h La ws 122123 10. 14 Owne r s hi p of Pr ope r t i e s 123 10. 15 Pl a n As s e t s ; Pr ohi bi t e d Tr a ns a c t i ons 123 10. 16 Tr a de m a r ks ; Pa t e nt s , Et c . 123 10. 17 Bur de ns om e Re s t r i c t i ons 123 10. 18 [ Re s e r ve d] 123 10. 19 I nve s t m e nt Com pa ny Ac t , Et c . 123 10. 20 Sol ve nc y 123124 10. 21 Fr a nc hi s e Agr e e m e nt s ; M a t e r i a l Bus i ne s s Re l a t i ons hi ps 123124 10. 22 Se c ur i t y I nt e r e s t s 124 10. 23 Cont i nui ng Re pr e s e nt a t i ons a nd W a r r a nt i e s 124 10. 24 Ant i - Cor r upt i on La ws ; Sa nc t i ons 124 10. 25 Af f e c t e d Fi na nc i a l I ns t i t ut i on 124125 ARTI CLE 11 FI NANCI AL COVENANTS AND I NFORM ATI ON 124125 11. 1 Fi na nc i a l Cove na nt s .
124125 11. 2 Fi na nc i a l I nf or m a t i on 126127 ARTI CLE 12 AFFI RM ATI VE COVENANTS 128129 12. 1 M a i nt e na nc e of Exi s t e nc e a nd Pe r m i t s 128129 12. 2 ERI SA 129 12. 3 I ns pe c t i on 129 12. 4 Col l a t e r a l Audi t s 129 12. 5 Books a nd Re c or ds 129130 12. 6 M a i nt e na nc e of Pr ope r t i e s 130 12. 7 Ta xe s a nd Ot he r Obl i ga t i ons 130 12. 8 I ns ur a nc e . 130 12. 9 Com pl i a nc e wi t h La ws ; Pe r f or m a nc e Unde r Agr e e m e nt s 131 12. 10 Agr e e m e nt s wi t h Se l l e r s 131 12. 11 Re pur c ha s e Agr e e m e nt s 131 12. 12 [ Re s e r ve d] . 131132 12. 13 La ndl or d’ s Cons e nt s 131132 12. 14 Not i f i c a t i on 131132 12. 15 Fur t he r As s ur a nc e s 133 12. 16 De pos i t Ac c ount s 133134 12. 17 J oi nde r of Ne w Subs i di a r i e s a nd De a l e r s hi ps 133134 12. 18 Us e of Pr oc e e ds 134 12. 19 Ant i - M one y La unde r i ng Com pl i a nc e 134135 12. 20 J oi nde r of Addi t i ona l Dua l Subs i di a r y Le nde r s 134135 12. 21 Fi na nc e d Ent i t i e s 134135 12. 22 Type of Bus i ne s s 135 ARTI CLE 13 NEGATI VE COVENANTS 135 13. 1 M e r ge r s , Et c . 135 13. 2 [ Re s e r ve d] . 136137 13. 3 Li e ns 137 13. 4 Re s t r i c t e d Pa ym e nt s 139140 i i i 115525625. 4 0063724- 00082
13. 5 Subor di na t e d De bt 140141 13. 6 Loa ns a nd I nve s t m e nt s 140141 13. 7 Tr a ns a c t i ons wi t h Af f i l i a t e s 142143 13. 8 Type of Bus i ne s s 142[ Re s e r ve d] 143 13. 9 St r uc t ur e 142143 13. 10 I nde bt e dne s s 143 13. 11 M a r gi n St oc k; Spe c ul a t i on 145 13. 12 Re s t r i c t i ve Agr e e m e nt s 145 13. 13 Pe r m i t t e d Ac qui s i t i ons 145146 13. 14 Ac c ount i ng Cha nge s ; Fi s c a l Ye a r 148 13. 15 Exc l ude d Ta x Cr e di t I nve s t m e nt Subs i di a r i e s 148 13. 16 Dua l Subs i di a r i e s 148 13. 17 Addi t i ona l Cr e di t Suppor t Doc um e nt a t i on. 148149 ARTI CLE 14 DEFAULT AND REM EDI ES 149 14. 1 Eve nt s of De f a ul t 149 14. 2 Cons e que nc e s of De f a ul t ; Ri ght s a nd Re m e di e s 151152 14. 3 Appl i c a t i on of Pa ym e nt s 153 ARTI CLE 15 HAZARDOUS SUBSTANCES 153154 15. 1 Re pr e s e nt a t i ons a nd W a r r a nt i e s 153154 15. 2 Ac t i vi t i e s 153154 15. 3 I ns pe c t i ons 154 15. 4 Re l e a s e a nd I nde m ni t y 154 15. 5 Sur vi va l 154155 ARTI CLE 16 THE AGENT 154155 16. 1 Appoi nt m e nt ; Na t ur e of Re l a t i ons hi p 154155 16. 2 Powe r s 155 16. 3 Ge ne r a l I m m uni t y 155 16. 4 No Re s pons i bi l i t y f or Loa ns , Re c i t a l s , Et c . 155 16. 5 Ac t i on on I ns t r uc t i ons of Le nde r s 155156 16. 6 Em pl oym e nt of t he Age nt s
a nd Couns e l 155156 16. 7 Re l i a nc e on Doc um e nt s ; Couns e l 156 16. 8 Re i m bur s e m e nt a nd I nde m ni f i c a t i on 156 16. 9 Not i c e of Eve nt of De f a ul t 156157 16. 10 Ri ght s a s a Le nde r 157 16. 11 Le nde r Cr e di t De c i s i on, Le ga l Re pr e s e nt a t i on. 157 16. 12 Suc c e s s or Age nt 157158 16. 13 Age nt ’ s Fe e s 158 16. 14 De l e ga t i on t o Af f i l i a t e s 158159 16. 15 Exe c ut i on of Col l a t e r a l Doc um e nt s 158159 16. 16 Col l a t e r a l Re l e a s e s 158159 16. 17 No Advi s or y or Fi duc i a r y Re s pons i bi l i t y 158159 16. 18 Co- Doc um e nt a t i on Age nt s , Syndi c a t i on Age nt , e t c . 159 16. 19 Ce r t a i n ERI SA M a t t e r s . 159160 ARTI CLE 17 M I SCELLANEOUS 160161 i v 115525625. 4 0063724- 00082 17. 1 Expe ns e s ; I nde m ni f i c a t i on 160161 17. 2 Suc c e s s or s a nd As s i gns 161162 17. 3 Pa r t i c i pa t i ons . 162 17. 4 As s i gnm e nt s . 163164 17. 5 Re gi s t e r 164165 17. 6 Di s s e m i na t i on of I nf or m a t i on 165 17. 7 Ra t a bl e Pa ym e nt s 165 17. 8 Se t of f 165166 17. 9 Am e ndm e nt s a nd W a i ve r s . 166 17. 10 W a i ve r ; Cum ul a t i ve Re m e di e s 167 17. 11 Not i c e s . 167168 17. 12 I nt e gr a t i on; Conf l i c t i ng Te r m s 168169 17. 13 Gove r ni ng La w 169 17. 14 Cons e nt To J ur i s di c t i on 169 17. 15 Doc um e nt s
Sa t i s f a c t or y t o t he Age nt a nd Re qui r e d Le nde r s 169170 17. 16 Exhi bi t s 169170 17. 17 He a di ngs 169170 17. 18 Nonl i a bi l i t y of Le nde r s 169170 17. 19 Sur vi va l of Re pr e s e nt a t i ons 170 17. 20 Gove r nm e nt a l Re gul a t i on 170 17. 21 Count e r pa r t s 170171 17. 22 Se ve r a bi l i t y 170171 17. 23 Cons t r uc t i on 170171 17. 24 USA Pa t r i ot Ac t Not i f i c a t i on 171 17. 25 Nonr e l i a nc e 171 17. 26 Conf i de nt i a l i t y 171 17. 27 For d Le t t e r Agr e e m e nt 172 17. 28 W a i ve r of J ur y Tr i a l 172 17. 29 Di s c l os ur e 172 17. 30 Ac knowl e dge m e nt a nd Cons e nt t o Ba i l - I n of Af f e c t e d Fi na nc i a l I ns t i t ut i ons 172 17. 31 Am e ndm e nt a nd Re s t a t e m e nt 173 17. 32 Ac knowl e dge m e nt Re ga r di ng a ny Suppor t e d QFCs 173 SCHEDULE 1 – COM M I TM ENTS SCHEDULE 2 – DUAL SUBSI DI ARI ES PRI CI NG SCHEDULE DI SCLOSURE SCHEDULE EXHI BI T A – COM PLI ANCE CERTI FI CATE EXHI BI T B- 1 – USED VEHI CLE BORROW I NG BASE CERTI FI CATE EXHI BI T B- 2 – SERVI CE LOANER VEHI CLE BORROW I NG BASE CERTI FI CATE EXHI BI T C – REVOLVI NG LOAN BORROW I NG BASE CERTI FI CATE EXHI BI T D – ASSI GNM ENT AGREEM ENT EXHI BI T E – PLEDGE AGREEM ENT EXHI BI T F – SECURI TY AGREEM ENT v 115525625. 4 0063724-
00082
EXHI BI T G – COM M ERCI AL GUARANTY EXHI BI T H- 1 – LOAN PARTY TERM I NATI ON AGREEM ENT EXHI BI T H- 2 – SI LO SUBSI DI ARY TERM I NATI ON AGREEM ENT EXHI BI T I – BORROW ER J OI NDER AGREEM ENT EXHI BI T J – GUARANTOR J OI NDER AGREEM ENT EXHI BI T K – EXI STI NG SUBSI DI ARY J OI NDER AGREEM ENT EXHI BI T L – BORROW ER TERM I NATI ON AGREEM ENT EXHI BI T M – ADDI TI ONAL LENDER AGREEM ENT EXHI BI T N – I NCREASI NG LENDER AGREEM ENT EXHI BI T O – REALLOCATI ON REQUEST vi 115525625. 4 0063724- 00082 FOURTH AM ENDED AND RESTATED LOAN AGREEM ENT Thi s Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt ( " Agr e e m e nt ” ) i s e nt e r e d i nt o a s of Apr i l 29, 2021, a m ong Li t hi a M ot or s , I nc . , a n Or e gon c or por a t i on ( t he " Com pa ny” ) , e a c h of t he Subs i di a r i e s of t he Com pa ny l i s t e d on t he s i gna t ur e pa ge s of t hi s Agr e e m e nt or whi c h he r e a f t e r be c om e s a Bor r owe r he r e unde r , e a c h f i na nc i a l i ns t i t ut i on l i s t e d on t he s i gna t ur e pa ge s of t hi s Agr e e m e nt or whi c h he r e a f t e r be c om e s a pa r t y he r e t o ( e a c h a " Le nde r ” a nd a ny t wo or m or e , " Le nde r s ” ) ; a nd U. S. Ba nk Na t i ona l As s oc i a t i on ( " U. S. Ba nk” ) , a s t he Age nt f or t he Le nde r s .
RECI TALS A. The Com pa ny, c e r t a i n of i t s Subs i di a r i e s , t he l e nde r s f r om t i m e t o t i m e pa r t i e s t he r e t o, a nd t he Age nt , a r e pa r t y t o t ha t c e r t a i n Thi r d Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt da t e d a s of De c e m be r 9, 2019 ( a s a m e nde d, r e s t a t e d, s uppl e m e nt e d or ot he r wi s e m odi f i e d pr i or t o t he da t e he r e of , t he " Exi s t i ng Loa n Agr e e m e nt ” ) , pur s ua nt t o whi c h s uc h l e nde r s unde r t he Exi s t i ng Loa n Agr e e m e nt e xt e nde d a r e vol vi ng c r e di t f a c i l i t y t o t he Com pa ny a nd c e r t a i n of i t s Subs i di a r i e s , s uc h l e nde r s e xt e nde d a ne w ve hi c l e f l oor pl a n l i ne of c r e di t t o t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , s uc h l e nde r s e xt e nde d a us e d ve hi c l e f l oor pl a n l i ne of c r e di t t o t he Com pa ny, a nd s uc h l e nde r s e xt e nde d a s e r vi c e l oa ne r ve hi c l e f l oor pl a n l i ne of c r e di t t o t he Com pa ny. B. The Com pa ny a nd t he ot he r Bor r owe r s ha ve a s ke d t he Le nde r s a nd t he Age nt t o f ur t he r a m e nd a nd r e s t a t e t he Exi s t i ng Loa n Agr e e m e nt t o ( a ) i nc r e a s e t he " Aggr e ga t e Com m i t m e nt ” s pe c i f i e d i n t he Exi s t i ng Loa n Agr e e m e nt f r om $2, 800, 000, 000 t o $3, 750, 000, 000, a nd ( b) m a ke s uc h a ddi t i ona l
a m e ndm e nt s a nd m odi f i c a t i ons t o t he t e r m s a nd c ondi t i ons of t he Exi s t i ng Loa n Agr e e m e nt a s a r e m or e s pe c i f i c a l l y s e t f or t h he r e i n. I n c ons i de r a t i on of t he m ut ua l c ove na nt s a nd a gr e e m e nt s s e t f or t h he r e i n a nd f or ot he r va l ua bl e c ons i de r a t i on, t he pa r t i e s he r e t o a gr e e t ha t t he Exi s t i ng Loa n Agr e e m e nt i s a m e nde d a nd r e s t a t e d i n i t s e nt i r e t y a s f ol l ows : ARTI CLE 1 DEFI NI TI ONS AND I NTERPRETI VE PROVI SI ONS 1. 1 De f i ne d Te r m s . As us e d i n t hi s Agr e e m e nt , t he f ol l owi ng t e r m s s ha l l ha ve t he f ol l owi ng m e a ni ngs : " Ac c e s s La ws ” m e a ns t he Am e r i c a ns W i t h Di s a bi l i t i e s Ac t of 1990; t he Fa i r Hous i ng Am e ndm e nt s Ac t of 1988; a l l ot he r f e de r a l , s t a t e a nd l oc a l l a ws or or di na nc e s r e l a t e d t o di s a bl e d a c c e s s ; a nd a l l s t a t ut e s , r ul e s , r e gul a t i ons , or di na nc e s , or de r s of gove r nm e nt a l bodi e s a nd r e gul a t or y a ge nc i e s a nd or de r s a nd de c r e e s of a ny c our t a dopt e d, e na c t e d or i s s ue d wi t h r e s pe c t t he r e t o; a l l a s now e xi s t i ng or he r e a f t e r a m e nde d or a dopt e d. " Ac qui s i t i on” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 13. " Ac qui s i t i on Subs i di a r y” m e a ns a ny Subs i di a r y t o be
a c qui r e d i n a n Ac qui s i t i on. 1 115525625. 4 0063724- 00082
" Addi t i ona l Com m i t m e nt Le nde r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 18. 4. " Addi t i ona l Le nde r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 12. 2. " Adj us t e d Te r m SOFR” m e a ns , f or pur pos e s of a ny c a l c ul a t i on, t he r a t e pe r a nnum e qua l t o ( a ) t he Te r m SOFR Ba s e Ra t e f or s uc h c a l c ul a t i on pl us ( b) t he Te r m SOFR Adj us t m e nt ; pr ovi de d t ha t i f Adj us t e d Te r m SOFR a s s o de t e r m i ne d s ha l l e ve r be l e s s t ha n t he Fl oor , t he n Adj us t e d Te r m SOFR s ha l l be de e m e d t o be t he Fl oor . " Adj us t e d Da i l y Si m pl e SOFR” m e a ns , f or a ny da y ( a " SOFR I nt e r e s t Da y” ) , a n i nt e r e s t r a t e pe r a nnum e qua l t o t he gr e a t e r of ( a ) t he s um of ( i ) SOFR f or t he da y t ha t i s f i ve Bus i ne s s Da ys pr i or t o ( A) i f s uc h SOFR I nt e r e s t Da y i s a Bus i ne s s Da y, s uc h SOFR I nt e r e s t Da y or ( B) i f s uc h SOFR I nt e r e s t Da y i s not a Bus i ne s s Da y, t he Bus i ne s s Da y i m m e di a t e l y pr e c e di ng s uc h SOFR I nt e r e s t Da y a nd ( i i ) t he Si m pl e SOFR Adj us t m e nt a nd ( b) t he Fl oor ; pr ovi de d t ha t i f SOFR i s not publ i s he d on s uc h Bus i ne s s Da y due t o a hol i da y or ot he r c i r c um s t a nc e t ha t t he Age nt de e m s i n i t s s ol e di s c r e t i on
t o be t e m por a r y, t he a ppl i c a bl e SOFR r a t e s ha l l be t he SOFR r a t e l a s t publ i s he d pr i or t o s uc h Bus i ne s s Da y. Any c ha nge i n Adj us t e d Da i l y Si m pl e SOFR due t o a c ha nge i n SOFR s ha l l be e f f e c t i ve f r om a nd i nc l udi ng t he e f f e c t i ve da t e of s uc h c ha nge i n SOFR wi t hout not i c e t o t he Com pa ny. For pur pos e s of de t e r m i ni ng a ny i nt e r e s t r a t e he r e unde r or unde r a ny Loa n Doc um e nt whi c h i s ba s e d on Adj us t e d Da i l y Si m pl e SOFR, s uc h i nt e r e s t r a t e s ha l l c ha nge a s a nd whe n Adj us t e d Da i l y Si m pl e SOFR s ha l l c ha nge . " Adva nc e ” m e a ns a Ne w Ve hi c l e Fl oor pl a n Adva nc e , Us e d Ve hi c l e Fl oor pl a n Adva nc e , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Adva nc e , Re vol vi ng Loa n Adva nc e , or ( unl e s s ot he r wi s e e xpr e s s l y pr ovi de d) , a Swi ng Li ne Loa n. " Af f e c t e d Fi na nc i a l I ns t i t ut i on” m e a ns ( a ) a ny EEA Fi na nc i a l I ns t i t ut i on or ( b) a ny UK Fi na nc i a l I ns t i t ut i on. " Af f e c t e d Le nde r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 15. " Af f i l i a t e ” m e a ns wi t h r e s pe c t t o a ny Pe r s on ( a ) e a c h ot he r Pe r s on t ha t , di r e c t l y or i ndi r e c t l y, owns or c ont r ol s , whe t he r be ne f i c i a l l y, or a s a t r us t e e , gua r di a n or ot he r
f i duc i a r y, f i ve pe r c e nt ( 5% ) or m or e of t he s t oc k or ot he r owne r s hi p i nt e r e s t s ha vi ng or di na r y vot i ng powe r of s uc h Pe r s on; ( b) e a c h Pe r s on t ha t Cont r ol s , i s Cont r ol l e d by or i s unde r c om m on Cont r ol wi t h s uc h Pe r s on or a ny Af f i l i a t e of s uc h Pe r s on; a nd ( c ) e a c h of s uc h Pe r s on’ s e xe c ut i ve of f i c e r s , di r e c t or s , j oi nt ve nt ur e r s , m e m be r s a nd ge ne r a l pa r t ne r s . " Age nt ” or " Adm i ni s t r a t i ve Age nt ” m e a ns U. S. Ba nk i n i t s c a pa c i t y a s c ont r a c t ua l r e pr e s e nt a t i ve of t he Le nde r s pur s ua nt t o Ar t i c l e 16, a nd not i n i t s i ndi vi dua l c a pa c i t y a s a Le nde r , a nd a ny s uc c e s s or Age nt a ppoi nt e d pur s ua nt t o Ar t i c l e 16. " Aggr e ga t e Com m i t m e nt ” m e a ns , a t a ny t i m e , t he s um of t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , pl us t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt , pl us t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , pl us t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt , a s a dj us t e d f r om t i m e t o t i m e pur s ua nt t o t he t e r m s he r e of , pr ovi de d t ha t , e xc e pt 2 115525625. 4 0063724- 00082 a s pr ovi de d i n Se c t i on 6. 12, t he Aggr e ga t e Com m i t m e nt s ha l l
not be m or e t ha n $3, 750, 000, 000. 003, 750, 000, 000. " Aggr e ga t e Le nde r Com m i t m e nt ” m e a ns , f or a ny Le nde r , t he s um of s uc h Le nde r ’ s Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , a nd Re vol vi ng Loa n Com m i t m e nt . " Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt s of a l l Le nde r s a t s uc h t i m e . " Aggr e ga t e Out s t a ndi ng Cr e di t Expos ur e ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Out s t a ndi ng Cr e di t Expos ur e of a l l Le nde r s a t s uc h t i m e . " Aggr e ga t e Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e of a l l Le nde r s a t s uc h t i m e . " Aggr e ga t e Out s t a ndi ng Re vol vi ng Loa n Expos ur e ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Out s t a ndi ng Re vol vi ng Loa n Expos ur e of a l l Le nde r s a t s uc h t i m e . " Aggr e ga t e Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e
Fl oor pl a n Expos ur e of a l l Le nde r s a t s uc h t i m e . " Aggr e ga t e Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e of a l l Le nde r s a t s uc h t i m e . " Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Re vol vi ng Loa n Com m i t m e nt s of a l l Le nde r s a t s uc h t i m e ; pr ovi de d t ha t t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt s ha l l not a t a ny t i m e be m or e t ha n 40. 0040% of t he a m ount of t he Aggr e ga t e Com m i t m e nt a t s uc h t i m e . " Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt s of a l l Le nde r s a t s uc h t i m e ; pr ovi de d t ha t t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt s ha l l not a t a ny t i m e be m or e t ha n 3. 0% of t he a m ount of t he Aggr e ga t e Com m i t m e nt a t s uc h t i m e . " Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of t he Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt s of a l l Le nde r s a t s uc h t i m e . " Agr e e m e nt ” ha s
t he m e a ni ng s e t f or t h i n t he i nt r oduc t or y pa r a gr a ph. " Al t e r na t e Ba s e Ra t e ” m e a ns , f or a ny da y, a r a t e of i nt e r e s t pe r a nnum e qua l t o t he hi ghe s t of ( a ) t he Pr i m e Ra t e f or s uc h da y, ( b) t he s um of t he Fe de r a l Funds Ef f e c t i ve Ra t e f or s uc h da y pl us . 50% pe r a nnum a nd ( c ) Adj us t e d Da i l y Si m pl e SOFR i n e f f e c t f or s uc h da y pl us 1. 50% . Any c ha nge i n t he Al t e r na t e Ba s e Ra t e due t o a c ha nge i n t he Pr i m e Ra t e , t he Fe de r a l Funds Ef f e c t i ve Ra t e , or t he Adj us t e d Da i l y Si m pl e SOFR s ha l l be e f f e c t i ve f r om t he e f f e c t i ve da t e of s uc h c ha nge . I f t he Al t e r na t e Ba s e Ra t e i s be i ng us e d whe n Da i l y Si m pl e SOFR Loa ns 3 115525625. 4 0063724- 00082
a r e una va i l a bl e pur s ua nt t o Se c t i on 7. 3, t he n t he Al t e r na t e Ba s e Ra t e s ha l l be t he hi ghe s t of c l a us e s ( a ) a nd ( b) , wi t hout r e f e r e nc e t o c l a us e ( c ) a bove . " Al t e r na t e Ba s e Ra t e M a r gi n ( Ne w Ve hi c l e ) ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Al t e r na t e Ba s e Ra t e M a r gi n ( Re vol vi ng) ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Al t e r na t e Ba s e Ra t e M a r gi n ( Se r vi c e Loa ne r Ve hi c l e ) ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Al t e r na t e Ba s e Ra t e M a r gi n ( Us e d Ve hi c l e ) ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Anni ve r s a r y Da t e ” m e a ns e a c h a nni ve r s a r y of t he Cl os i ng Da t e . " Ant i - Cor r upt i on La ws ” m e a ns t he For e i gn Cor r upt Pr a c t i c e s Ac t of 1977, a s a m e nde d, a nd t he r ul e s a nd r e gul a t i ons t he r e unde r , a nd a ny ot he r a nt i - c or r upt i on l a w a ppl i c a bl e t o a ny Bor r owe r a nd i t s Subs i di a r i e s . " Appl i c a bl e La w” m e a ns a l l a ppl i c a bl e pr ovi s i ons a nd r e qui r e m e nt s of ( a ) a l l c ons t i t ut i ons , s t a t ut e s , or di na nc e s , r ul e s , r e gul a t i ons , s t a nda r ds , or de r s , a nd di r e c t i ve s of a ny Gove r nm e nt a l Bodi e s , ( b) Gove r nm e nt a l Appr ova l s , a nd ( c ) or de r s ,
de c i s i ons , de c r e e s , j udgm e nt s , i nj unc t i ons , a nd wr i t s of a l l c our t s a nd a r bi t r a t or s , whe t he r s uc h Appl i c a bl e La ws pr e s e nt l y e xi s t , or a r e m odi f i e d, pr om ul ga t e d, or i m pl e m e nt e d a f t e r t he da t e he r e of . " Appr ove d Fund” m e a ns a ny Fund t ha t i s a dm i ni s t e r e d or m a na ge d by ( a ) a Le nde r , ( b) a n Af f i l i a t e of a Le nde r or ( c ) a n e nt i t y or a n Af f i l i a t e of a n e nt i t y t ha t a dm i ni s t e r s or m a na ge s a Le nde r . " As s i gne e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 17. 4. " As s i gnm e nt Agr e e m e nt ” m e a ns a n a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d a s Exhi bi t D. " At t or ne y Cos t s ” m e a ns a nd i nc l ude s a l l r e a s ona bl e f e e s a nd di s bur s e m e nt s of a ny l a w f i r m or r e t a i ne d c ouns e l a nd of a ny i n- hous e or i nt e r na l c ouns e l whe t he r or not l i t i ga t i on or a r bi t r a t i on i s c om m e nc e d, a nd i f l i t i ga t i on or a r bi t r a t i on i s c om m e nc e d s ha l l i nc l ude f e e s a nd di s bur s e m e nt s i nc ur r e d a t t r i a l , i n a ny a ppe l l a t e pr oc e e di ng, ba nkr upt c y pr oc e e di ng ( i nc l udi ng e f f or t s t o m odi f y or va c a t e a ny a ut om a t i c s t a y or i nj unc t i on) or r e c e i ve r s hi p, a nd pos t - j udgm e nt a t t or ne y f e e s i nc ur r e d i n e nf or c i ng
a ny j udgm e nt . " Ava i l a bl e Te nor ” m e a ns , a s of a ny da t e of de t e r m i na t i on a nd wi t h r e s pe c t t o t he t he n- c ur r e nt Be nc hm a r k, a s a ppl i c a bl e , ( x) i f t he t he n- c ur r e nt Be nc hm a r k i s a t e r m r a t e , a ny t e nor f or s uc h Be nc hm a r k t ha t i s or m a y be us e d f or de t e r m i ni ng t he l e ngt h of a n I nt e r e s t Pe r i od 4 115525625. 4 0063724- 00082 or ( y) ot he r wi s e , a ny pa ym e nt pe r i od f or i nt e r e s t c a l c ul a t e d wi t h r e f e r e nc e t o s uc h Be nc hm a r k, a s a ppl i c a bl e , pur s ua nt t o t hi s Agr e e m e nt a s of s uc h da t e . " Ba i l - I n Ac t i on” m e a ns t he e xe r c i s e of a ny W r i t e - Down a nd Conve r s i on Powe r s by t he a ppl i c a bl e Re s ol ut i on Aut hor i t y i n r e s pe c t of a ny l i a bi l i t y of a n Af f e c t e d Fi na nc i a l I ns t i t ut i on. " Ba i l - I n Le gi s l a t i on” m e a ns ( a ) wi t h r e s pe c t t o a ny EEA M e m be r Count r y i m pl e m e nt i ng Ar t i c l e 55 of Di r e c t i ve 2014/ 59/ EU of t he Eur ope a n Pa r l i a m e nt a nd of t he Counc i l of t he Eur ope a n Uni on, t he i m pl e m e nt i ng l a w, r e gul a t i on r ul e or r e qui r e m e nt f or s uc h EEA M e m be r Count r y f r om t i m e t o t i m e whi c h i s de s c r i be d i n t he EU Ba i l - I n Le gi s l a t i on Sc he dul e a nd ( b) wi t h r e s pe c t t o t he Uni t e d Ki ngdom ,
Pa r t I of t he Uni t e d Ki ngdom Ba nki ng Ac t 2009 ( a s a m e nde d f r om t i m e t o t i m e ) a nd a ny ot he r l a w, r e gul a t i on or r ul e a ppl i c a bl e i n t he Uni t e d Ki ngdom r e l a t i ng t o t he r e s ol ut i on of uns ound or f a i l i ng ba nks , i nve s t m e nt f i r m s or ot he r f i na nc i a l i ns t i t ut i ons or t he i r a f f i l i a t e s ( ot he r t ha n t hr ough l i qui da t i on, a dm i ni s t r a t i on or ot he r i ns ol ve nc y pr oc e e di ngs ) . " Be nc hm a r k” m e a ns , i ni t i a l l y, Adj us t e d Da i l y Si m pl e SOFR, Adj us t e d Te r m SOFR or t he Te r m SOFR Al t e r na t i ve Ra t e , a s a ppl i c a bl e ; pr ovi de d t ha t i f a r e pl a c e m e nt of t he Be nc hm a r k ha s oc c ur r e d pur s ua nt t o Se c t i on 7. 3( b) , t he n " Be nc hm a r k” m e a ns t he a ppl i c a bl e Be nc hm a r k Re pl a c e m e nt t o t he e xt e nt t ha t s uc h Be nc hm a r k Re pl a c e m e nt ha s be c om e e f f e c t i ve pur s ua nt t o Se c t i on 7. 3( b) . " Be nc hm a r k Re pl a c e m e nt ” m e a ns , f or a ny Ava i l a bl e Te nor , t he s um of : ( a ) t he a l t e r na t e be nc hm a r k r a t e t ha t ha s be e n s e l e c t e d by t he Age nt a nd t he Com pa ny a s t he r e pl a c e m e nt f or t he t he n- c ur r e nt Be nc hm a r k f or t he a ppl i c a bl e Cor r e s pondi ng Te nor gi vi ng due c ons i de r a t i on t o ( i ) a ny s e l e c t i on or r e c om m e nda t i on of
a r e pl a c e m e nt be nc hm a r k r a t e or t he m e c ha ni s m f or de t e r m i ni ng s uc h a r a t e by t he Re l e va nt Gove r nm e nt a l Body or ( i i ) a ny e vol vi ng or t he n- pr e va i l i ng m a r ke t c onve nt i on f or de t e r m i ni ng a be nc hm a r k r a t e a s a r e pl a c e m e nt f or t he t he n- c ur r e nt Be nc hm a r k f or U. S. dol l a r - de nom i na t e d s yndi c a t e d c r e di t f a c i l i t i e s a t s uc h t i m e a nd ( b) t he r e l a t e d Be nc hm a r k Re pl a c e m e nt Adj us t m e nt . I f t he Be nc hm a r k Re pl a c e m e nt woul d be l e s s t ha n t he Fl oor , t he Be nc hm a r k Re pl a c e m e nt wi l l be de e m e d t o be t he Fl oor f or t he pur pos e s of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s . " Be nc hm a r k Re pl a c e m e nt Adj us t m e nt ” m e a ns , wi t h r e s pe c t t o a ny r e pl a c e m e nt of t he t he n- c ur r e nt Be nc hm a r k wi t h a n Una dj us t e d Be nc hm a r k Re pl a c e m e nt f or a ny a ppl i c a bl e I nt e r e s t Pe r i od a nd Ava i l a bl e Te nor f or a ny s e t t i ng of s uc h Be nc hm a r k Re pl a c e m e nt , t he s pr e a d a dj us t m e nt , or m e t hod f or c a l c ul a t i ng or de t e r m i ni ng s uc h s pr e a d a dj us t m e nt , ( whi c h m a y be a pos i t i ve or ne ga t i ve va l ue or z e r o) t ha t ha s be e n s e l e c t e d by t he Age nt a nd t he Com pa ny f or t he a ppl i c a bl e Cor r e s pondi ng
Te nor gi vi ng due c ons i de r a t i on t o ( i ) a ny s e l e c t i on or r e c om m e nda t i on of a s pr e a d a dj us t m e nt , or m e t hod f or c a l c ul a t i ng or de t e r m i ni ng s uc h s pr e a d a dj us t m e nt , f or t he r e pl a c e m e nt of s uc h Be nc hm a r k wi t h t he a ppl i c a bl e Una dj us t e d Be nc hm a r k Re pl a c e m e nt by t he Re l e va nt Gove r nm e nt a l Body on t he a ppl i c a bl e Be nc hm a r k Re pl a c e m e nt Da t e or ( i i ) a ny e vol vi ng or t he n- pr e va i l i ng m a r ke t c onve nt i on f or de t e r m i ni ng a s pr e a d a dj us t m e nt , or m e t hod f or c a l c ul a t i ng or de t e r m i ni ng s uc h s pr e a d a dj us t m e nt , f or t he r e pl a c e m e nt of s uc h Be nc hm a r k wi t h t he a ppl i c a bl e Una dj us t e d Be nc hm a r k Re pl a c e m e nt f or U. S. dol l a r - de nom i na t e d s yndi c a t e d c r e di t f a c i l i t i e s . 5 115525625. 4 0063724- 00082
" Be nc hm a r k Re pl a c e m e nt Conf or m i ng Cha nge s ” m e a ns , wi t h r e s pe c t t o a ny Be nc hm a r k Re pl a c e m e nt , a ny t e c hni c a l , a dm i ni s t r a t i ve or ope r a t i ona l c ha nge s ( i nc l udi ng c ha nge s t o t he de f i ni t i on of " Adva nc e ” a nd " SOFR Loa ns , ” t he de f i ni t i on of " Al t e r na t e Ba s e Ra t e , ” t he de f i ni t i on of " Bus i ne s s Da y, ” t he de f i ni t i on of " I nt e r e s t Pe r i od, ” t i m i ng a nd f r e que nc y of de t e r m i ni ng r a t e s a nd m a ki ng pa ym e nt s of i nt e r e s t , t i m i ng of bor r owi ng r e que s t s or pr e pa ym e nt , c onve r s i on or c ont i nua t i on not i c e s , l e ngt h of l ookba c k pe r i ods , t he a ppl i c a bi l i t y of br e a ka ge pr ovi s i ons , a nd ot he r t e c hni c a l , a dm i ni s t r a t i ve or ope r a t i ona l m a t t e r s ) t ha t t he Age nt de c i de s m a y be a ppr opr i a t e t o r e f l e c t t he a dopt i on a nd i m pl e m e nt a t i on of s uc h Be nc hm a r k Re pl a c e m e nt a nd t o pe r m i t t he a dm i ni s t r a t i on t he r e of by t he Age nt i n a m a nne r s ubs t a nt i a l l y c ons i s t e nt wi t h m a r ke t pr a c t i c e ( or , i f t he Age nt de c i de s t ha t a dopt i on of a ny por t i on of s uc h m a r ke t pr a c t i c e i s not a dm i ni s t r a t i ve l y f e a s i bl e or i f t he Age nt de t e r m i ne s t ha t no m a r ke t pr a c t i c e f or t he a dm i ni s t r a t i on of s uc h
Be nc hm a r k Re pl a c e m e nt e xi s t s , i n s uc h ot he r m a nne r of a dm i ni s t r a t i on a s t he Age nt de c i de s i s r e a s ona bl y ne c e s s a r y i n c onne c t i on wi t h t he a dm i ni s t r a t i on of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s ) . " Be nc hm a r k Re pl a c e m e nt Da t e ” m e a ns t he e a r l i e s t t o oc c ur of t he f ol l owi ng e ve nt s wi t h r e s pe c t t o t he t he n- c ur r e nt Be nc hm a r k: ( 1) i n t he c a s e of c l a us e ( 1) or ( 2) of t he de f i ni t i on of " Be nc hm a r k Tr a ns i t i on Eve nt , ” t he l a t e r of ( a ) t he da t e of t he publ i c s t a t e m e nt or publ i c a t i on of i nf or m a t i on r e f e r e nc e d t he r e i n a nd ( b) t he da t e on whi c h t he a dm i ni s t r a t or of s uc h Be nc hm a r k ( or t he publ i s he d c om pone nt us e d i n t he c a l c ul a t i on t he r e of ) pe r m a ne nt l y or i nde f i ni t e l y c e a s e s t o pr ovi de a l l Ava i l a bl e Te nor s of s uc h Be nc hm a r k ( or s uc h c om pone nt t he r e of ) ; ( 2) i n t he c a s e of c l a us e ( 3) of t he de f i ni t i on of " Be nc hm a r k Tr a ns i t i on Eve nt , ” t he f i r s t da t e on whi c h s uc h Be nc hm a r k ( or t he publ i s he d c om pone nt us e d i n t he c a l c ul a t i on t he r e of ) ha s be e n de t e r m i ne d a nd a nnounc e d by t he r e gul a t or y s upe r vi s or f or t he a dm i ni s t r a t or of s uc h Be nc hm a r k ( or
s uc h c om pone nt t he r e of ) t o be no l onge r r e pr e s e nt a t i ve ; pr ovi de d, t ha t s uc h non- r e pr e s e nt a t i ve ne s s wi l l be de t e r m i ne d by r e f e r e nc e t o t he m os t r e c e nt s t a t e m e nt or publ i c a t i on r e f e r e nc e d i n s uc h c l a us e ( 3) a nd e ve n i f a ny Ava i l a bl e Te nor of s uc h Be nc hm a r k ( or s uc h c om pone nt t he r e of ) c ont i nue s t o be pr ovi de d on s uc h da t e ; a nd ( 3) i n t he c a s e of a n Ea r l y Opt - i n El e c t i on, t he Bus i ne s s Da y s pe c i f i e d by t he Age nt i n t he not i c e of t he Ea r l y Opt - i n El e c t i on pr ovi de d t o t he Le nde r s , s o l ong a s t he Age nt ha s not r e c e i ve d, by 5: 00 p. m . ( Ce nt r a l t i m e ) on t he f i f t h Bus i ne s s Da y a f t e r t he da t e not i c e of s uc h Ea r l y Opt - i n El e c t i on i s pr ovi de d t o t he Le nde r s , wr i t t e n not i c e of obj e c t i on t o s uc h Ea r l y Opt - i n El e c t i on f r om Le nde r s c om pr i s i ng t he Re qui r e d Le nde r s . For t he a voi da nc e of doubt , ( i ) i f t he e ve nt gi vi ng r i s e t o t he Be nc hm a r k Re pl a c e m e nt Da t e oc c ur s on t he s a m e da y a s , but e a r l i e r t ha n, t he Re f e r e nc e Ti m e i n r e s pe c t of a ny de t e r m i na t i on, t he Be nc hm a r k Re pl a c e m e nt Da t e wi l l be de e m e d t o ha ve oc c ur r e d pr i or t o t he Re f e r e nc e Ti m e f or s uc h
de t e r m i na t i on a nd ( i i ) t he " Be nc hm a r k Re pl a c e m e nt Da t e ” wi l l be de e m e d t o ha ve oc c ur r e d i n t he c a s e of c l a us e ( 1) or ( 2) wi t h r e s pe c t t o a ny Be nc hm a r k upon t he oc c ur r e nc e of 6 115525625. 4 0063724- 00082 t he a ppl i c a bl e e ve nt or e ve nt s s e t f or t h t he r e i n wi t h r e s pe c t t o a l l t he n- c ur r e nt Ava i l a bl e Te nor s of s uc h Be nc hm a r k ( or t he publ i s he d c om pone nt us e d i n t he c a l c ul a t i on t he r e of ) . " Be nc hm a r k Tr a ns i t i on Eve nt ” m e a ns t he oc c ur r e nc e of one or m or e of t he f ol l owi ng e ve nt s wi t h r e s pe c t t o t he t he n- c ur r e nt Be nc hm a r k: ( 1) a publ i c s t a t e m e nt or publ i c a t i on of i nf or m a t i on by or on be ha l f of t he a dm i ni s t r a t or of s uc h Be nc hm a r k ( or t he publ i s he d c om pone nt us e d i n t he c a l c ul a t i on t he r e of ) a nnounc i ng t ha t s uc h a dm i ni s t r a t or ha s c e a s e d or wi l l c e a s e t o pr ovi de a l l Ava i l a bl e Te nor s of s uc h Be nc hm a r k ( or s uc h c om pone nt t he r e of ) , pe r m a ne nt l y or i nde f i ni t e l y, pr ovi de d t ha t , a t t he t i m e of s uc h s t a t e m e nt or publ i c a t i on, t he r e i s no s uc c e s s or a dm i ni s t r a t or t ha t wi l l c ont i nue t o pr ovi de a ny Ava i l a bl e Te nor of s uc h Be nc hm a r k ( or s uc h c om pone nt
t he r e of ) ; ( 2) a publ i c s t a t e m e nt or publ i c a t i on of i nf or m a t i on by t he r e gul a t or y s upe r vi s or f or t he a dm i ni s t r a t or of s uc h Be nc hm a r k ( or t he publ i s he d c om pone nt us e d i n t he c a l c ul a t i on t he r e of ) , t he Boa r d of Gove r nor s of t he Fe de r a l Re s e r ve Sys t e m , t he Fe de r a l Re s e r ve Ba nk of Ne w Yor k, a n i ns ol ve nc y of f i c i a l wi t h j ur i s di c t i on ove r t he a dm i ni s t r a t or f or s uc h Be nc hm a r k ( or s uc h c om pone nt ) , a r e s ol ut i on a ut hor i t y wi t h j ur i s di c t i on ove r t he a dm i ni s t r a t or f or s uc h Be nc hm a r k ( or s uc h c om pone nt ) or a c our t or a n e nt i t y wi t h s i m i l a r i ns ol ve nc y or r e s ol ut i on a ut hor i t y ove r t he a dm i ni s t r a t or f or s uc h Be nc hm a r k ( or s uc h c om pone nt ) , whi c h s t a t e s t ha t t he a dm i ni s t r a t or of s uc h Be nc hm a r k ( or s uc h c om pone nt ) ha s c e a s e d or wi l l c e a s e t o pr ovi de a l l Ava i l a bl e Te nor s of s uc h Be nc hm a r k ( or s uc h c om pone nt t he r e of ) pe r m a ne nt l y or i nde f i ni t e l y, pr ovi de d t ha t , a t t he t i m e of s uc h s t a t e m e nt or publ i c a t i on, t he r e i s no s uc c e s s or a dm i ni s t r a t or t ha t wi l l c ont i nue t o pr ovi de a ny Ava i l a bl e Te nor of s uc h Be nc hm a r k ( or s uc h c om pone nt t he r e of ) ; or ( 3) a
publ i c s t a t e m e nt or publ i c a t i on of i nf or m a t i on by a ny of t he e nt i t i e s r e f e r e nc e d i n c l a us e ( 2) a bove a nnounc i ng t ha t a l l Ava i l a bl e Te nor s of s uc h Be nc hm a r k ( or s uc h c om pone nt t he r e of ) a r e no l onge r , or a s of a s pe c i f i e d f ut ur e da t e wi l l no l onge r be , r e pr e s e nt a t i ve . For t he a voi da nc e of doubt , a " Be nc hm a r k Tr a ns i t i on Eve nt ” wi l l be de e m e d t o ha ve oc c ur r e d wi t h r e s pe c t t o a ny Be nc hm a r k i f a publ i c s t a t e m e nt or publ i c a t i on of i nf or m a t i on s e t f or t h a bove ha s oc c ur r e d wi t h r e s pe c t t o e a c h t he n- c ur r e nt Ava i l a bl e Te nor of s uc h Be nc hm a r k ( or t he publ i s he d c om pone nt us e d i n t he c a l c ul a t i on t he r e of ) . " Be nc hm a r k Una va i l a bi l i t y Pe r i od” m e a ns t he pe r i od ( i f a ny) ( x) be gi nni ng a t t he t i m e t ha t a Be nc hm a r k Re pl a c e m e nt Da t e pur s ua nt t o c l a us e s ( 1) or ( 2) of t ha t de f i ni t i on ha s oc c ur r e d i f , a t s uc h t i m e , no Be nc hm a r k Re pl a c e m e nt ha s r e pl a c e d t he t he n- c ur r e nt Be nc hm a r k i n a c c or da nc e wi t h Se c t i on 7. 3, a nd ( y) e ndi ng a t t he t i m e t ha t a Be nc hm a r k Re pl a c e m e nt ha s r e pl a c e d t he t he n- c ur r e nt Be nc hm a r k i n a c c or da nc e wi t h Se c t i on 7. 3. " Be ne f i c i a l
Owne r s hi p Ce r t i f i c a t i on” m e a ns a c e r t i f i c a t i on r e ga r di ng be ne f i c i a l owne r s hi p a s r e qui r e d by t he Be ne f i c i a l Owne r s hi p Re gul a t i on. 7 115525625. 4 0063724- 00082
" Be ne f i c i a l Owne r s hi p Re gul a t i on” m e a ns 31 C. F. R. § 1010. 230. " Be ne f i t Pl a n” m e a ns a ny of ( a ) a n " e m pl oye e be ne f i t pl a n” ( a s de f i ne d i n ERI SA) t ha t i s s ubj e c t t o Ti t l e I of ERI SA, ( b) a " pl a n” a s de f i ne d i n a nd s ubj e c t t o Se c t i on 4975 of t he Code or ( c ) a ny pe r s on whos e a s s e t s i nc l ude ( f or pur pos e s of ERI SA Se c t i on 3( 42) or ot he r wi s e f or pur pos e s of Ti t l e I of ERI SA or Se c t i on 4975 of t he Code ) t he a s s e t s of a ny s uc h " e m pl oye e be ne f i t pl a n” or " pl a n. ” " Bor r owe r ” m e a ns a Ne w Ve hi c l e Fl oor pl a n Bor r owe r , t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r , t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r or t he Re vol vi ng Loa n Bor r owe r a nd " Bor r owe r s ” m e a ns a ny t wo or m or e of t he m . " Bor r owe r J oi nde r Agr e e m e nt ” m e a ns a n a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d he r e t o a s Exhi bi t I . " Bor r owe r Te r m i na t i on Agr e e m e nt ” m e a ns a n a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d he r e t o a s Exhi bi t L. " Bus i ne s s Da y” m e a ns a ny da y ( ot he r t ha n a Sa t ur da y or Sunda y) on whi c h ba nks ge ne r a l l y a r e ope n i n Ne w Yor k Ci t y, Ne w Yor k f or t he c onduc t of s ubs t a nt i a l l y a l l of t he i r
c om m e r c i a l l e ndi ng a c t i vi t i e s a nd i nt e r ba nk wi r e t r a ns f e r s c a n be m a de on t he Fe dwi r e s ys t e m ; pr ovi de d t ha t whe n us e d i n c onne c t i on wi t h a SOFR Loa n, t he c om pone nt of t he Al t e r na t e Ba s e Ra t e ba s e d upon SOFR or a ny ot he r c a l c ul a t i on or de t e r m i na t i on i nvol vi ng SOFR, t he t e r m " Bus i ne s s Da y” m e a ns a ny s uc h da y t ha t i s a l s o a U. S. Gove r nm e nt Se c ur i t i e s Bus i ne s s Da y. " Ca na di a n De a l e r s hi p” m e a ns a De a l e r s hi p whos e pr i m a r y bus i ne s s i s t he r e t a i l s a l e s or r e t a i l s a l e a nd l e a s e of ne w a nd/ or us e d a ut om obi l e s , t r uc ks a nd/ or m ot or c yc l e s i n Ca na da . " Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ” m e a ns ( a ) a ny a c c ount s r e c e i va bl e , m or t ga ge r e c e i va bl e s , l oa n r e c e i va bl e s , e qui pm e nt , r oya l t y, f r a nc hi s e f e e , l i c e ns e f e e , pa t e nt or ot he r r e ve nue s t r e a m s a nd ot he r r i ght s t o pa ym e nt or r e l a t e d a s s e t s a nd t he pr oc e e ds t he r e of a nd a ny s e c ur i t i e s ba c ke d by s uc h a s s e t s a nd ( b) a l l c ol l a t e r a l s e c ur i ng s uc h r e c e i va bl e or a s s e t s , a l l c ont r a c t s a nd c ont r a c t r i ght s , gua r a nt e e s or ot he r obl i ga t i ons i n r e s pe c t of s uc h r e c e i va bl e or a s s e t , l oc kbox a c c ount s a nd
r e c or ds wi t h r e s pe c t t o s uc h a c c ount or a s s e t a nd a ny ot he r a s s e t c us t om a r i l y t r a ns f e r r e d ( or i n r e s pe c t of whi c h s e c ur i t y i nt e r e s t s a r e c us t om a r i l y gr a nt e d) t oge t he r wi t h a c c ount s or a s s e t s i n c onne c t i on wi t h a s e c ur i t i z a t i on or r e c e i va bl e s a l e t r a ns a c t i on. " Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on” m e a ns one or m or e t r a ns a c t i ons pur s ua nt t o whi c h ( i ) Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s or i nt e r e s t s t he r e i n a r e s ol d or t r a ns f e r r e d t o or f i na nc e d by one or m or e Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r i e s , a nd ( i i ) s uc h Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r i e s f i na nc e ( or r e f i na nc e ) t he i r a c qui s i t i on of s uc h Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s or i nt e r e s t s t he r e i n, or t he f i na nc i ng t he r e of , by s e l l i ng or bor r owi ng a ga i ns t Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ( i nc l udi ng c ondui t a nd wa r e hous e f i na nc i ngs ) a nd a ny he dgi ng a gr e e m e nt s e nt e r e d i nt o i n c onne c t i on wi t h s uc h Ca na di a n Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ; pr ovi de d, t ha t r e c our s e t o t he Com pa ny or a ny Subs i di a r y ( ot he r t ha n t he Spe c i a l Pur pos e
Se c ur i t i z a t i on Subs i di a r i e s ) i n c onne c t i on wi t h s uc h t r a ns a c t i ons s ha l l be l i m i t e d t o t he e xt e nt c us t om a r y ( a s de t e r m i ne d by t he 8 115525625. 4 0063724- 00082 Com pa ny i n good f a i t h) f or s i m i l a r t r a ns a c t i ons i n t he a ppl i c a bl e j ur i s di c t i ons ( i nc l udi ng, t o t he e xt e nt a ppl i c a bl e , i n a m a nne r c ons i s t e nt wi t h t he de l i ve r y of a " t r ue s a l e ” / " a bs ol ut e t r a ns f e r ” opi ni on wi t h r e s pe c t t o a ny t r a ns f e r by t he Com pa ny or a ny Subs i di a r y ( ot he r t ha n a Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r y) ) . " Ca na di a n Subs i di a r y” m e a ns a ny Subs i di a r y of t he Com pa ny or ga ni z e d unde r t he l a ws of Ca na da or a ny pr ovi nc e i n Ca na da . " Ca na di a n Subs i di a r y I nde bt e dne s s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 10( p) . " Ca pi t a l i z e d Le a s e ” of a Pe r s on m e a ns a ny l e a s e of pr ope r t y by s uc h Pe r s on a s l e s s e e whi c h woul d be c a pi t a l i z e d on a ba l a nc e s he e t of s uc h Pe r s on pr e pa r e d i n a c c or da nc e wi t h GAAP. " Ca pi t a l i z e d Le a s e Obl i ga t i ons ” of a Pe r s on m e a ns t he a m ount of t he obl i ga t i ons of s uc h Pe r s on unde r Ca pi t a l i z e d Le a s e s whi c h woul d be s hown a s a l i a bi l i t y on a ba l a nc e s he e t of s uc h Pe r s on
pr e pa r e d i n a c c or da nc e wi t h GAAP. " Ca s h Col l a t e r a l i z e ” m e a ns t o de pos i t i n t he LC Col l a t e r a l Ac c ount or t o pl e dge a nd de pos i t wi t h or de l i ve r t o t he Age nt , f or t he be ne f i t of one or m or e of t he LC I s s ue r or Le nde r s , a s c ol l a t e r a l f or t he LC Obl i ga t i ons or obl i ga t i ons of Le nde r s t o f und pa r t i c i pa t i ons i n r e s pe c t of LC Obl i ga t i ons , c a s h or de pos i t a c c ount ba l a nc e s or , i f t he Age nt a nd t he LC I s s ue r s ha l l a gr e e i n t he i r s ol e di s c r e t i on, ot he r c r e di t s uppor t , i n e a c h c a s e pur s ua nt t o doc um e nt a t i on i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt a nd t he LC I s s ue r . " Ca s h Col l a t e r a l ” s ha l l ha ve ha s a m e a ni ng c or r e l a t i ve t o t he f or e goi ng a nd s ha l l i nc l ude t he pr oc e e ds of s uc h c a s h c ol l a t e r a l a nd ot he r c r e di t s uppor t . " Ca s h Equi va l e nt I nve s t m e nt s ” m e a ns ( i ) s hor t - t e r m obl i ga t i ons of , or f ul l y gua r a nt e e d by, t he Uni t e d St a t e s of Am e r i c a , ( i i ) c om m e r c i a l pa pe r r a t e d A- 1 or be t t e r by S& P or P- 1 or be t t e r by M oody’ s , ( i i i ) de m a nd de pos i t a c c ount s m a i nt a i ne d i n t he or di na r y c our s e of bus i ne s s , a nd ( i v) c e r t i f i c a t e s of de pos i t i s s ue d by a nd t i m e
de pos i t s wi t h c om m e r c i a l ba nks ( whe t he r dom e s t i c or f or e i gn) ha vi ng c a pi t a l a nd s ur pl us i n e xc e s s of $500, 000, 000; pr ovi de d i n e a c h c a s e t ha t t he s a m e pr ovi de s f or pa ym e nt of bot h pr i nc i pa l a nd i nt e r e s t ( a nd not pr i nc i pa l a l one or i nt e r e s t a l one ) a nd i s not s ubj e c t t o a ny c ont i nge nc y r e ga r di ng t he pa ym e nt of pr i nc i pa l or i nt e r e s t , ( v) s ha r e s of m one y m a r ke t m ut ua l f unds t ha t a r e r a t e d a t l e a s t " AAAm ” or " AAAG” by S& P or " P- 1” or be t t e r by M oody’ s , a nd ( vi ) ot he r c a s h e qui va l e nt i nve s t m e nt s a ppr ove d i n wr i t i ng by t he Age nt . " Cha nge i n Cont r ol ” m e a ns : ( i ) t he a c qui s i t i on by a ny Pe r s on, or t wo or m or e Pe r s ons a c t i ng i n c onc e r t , i n e i t he r c a s e ot he r t ha n Li t hi a Hol di ng Com pa ny, L. L. C. a nd t he Pr i nc i pa l , of be ne f i c i a l owne r s hi p ( wi t hi n t he m e a ni ng of Rul e 13d- 3 of t he U. S. Se c ur i t i e s a nd Exc ha nge Com m i s s i on unde r t he Se c ur i t i e s Exc ha nge Ac t of 1934) of 35% or m or e of t he out s t a ndi ng s ha r e s of vot i ng s t oc k of t he Com pa ny on a f ul l y di l ut e d ba s i s ; ( i i ) wi t hi n a ny t we l ve - m ont h pe r i od, oc c upa t i on of a m a j or i t y of t he s e a t s ( ot he r t ha n
va c a nt s e a t s ) on t he boa r d of di r e c t or s of t he Com pa ny by Pe r s ons who we r e ne i t he r ( x) nom i na t e d by t he boa r d of di r e c t or s of t he Com pa ny nor ( y) a ppoi nt e d or a ppr ove d by di r e c t or s s o nom i na t e d; ( i i i ) t he Com pa ny c ons ol i da t e s wi t h or m e r ge s i nt o a not he r Pe r s on or c onve ys , t r a ns f e r s or l e a s e s a l l or 9 115525625. 4 0063724- 00082
s ubs t a nt i a l l y a l l of i t s pr ope r t y t o a ny Pe r s on, or a ny Pe r s on c ons ol i da t e s wi t h or m e r ge s i nt o t he Com pa ny, i n e i t he r e ve nt pur s ua nt t o a t r a ns a c t i on i n whi c h t he out s t a ndi ng c a pi t a l s t oc k of t he Com pa ny i s r e c l a s s i f i e d or c ha nge d i nt o or e xc ha nge d f or ( A) c a s h or Ca s h Equi va l e nt I nve s t m e nt s or ( B) s e c ur i t i e s , a nd t he hol de r s of t he c a pi t a l s t oc k i n t he Com pa ny i m m e di a t e l y pr i or t o s uc h t r a ns a c t i on do not , a s a r e s ul t of s uc h t r a ns a c t i on, own, di r e c t l y or i ndi r e c t l y, m or e t ha n 51% of t he c om bi ne d vot i ng powe r of t he Com pa ny’ s c a pi t a l s t oc k or t he c a pi t a l s t oc k of i t s s uc c e s s or e nt i t y i n s uc h t r a ns a c t i on or ( i v) a " c ha nge of c ont r ol ” or " c ha nge of owne r s hi p” ( or a ny t e r m s ubs t a nt i a l l y e qui va l e nt t o a ny of t he f or e goi ng phr a s e s i n t hi s c l a us e ( i v) ) oc c ur s , i n e a c h c a s e , a s s uc h t e r m or phr a s e i s de f i ne d i n a ny i nde nt ur e e vi de nc i ng or r e l a t i ng t o a ny de bt s e c ur i t i e s of t he Com pa ny or a ny Subs i di a r y t he r e of ( ot he r t ha n ( x) a Ca na di a nFor e i gn Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y or ( y) a n Exc l ude d Subs i di a r y) i s s ue d i n a t r a ns a c t i on
r e gi s t e r e d wi t h t he SEC or i s s ue d t o qua l i f i e d i ns t i t ut i ona l buye r s f or r e s a l e pur s ua nt t o Rul e 144A of t he Se c ur i t i e s Ac t . " Cha nge i n La w” ha s t he m e a ni ng s e t f or t h i n Se c t i on 7. 1. " Cl a i m s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 5. 12. " Cl os i ng Da t e ” m e a ns Apr i l 29, 2021, t he da t e on whi c h a l l c ondi t i ons pr e c e de nt i n Se c t i on 9. 1 a r e s a t i s f i e d. " Code ” m e a ns t he I nt e r na l Re ve nue Code of 1986, a s a m e nde d, r e f or m e d or ot he r wi s e m odi f i e d f r om t i m e t o t i m e or a ny s uc c e s s or f e de r a l i nc om e t a x s t a t ut e or c ode a nd t he r e gul a t i ons a nd publ i s he d i nt e r pr e t a t i ons pr om ul ga t e d t he r e unde r . " Col l a t e r a l ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 8. 1. 1. " Col l a t e r a l Doc um e nt s ” m e a ns a nd i nc l ude s t he Se c ur i t y Agr e e m e nt , t he Pl e dge Agr e e m e nt , a nd a l l de e ds of t r us t , a s s i gnm e nt s , m or t ga ge s , s e c ur i t y a gr e e m e nt s , ba nk a c c ount c ont r ol a gr e e m e nt s , a nd ot he r doc um e nt s e xe c ut e d or de l i ve r e d t o t he Age nt by a ny Pe r s on a t a ny t i m e t o e vi de nc e a nd/ or pe r f e c t s e c ur i t y i nt e r e s t s i n t he Col l a t e r a l . " Com m i t m e nt ” m e a ns , a s t o a ny Le nde r , s uc h Le nde r ’ s Re vol vi ng Loa n
Com m i t m e nt , Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , Le t t e r of Cr e di t Com m i t m e nt , Re vol vi ng Swi ng Li ne Com m i t m e nt , Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt , Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt , or Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Swi ng Li ne Com m i t m e nt . " Com m odi t y Exc ha nge Ac t ” m e a ns t he Com m odi t y Exc ha nge Ac t ( 7 U. S. C. Se c t i on 1 e t s e q. ) , a s a m e nde d f r om t i m e t o t i m e , a nd a ny s uc c e s s or s t a t ut e . " Com pa ny” m e a ns Li t hi a M ot or s , I nc . , a n Or e gon c or por a t i on. " Com pl i a nc e Ce r t i f i c a t e ” m e a ns a c e r t i f i c a t e s ubs t a nt i a l l y i n t he f or m a t t a c he d a s Exhi bi t A, or i n s uc h ot he r f or m a s i s a c c e pt a bl e t o t he Age nt . 10 115525625. 4 0063724- 00082 " Conne c t i on I nc om e Ta xe s ” m e a ns Ot he r Conne c t i on Ta xe s t ha t a r e i m pos e d on or m e a s ur e d by ne t i nc om e ( howe ve r de nom i na t e d) or t ha t a r e f r a nc hi s e Ta xe s or br a nc h pr of i t s Ta xe s . " Cont i nge nt Obl i ga t i on” m e a ns a ny gua r a nt e e of I nde bt e dne s s of a ny ot he r Pe r s on or a ny a gr e e m e nt t o m a i nt a i n t he ne t wor t h, wor ki ng c a pi t a l
or ot he r f i na nc i a l c ondi t i on of a ny ot he r Pe r s on i n r e s pe c t of s uc h ot he r Pe r s on’ s I nde bt e dne s s , whe t he r di r e c t , i ndi r e c t or c ont i nge nt , i nc l udi ng, wi t hout l i m i t a t i on, a ny pur c ha s e or r e pur c ha s e a gr e e m e nt , c om f or t l e t t e r , or ke e p- we l l , t a ke - or - pa y, t hr ough- put or ot he r a r r a nge m e nt of wha t e ve r na t ur e ha vi ng t he e f f e c t of a s s ur i ng or hol di ng ha r m l e s s a ny Pe r s on a ga i ns t l os s wi t h r e s pe c t t o a ny I nde bt e dne s s of s uc h ot he r Pe r s on; pr ovi de d, howe ve r , t ha t t he t e r m " Cont i nge nt Obl i ga t i on” s ha l l not i nc l ude e ndor s e m e nt s of i ns t r um e nt s f or de pos i t or c ol l e c t i on i n t he or di na r y c our s e of bus i ne s s . The a m ount of a ny Cont i nge nt Obl i ga t i on s ha l l be de e m e d t o be a n a m ount e qua l t o t he s t a t e d or de t e r m i na bl e a m ount of t he pr i m a r y obl i ga t i on i n r e s pe c t of whi c h s uc h Cont i nge nt Obl i ga t i on i s m a de or , i f not s t a t e d or de t e r m i na bl e , t he m a xi m um r e a s ona bl y a nt i c i pa t e d l i a bi l i t y i n r e s pe c t t he r e of a s de t e r m i ne d i n good f a i t h by t he Pe r s on s ubj e c t t o s uc h obl i ga t i on. " Cont r ol ” m e a ns t he pos s e s s i on, di r e c t l y or i ndi r e c t l y, of t he powe r t o di r e c t or
c a us e t he di r e c t i on of t he m a na ge m e nt a nd pol i c i e s of a Pe r s on, whe t he r t hr ough t he owne r s hi p of vot i ng s e c ur i t i e s , by c ont r a c t or ot he r wi s e a nd " Cont r ol l e d by” s ha l l ha ve t he c onc om i t a nt m e a ni ng. For pur pos e s of de t e r m i ni ng whe t he r a M i nor i t y De a l e r i s a M i nor i t y De a l e r Af f i l i a t e or a M i nor i t y De a l e r Subs i di a r y, " Cont r ol ” s ha l l be e s t a bl i s he d whe n ( i ) a Loa n Pa r t y i s t he m a na ge r of t he M i nor i t y De a l e r or ( i i ) t he m a na ge r of t he M i nor i t y De a l e r ha s de l e ga t e d t o a Loa n Pa r t y a l l or a s ubs t a nt i a l por t i on of s uc h m a na ge r ’ s powe r a nd a ut hor i t y unde r t he M i nor i t y De a l e r ’ s ope r a t i ng a gr e e m e nt , byl a ws , l i m i t e d l i a bi l i t y c om pa ny a gr e e m e nt or ot he r a ppl i c a bl e or ga ni z a t i ona l doc um e nt s , a nd, i n t he c a s e of c l a us e ( i ) or ( i i ) , s uc h M i nor i t y De a l e r i s r e f l e c t e d i n t he a udi t e d, c ons ol i da t e d f i na nc i a l s t a t e m e nt s of t he Com pa ny. " Cont r ol l e d Gr oup” m e a ns a l l m e m be r s of a c ont r ol l e d gr oup of c or por a t i ons or ot he r bus i ne s s e nt i t i e s a nd a l l t r a de s or bus i ne s s e s ( whe t he r or not i nc or por a t e d) unde r c om m on c ont r ol whi c h, t oge t he r wi t h a ny Loa n
Pa r t y or a ny of i t s Subs i di a r i e s , a r e t r e a t e d a s a s i ngl e e m pl oye r unde r Se c t i on 414 of t he Code . " Cor r e s pondi ng Te nor ” wi t h r e s pe c t t o a ny Ava i l a bl e Te nor m e a ns , a s a ppl i c a bl e , e i t he r a t e nor ( i nc l udi ng ove r ni ght ) or a n i nt e r e s t pa ym e nt pe r i od ha vi ng a ppr oxi m a t e l y t he s a m e l e ngt h ( di s r e ga r di ng bus i ne s s da y a dj us t m e nt ) a s s uc h Ava i l a bl e Te nor . " Cr e di t Ext e ns i on” m e a ns t he m a ki ng of a n Adva nc e or t he i s s ua nc e of a Le t t e r of Cr e di t he r e unde r . " Da i l y Si m pl e SOFR Loa n” m e a ns a ny Loa n be a r i ng i nt e r e s t a t a r a t e ba s e d on Adj us t e d Da i l y Si m pl e SOFR ( ot he r t ha n pur s ua nt t o t he Adj us t e d Da i l y Si m pl e SOFR c om pone nt of t he de f i ni t i on of " Al t e r na t e Ba s e Ra t e ” ) . " DFC” m e a ns Dr i ve wa y Fi na nc e Cor por a t i on, a n Or e gon c or por a t i on. 11 115525625. 4 0063724- 00082
" DFC I nde bt e dne s s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 10( r ) . " DFC Subs i di a r y” m e a ns a ny of ( a ) DFC a nd ( b) e a c h Subs i di a r y of DFC. " De a l e r s hi p” m e a ns a Subs i di a r y of t he Com pa ny whos e pr i m a r y bus i ne s s i s t he r e t a i l s a l e s s a l e or r e t a i l s a l e a nd l e a s e of ne w a nd/ or us e d a ut om obi l e s , t r uc ks a nd/ or m ot or c yc l e s , ot he r t ha n Exc l ude d Ve hi c l e s , i n t he Uni t e d St a t e s of Am e r i c a or i n Ca na da . " De a l e r s hi p Loa n Li m i t ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 3. 1( b) . " De a l e r s hi p Subl i m i t ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 3. 1( b) . " De bt or Re l i e f La ws ” m e a ns t he Ba nkr upt c y Code of t he Uni t e d St a t e s of Am e r i c a , a nd a l l ot he r l i qui da t i on, c ons e r va t or s hi p, ba nkr upt c y, a s s i gnm e nt f or t he be ne f i t of c r e di t or s , m or a t or i um , r e a r r a nge m e nt , r e c e i ve r s hi p, i ns ol ve nc y, r e or ga ni z a t i on, or s i m i l a r de bt or r e l i e f La ws of t he Uni t e d St a t e s or ot he r a ppl i c a bl e j ur i s di c t i ons f r om t i m e t o t i m e i n e f f e c t . " De e m e d Sa l e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 3. 3( c ) . " De f a ul t ” m e a ns a ny Eve nt of De f a ul t or a ny e ve nt whi c h wi t h t he gi vi ng of not i c e or t he
pa s s a ge of t i m e , or bot h, woul d c ons t i t ut e a n Eve nt of De f a ul t . " De f a ul t i ng Le nde r ” m e a ns , s ubj e c t t o 6. 14. 2, a ny Le nde r t ha t ( a ) ha s f a i l e d t o ( i ) f und a l l or a ny por t i on of i t s Loa ns wi t hi n t wo ( 2) Bus i ne s s Da ys a f t e r t he da t e s uc h Loa ns we r e r e qui r e d t o be f unde d he r e unde r unl e s s s uc h Le nde r not i f i e s t he Age nt a nd Com pa ny i n wr i t i ng t ha t s uc h f a i l ur e i s t he r e s ul t of s uc h Le nde r ’ s de t e r m i na t i on t ha t one or m or e c ondi t i ons pr e c e de nt t o f undi ng ( e a c h of whi c h c ondi t i ons pr e c e de nt , t oge t he r wi t h a ny a ppl i c a bl e de f a ul t , s ha l l be s pe c i f i c a l l y i de nt i f i e d i n s uc h wr i t i ng) ha s not be e n s a t i s f i e d or wa i ve d, or ( i i ) pa y t o t he Age nt , t he LC I s s ue r , t he Swi ng Li ne Le nde r or a ny ot he r Le nde r a ny ot he r a m ount r e qui r e d t o be pa i d by i t he r e unde r ( i nc l udi ng i n r e s pe c t of i t s pa r t i c i pa t i on i n Le t t e r s of Cr e di t or Swi ng Li ne Loa ns ) wi t hi n t wo ( 2) Bus i ne s s Da ys a f t e r t he da t e whe n due , ( b) ha s not i f i e d a ny Bor r owe r , t he Age nt , t he LC I s s ue r or t he Swi ng Li ne Le nde r i n wr i t i ng t ha t i t doe s not i nt e nd t o c om pl y wi t h i t s f undi ng obl i ga t i ons he r e unde r , or ha s
m a de a publ i c s t a t e m e nt t o t ha t e f f e c t ( unl e s s s uc h wr i t i ng or publ i c s t a t e m e nt r e l a t e s t o s uc h Le nde r ’ s obl i ga t i on t o f und a Loa n he r e unde r a nd s t a t e s t ha t s uc h pos i t i on i s ba s e d on s uc h Le nde r ’ s de t e r m i na t i on t ha t a c ondi t i on pr e c e de nt t o f undi ng ( whi c h c ondi t i on pr e c e de nt , t oge t he r wi t h a ny a ppl i c a bl e de f a ul t , s ha l l be s pe c i f i c a l l y i de nt i f i e d i n s uc h wr i t i ng or publ i c s t a t e m e nt ) c a nnot be s a t i s f i e d) , ( c ) ha s f a i l e d, wi t hi n t hr e e ( 3) Bus i ne s s Da ys a f t e r wr i t t e n r e que s t by t he Age nt or t he Com pa ny, t o c onf i r m i n wr i t i ng t o t he Age nt a nd t he Com pa ny t ha t i t wi l l c om pl y wi t h i t s pr os pe c t i ve f undi ng obl i ga t i ons he r e unde r ( pr ovi de d t ha t s uc h Le nde r s ha l l c e a s e t o be a De f a ul t i ng Le nde r pur s ua nt t o t hi s c l a us e ( c ) upon r e c e i pt of s uc h wr i t t e n c onf i r m a t i on by t he Age nt a nd t he Com pa ny) , or ( d) ha s , or ha s a di r e c t or i ndi r e c t pa r e nt c om pa ny t ha t ha s , ( i ) be c om e t he s ubj e c t of a pr oc e e di ng unde r a ny De bt or Re l i e f La w, ( i i ) ha d a ppoi nt e d f or i t a r e c e i ve r , c us t odi a n, c ons e r va t or , t r us t e e , a dm i ni s t r a t or , a s s i gne e f or t he be ne f i t of c r e di t or s or
s i m i l a r Pe r s on c ha r ge d wi t h r e or ga ni z a t i on or l i qui da t i on of i t s bus i ne s s or a s s e t s ( ot he r t ha n a n Undi s c l os e d Adm i ni s t r a t i on) , i nc l udi ng t he Fe de r a l De pos i t I ns ur a nc e Cor por a t i on or a ny ot he r s t a t e or f e de r a l r e gul a t or y a ut hor i t y a c t i ng i n s uc h a c a pa c i t y, or ( i i i ) be c om e t he s ubj e c t of a Ba i l - I n Ac t i on; pr ovi de d t ha t a Le nde r s ha l l not be a De f a ul t i ng Le nde r s ol e l y by vi r t ue of t he 12 115525625. 4 0063724- 00082 owne r s hi p or a c qui s i t i on of a ny e qui t y i nt e r e s t i n t ha t Le nde r or a ny di r e c t or i ndi r e c t pa r e nt c om pa ny t he r e of by a Gove r nm e nt a l Aut hor i t y s o l ong a s s uc h owne r s hi p i nt e r e s t doe s not r e s ul t i n or pr ovi de s uc h Le nde r wi t h i m m uni t y f r om t he j ur i s di c t i on of c our t s wi t hi n t he Uni t e d St a t e s or f r om t he e nf or c e m e nt of j udgm e nt s or wr i t s of a t t a c hm e nt on i t s a s s e t s or pe r m i t s uc h Le nde r ( or s uc h Gove r nm e nt a l Aut hor i t y) t o r e j e c t , r e pudi a t e , di s a vow or di s a f f i r m a ny c ont r a c t s or a gr e e m e nt s m a de wi t h s uc h Le nde r . Any de t e r m i na t i on by t he Age nt t ha t a Le nde r i s a De f a ul t i ng Le nde r unde r a ny one or m or e of c l a us e s ( a ) t hr ough ( d)
a bove s ha l l be c onc l us i ve a nd bi ndi ng a bs e nt m a ni f e s t e r r or , a nd s uc h Le nde r s ha l l be de e m e d t o be a De f a ul t i ng Le nde r ( s ubj e c t t o Se c t i on 6. 14. 2) upon de l i ve r y of wr i t t e n not i c e of s uc h de t e r m i na t i on t o t he Com pa ny, t he LC I s s ue r , t he Swi ng Li ne Le nde r a nd e a c h Le nde r . " De f a ul t Ra t e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 1. 2. " De m o” m e a ns a ny Ne w Ve hi c l e ( e xc e pt t ha t a ny m i l e a ge l i m i t a t i ons i nc l ude d i n t he de f i ni t i on f or a pa r t i c ul a r t ype of Ve hi c l e s ha l l not be a ppl i c a bl e t o De m os ) t ha t i s us e d by a De a l e r s hi p a s a de m ons t r a t i on uni t . " Di s c l os ur e Sc he dul e ” m e a ns t he Di s c l os ur e Sc he dul e a t t a c he d he r e t o. " Dol l a r ” or " $” m e a ns l a wf ul m one y of t he Uni t e d St a t e s of Am e r i c a . " Dua l Subs i di a r y” m e a ns a Subs i di a r y whi c h ha s e nt e r e d i nt o s e pa r a t e f l oor pl a n f i na nc i ng a r r a nge m e nt s wi t h a t l e a s t one Dua l Subs i di a r y Le nde r . The Dua l Subs i di a r i e s a s of t he Cl os i ng Da t e a r e s e t f or t h on Sc he dul e 2. The Com pa ny m a y de s i gna t e Subs i di a r i e s a s Dua l Subs i di a r i e s f r om t i m e t o t i m e i n a c c or da nc e wi t h Se c t i ons 6. 19 a nd 13. 16. " Dua l Subs i di a r y
Fi na nc i ng Com m e nc e m e nt Da t e ” m e a ns , wi t h r e s pe c t t o a ny Dua l Subs i di a r y, t he da t e t ha t s uc h Dua l Subs i di a r y be gi ns t o f i na nc e ne w Ve hi c l e s of a ny Re m ove d Fr a nc hi s e , us e d a nd/ or s e r vi c e l oa ne r Ve hi c l e s t hr ough Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s a s pe r m i t t e d by Se c t i ons 6. 19 a nd 13. 16. " Dua l Subs i di a r y Le nde r ” ha s t he m e a ni ng s e t f or t h i n t he de f i ni t i on of " Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s ” . " Ea r l y Opt - i n El e c t i on” m e a ns t he j oi nt e l e c t i on by t he Age nt a nd t he Com pa ny t o t r i gge r a f a l l ba c k f r om t he t he n- c ur r e nt Be nc hm a r k t o t he Be nc hm a r k Re pl a c e m e nt , a nd a not i f i c a t i on by t he Age nt t o e a c h of t he ot he r pa r t i e s he r e t o of s uc h e l e c t i on a nd t he pr opos e d Be nc hm a r k Re pl a c e m e nt . " EBI TDAR” ha s t he m e a ni ng s e t f or t h i n Se c t i on 11. 1. 2. " EEA Fi na nc i a l I ns t i t ut i on” m e a ns ( a ) a ny c r e di t i ns t i t ut i on or i nve s t m e nt f i r m e s t a bl i s he d i n a ny EEA M e m be r Count r y t ha t i s s ubj e c t t o t he s upe r vi s i on of a n EEA Re s ol ut i on Aut hor i t y, ( b) a ny e nt i t y e s t a bl i s he d i n a n EEA M e m be r Count r y t ha t i s a pa r e nt of a n i ns t i t ut i on de s c r i be d i n c l a us e ( a )
of t hi s de f i ni t i on, or ( c ) a ny f i na nc i a l i ns t i t ut i on e s t a bl i s he d i n a n EEA M e m be r Count r y t ha t i s a s ubs i di a r y of a n i ns t i t ut i on de s c r i be d i n c l a us e ( a ) or ( b) of t hi s de f i ni t i on a nd i s s ubj e c t t o c ons ol i da t e d s upe r vi s i on wi t h i t s pa r e nt . 13 115525625. 4 0063724- 00082
" EEA M e m be r Count r y” m e a ns a ny of t he m e m be r s t a t e s of t he Eur ope a n Uni on, I c e l a nd, Li e c ht e ns t e i n, a nd Nor wa y. " EEA Re s ol ut i on Aut hor i t y” m e a ns a ny publ i c a dm i ni s t r a t i ve a ut hor i t y or a ny pe r s on e nt r us t e d wi t h publ i c a dm i ni s t r a t i ve a ut hor i t y of a ny EEA M e m be r Count r y ( i nc l udi ng a ny de l e ge e ) ha vi ng r e s pons i bi l i t y f or t he r e s ol ut i on of a ny EEA Fi na nc i a l I ns t i t ut i on. " El i gi bl e Ac c ount ” m e a ns a m ount s owe d by a c us t om e r t o a De a l e r s hi p f or pa r t s or a c c e s s or i e s s ol d t o s uc h c us t om e r or f or s e r vi c e s pe r f or m e d f or s uc h c us t om e r , i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t , whi c h i s due a nd pa ya bl e i n f ul l not m or e t ha n 90 da ys a f t e r da t e of s a l e or i nvoi c e , a nd whi c h i s not m or e t ha n 60 da ys pa s t due . " El i gi bl e As s i gne e ” m e a ns ( a ) a Le nde r ; ( b) a n Appr ove d Fund; ( c ) a c om m e r c i a l ba nk or ga ni z e d unde r t he l a ws of t he Uni t e d St a t e s , or a ny s t a t e t he r e of , a nd ha vi ng t ot a l a s s e t s i n e xc e s s of $3, 000, 000, 000, c a l c ul a t e d i n a c c or da nc e wi t h t he a c c ount i ng pr i nc i pl e s pr e s c r i be d by t he r e gul a t or y a ut hor i t y a ppl i c a bl e t o s uc h
ba nk i n i t s j ur i s di c t i on of or ga ni z a t i on; ( d) a c om m e r c i a l ba nk or ga ni z e d unde r t he l a ws of a ny ot he r c ount r y t ha t i s a m e m be r of t he OECD, or a pol i t i c a l s ubdi vi s i on of a ny s uc h c ount r y, a nd ha vi ng t ot a l a s s e t s i n e xc e s s of $3, 000, 000, 000, c a l c ul a t e d i n a c c or da nc e wi t h t he a c c ount i ng pr i nc i pl e s pr e s c r i be d by t he r e gul a t or y a ut hor i t y a ppl i c a bl e t o s uc h ba nk i n i t s j ur i s di c t i on of or ga ni z a t i on, s o l ong a s s uc h ba nk i s a c t i ng t hr ough a br a nc h or a ge nc y l oc a t e d i n t he c ount r y i n whi c h i t i s or ga ni z e d or a not he r c ount r y t ha t i s de s c r i be d i n t hi s c l a us e ( d) ; or ( e ) t he c e nt r a l ba nk of a ny c ount r y t ha t i s a m e m be r of t he OECD; pr ovi de d, howe ve r , t ha t ne i t he r t he Bor r owe r nor a n Af f i l i a t e of t he Bor r owe r s ha l l qua l i f y a s a n El i gi bl e As s i gne e . " El i gi bl e Ne w Ve hi c l e ” m e a ns a Ne w Ve hi c l e owne d by a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p whi c h i s a n El i gi bl e Ve hi c l e a nd i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t . " El i gi bl e Re a l Pr ope r t y” m e a ns Re a l Pr ope r t y owne d by a ny Re a l Es t a t e Subs i di a r y or De a l e r s hi p a nd whi c h s a t i s f i e s a l l
r e qui r e m e nt s s e t f or t h i n Se c t i on 9. 4. " El i gi bl e Re c e i va bl e s ” m e a ns a m ount s owi ng t o t he Com pa ny or a Subs i di a r y i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t , whi c h a r e ( a ) El i gi bl e Ac c ount s ; ( b) c om m i s s i ons owe d t o t he De a l e r s hi ps by f i na nc i a l i ns t i t ut i ons or f i na nc e c om pa ni e s whi c h a r e not Af f i l i a t e s of a ny Loa n Pa r t y i n c onne c t i on wi t h t he pur c ha s e by s uc h i ns t i t ut i ons of r e t a i l i ns t a l l m e nt c ont r a c t s a nd l e a s e s a r i s i ng f r om t he s a l e or l e a s e of Ne w Ve hi c l e s a nd Us e d Ve hi c l e s ( f i na nc e r e c e i va bl e s ) , whi c h ha ve not r e m a i ne d unpa i d f or m or e t ha n 90 da ys , or ( c ) a m ount s owe d t o t he Com pa ny or a De a l e r s hi p by a m a nuf a c t ur e r of Ve hi c l e s a s i nc e nt i ve pa ym e nt s , r e ba t e s , f a c t or y c r e di t s a nd t he l i ke , but e xc l udi ng f a c t or y hol dba c ks ( f a c t or y r e c e i va bl e s ) , whi c h ha ve not r e m a i ne d unpa i d f or m or e t ha n 90 da ys , s ubj e c t t o t he e xc l us i on by t he Age nt of s uc h a m ount s whi c h a r e owe d t o t he Com pa ny or a De a l e r s hi p by a m a nuf a c t ur e r whi c h ha s c om m e nc e d or ha d c om m e nc e d a ga i ns t i t , a ny pr oc e e di ng unde r a ny pr e s e nt or
f ut ur e ba nkr upt c y l a w. " El i gi bl e Se r vi c e Loa ne r Ve hi c l e ” m e a ns a Se r vi c e Loa ne r Ve hi c l e whi c h: ( a ) i s owne d by a De a l e r s hi p ( ot he r t ha n a Si l o Subs i di a r y) , ( b) i s f r e e of a ny Li e ns ot he r t ha n i n f a vor of t he 14 115525625. 4 0063724- 00082 Age nt , e xc e pt a s ot he r wi s e a gr e e d by t he Age nt i n wr i t i ng a nd ( c ) a s of a ny da t e of de t e r m i na t i on, wa s not i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e on a ny da t e m or e t ha n f i f t e e n ( 15) m ont hs pr i or t o s uc h da t e of de t e r m i na t i on. " El i gi bl e Ve hi c l e ” m e a ns a n a ut om obi l e , t r uc k or m ot or c yc l e wi t h a gr os s ve hi c l e we i ght of no m or e t ha n 16, 000 pounds , whi c ht ha t i s not a n Exc l ude d Ve hi c l e a nd s a t i s f i e s t he f ol l owi ng r e qui r e m e nt s : ( a ) The ve hi c l e i s owne d by a De a l e r s hi p, s ubj e c t t o a pe r f e c t e d s e c ur i t y i nt e r e s t i n f a vor of t he Age nt , a nd f r e e of a ny t i t l e de f e c t s , l i e ns , s e c ur i t y i nt e r e s t s , l e a s e s , ba i l m e nt s , c ons i gnm e nt s or ot he r i nt e r e s t s of a ny Pe r s on ot he r t ha n Age nt , e xc e pt a s a gr e e d by t he Age nt i n wr i t i ng. ( b) Unl e s s t he ve hi c l e i s a De m o, or i s i n t r a ns i t f r om t he s e l l e r , i t i s l oc a t e d a t
l oc a t i ons whi c h t he De a l e r s hi ps di s c l os e d t o t he Age nt a nd whi c h a r e a c c e pt a bl e t o t he Age nt . I f t he ve hi c l e i s i n t r a ns i t f r om a s e l l e r , t he n upon r e c e i pt by a De a l e r s hi p i t wi l l be l oc a t e d a t one of s uc h l oc a t i ons . ( c ) The ve hi c l e i s he l d f or s a l e or l e a s e i n t he or di na r y c our s e of a De a l e r s hi p’ s bus i ne s s . ( d) The ve hi c l e i s unda m a ge d a nd of good a nd m e r c ha nt a bl e qua l i t y. ( e ) The ve hi c l e i s ot he r wi s e a c c e pt a bl e t o t he Age nt . " Envi r onm e nt a l La ws ” m e a ns a ny a nd a l l f e de r a l , s t a t e , l oc a l a nd f or e i gn s t a t ut e s , l a ws , j udi c i a l de c i s i ons , r e gul a t i ons , or di na nc e s , r ul e s , j udgm e nt s , or de r s , de c r e e s , pl a ns , i nj unc t i ons , pe r m i t s , c onc e s s i ons , gr a nt s , f r a nc hi s e s , l i c e ns e s , a gr e e m e nt s a nd ot he r gove r nm e nt a l r e s t r i c t i ons r e l a t i ng t o ( a ) Ha z a r dous Subs t a nc e s , ( b) t he pr ot e c t i on of t he e nvi r onm e nt , ( c ) pe r s ona l i nj ur y or pr ope r t y da m a ge r e l a t i ng t o t he r e l e a s e or di s c ha r ge of Ha z a r dous M a t e r i a l s , ( d) e m i s s i ons , di s c ha r ge s or r e l e a s e s of pol l ut a nt s , c ont a m i na nt s , ha z a r dous s ubs t a nc e s or wa s t e s i nt o s ur f a c e wa t e r , gr ound wa t e r or l a nd, or ( e ) t he
m a nuf a c t ur e , pr oc e s s i ng, di s t r i but i on, us e , t r e a t m e nt , s t or a ge , di s pos a l , t r a ns por t or ha ndl i ng of pol l ut a nt s , c ont a m i na nt s , ha z a r dous s ubs t a nc e s or wa s t e s or t he c l e a n- up or ot he r r e m e di a t i on t he r e of , a l l a s now e xi s t i ng or he r e a f t e r a m e nde d or a dopt e d. " Envi r onm e nt a l Re por t s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 9. 4. 2. " Equi t y I nt e r e s t Re pur c ha s e Thr e s hol d” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 4( z ) ( i i ) . " Equi t y I nt e r e s t s ” m e a ns s ha r e s of c a pi t a l s t oc k, pa r t ne r s hi p i nt e r e s t s , m e m be r s hi p i nt e r e s t s i n a l i m i t e d l i a bi l i t y c om pa ny, be ne f i c i a l i nt e r e s t s i n a t r us t or ot he r e qui t y owne r s hi p i nt e r e s t s i n a Pe r s on, a nd a ny wa r r a nt s , opt i ons or ot he r r i ght s e nt i t l i ng t he hol de r t he r e of t o pur c ha s e or a c qui r e a ny s uc h e qui t y i nt e r e s t . " ERI SA” m e a ns t he Em pl oye e Re t i r e m e nt I nc om e Se c ur i t y Ac t of 1974. 15 115525625. 4 0063724- 00082
" ERI SA Af f i l i a t e ” m e a ns , a s a ppl i e d t o a Loa n Pa r t y, a ny t r a de or bus i ne s s ( whe t he r or not i nc or por a t e d) t ha t , t oge t he r wi t h s uc h Loa n Pa r t y, i s t r e a t e d a s a s i ngl e e m pl oye r unde r Se c t i on 414( b) or ( c ) of t he Code or , s ol e l y f or pur pos e s of Se c t i on 302 of ERI SA a nd Se c t i on 412 of t he Code , i s t r e a t e d a s a s i ngl e e m pl oye r unde r Se c t i on 414 of t he Code . " ERI SA Eve nt ” m e a ns ( a ) a ny " r e por t a bl e e ve nt ” , a s de f i ne d i n Se c t i on 4043 of ERI SA or t he r e gul a t i ons i s s ue d t he r e unde r wi t h r e s pe c t t o a Pl a n ( ot he r t ha n a n e ve nt f or whi c h t he 30- da y not i c e pe r i od i s wa i ve d) ; ( b) t he f a i l ur e wi t h r e s pe c t t o a ny Pl a n t o s a t i s f y t he " m i ni m um f undi ng s t a nda r d” ( a s de f i ne d i n Se c t i on 412 of t he Code or Se c t i on 302 of ERI SA) , whe t he r or not wa i ve d; ( c ) t he f i l i ng pur s ua nt t o Se c t i on 412( c ) of t he Code or Se c t i on 302( c ) of ERI SA of a n a ppl i c a t i on f or a wa i ve r of t he m i ni m um f undi ng s t a nda r d wi t h r e s pe c t t o a ny Pl a n; ( d) t he i nc ur r e nc e by a ny Loa n Pa r t y or a ny of i t s ERI SA Af f i l i a t e s of a ny l i a bi l i t y unde r Ti t l e I V of ERI SA wi t h r e s pe c t t o a ny Pl a n ( ot he r t ha n
pr e m i um s due a nd not de l i nque nt unde r Se c t i on 4007 of ERI SA) ; ( e ) t he r e c e i pt by a ny Loa n Pa r t y or a ny ERI SA Af f i l i a t e f r om t he PBGC or a pl a n a dm i ni s t r a t or of a ny not i c e r e l a t i ng t o a n i nt e nt i on t o t e r m i na t e a ny Pl a n or Pl a ns or t o a ppoi nt a t r us t e e t o a dm i ni s t e r a ny Pl a n; ( f ) t he i nc ur r e nc e by a ny Loa n Pa r t y or a ny of i t s ERI SA Af f i l i a t e s of a ny l i a bi l i t y wi t h r e s pe c t t o t he wi t hdr a wa l or pa r t i a l wi t hdr a wa l of a ny Loa n Pa r t y or a ny of i t s ERI SA Af f i l i a t e s f r om a ny Pl a n or M ul t i e m pl oye r Pl a n; or ( g) t he r e c e i pt by a ny Loa n Pa r t y or a ny ERI SA Af f i l i a t e of a ny not i c e , or t he r e c e i pt by a ny M ul t i e m pl oye r Pl a n f r om a ny Loa n Pa r t y or a ny ERI SA Af f i l i a t e of a ny not i c e , c onc e r ni ng t he i m pos i t i on upon a ny Loa n Pa r t y or a ny of i t s ERI SA Af f i l i a t e s of wi t hdr a wa l l i a bi l i t y unde r Se c t i on 4201 of ERI SA or a de t e r m i na t i on t ha t a M ul t i e m pl oye r Pl a n i s , or i s e xpe c t e d t o be , i ns ol ve nt , wi t hi n t he m e a ni ng of Ti t l e I V of ERI SA. " Er r one ous Pa ym e nt ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 20( a ) . " EU” m e a ns t he Eur ope a n Uni on. " EU Ba i l - I n Le gi s l a t i on
Sc he dul e ” m e a ns t he EU Ba i l - I n Le gi s l a t i on Sc he dul e publ i s he d by t he Loa n M a r ke t As s oc i a t i on ( or a ny s uc c e s s or pe r s on) , a s i n e f f e c t f r om t i m e t o t i m e . " Eve nt of De f a ul t ” m e a ns t he oc c ur r e nc e of a ny e ve nt de s c r i be d i n Se c t i on 14. 1. " Exc l ude d Funde d De bt ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 10( l ) . " Exc l ude d I t e m s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 11. 1. 2. " Exc l ude d Pr ope r t y” m e a ns a ny of ( a ) a ny Equi t y I nt e r e s t s i n a ny De a l e r s hi p, a ny Ca na di a nFor e i gn Subs i di a r y ( e xc e pt a ny Ca na di a n Subs i di a r y t ha t i s a Fi na nc e d Ent i t y) a nd, t o t he e xt e nt pr ohi bi t e d by a ny m a nuf a c t ur e r of Ve hi c l e s , a ny Subs i di a r y of t he Com pa ny t ha t i s t he hol de r of f i ve pe r c e nt ( 5% ) or m or e of t he Equi t y I nt e r e s t s i n a ny De a l e r s hi p; ( b) a ny r e a l e s t a t e or i nt e r e s t i n r e a l e s t a t e , i nc l udi ng a l e a s e or r e nt s t he r e unde r , a nd a ny i m pr ove m e nt s a nd f i xt ur e s , unl e s s a ny of t he f or e goi ng c ons t i t ut e El i gi bl e Re a l Pr ope r t y; ( c ) a ny vot i ng s t oc k of a ny di r e c t Subs i di a r y of a ny Loa n Pa r t y t ha t i s a c ont r ol l e d f or e i gn c or por a t i on ( a s de f i ne d i n Se c t i on 957 of t he I nt e r na l
Re ve nue Code ( a " CFC” ) ) i n e xc e s s of 65% of t he t ot a l c om bi ne d vot i ng powe r of a l l c l a s s e s of s t oc k of s uc h CFC t ha t a r e e nt i t l e d t o vot e ( wi t hi n t he m e a ni ng of Se c t i on 1. 956- 2( c ) ( 2) of t he Tr e a s ur y Re gul a t i ons ) , t o t he e xt e nt t he pl e dge of a gr e a t e r 16 115525625. 4 0063724- 00082 pe r c e nt a ge woul d r e a s ona bl y be e xpe c t e d t o r e s ul t i n m a t e r i a l a dve r s e t a x c ons e que nc e s t o a ny Bor r owe r , a s r e a s ona bl y de t e r m i ne d i n good f a i t h by t he Bor r owe r s ; ( d) a ny l e a s e , l i c e ns e or ot he r a gr e e m e nt or c ont r a c t or a ny pr ope r t y s ubj e c t t o a pur c ha s e m one y s e c ur i t y i nt e r e s t , Li e n s e c ur i ng a Ca pi t a l i z e d Le a s e Obl i ga t i on or s i m i l a r a r r a nge m e nt , i n e a c h c a s e pe r m i t t e d t o be i nc ur r e d unde r t hi s Agr e e m e nt , t o t he e xt e nt t ha t a gr a nt of a s e c ur i t y i nt e r e s t t he r e i n woul d r e qui r e a c ons e nt not obt a i ne d or vi ol a t e or i nva l i da t e s uc h l e a s e , l i c e ns e , a gr e e m e nt or c ont r a c t or pur c ha s e m one y a r r a nge m e nt , Ca pi t a l i z e d Le a s e Obl i ga t i on or s i m i l a r a r r a nge m e nt or c r e a t e a r i ght of t e r m i na t i on i n f a vor of a ny ot he r pa r t y t he r e t o ( ot he r t ha n t he Com pa ny or a n Af f i l i a t e of t he
Com pa ny) , i n e a c h c a s e a f t e r gi vi ng e f f e c t t o t he a ppl i c a bl e a nt i - a s s i gnm e nt pr ovi s i ons of t he Uni f or m Com m e r c i a l Code ( " UCC” ) a nd ot he r Appl i c a bl e La w a nd ot he r t ha n pr oc e e ds a nd r e c e i va bl e s t he r e of ; ( e ) a ny Uni t e d St a t e s i nt e nt - t o- us e Tr a de m a r k a ppl i c a t i ons t o t he e xt e nt t ha t , a nd s ol e l y dur i ng t he pe r i od i n whi c h, t he gr a nt , a t t a c hm e nt or e nf or c e m e nt of a s e c ur i t y i nt e r e s t t he r e i n woul d, unde r a ppl i c a bl e f e de r a l l a w, i m pa i r t he r e gi s t r a bi l i t y of s uc h a ppl i c a t i ons or t he va l i di t y or e nf or c e a bi l i t y of r e gi s t r a t i ons i s s ui ng f r om s uc h a ppl i c a t i ons ; ( f ) a ny a s s e t or pr ope r t y t o t he e xt e nt t ha t t he gr a nt of a s e c ur i t y i nt e r e s t i s pr ohi bi t e d by Appl i c a bl e La w or r e qui r e s a c ons e nt not obt a i ne d of a ny Gove r nm e nt a l Aut hor i t y pur s ua nt t o s uc h a ppl i c a bl e l a w, r ul e or r e gul a t i on, i n e a c h c a s e a f t e r gi vi ng e f f e c t t o t he a ppl i c a bl e a nt i - a s s i gnm e nt pr ovi s i ons of t he UCC a nd ot he r Appl i c a bl e La w a nd ot he r t ha n pr oc e e ds a nd r e c e i va bl e s t he r e of ; a nd ( g) wi t h r e s pe c t t o a ny Dua l Subs i di a r y, a ny Ve hi c l e s or r e l a t e d a s s e t s t ha t s uc h Dua l Subs i di a r y a c qui r e s
wi t h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s a nd r e l a t e d a s s e t s ( i nc l udi ng pr oc e e ds ) wi t h r e s pe c t t o whi c h t he Age nt ha s e xpr e s s l y a gr e e d, i n a n I nt e r c r e di t or Agr e e m e nt , a r e not Col l a t e r a l unde r t he Loa n Doc um e nt s ; pr ovi de d, howe ve r , t ha t " Exc l ude d Pr ope r t y” s ha l l not i nc l ude a ny pr oc e e ds , pr oduc t s , s ubs t i t ut i ons or r e pl a c e m e nt s of a ny Exc l ude d Pr ope r t y ( unl e s s s uc h pr oc e e ds , pr oduc t s , s ubs t i t ut i ons or r e pl a c e m e nt s woul d c ons t i t ut e Exc l ude d Pr ope r t y) . " Exc l ude d Subs i di a r y” m e a ns a ny of ( a ) e a c h Exc l ude d Ta x Cr e di t I nve s t m e nt Subs i di a r y; a nd ( b) e a c h DFC Subs i di a r y. " Exc l ude d Swa p Obl i ga t i on” m e a ns , a ny Swa p Obl i ga t i on wi t h r e s pe c t t o a Le nde r - Pr ovi de d Swa p i f , a nd onl y t o t he e xt e nt t ha t , a l l or a por t i on of t he gua r a nt e e of s uc h Gua r a nt or of , or t he gr a nt by s uc h Gua r a nt or of a s e c ur i t y i nt e r e s t t o s e c ur e , s uc h Swa p Obl i ga t i on ( or a ny gua r a nt e e t he r e of ) i s or be c om e s i l l e ga l unde r t he Com m odi t y Exc ha nge Ac t or a ny r ul e , r e gul a t i on or or de r of t he Com m odi t y Fut ur e s Tr a di ng Com m i s s i on ( or t he a ppl i c a t i on or of f i c i a l i nt e r pr e t a t i on of a ny
t he r e of ) , i nc l udi ng by vi r t ue of s uc h Gua r a nt or ’ s f a i l ur e f or a ny r e a s on t o c ons t i t ut e a n " e l i gi bl e c ont r a c t pa r t i c i pa nt ” a s de f i ne d i n t he Com m odi t y Exc ha nge Ac t a nd t he r e gul a t i ons t he r e unde r a t t he t i m e t he gua r a nt e e of s uc h Gua r a nt or or t he gr a nt of s uc h s e c ur i t y i nt e r e s t be c om e s e f f e c t i ve wi t h r e s pe c t t o s uc h Swa p Obl i ga t i on. I f a Swa p Obl i ga t i on a r i s e s unde r a m a s t e r a gr e e m e nt gove r ni ng m or e t ha n one Swa p, s uc h e xc l us i on s ha l l a ppl y onl y t o t he por t i on of s uc h Swa p Obl i ga t i on t ha t i s a t t r i but a bl e t o Swa ps f or whi c h s uc h gua r a nt e e or s e c ur i t y i nt e r e s t i s or be c om e s i l l e ga l . " Exc l ude d Ta x Cr e di t I nve s t m e nt Subs i di a r y” m e a ns a ny of ( a ) LCDC a nd ( b) a ny pr e s e nt or f ut ur e Subs i di a r y of t he Com pa ny t ha t i s f or m e d f or t he s ol e pur pos e of m a ki ng I nve s t m e nt s pe r m i t t e d unde r Se c t i on 13. 6( p) . " Exc l ude d Ta xe s ” m e a ns , i n t he c a s e of e a c h Le nde r or a ppl i c a bl e Le ndi ng I ns t a l l a t i on, t he LC I s s ue r , a nd t he Age nt , ( a ) Ta xe s i m pos e d on i t s ove r a l l ne t i nc om e , f r a nc hi s e Ta xe s , or 17 115525625. 4 0063724- 00082
br a nc h pr of i t s Ta xe s , i n e a c h c a s e , ( i ) i m pos e d on i t , by t he r e s pe c t i ve j ur i s di c t i on unde r t he l a ws of whi c h s uc h Le nde r , t he LC I s s ue r or t he Age nt i s i nc or por a t e d or i s or ga ni z e d or i n whi c h i t s pr i nc i pa l e xe c ut i ve of f i c e i s l oc a t e d or , i n t he c a s e of a Le nde r , i n whi c h s uc h Le nde r ’ s a ppl i c a bl e Le ndi ng I ns t a l l a t i on i s l oc a t e d, or ( i i ) t ha t a r e Ot he r Conne c t i on Ta xe s , ( b) i n t he c a s e of a Le nde r , a ny U. S. f e de r a l wi t hhol di ng t a x t ha t i s i m pos e d on a m ount s pa ya bl e t o s uc h Le nde r pur s ua nt t o t he l a ws i n e f f e c t a t t he t i m e s uc h Le nde r be c om e s a pa r t y t o t hi s Agr e e m e nt or de s i gna t e s a ne w Le ndi ng I ns t a l l a t i on, e xc e pt i n e a c h c a s e t o t he e xt e nt t ha t , pur s ua nt t o Se c t i on 7. 4. 1, a m ount s wi t h r e s pe c t t o s uc h Ta xe s we r e pa ya bl e e i t he r t o s uc h Le nde r ’ s a s s i gnor i m m e di a t e l y be f or e s uc h Le nde r be c a m e a pa r t y he r e t o or t o s uc h Le nde r i m m e di a t e l y be f or e i t c ha nge d i t s Le ndi ng I ns t a l l a t i on, ( c ) Ta xe s a t t r i but a bl e t o a Le nde r ’ s , t he LC I s s ue r ’ s or t he Age nt ’ s f a i l ur e t o c om pl y wi t h Se c t i on 7. 4. 6, a nd ( d) a ny U. S. f e de r a l wi t hhol di ng t a xe s i m pos e d by
FATCA. " Exc l ude d Ve hi c l e ” m e a ns , c ol l e c t i ve l y: ( a ) a ny r e c r e a t i ona l ve hi c l e , m ot or hom e , bus , t ow or r e c ove r y ve hi c l e , a l l - t e r r a i n ve hi c l e , s nowm obi l e , wa t e r c r a f t , s c oot e r or m ope d, ( b) a ny ve hi c l e de s i gne d f or us e pr i m a r i l y i n c ons t r uc t i on, a gr i c ul t ur a l or f a r m i ng ope r a t i ons a nd ( c ) a ny ve hi c l e wi t h a gr os s ve hi c l e we i ght r a t i ng a bove 16, 000 pounds . " Exi s t i ng Le t t e r s of Cr e di t ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 5. 2. " Exi s t i ng Loa n Agr e e m e nt ” ha s t he m e a ni ng s e t f or t h i n Re c i t a l A. " Exi s t i ng Subs i di a r y J oi nde r Agr e e m e nt ” m e a ns a n a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d he r e t o a s Exhi bi t K. " Ext e ndi ng Le nde r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 18. 5. " FATCA” m e a ns Se c t i ons 1471 t hr ough 1474 of t he Code , a s of t he da t e of t hi s Agr e e m e nt ( or a ny a m e nde d or s uc c e s s or ve r s i on t ha t i s s ubs t a nt i ve l y c om pa r a bl e a nd not m a t e r i a l l y m or e one r ous t o c om pl y wi t h) , a ny c ur r e nt or f ut ur e r e gul a t i ons or of f i c i a l i nt e r pr e t a t i ons t he r e of , a ny a gr e e m e nt s e nt e r e d i nt o pur s ua nt t o Se c t i on 1471( b) ( 1) of t he Code a nd a ny f i s c a l or
r e gul a t or y l e gi s l a t i on, r ul e s or pr a c t i c e s a dopt e d pur s ua nt t o a ny i nt e r gove r nm e nt a l a gr e e m e nt , t r e a t y or c onve nt i on a m ong Gove r nm e nt a l Aut hor i t i e s e nt e r e d i nt o i n c onne c t i on wi t h t he i m pl e m e nt a t i on of t he f or e goi ng. " Fe de r a l Funds Ef f e c t i ve Ra t e ” m e a ns , f or a ny da y, a n i nt e r e s t r a t e pe r a nnum e qua l t o t he we i ght e d a ve r a ge of t he r a t e s on ove r ni ght Fe de r a l f unds t r a ns a c t i ons wi t h m e m be r s of t he Fe de r a l Re s e r ve Sys t e m a r r a nge d by Fe de r a l f unds br oke r s on s uc h da y, a s publ i s he d f or s uc h da y ( or , i f s uc h da y i s not a Bus i ne s s Da y, f or t he i m m e di a t e l y pr e c e di ng Bus i ne s s Da y) by t he Fe de r a l Re s e r ve Ba nk of Ne w Yor k, or , i f s uc h r a t e i s not s o publ i s he d f or a ny da y whi c h i s a Bus i ne s s Da y, t he a ve r a ge of t he quot a t i ons a t a ppr oxi m a t e l y 10: 00 a . m . ( Pa c i f i c t i m e ) on s uc h da y on s uc h t r a ns a c t i ons r e c e i ve d by t he Age nt f r om t hr e e Fe de r a l f unds br oke r s of r e c ogni z e d s t a ndi ng s e l e c t e d by t he Age nt i n i t s s ol e di s c r e t i on. " Fi na nc e d Ent i t y” m e a ns , a t a ny t i m e , a Pe r s on t ha t owns a ny a s s e t s t ha t a r e i nc l ude d i n a ny of t he Re vol vi ng Loa n Bor r owi ng
Ba s e , t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e or t he Us e d Ve hi c l e Bor r owi ng Ba s e a t s uc h t i m e . 18 115525625. 4 0063724- 00082 " Fi s c a l Ye a r ” m e a ns t he f i s c a l ye a r of t he Com pa ny a nd i t s Subs i di a r i e s , t he l a s t da y of whi c h i s De c e m be r 31. " Fi xe d Cha r ge Cove r a ge Ra t i o” ha s t he m e a ni ng s e t f or t h i n Se c t i on 11. 1. 2. " Fl e e t Sa l e Cont r a c t ” m e a ns a n a gr e e m e nt or s e r i e s of a gr e e m e nt s by a De a l e r s hi p t o s e l l m or e t ha n f i ve Ne w Ve hi c l e s t o a pur c ha s e r i f a t a ny t i m e t he r e wi l l be m or e t ha n f i ve Ve hi c l e s f or whi c h s uc h De a l e r s hi p ha s not be e n pa i d i n f ul l , a nd s ha l l i nc l ude a l l doc um e nt s e vi de nc i ng s uc h s a l e , i nc l udi ng t he c ont r a c t or c ont r a c t s be t we e n s uc h De a l e r s hi p a nd t he pur c ha s e r , de l i ve r y a gr e e m e nt s a nd pur c ha s e or de r s . " Fl e e t Ve hi c l e ” m e a ns a Ne w Ve hi c l e t ha t i s t o be s ol d by a De a l e r s hi p pur s ua nt t o a Fl e e t Sa l e Cont r a c t . " Fl oor ” m e a ns a r a t e of i nt e r e s t e qua l t o 0% . " FLSA” m e a ns t he Fa i r La bor St a nda r ds Ac t of 1938, a s a m e nde d f r om t i m e t o t i m e , a nd t he r e gul a t i ons pr om ul ga t e d t he r e unde r . " For e i gn De a l e r s hi p” m e a ns a De a l e r s hi p
whos e pr i m a r y bus i ne s s i s t he r e t a i l s a l e or r e t a i l s a l e a nd l e a s e of ne w a nd/ or us e d a ut om obi l e s , t r uc ks a nd/ or m ot or c yc l e s out s i de of t he Uni t e d St a t e s . " For e i gn Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ” m e a ns ( a ) a ny a c c ount s r e c e i va bl e , m or t ga ge r e c e i va bl e s , l oa n r e c e i va bl e s , e qui pm e nt , r oya l t y, f r a nc hi s e f e e , l i c e ns e f e e , pa t e nt or ot he r r e ve nue s t r e a m s a nd ot he r r i ght s t o pa ym e nt or r e l a t e d a s s e t s a nd t he pr oc e e ds t he r e of a nd a ny s e c ur i t i e s ba c ke d by s uc h a s s e t s a nd ( b) a l l c ol l a t e r a l s e c ur i ng s uc h r e c e i va bl e or a s s e t s , a l l c ont r a c t s a nd c ont r a c t r i ght s , gua r a nt e e s or ot he r obl i ga t i ons i n r e s pe c t of s uc h r e c e i va bl e or a s s e t , l oc kbox a c c ount s a nd r e c or ds wi t h r e s pe c t t o s uc h a c c ount or a s s e t a nd a ny ot he r a s s e t c us t om a r i l y t r a ns f e r r e d ( or i n r e s pe c t of whi c h s e c ur i t y i nt e r e s t s a r e c us t om a r i l y gr a nt e d) t oge t he r wi t h a c c ount s or a s s e t s i n c onne c t i on wi t h a s e c ur i t i z a t i on or r e c e i va bl e s a l e t r a ns a c t i on. " For e i gn Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on” m e a ns one or m or e t r a ns a c t i ons pur s ua nt t o whi c h ( i ) For e i gn Re c e i va bl e s or
Se c ur i t i z a t i on As s e t s or i nt e r e s t s t he r e i n a r e s ol d or t r a ns f e r r e d t o or f i na nc e d by one or m or e Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r i e s , a nd ( i i ) s uc h Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r i e s f i na nc e ( or r e f i na nc e ) t he i r a c qui s i t i on of s uc h For e i gn Re c e i va bl e s or Se c ur i t i z a t i on As s e t s or i nt e r e s t s t he r e i n, or t he f i na nc i ng t he r e of , by s e l l i ng or bor r owi ng a ga i ns t For e i gn Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ( i nc l udi ng c ondui t a nd wa r e hous e f i na nc i ngs ) a nd a ny he dgi ng a gr e e m e nt s e nt e r e d i nt o i n c onne c t i on wi t h s uc h For e i gn Re c e i va bl e s or Se c ur i t i z a t i on As s e t s ; pr ovi de d, t ha t r e c our s e t o t he Com pa ny or a ny Subs i di a r y ( ot he r t ha n t he Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r i e s ) i n c onne c t i on wi t h s uc h t r a ns a c t i ons s ha l l be l i m i t e d t o t he e xt e nt c us t om a r y ( a s de t e r m i ne d by t he Com pa ny i n good f a i t h) f or s i m i l a r t r a ns a c t i ons i n t he a ppl i c a bl e j ur i s di c t i ons ( i nc l udi ng, t o t he e xt e nt a ppl i c a bl e , i n a m a nne r c ons i s t e nt wi t h t he de l i ve r y of a " t r ue s a l e ” / " a bs ol ut e t r a ns f e r ” opi ni on wi t h 19 115525625. 4 0063724- 00082
r e s pe c t t o a ny t r a ns f e r by t he Com pa ny or a ny Subs i di a r y ( ot he r t ha n a Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r y) ) . " For e i gn Subs i di a r y” m e a ns a ny Subs i di a r y of t he Com pa ny or ga ni z e d unde r t he l a ws of a ny j ur i s di c t i on ot he r t ha n t he Uni t e d St a t e s or a ny s t a t e or ot he r pol i t i c a l s ubdi vi s i on t he r e of . " For e i gn Subs i di a r y I nde bt e dne s s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 10( p) . " For m e r Le nde r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 9. 3. 1. " For m e r Le nde r Loa n” m e a ns a l oa n m a de by a For m e r Le nde r t o f i na nc e a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p’ s Ne w Ve hi c l e s . " Fr a nc hi s e Agr e e m e nt ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 10. 21. " Fr ont i ng Expos ur e ” m e a ns , a t a ny t i m e t he r e i s a De f a ul t i ng Le nde r , ( a ) wi t h r e s pe c t t o t he LC I s s ue r , s uc h De f a ul t i ng Le nde r ’ s r a t a bl e s ha r e of t he LC Obl i ga t i ons wi t h r e s pe c t t o Le t t e r s of Cr e di t i s s ue d by t he LC I s s ue r ot he r t ha n LC Obl i ga t i ons a s t o whi c h s uc h De f a ul t i ng Le nde r ’ s pa r t i c i pa t i on obl i ga t i on ha s be e n r e a l l oc a t e d t o ot he r Le nde r s or Ca s h Col l a t e r a l i z e d i n a c c or da nc e wi t h t he t e r m s he r e of , a nd ( b) wi t h
r e s pe c t t o t he Swi ng Li ne Le nde r , s uc h De f a ul t i ng Le nde r ’ s r a t a bl e s ha r e of out s t a ndi ng Swi ng Li ne Loa ns m a de by t he Swi ng Li ne Le nde r ot he r t ha n Swi ng Li ne Loa ns a s t o whi c h s uc h De f a ul t i ng Le nde r ’ s pa r t i c i pa t i on obl i ga t i on ha s be e n r e a l l oc a t e d t o ot he r Le nde r s . " Fund” m e a ns a ny Pe r s on ( ot he r t ha n a na t ur a l pe r s on) t ha t i s ( or wi l l be ) e nga ge d i n m a ki ng, pur c ha s i ng, hol di ng or ot he r wi s e i nve s t i ng i n c om m e r c i a l l oa ns a nd s i m i l a r e xt e ns i ons of c r e di t i n t he or di na r y c our s e of i t s bus i ne s s . " Funde d De bt ” m e a ns ( i ) I nde bt e dne s s of t he t ype de s c r i be d i n c l a us e s ( a ) , ( b) , ( c ) a nd ( f ) of t he de f i ni t i on of I nde bt e dne s s , a nd ( i i ) a l l Cont i nge nt Obl i ga t i ons i n r e s pe c t of I nde bt e dne s s of t he t ype de s c r i be d i n c l a us e s ( a ) , ( b) , ( c ) , a nd ( f ) of t he de f i ni t i on of I nde bt e dne s s ; pr ovi de d, howe ve r , t ha t Funde d De bt s ha l l not i nc l ude uns e c ur e d t r a de a c c ount s pa ya bl e i nc ur r e d i n t he or di na r y c our s e of bus i ne s s . " GAAP” m e a ns ge ne r a l l y a c c e pt e d a c c ount i ng pr i nc i pl e s s e t f or t h f r om t i m e t o t i m e i n t he opi ni ons a nd pr onounc e m e nt s of t he Ac c ount i ng Pr i nc i pl e s
Boa r d of t he Am e r i c a n I ns t i t ut e of Ce r t i f i e d Publ i c Ac c ount a nt s a nd s t a t e m e nt s a nd pr onounc e m e nt s of t he Fi na nc i a l Ac c ount i ng St a nda r ds Boa r d ( or a ge nc i e s wi t h s i m i l a r f unc t i ons of c om pa r a bl e s t a t ur e a nd a ut hor i t y wi t hi n t he U. S. a c c ount i ng pr of e s s i on) whi c h a r e a ppl i c a bl e t o t he c i r c um s t a nc e s a s of t he da t e of a ppl i c a t i on. " Gove r nm e nt a l Appr ova l ” m e a ns a ny a ut hor i z a t i on, or de r , c ons e nt , a dj udi c a t i on, a ppr ova l , c e r t i f i c a t e of c om pl i a nc e , l i c e ns e , pe r m i t , va l i da t i on, or e xe m pt i on f r om , c ont r a c t wi t h, r e gi s t r a t i on or f i l i ng wi t h, or r e por t or not i c e t o, a ny Gove r nm e nt a l Body r e qui r e d or pe r m i t t e d by Appl i c a bl e La w. 20 115525625. 4 0063724- 00082 " Gove r nm e nt a l Aut hor i t y” m e a ns t he gove r nm e nt of t he Uni t e d St a t e s of Am e r i c a or a ny ot he r na t i on, or of a ny pol i t i c a l s ubdi vi s i on t he r e of , whe t he r s t a t e or l oc a l , a nd a ny a ge nc y, a ut hor i t y, i ns t r um e nt a l i t y, r e gul a t or y body, c our t , c e nt r a l ba nk or ot he r e nt i t y e xe r c i s i ng e xe c ut i ve , l e gi s l a t i ve , j udi c i a l , t a xi ng, r e gul a t or y or a dm i ni s t r a t i ve powe r s or f unc t i ons of or pe r t a i ni ng t o gove r nm e nt
( i nc l udi ng, wi t hout l i m i t a t i on, a ny s upr a - na t i ona l bodi e s s uc h a s t he Eur ope a n Uni on or t he Eur ope a n Ce nt r a l Ba nk) a nd a ny gr oup or body c ha r ge d wi t h s e t t i ng f i na nc i a l a c c ount i ng or r e gul a t or y c a pi t a l r ul e s or s t a nda r ds ( i nc l udi ng, wi t hout l i m i t a t i on, t he Fi na nc i a l Ac c ount i ng St a nda r ds Boa r d, t he Ba nk f or I nt e r na t i ona l Se t t l e m e nt s or t he Ba s e l Com m i t t e e on Ba nki ng Supe r vi s or y Pr a c t i c e s or a ny s uc c e s s or or s i m i l a r a ut hor i t y t o a ny of t he f or e goi ng) . " Gove r nm e nt a l Body” m e a ns ( a ) a ny f or e i gn or dom e s t i c f e de r a l , s t a t e or l oc a l gove r nm e nt or m uni c i pa l i t y or pol i t i c a l s ubdi vi s i on of a ny gove r nm e nt or m uni c i pa l i t y, ( b) a ny a s s e s s m e nt , i m pr ove m e nt , c om m uni t y f a c i l i t i e s or ot he r s pe c i a l t a xi ng di s t r i c t , ( c ) a ny gove r nm e nt a l or qua s i - gove r nm e nt a l body, a ut hor i t y, boa r d, bur e a u, c om m i s s i on, c or por a t i on, de pa r t m e nt , i ns t r um e nt a l i t y or publ i c body, ( d) a ny c our t , a dm i ni s t r a t i ve t r i buna l , a r bi t r a t or , publ i c ut i l i t y or r e gul a t or y body, or ( e ) a ny c e nt r a l ba nk or c om pa r a bl e a ut hor i t y. " Gua r a nt or ” m e a ns e a c h Subs i di a r y whi c h a t a ny t i m e
e xe c ut e s a Gua r a nt y of t he Re vol vi ng Loa n Obl i ga t i ons , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons f or t he be ne f i t of t he Age nt a nd t he Le nde r s , i t be i ng unde r s t ood t ha t ( a ) a Subs i di a r y s ha l l c e a s e t o be a Gua r a nt or f r om a nd a f t e r t he t i m e ( i f e ve r ) t he Loa n Doc um e nt s pe r m i t t he r e l e a s e of s uc h Gua r a nt y a nd s uc h Subs i di a r y a nd t he Age nt e xe c ut e a nd de l i ve r a Loa n Pa r t y Te r m i na t i on Agr e e m e nt a nd ( b) e a c h pr e s e nt a nd f ut ur e Subs i di a r y of t he Com pa ny, t ha t owns or ope r a t e s a De a l e r s hi p ( ot he r t ha n ( i x) Ca na di a n Subs i di a r i e s a For e i gn Subs i di a r y t ha t a r e i s not a Fi na nc e d Ent i t i e s a ndEnt i t y or ( i i y) a n Exc l ude d Subs i di a r i e s , Subs i di a r y) s ha l l be or be c om e a Gua r a nt or . " Gua r a nt or J oi nde r Agr e e m e nt ” m e a ns a n a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d he r e t o a s Exhi bi t J . " Gua r a nt or Obl i ga t i ons ” m e a ns a l l pr e s e nt a nd f ut ur e i nde bt e dne s s , obl i ga t i ons , l i a bi l i t i e s , r e i m bur s e m e nt s , i nde m ni t i e s , c ove na nt s , wa r r a nt i e s a nd dut i e s of e a c h pr e s e nt a nd f ut ur e Gua r a nt or of t he Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons ,
Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd Re vol vi ng Loa n Obl i ga t i ons t o t he Age nt a nd t he Le nde r s pur s ua nt t o a ny Gua r a nt y of t he Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd Re vol vi ng Loa n Obl i ga t i ons a t a ny t i m e e xe c ut e d by s uc h Gua r a nt or ; pr ovi de d t ha t t he Gua r a nt or Obl i ga t i ons s ha l l e xc l ude a l l Exc l ude d Swa p Obl i ga t i ons . " Gua r a nt y” m e a ns e a c h gua r a nt y of t he Re vol vi ng Loa n Obl i ga t i ons , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons he r e t of or e , c ont e m por a ne ous l y he r e wi t h or he r e a f t e r e xe c ut e d by a ny Pe r s on, s ubs t a nt i a l l y i n t he f or m a t t a c he d he r e t o a s Exhi bi t G. " Ha z a r dous Subs t a nc e ” m e a ns ( a ) a ny s ubs t a nc e or m a t e r i a l now or he r e a f t e r de f i ne d or de s i gna t e d a s a ha z a r dous , t oxi c or r a di oa c t i ve m a t e r i a l , wa s t e or s ubs t a nc e , or a s a pol l ut a nt or c ont a m i na nt ( or de s i gna t e d by a ny ot he r s i m i l a r t e r m ) , by a ny Envi r onm e nt a l La w now or 21 115525625. 4 0063724- 00082
he r e a f t e r i n e f f e c t ; ( b) a s be s t os a nd a ny s ubs t a nc e or c om pound c ont a i ni ng a s be s t os ; ( c ) pe t r ol e um , na t ur a l ga s , na t ur a l ga s l i qui ds , l i que f i e d na t ur a l ga s , s ynt he t i c ga s us a bl e f or f ue l ( or m i xt ur e s of na t ur a l ga s a nd s uc h s ynt he t i c ga s ) a nd a s h pr oduc e d by a r e s our c e r e c ove r y f a c i l i t y ut i l i z i ng a m uni c i pa l s ol i d wa s t e s t r e a m , a nd dr i l l i ng f l ui ds , pr oduc e d wa t e r s a nd ot he r wa s t e s a s s oc i a t e d wi t h t he e xpl or a t i on, de ve l opm e nt or pr oduc t i on of c r ude oi l , na t ur a l ga s , or ge ot he r m a l r e s our c e s ; ( d) ur e a f or m a l de hyde f oa m i ns ul a t i on; ( e ) pol yc hl or i na t e d bi phe nyl s ( PCBs ) ; ( f ) r a don; a nd ( g) a ny ot he r c he m i c a l , m a t e r i a l , or s ubs t a nc e , e xpos ur e t o whi c h ( be c a us e of i t s qua nt i t y, c onc e nt r a t i on, or phys i c a l or c he m i c a l c ha r a c t e r i s t i c s ) i s l i m i t e d or r e gul a t e d f or he a l t h a nd s a f e t y r e a s ons by a ny Gove r nm e nt a l Aut hor i t y, or whi c h pos e s a s i gni f i c a nt pr e s e nt or pot e nt i a l ha z a r d t o hum a n he a l t h a nd s a f e t y or t o t he e nvi r onm e nt i f r e l e a s e d i nt o t he wor kpl a c e or t he e nvi r onm e nt . " Hi ghe s t La wf ul Ra t e ” m e a ns , on a ny da y, t he m a xi m um non- us ur i ous
r a t e of i nt e r e s t pe r m i t t e d f or t ha t da y by a ppl i c a bl e f e de r a l or s t a t e l a w, s t a t e d a s a r a t e pe r a nnum . " I nc r e a s i ng Le nde r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 12. 2. " I nde bt e dne s s ” m e a ns , wi t hout dupl i c a t i on, wi t h r e s pe c t t o a ny Pe r s on, ( a ) a l l i nde bt e dne s s of s uc h Pe r s on f or bor r owe d m one y or f or t he de f e r r e d pur c ha s e pr i c e of pr ope r t y or s e r vi c e s , ( b) a l l obl i ga t i ons e vi de nc e d by bonds , not e s , de be nt ur e s , c onve r t i bl e de be nt ur e s or ot he r s i m i l a r i ns t r um e nt s , ( c ) a l l i nde bt e dne s s c r e a t e d or a r i s i ng unde r a ny c ondi t i ona l s a l e or ot he r t i t l e r e t e nt i on a gr e e m e nt wi t h r e s pe c t t o pr ope r t y a c qui r e d ( e ve n t hough t he r i ght s a nd r e m e di e s of t he s e l l e r or l e nde r unde r s uc h a gr e e m e nt i n t he e ve nt of de f a ul t , a c c e l e r a t i on, or t e r m i na t i on a r e l i m i t e d t o r e pos s e s s i on or s a l e of s uc h pr ope r t y) , ( d) a l l obl i ga t i ons unde r l e t t e r s of c r e di t , ba nke r s ’ a nd t r a de a c c e pt a nc e s , s ur e t y bonds a nd s i m i l a r i ns t r um e nt s , ( e ) a l l obl i ga t i ons unde r Swa ps , ( f ) a l l Ca pi t a l i z e d Le a s e Obl i ga t i ons a nd a l l obl i ga t i ons a s l e s s e e unde r Synt he t i c Le a s e s , ( g) a l l
i nde bt e dne s s t ha t i s r e qui r e d i n a c c or da nc e wi t h GAAP t o be i nc l ude d a s a l i a bi l i t y on s uc h Pe r s on’ s ba l a nc e s he e t , ( h) a l l Cont i nge nt Obl i ga t i ons , a nd ( i ) a l l I nde bt e dne s s r e f e r r e d t o i n c l a us e ( a ) , ( b) , ( c ) , ( d) , ( e ) , ( f ) , ( g) , a nd ( h) a bove s e c ur e d by a ny l i e n, s e c ur i t y i nt e r e s t or ot he r c ha r ge or e nc um br a nc e upon or i n pr ope r t y ( i nc l udi ng, wi t hout l i m i t a t i on, a c c ount s a nd c ont r a c t r i ght s ) owne d by s uc h Pe r s on, e ve n t hough s uc h Pe r s on ha s not a s s um e d or be c om e l i a bl e f or t he pa ym e nt of s uc h I nde bt e dne s s , a nd ( j ) i f a ny Eve nt of De f a ul t de s c r i be d i n Se c t i on 14. 1. 12 ha s oc c ur r e d, t he l i a bi l i t y, i f a ny, r e l a t e d t he r e t o. For pur pos e s of t hi s de f i ni t i on, t he I nde bt e dne s s of a ny Pe r s on s ha l l i nc l ude t he i nde bt e dne s s of a ny pa r t ne r s hi p i n whi c h s uc h Pe r s on i s a ge ne r a l pa r t ne r , unl e s s s uc h I nde bt e dne s s i s e xpr e s s l y m a de non- r e c our s e t o s uc h Pe r s on. I n r e s pe c t of I nde bt e dne s s de s c r i be d i n c l a us e ( i ) of t he f or e goi ng de f i ni t i on, t he a m ount of s uc h I nde bt e dne s s a s of a ny da t e of de t e r m i na t i on wi l l be t he l e s s e r of ( x) t he f a i r m a r ke t va l ue of t he
s ubj e c t pr ope r t y a s of s uc h da t e a nd ( y) t he a m ount of s uc h I nde bt e dne s s a s of s uc h da t e . " I nde m ni f i e d Pe r s ons ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 5. 12. " I nde m ni f i e d Ta xe s ” m e a ns Ta xe s i m pos e d on or wi t h r e s pe c t t o a ny pa ym e nt m a de by or on a c c ount of a ny obl i ga t i on of a ny Loa n Pa r t y unde r a ny Loa n Doc um e nt , ot he r t ha n Exc l ude d Ta xe s a nd Ot he r Ta xe s . 22 115525625. 4 0063724- 00082 " I ni t i a l Condi t i on” ha s t he m e a ni ng s e t f or t h i n Se c t i on 9. 1. " I nt e r c r e di t or Agr e e m e nt ” m e a ns a n i nt e r c r e di t or a gr e e m e nt t o be e nt e r e d i nt o by a nd a m ong t he Age nt a nd t he Re qui r e d I nt e r c r e di t or Count e r pa r t i e s , whi c h s ha l l be i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt . " I nt e r e s t Pe r i od” m e a ns , wi t h r e s pe c t t o a Te r m SOFR Loa n, a pe r i od of t hr e e or s i x m ont hs ( i n e a c h c a s e , s ubj e c t t o t he a va i l a bi l i t y t he r e of ) c om m e nc i ng on a Bus i ne s s Da y s e l e c t e d by t he a ppl i c a bl e Bor r owe r pur s ua nt t o t hi s Agr e e m e nt a nd e ndi ng on t he da y t ha t c or r e s ponds num e r i c a l l y t o s uc h da t e t hr e e or s i x m ont hs t he r e a f t e r ; pr ovi de d t ha t ( a ) a ny I nt e r e s t Pe r i od t ha t woul d
ot he r wi s e e nd on a da y t ha t i s not a Bus i ne s s Da y s ha l l be e xt e nde d t o t he ne xt s uc c e e di ng Bus i ne s s Da y unl e s s s uc h s uc c e e di ng Bus i ne s s Da y f a l l s i n a ne w c a l e nda r m ont h, i n whi c h c a s e s uc h I nt e r e s t Pe r i od s ha l l e nd on t he i m m e di a t e l y pr e c e di ng Bus i ne s s Da y; ( b) a ny I nt e r e s t Pe r i od t ha t c om m e nc e s on t he l a s t Bus i ne s s Da y of a c a l e nda r m ont h ( or on a da y f or whi c h t he r e i s no num e r i c a l l y c or r e s pondi ng da y i n t he c a l e nda r m ont h a t t he e nd of s uc h I nt e r e s t Pe r i od) s ha l l e nd on t he l a s t Bus i ne s s Da y of t he c a l e nda r m ont h a t t he e nd of s uc h I nt e r e s t Pe r i od; ( c ) no I nt e r e s t Pe r i od s ha l l e xt e nd be yond t he Te r m i na t i on Da t e ; a nd ( d) no t e nor t ha t ha s be e n r e m ove d f r om t hi s de f i ni t i on pur s ua nt t o Se c t i on 7. 3( b) ( i v) m a y be a va i l a bl e f or s e l e c t i on by t he Com pa ny. " I nve s t m e nt s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 6. " I SDA De f i ni t i ons ” m e a ns t he 2006 I SDA De f i ni t i ons publ i s he d by t he I nt e r na t i ona l Swa ps a nd De r i va t i ve s As s oc i a t i on, I nc . or a ny s uc c e s s or t he r e t o, a s a m e nde d or s uppl e m e nt e d f r om t i m e t o t i m e , or a ny s uc c e s s or de f i ni t i ona l
bookl e t f or i nt e r e s t r a t e de r i va t i ve s publ i s he d f r om t i m e t o t i m e by t he I nt e r na t i ona l Swa ps a nd De r i va t i ve s As s oc i a t i on, I nc . or s uc h s uc c e s s or t he r e t o. " La ndl or d’ s Cons e nt ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 12. 13. " LC Agr e e m e nt ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 5. 3. " LC Appl i c a t i on” ha s t he m e a ni ng s e t f or t h i n Se c t i on 5. 3. " LC Col l a t e r a l Ac c ount ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 5. 11. " LCDC” m e a ns Li t hi a Com m uni t y De ve l opm e nt Com pa ny, I nc . , a n Or e gon c or por a t i on. " LC Fe e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 5. 10. 1. " LC Fe e Pe r c e nt a ge ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . 23 115525625. 4 0063724- 00082
" LC I s s ue r ” m e a ns U. S. Ba nk ( or a ny s ubs i di a r y or a f f i l i a t e of U. S. Ba nk de s i gna t e d by U. S. Ba nk) i n i t s c a pa c i t y a s i s s ue r of Le t t e r s of Cr e di t he r e unde r . " LC Obl i ga t i ons ” m e a ns , a s of a ny da t e of de t e r m i na t i on, t he s um , wi t hout dupl i c a t i on, of ( a ) t he a ggr e ga t e undr a wn s t a t e d a m ount unde r Le t t e r s of Cr e di t out s t a ndi ng a t s uc h t i m e , pl us ( b) t he a ggr e ga t e unpa i d a m ount a t s uc h t i m e of a l l Re i m bur s e m e nt Obl i ga t i ons . " LCA Te s t Da t e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 1. 5. " Le nde r ” ha s t he m e a ni ng s e t f or t h i n t he i nt r oduc t or y pa r a gr a ph a nd i nc l ude s , a s t he c ont e xt r e qui r e s , t he LC I s s ue r a nd Swi ng Li ne Le nde r . " Le nde r Pa r t y” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 20( a ) . " Le nde r - Pr ovi de d Swa p” m e a ns a Swa p whi c h i s pr ovi de d t o t he Com pa ny or a ny Subs i di a r y by t he Age nt , t he LC I s s ue r , a ny ot he r Le nde r or a ny Af f i l i a t e t he r e of ( a t t he t i m e s uc h Swa p i s e nt e r e d i nt o) . " Le ndi ng I ns t a l l a t i on” m e a ns , wi t h r e s pe c t t o a Le nde r or t he Age nt , t he of f i c e , br a nc h, s ubs i di a r y or a f f i l i a t e of s uc h Le nde r or t he Age nt l i s t e d on t he s i gna t ur e pa ge s
he r e of ( i n t he c a s e of t he Age nt ) or on i t s Que s t i onna i r e ( i n t he c a s e of a Le nde r ) or ot he r wi s e s e l e c t e d by s uc h Le nde r or t he Age nt pur s ua nt t o Se c t i on 6. 3. 2. " Le t t e r of Cr e di t ” m e a ns a ny of t he Exi s t i ng Le t t e r s of Cr e di t a nd a ny l e t t e r of c r e di t i s s ue d pur s ua nt t o Ar t i c l e 5. " Le t t e r of Cr e di t Com m i t m e nt ” ( whi c h i s a s ubl i m i t of t he Re vol vi ng Loa n Com m i t m e nt ) m e a ns a n a m ount e qua l t o $75, 000, 000. 0075, 000, 000. " Le ve r a ge Ra t i o” ha s t he m e a ni ng s e t f or t h i n Se c t i on 11. 1. 3. " Li e n” m e a ns a ny m or t ga ge , de e d of t r us t , pl e dge , s e c ur i t y i nt e r e s t , hypot he c a t i on, a s s i gnm e nt , de pos i t a r r a nge m e nt , e nc um br a nc e , l i e n ( s t a t ut or y or ot he r ) , or pr e f e r e nc e , pr i or i t y, or ot he r s e c ur i t y a gr e e m e nt or pr e f e r e nt i a l a r r a nge m e nt , c ha r ge , or e nc um br a nc e of a ny ki nd or na t ur e wha t s oe ve r ( i nc l udi ng, wi t hout l i m i t a t i on, a ny c ondi t i ona l s a l e or ot he r t i t l e r e t e nt i on a gr e e m e nt , a ny f i na nc i ng l e a s e ha vi ng s ubs t a nt i a l l y t he s a m e e c onom i c e f f e c t a s a ny of t he f or e goi ng, t he i nt e r e s t of a l e s s or unde r a Ca pi t a l Le a s e or Synt he t i c Le a s e a nd t he f i l i ng of a ny
f i na nc i ng s t a t e m e nt unde r t he Uni f or m Com m e r c i a l Code or c om pa r a bl e l a w of a ny j ur i s di c t i on t o e vi de nc e of a ny of t he f or e goi ng) . " Li m i t e d Condi t i on Ac qui s i t i on” m e a ns a ny Ac qui s i t i on t ha t i s not c ondi t i one d on t he a va i l a bi l i t y of , or on obt a i ni ng, t hi r d- pa r t y f i na nc i ng. " Loa n” or " Loa ns ” m e a ns a ny one or m or e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Re vol vi ng Loa ns a nd Swi ng Li ne Loa ns . 24 115525625. 4 0063724- 00082 " Loa n Doc um e nt s ” m e a ns t hi s Agr e e m e nt , t he LC Agr e e m e nt s , t he Le t t e r s of Cr e di t , t he LC Appl i c a t i ons , t he Col l a t e r a l Doc um e nt s , e a c h I nt e r c r e di t or Agr e e m e nt , t he pr om i s s or y not e s e vi de nc i ng t he Obl i ga t i ons , t he Gua r a nt i e s , a nd a l l ot he r doc um e nt s a nd i ns t r um e nt s a t t a c he d he r e t o, r e f e r r e d t o he r e i n, he r e t of or e or c ont e m por a ne ous l y he r e wi t h or he r e a f t e r e xe c ut e d or de l i ve r e d t o t he Age nt a nd t he Le nde r s by a ny Loa n Pa r t y i n c onne c t i on wi t h t he Obl i ga t i ons . " Loa n Pa r t y” m e a ns a ny Bor r owe r or Gua r a nt or . " Loa n Pa r t y Te r m i na t i on Agr e e m e nt ” m e a ns wi t h r e s pe c t
t o a ny Loa n Pa r t y ( ot he r t ha n a Si l o Subs i di a r y) t ha t s ha l l c e a s e t o be a Bor r owe r or a Gua r a nt or he r e unde r , a n a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d a s Exhi bi t H- 1. " Loa n Ye a r ” m e a ns e a c h 12 m ont h pe r i od c om m e nc i ng on ( a nd i nc l udi ng) t he Cl os i ng Da t e ( or a n Anni ve r s a r y Da t e ) a nd e ndi ng on ( but e xc l udi ng) t he ne xt s uc c e e di ng Anni ve r s a r y Da t e . " LRE” m e a ns Li t hi a Re a l Es t a t e , I nc . , a n Or e gon c or por a t i on. " M a t e r i a l Adve r s e Ef f e c t ” m e a ns a ( a ) m a t e r i a l a dve r s e c ha nge i n or m a t e r i a l a dve r s e e f f e c t upon t he bus i ne s s , m a na ge m e nt , pr ope r t i e s , c ondi t i on ( f i na nc i a l or ot he r wi s e ) , a s s e t s or ope r a t i ons of t he Com pa ny a nd i t s Subs i di a r i e s t a ke n a s a whol e ; or ( b) a m a t e r i a l a dve r s e e f f e c t upon or m a t e r i a l i m pa i r m e nt i n ( i ) t he a t t a c hm e nt , pe r f e c t i on, or pr i or i t y of t he s e c ur i t y i nt e r e s t s of t he Age nt a nd t he Le nde r s i n t he Col l a t e r a l or i n t he va l ue of a ny m a t e r i a l pa r t of t he Col l a t e r a l ; ( i i ) t he a bi l i t y of t he Com pa ny a nd i t s Subs i di a r i e s t a ke n a s a whol e t o pe r f or m t he i r obl i ga t i ons unde r t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt ;
or ( i i i ) t he l e ga l i t y, va l i di t y, bi ndi ng e f f e c t or e nf or c e a bi l i t y of or t he r i ght s a nd r e m e di e s a va i l a bl e t o t he Age nt a nd t he Le nde r s unde r t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt . " M a xi m um Re vol vi ng Loa n Am ount ” m e a ns , a s of a ny da t e of de t e r m i na t i on, t he l e s s e r of ( a ) t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt m i nus a ny Re s e r ve Am ount ; a nd ( b) t he Re vol vi ng Loa n Bor r owi ng Ba s e a t s uc h t i m e m i nus a ny Re s e r ve Am ount . " M a xi m um Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Am ount ” m e a ns , a s of a ny da t e of de t e r m i na t i on, t he l e s s e r of ( a ) t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt ; a nd ( b) t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e . " M a xi m um Us e d Ve hi c l e Fl oor pl a n Am ount ” m e a ns , a s of a ny da t e of de t e r m i na t i on, t he l e s s e r of ( a ) t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt ; a nd ( b) t he Us e d Ve hi c l e Bor r owi ng Ba s e . " M e a s ur e m e nt Pe r i od” ha s t he m e a ni ng s e t f or t h i n Se c t i on 11. 1. 2. " M i ni m um Col l a t e r a l Am ount ” m e a ns , wi t h r e s pe c t t o a De f a ul t i ng Le nde r , a t a ny t i m e , ( a ) wi t h r e s pe c t t o Ca s h Col l a t e r a l
c ons i s t i ng of c a s h or de pos i t a c c ount ba l a nc e s , a n a m ount e qua l t o 105% of t he Fr ont i ng Expos ur e of t he LC I s s ue r wi t h r e s pe c t t o s uc h De f a ul t i ng 25 115525625. 4 0063724- 00082
Le nde r f or a l l Le t t e r s of Cr e di t i s s ue d a nd out s t a ndi ng a t a ny s uc h t i m e a nd ( b) ot he r wi s e , a n a m ount de t e r m i ne d by t he Age nt a nd t he LC I s s ue r i n t he i r s ol e di s c r e t i on. " M i nor i t y De a l e r ” m e a ns a M i nor i t y De a l e r Af f i l i a t e or a M i nor i t y De a l e r Subs i di a r y; pr ovi de d, t ha t t he Com pa ny s ha l l not de s i gna t e m or e t ha n a t ot a l of s e ve n M i nor i t y De a l e r s a t a ny one t i m e , i n a ddi t i on t o t he de s i gna t i on of DCH CA, LLC a s a M i nor i t y De a l e r . " M i nor i t y De a l e r Af f i l i a t e ” m e a ns a Pe r s on, de s i gna t e d i n wr i t i ng by t he Com pa ny t o t he Age nt f r om t i m e t o t i m e , ( a ) i n whi c h one or m or e M i nor i t y De a l e r Pa r t ne r s , a nd one or m or e Loa n Pa r t i e s , ha s a n e qui t y owne r s hi p i nt e r e s t a nd ( b) whi c h i s not ot he r wi s e a Subs i di a r y of t he Com pa ny. " M i nor i t y De a l e r Pa r t ne r ” m e a ns a n i ndi vi dua l of e t hni c m i nor i t y de s c e nt , de s i gna t e d i n wr i t i ng by t he Com pa ny t o t he Age nt f r om t i m e t o t i m e , who owns a ny e qui t y owne r s hi p i nt e r e s t s i n a M i nor i t y De a l e r , a nd a ny Af f i l i a t e of s uc h i ndi vi dua l t hr ough whi c h t he i ndi vi dua l hol ds hi s or he r e qui t y owne r s hi p i nt e r e s t s i n a
M i nor i t y De a l e r . " M i nor i t y De a l e r Subs i di a r y” m e a ns a Subs i di a r y of t he Com pa ny, de s i gna t e d i n wr i t i ng by t he Com pa ny t o t he Age nt f r om t i m e t o t i m e , i n whi c h one or m or e M i nor i t y De a l e r Pa r t ne r s owns , di r e c t l y or i ndi r e c t l y, e qui t y owne r s hi p i nt e r e s t s of s uc h Subs i di a r y or ha s t he r i ght t o a c qui r e , di r e c t l y or i ndi r e c t l y, e qui t y owne r s hi p i nt e r e s t s of s uc h Subs i di a r y. " M odi f y” a nd " M odi f i c a t i on” ha s t he m e a ni ng s e t f or t h i n Se c t i on 5. 1. " M oody’ s ” m e a ns M oody’ s I nve s t or s Se r vi c e , I nc . " M ul t i e m pl oye r Pl a n” m e a ns a Pl a n m a i nt a i ne d pur s ua nt t o a c ol l e c t i ve ba r ga i ni ng a gr e e m e nt or a ny ot he r a r r a nge m e nt t o whi c h a ny Loa n Pa r t y or a ny ERI SA Af f i l i a t e i s , or i n t he i m m e di a t e l y pr e c e di ng s i x ye a r s wa s , a pa r t y t o whi c h m or e t ha n one e m pl oye r i s obl i ga t e d t o m a ke c ont r i but i ons . " Ne t M a r k- t o- M a r ke t Expos ur e ” of a Pe r s on m e a ns , a s of a ny da t e of de t e r m i na t i on, wi t h r e s pe c t t o a ny Swa p, t he e xc e s s ( i f a ny) of a l l unr e a l i z e d l os s e s ove r a l l unr e a l i z e d pr of i t s of s uc h Pe r s on a r i s i ng f r om s uc h Swa p. " Unr e a l i z e d l os s e s ” m e a ns t he f a i r
m a r ke t va l ue of t he c os t t o s uc h Pe r s on of r e pl a c i ng s uc h Swa p a s of t he da t e of de t e r m i na t i on ( a s s um i ng t he Swa p we r e t o be t e r m i na t e d a s of t ha t da t e ) , a nd " unr e a l i z e d pr of i t s ” m e a ns t he f a i r m a r ke t va l ue of t he ga i n t o s uc h Pe r s on of r e pl a c i ng s uc h Swa p a s of t he da t e of de t e r m i na t i on ( a s s um i ng s uc h Swa p we r e t o be t e r m i na t e d a s of t ha t da t e ) . " Ne w Loa n Pa r t y” m e a ns a n Ac qui s i t i on Subs i di a r y t ha t , pur s ua nt t o Se c t i on 12. 17, i s r e qui r e d t o e xe c ut e a Gua r a nt or J oi nde r Agr e e m e nt or Bor r owe r J oi nde r Agr e e m e nt . " Ne w Ve hi c l e ” m e a ns a Ve hi c l e t ha t ha s ne ve r be e n owne d e xc e pt by a m a nuf a c t ur e r , di s t r i but or or de a l e r ( i nc l udi ng a ve hi c l e a c qui r e d by t r a de wi t h a not he r de a l e r ) ; ha s ne ve r be e n r e gi s t e r e d or t i t l e d; i s of t he c ur r e nt or i m m e di a t e l y pr e c e di ng m ode l ye a r ; a nd, e xc e pt f or a De m o, ha s not be e n dr i ve n m or e t ha n 500 t ot a l m i l e s . 26 115525625. 4 0063724- 00082 " Ne w Ve hi c l e Fl oor pl a n Adva nc e ” m e a ns a bor r owi ng c ons i s t i ng of t he Ne w Ve hi c l e Fl oor pl a n Loa ns t o be m a de by t he Le nde r s on a ny da t e . " Ne w Ve hi c l e Fl oor pl a n Bor r owe r ”
m e a ns t he Com pa ny, a ny De a l e r s hi p e xe c ut i ng t hi s Agr e e m e nt a s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r a nd a ny De a l e r s hi p whi c h he r e a f t e r be c om e s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r i n a c c or da nc e wi t h t he r e qui r e m e nt s of t hi s Agr e e m e nt , i n i t s c a pa c i t y a s a bor r owe r unde r t he c r e di t f a c i l i t i e s de s c r i be d i n Ar t i c l e 2 of t hi s Agr e e m e nt . " Ne w Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e ” m e a ns t he s um of ( a ) Adj us t e d Da i l y Si m pl e SOFR or t he Te r m SOFR Al t e r na t i ve Ra t e , a s de s i gna t e d by t he Com pa ny f r om t i m e t o t i m e , pl us ( b) t he Ne w Ve hi c l e Fl oor pl a n M a r gi n. " Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt ” m e a ns f or e a c h Le nde r , t he obl i ga t i on of s uc h Le nde r t o m a ke Ne w Ve hi c l e Fl oor pl a n Loa ns t o t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s a nd t o pa r t i c i pa t e i n Ne w Ve hi c l e Swi ng Li ne Loa ns , i n a n a ggr e ga t e a m ount not e xc e e di ng t he a m ount s e t f or t h f or s uc h Le nde r on Sc he dul e 1, a s s uc h a m ount m a y be m odi f i e d a s t he r e s ul t of a ny a s s i gnm e nt or a s ot he r wi s e m odi f i e d f r om t i m e t o t i m e pur s ua nt t o Se c t i on 6. 17 or t he ot he r pr ovi s i ons he r e of . " Ne w Ve hi c l e Fl oor pl a n
Com m i t m e nt Fe e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 1. 7. " Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p” m e a ns e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r e xc e pt t he Com pa ny. " Ne w Ve hi c l e Fl oor pl a n Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 1. 1. " Ne w Ve hi c l e Fl oor pl a n M a r gi n” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons ” m e a ns a l l pr e s e nt a nd f ut ur e Ne w Ve hi c l e Fl oor pl a n Loa ns , Ne w Ve hi c l e Swi ng Li ne Loa ns , a nd ot he r de bt s , l i a bi l i t i e s , obl i ga t i ons , r e i m bur s e m e nt s , i nde m ni t i e s , c ove na nt s , wa r r a nt i e s , dut i e s a nd obl i ga t i ons r e l a t i ng t he r e t o of e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r t o t he Age nt a nd t he Le nde r s unde r t hi s Agr e e m e nt , a nd t he ot he r Loa n Doc um e nt s , whe t he r now or he r e a f t e r e xi s t i ng or i nc ur r e d, whe t he r l i qui da t e d or unl i qui da t e d, whe t he r a bs ol ut e or c ont i nge nt , a nd i nc l udi ng wi t hout l i m i t a t i on pr i nc i pa l , i nt e r e s t , f e e s , At t or ne y Cos t s , e xpe ns e s a nd c ha r ge s r e l a t i ng t o a ny of t he f or e goi ng. " Ne w Ve hi c l e
Loa n” m e a ns a Ne w Ve hi c l e Fl oor pl a n Loa n or Ne w Ve hi c l e Swi ng Li ne Loa n. " Ne w Ve hi c l e Loa n Adva nc e ” m e a ns a ny Ne w Ve hi c l e Fl oor pl a n Adva nc e or a ny Ne w Ve hi c l e Swi ng Li ne Loa n m a de t o f i na nc e El i gi bl e Ne w Ve hi c l e s . " Ne w Ve hi c l e Loa n Adva nc e Da t e ” m e a ns ( a ) wi t h r e s pe c t t o a ny Ne w Ve hi c l e ( ot he r t ha n a Ne w Ve hi c l e pr e vi ous l y f i na nc e d wi t h a For m e r Le nde r Loa n or a n a dva nc e unde r t he Exi s t i ng Loa n Agr e e m e nt ) , t he da t e t he Ne w Ve hi c l e Loa n Adva nc e wa s m a de t o f i na nc e s uc h 27 115525625. 4 0063724- 00082
Ve hi c l e ; ( b) wi t h r e s pe c t t o a ny Ne w Ve hi c l e pr e vi ous l y f i na nc e d by a For m e r Le nde r a nd r e f i na nc e d wi t h a Ne w Ve hi c l e Loa n Adva nc e , t he da t e t he a dva nc e wa s m a de by t he For m e r Le nde r t o f i na nc e t he a ppl i c a bl e Ve hi c l e ; a nd ( c ) wi t h r e s pe c t t o a ny Ne w Ve hi c l e pr e vi ous l y f i na nc e d unde r t he Exi s t i ng Loa n Agr e e m e nt , t he da t e t he a dva nc e wa s m a de unde r t he Exi s t i ng Loa n Agr e e m e nt t o f i na nc e t he a ppl i c a bl e Ve hi c l e . " Ne w Ve hi c l e M ont hl y Pa ym e nt Da t e ” m e a ns t he t e nt h da y of e a c h m ont h, or i f s uc h da y i s not a Bus i ne s s Da y, t he ne xt Bus i ne s s Da y. " Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt ” ( whi c h i s a s ubl i m i t of t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt ) m e a ns a n a m ount e qua l t o $100, 000, 000. 00100, 000, 000 pl us t he a ggr e ga t e ba l a nc e i n a l l PR Ac c ount s . " Ne w Ve hi c l e Swi ng Li ne Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 2. 1. " Non- De f a ul t i ng Le nde r ” m e a ns , a t a ny t i m e , e a c h Le nde r t ha t i s not a De f a ul t i ng Le nde r a t s uc h t i m e . " Non- Ext e ndi ng Le nde r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 18. 2. " Non- U. S. Le nde r ” m e a ns a Le nde r t ha t i s not a
Uni t e d St a t e s pe r s on a s de f i ne d i n Se c t i on 7701( a ) ( 30) of t he Code . " Not i c e Da t e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 18. 2. " Obl i ga t i ons ” m e a ns a l l pr e s e nt a nd f ut ur e Loa ns , Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons , Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons , Re vol vi ng Loa n Obl i ga t i ons , LC Obl i ga t i ons , a nd ot he r de bt s , l i a bi l i t i e s , obl i ga t i ons , r e i m bur s e m e nt s , i nde m ni t i e s , c ove na nt s , wa r r a nt i e s , dut i e s a nd obl i ga t i ons of a ny one or m or e of t he Bor r owe r s t o t he Age nt a nd t he Le nde r s unde r t he LC Agr e e m e nt s , LC Appl i c a t i ons , t he Le t t e r s of Cr e di t , t hi s Agr e e m e nt , a nd t he ot he r Loa n Doc um e nt s , whe t he r now or he r e a f t e r e xi s t i ng or i nc ur r e d, whe t he r l i qui da t e d or unl i qui da t e d, whe t he r a bs ol ut e or c ont i nge nt , a nd i nc l udi ng wi t hout l i m i t a t i on pr i nc i pa l , i nt e r e s t , f e e s , At t or ne y Cos t s , e xpe ns e s a nd c ha r ge s r e l a t i ng t o a ny of t he f or e goi ng; pr ovi de d, howe ve r , t ha t t he Obl i ga t i ons s ha l l e xc l ude a l l Exc l ude d Swa p Obl i ga t i ons . " OFAC” m e a ns t he U. S. De pa r t m e nt of t he Tr e a s ur y’ s Of f i c e of For e i gn As s e t s Cont r ol , a nd a ny
s uc c e s s or t he r e t o. " Or i gi na l Equi pm e nt M a nuf a c t ur e r ” m e a ns t he or i gi na l m a nuf a c t ur e r of a Ve hi c l e . " Ot he r Conne c t i on Ta xe s ” m e a ns , i n t he c a s e of e a c h Le nde r or a ppl i c a bl e Le ndi ng I ns t a l l a t i on, t he LC I s s ue r , a nd t he Age nt , Ta xe s i m pos e d a s a r e s ul t of a pr e s e nt or f or m e r c onne c t i on be t we e n s uc h Pe r s on a nd t he j ur i s di c t i on i m pos i ng s uc h Ta x ( ot he r t ha n c onne c t i ons a r i s i ng f r om s uc h Pe r s on ha vi ng e xe c ut e d, de l i ve r e d, be c om e a pa r t y t o, pe r f or m e d i t s obl i ga t i ons unde r , r e c e i ve d pa ym e nt s unde r , r e c e i ve d or pe r f e c t e d a s e c ur i t y i nt e r e s t unde r , e nga ge d i n a ny ot he r t r a ns a c t i on pur s ua nt t o or e nf or c e d a ny Loa n Doc um e nt or s ol d or a s s i gne d a n i nt e r e s t i n a ny Loa n or Loa n Doc um e nt ) . 28 115525625. 4 0063724- 00082 " Ot he r Ne w Subs i di a r y” m e a ns a Subs i di a r y, ( a ) 100% of t he Equi t y I nt e r e s t s of whi c h a r e owne d, di r e c t l y or i ndi r e c t l y by t he Com pa ny, ( b) whi c h i s not i n t he bus i ne s s of s e l l i ng, s e r vi c i ng or l e a s i ng m ot or ve hi c l e s or owni ng r e a l pr ope r t y a nd ( c ) wi t h r e s pe c t t o whi c h t he Loa n Pa r t i e s ha ve c om pl i e d wi t h t he r e qui r e m e nt s of Se c t i on
12. 17. " Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng” m e a ns e xt e ns i ons of c r e di t t o a De a l e r s hi p by a n Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r ( ot he r t ha n e xt e ns i ons of c r e di t unde r t hi s Agr e e m e nt ) , a l l pr oc e e ds of whi c h a r e us e d t o pur c ha s e or f i na nc e Se r vi c e Loa ne r Ve hi c l e s . " Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r ” m e a ns a m ot or ve hi c l e m a nuf a c t ur e r or di s t r i but or or a f i na nc i a l i ns t i t ut i on or c om m e r c i a l f i na nc e c om pa ny a c c e pt a bl e t o t he Age nt whi c h i s a f f i l i a t e d wi t h a m ot or ve hi c l e m a nuf a c t ur e r or di s t r i but or a nd whi c h pr ovi de s f i na nc i ng f or Se r vi c e Loa ne r Ve hi c l e s t o a De a l e r s hi p. " Ot he r Ta xe s ” m e a ns a l l pr e s e nt or f ut ur e s t a m p, c our t or doc um e nt a r y, i nt a ngi bl e , r e c or di ng, f i l i ng or s i m i l a r Ta xe s t ha t a r i s e f r om a ny pa ym e nt m a de unde r , f r om t he e xe c ut i on, de l i ve r y, pe r f or m a nc e , e nf or c e m e nt or r e gi s t r a t i on of , f r om t he r e c e i pt or pe r f e c t i on of a s e c ur i t y i nt e r e s t unde r , or ot he r wi s e wi t h r e s pe c t t o, a ny Loa n Doc um e nt , e xc e pt a ny s uc h Ta xe s t ha t a r e Ot he r Conne c t i on Ta xe s i m pos e d wi t h r e s pe c t t o a n a s s i gnm e nt ( ot he r t ha n a n
a s s i gnm e nt m a de pur s ua nt t o Se c t i ons 6. 15 a nd 7. 5) . " Out of Ba l a nc e Condi t i on” m e a ns , wi t h r e s pe c t t o ( i ) a Ne w Ve hi c l e Fl oor pl a n Loa n, t he out s t a ndi ng ba l a nc e t he r e of ha s not be e n pa i d i n a c c or da nc e wi t h Se c t i ons 2. 3. 3 or 2. 3. 4, ( i i ) a Us e d Ve hi c l e Fl oor pl a n Loa n, t he out s t a ndi ng ba l a nc e t he r e of ha s not be e n pa i d i n a c c or da nc e wi t h Se c t i on 3. 1. 8 or a nd ( i i i ) a Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n, t he out s t a ndi ng ba l a nc e t he r e of ha s not be e n pa i d i n a c c or da nc e wi t h Se c t i on 3. 3. 8. " Out s t a ndi ng Cr e di t Expos ur e ” m e a ns , a s t o a ny Le nde r a t a ny t i m e , t he s um of ( a ) t he t he n out s t a ndi ng pr i nc i pa l a m ount of i t s Ne w Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Re vol vi ng Loa ns , pl us ( b) a n a m ount e qua l t o i t s r a t a bl e s ha r e of t he a ggr e ga t e pr i nc i pa l a m ount of Swi ng Li ne Loa ns out s t a ndi ng a t s uc h t i m e , pl us ( c ) a n a m ount e qua l t o i t s r a t a bl e s ha r e of t he LC Obl i ga t i ons a t s uc h t i m e . " Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e ” m e a ns , a s t o a ny Le nde r a t a ny t i m e , t he s um of ( a ) t he t he n
out s t a ndi ng pr i nc i pa l a m ount of i t s Ne w Ve hi c l e Fl oor pl a n Loa ns , pl us ( b) a n a m ount e qua l t o i t s r a t a bl e s ha r e of t he a ggr e ga t e pr i nc i pa l a m ount of Ne w Ve hi c l e Swi ng Li ne Loa ns out s t a ndi ng a t s uc h t i m e . " Out s t a ndi ng Re vol vi ng Loa n Expos ur e ” m e a ns , a s t o a ny Le nde r a t a ny t i m e , t he s um of ( a ) t he t he n out s t a ndi ng pr i nc i pa l a m ount of i t s Re vol vi ng Loa ns , pl us ( b) a n a m ount e qua l t o i t s r a t a bl e s ha r e of t he a ggr e ga t e pr i nc i pa l a m ount of Re vol vi ng Swi ng Li ne Loa ns out s t a ndi ng a t s uc h t i m e , pl us ( c ) a n a m ount e qua l t o i t s r a t a bl e s ha r e of t he LC Obl i ga t i ons a t s uc h t i m e . " Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e ” m e a ns , a s t o a ny Le nde r a t a ny t i m e , t he s um of ( a ) t he t he n out s t a ndi ng pr i nc i pa l a m ount of i t s Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , pl us ( b) a n a m ount e qua l t o i t s r a t a bl e s ha r e of t he a ggr e ga t e pr i nc i pa l a m ount of Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns out s t a ndi ng a t s uc h t i m e . 29 115525625. 4 0063724- 00082
" Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e ” m e a ns , a s t o a ny Le nde r a t a ny t i m e , t he s um of ( a ) t he t he n out s t a ndi ng pr i nc i pa l a m ount of i t s Us e d Ve hi c l e Fl oor pl a n Loa ns , pl us ( b) a n a m ount e qua l t o i t s r a t a bl e s ha r e of t he a ggr e ga t e pr i nc i pa l a m ount of Us e d Ve hi c l e Swi ng Li ne Loa ns out s t a ndi ng a t s uc h t i m e . " Pa r i Pa s s u Funde d De bt ” m e a ns Funde d De bt i nc ur r e d by t he Com pa ny a nd t he ot he r Loa n Pa r t i e s pr ovi de d t ha t e a c h of t he f ol l owi ng c ondi t i ons a r e s a t i s f i e d: ( a ) s uc h Funde d De bt i s pe r m i t t e d unde r s ubs e c t i on ( l ) of Se c t i on 13. 10; ( b) t he Com pa ny ha s de l i ve r e d t o t he Age nt a Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e c e r t i f yi ng t ha t , on t he da t e of i nc ur r e nc e of s uc h Funde d De bt a nd a f t e r gi vi ng e f f e c t t o s uc h i s s ua nc e a s Pa r i Pa s s u Funde d De bt , t he Re vol vi ng Loa n Ava i l a bi l i t y i s not l e s s t ha n $1. 00; ( c ) t he pr oc e e ds of s uc h Funde d De bt a r e us e d by t he Com pa ny t o r e pa y Re vol vi ng Loa ns ( t o t he e xt e nt out s t a ndi ng) ; ( d) t he s t a t e d f i na l m a t ur i t y a nd a ny r e qui r e d pr i nc i pa l a m or t i z a t i on of s uc h Funde d De bt i s not e a r l i e r t ha n 91 da ys
f ol l owi ng t he Te r m i na t i on Da t e a s i n e f f e c t on t he da t e of i nc ur r e nc e of s uc h Funde d De bt ; ( e ) s uc h Funde d De bt i s i nc ur r e d or gua r a nt e e d by t he Com pa ny a nd a l l ot he r Loa n Pa r t i e s a nd no Subs i di a r i e s of t he Com pa ny t ha t a r e not Loa n Pa r t i e s s ha l l ha ve a ny obl i ga t i ons i n r e s pe c t of s uc h Funde d De bt ; ( f ) s uc h Funde d De bt i s s e c ur e d by t he Col l a t e r a l , a nd no pr ope r t y or a s s e t s of t he Com pa ny or a ny of i t s Subs i di a r i e s , ot he r t ha n t he Col l a t e r a l , s e c ur e s s uc h Funde d De bt ; ( g) t he t e r m s a nd c ondi t i ons ( ot he r t ha n pr i c i ng, r a t e f l oor s , di s c ount s a nd f e e s ) gove r ni ng s uc h Funde d De bt a r e not m a t e r i a l l y l e s s f a vor a bl e t o t he Com pa ny or a ny ot he r Loa n Pa r t y t ha n t he t e r m s a nd c ondi t i ons of t he Loa n Doc um e nt s ; a nd ( h) t he Pe r s ons t o whom s uc h Funde d De bt i s owe d, or t he i r a ge nt , c ol l a t e r a l a ge nt or ot he r r e pr e s e nt a t i ve , ha ve e nt e r e d i nt o a n i nt e r c r e di t or a gr e e m e nt wi t h t he Age nt t ha t ( A) s ha l l pr ovi de t ha t t he Age nt i s t he c ol l a t e r a l a ge nt ( on be ha l f of t he Pe r s ons t o whom t he Pa r i Pa s s u Funde d De bt i s owe d) f or a l l l i e ns on Col l a t e r a l s e c ur i ng a ny
Pa r i Pa s s u Funde d De bt , a l l a c t i ons wi t h r e s pe c t t o a ny Col l a t e r a l m us t be t a ke n t hr ough t he Age nt , a nd a ny pr oc e e ds of Col l a t e r a l r e s ul t i ng f r om e nf or c e m e nt of r i ght s a nd r e m e di e s m us t be a ppl i e d a s f ol l ows : f i r s t , t o r e a s ona bl e c os t s a nd e xpe ns e s of t he Age nt i n c onne c t i on wi t h e nf or c e m e nt of r i ght s a nd r e m e di e s , i nc l udi ng f or e c l os ur e , s a l e a nd c ol l e c t i on of t he Col l a t e r a l , a nd s e c ond, r a t a bl y, t o t he Pa r i Pa s s u Funde d De bt a nd t he Obl i ga t i ons ( a nd c e r t a i n de s i gna t e d I nde bt e dne s s t ha t r e f i na nc e s t he Obl i ga t i ons or t he Aggr e ga t e Com m i t m e nt s ) , a nd ( B) s ha l l ot he r wi s e be i n f or m a nd c ont e nt s a t i s f a c t or y t o t he Age nt a nd t he Re qui r e d Le nde r s . " Pa r t i c i pa nt ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 17. 3. 1. " Pa r t i c i pa nt Re gi s t e r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 17. 3. 3. " PATRI OT Ac t ” m e a ns t he USA PATRI OT Ac t ( Ti t l e I I I of Pub. L. 107- 56 ( s i gne d i nt o l a w Oc t obe r 26, 2001) ) , a s a m e nde d f r om t i m e t o t i m e , a nd a ny s uc c e s s or s t a t ut e . " Pa ym e nt Com m i t m e nt ” m e a ns a c om m i t m e nt e nt e r e d i nt o be t we e n Age nt a nd a m a nuf a c t ur e r or di s t r i but or ,
pr ovi di ng f or pa ym e nt of f unds di r e c t l y t o s uc h m a nuf a c t ur e r or di s t r i but or i n pa ym e nt f or a Ne w Ve hi c l e Fl oor pl a n Bor r owe r ’ s pur c ha s e of Ne w Ve hi c l e s f r om s uc h m a nuf a c t ur e r or di s t r i but or . " Pa ym e nt Com m i t m e nt Col l a t e r a l Ac c ount ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 3. 5. 30 115525625. 4 0063724- 00082 " Pa ym e nt Re c i pi e nt ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 20( a ) . " PBGC” m e a ns t he Pe ns i on Be ne f i t Gua r a nt y Cor por a t i on or a ny e nt i t y s uc c e e di ng t o a ny or a l l of i t s f unc t i ons unde r ERI SA. " Pe r Annum Fe e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 16. " Pe r m i t t e d Ac qui s i t i on” m e a ns a n Ac qui s i t i on whi c h i s pe r m i t t e d by Se c t i on 13. 13. " Pe r m i t t e d Dua l Subs i di a r y Gua r a nt y” m e a ns , wi t h r e s pe c t t o a ny Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s pr ovi de d by a ny Dua l Subs i di a r y Le nde r , t he gua r a nt y of s uc h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s by ( a ) t he Com pa ny or ( b) a ny Dua l Subs i di a r y t ha t ope r a t e s one or m or e de a l e r s hi ps a t whi c h ne w Ve hi c l e , us e d Ve hi c l e or s e r vi c e l oa ne r Ve hi c l e Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s i s pr ovi de d by s uc h
Dua l Subs i di a r y Le nde r . " Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s ” m e a ns I nde bt e dne s s ( i nc l udi ng Pe r m i t t e d Dua l Subs i di a r y Gua r a nt i e s but e xc l udi ng I nde bt e dne s s pr ovi de d pur s ua nt t o t hi s Agr e e m e nt ) i nc ur r e d f r om t i m e t o t i m e by a ny Dua l Subs i di a r y c ons i s t i ng of f l oor pl a n f i na nc i ng f or ne w Ve hi c l e s , us e d Ve hi c l e s or s e r vi c e l oa ne r Ve hi c l e s pr ovi de d by f i na nc i a l i ns t i t ut i ons or m a nuf a c t ur e r - a f f i l i a t e d f i na nc e c om pa ni e s ( " Dua l Subs i di a r y Le nde r s ” ) t o s uc h Dua l Subs i di a r i e s , pr ovi de d t ha t e a c h Re qui r e d I nt e r c r e di t or Count e r pa r t y wi t h r e s pe c t t o s uc h I nde bt e dne s s i s a pa r t y t o a nd bound by a n I nt e r c r e di t or Agr e e m e nt . " Pe r m i t t e d Li e ns ” m e a ns Li e ns pe r m i t t e d by Se c t i on 13. 3. " Pe r m i t t e d Ne w De a l e r s hi p” m e a ns a De a l e r s hi p ( a ) ( i ) 100% ( or i f t he Com pa ny i s not pe r m i t t e d t o hol d 100% of s uc h Equi t y I nt e r e s t s be c a us e of l i m i t a t i ons i m pos e d by t he r e l e va nt m a nuf a c t ur e r 's f r a nc hi s e a gr e e m e nt , a t l e a s t 80% ) of t he Equi t y I nt e r e s t s of whi c h a r e owne d, di r e c t l y or i ndi r e c t l y by t he Com pa ny or ( i i ) t ha t i s a M i nor i t y De a l e r Subs i di a r y, ( b) whi c h
i s or ga ni z e d t o own a nd ope r a t e a ne wl y e s t a bl i s he d a ut om obi l e or m ot or c yc l e de a l e r s hi p poi nt , a nd ( c ) wi t h r e s pe c t t o whi c h t he Loa n Pa r t i e s ha ve c om pl i e d wi t h t he r e qui r e m e nt s of Se c t i on 12. 17. " Pe r m i t t e d Re s t r i c t i ons ” m e a ns r e s t r i c t i ons on t he a bi l i t y of a ny Subs i di a r y t o de c l a r e or pa y a ny di vi de nd or m a ke ot he r di s t r i but i ons , or t o a dva nc e or l oa n f unds or t r a ns f e r a s s e t s , t o t he Com pa ny or a ny ot he r Subs i di a r y, t o bor r ow m one y f r om t he Com pa ny or a ny ot he r Subs i di a r y, t o gr a nt Li e ns on t he a s s e t s of s uc h Subs i di a r y, t o s e c ur e t he Obl i ga t i ons or t he Gua r a nt or Obl i ga t i ons or t o gua r a nt y t he Obl i ga t i ons : ( a ) a s s e t f or t h on t he Di s c l os ur e Sc he dul e on t he Cl os i ng Da t e , i nc l udi ng r e s t r i c t i ons i m pos e d by e xi s t i ng Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng a r r a nge m e nt s ; ( b) pur s ua nt t o m odi f i c a t i ons t o Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng a r r a nge m e nt s i n e f f e c t on t he Cl os i ng Da t e , pr ovi de d t ha t s uc h m odi f i c a t i ons a r e not m a t e r i a l l y m or e r e s t r i c t i ve ; ( c ) pur s ua nt t o Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng a r r a nge m e nt s wi t h a ny
Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r ot he r t ha n a Pe r s on whi c h i s a n Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r on t he Cl os i ng Da t e ; ( d) a ppl i c a bl e t o a Pe r s on a t t he t i m e s uc h Pe r s on be c om e s a Subs i di a r y a nd not c r e a t e d i n c ont e m pl a t i on of s uc h a n e ve nt ; ( e ) r e s ul t i ng f r om m a nuf a c t ur e r - i m pos e d m odi f i c a t i ons t o a ny Fr a nc hi s e Agr e e m e nt ; ( f ) i m pos e d by Appl i c a bl e La w; ( g) a s s e t f or t h i n t he or ga ni z a t i ona l doc um e nt s of a Loa n Pa r t y a nd c ons i s t i ng of r e qui r e m e nt s f or di r e c t or , m a na ge r , s ha r e hol de r or m e m be r a ppr ova l ; ( h) a s s e t f or t h i n a ny 31 115525625. 4 0063724- 00082
doc um e nt r e l a t i ng t o Funde d De bt pe r m i t t e d unde r Se c t i ons 13. 10( o) , ( p) or ( s ) , but onl y t o t he e xt e nt a ppl i c a bl e t o Si l o Subs i di a r i e s , Ca na di a nFor e i gn Subs i di a r i e s ( ot he r t ha n a ny Ca na di a n Subs i di a r y t ha t i s a Fi na nc e d Ent i t y) or Dua l Subs i di a r i e s a nd t o t he e xt e nt s uc h r e s t r i c t i on doe s not di r e c t l y or i ndi r e c t l y pr ohi bi t a ny Si l o Subs i di a r y, Ca na di a n Subs i di a r y ( t ha t i s a Fi na nc e d Ent i t y) or Dua l Subs i di a r y f r om gua r a nt yi ng, or i m pos e a ny r e s t r i c t i on on t he a bi l i t y of a ny Si l o Subs i di a r y, Ca na di a n Subs i di a r y ( t ha t i s a Fi na nc e d Ent i t y) or Dua l Subs i di a r y t o gua r a nt y, t he Obl i ga t i ons ; ( i ) a s s e t f or t h i n a ny doc um e nt r e l a t i ng t o Addi t i ona l Funde d De bt I nde bt e dne s s pe r m i t t e d unde r Se c t i on 13. 10( l ) or Ca na di a n Subs i di a r y I nde bt e dne s s , i n e a c h c a s e onl y t o t he e xt e nt , pr ovi de d t ha t s uc h r e s t r i c t i on doe s not di r e c t l y or i ndi r e c t l y pr ohi bi t a ny De a l e r s hi p ( ot he r t ha n ( x) a For e i gn Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y or ( y) a n Exc l ude d Subs i di a r y) f r om gua r a nt yi ng, or i m pos e a ny r e s t r i c t i on on t he a bi l i t y of a ny s uc h Subs i di a r y t o gua r a nt y, t he
Obl i ga t i ons ; ( j ) a s s e t f or t h i n a ny doc um e nt r e l a t i ng t o I nde bt e dne s s pe r m i t t e d unde r Se c t i on 13. 10( d) ; ( k) on or wi t h r e s pe c t t o a ny Exc l ude d Subs i di a r y; or ( l ) i n c onne c t i on wi t h a ny Ca na di a nFor e i gn Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on; pr ovi de d s uc h r e s t r i c t i ons a r e l i m i t e d t o obl i gor s of Ca na di a nFor e i gn Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i ons a nd do not i nc l ude a ny Fi na nc e d Ent i t y. " Pe r m i t t e d Swa p Obl i ga t i ons ” m e a ns Swa p Obl i ga t i ons of t he Com pa ny unde r Swa ps whi c h a r e e nt e r e d i nt o or m a i nt a i ne d by t he Com pa ny wi t h a Le nde r , whi c h a r e e nt e r e d i nt o i n t he or di na r y c our s e of bus i ne s s f or r i s k m a na ge m e nt pur pos e s a nd not f or s pe c ul a t i ve pur pos e s . " Pe r s on” m e a ns a ny na t ur a l pe r s on, c or por a t i on, ge ne r a l or l i m i t e d pa r t ne r s hi p, j oi nt ve nt ur e , l i m i t e d l i a bi l i t y c om pa ny, f i r m , t r us t , a s s oc i a t i on, uni nc or por a t e d or ga ni z a t i on, gove r nm e nt , pol i t i c a l s ubdi vi s i on or a ny a ge nc y, de pa r t m e nt , or i ns t r um e nt a l i t y t he r e of , or a ny ot he r e nt i t y or or ga ni z a t i on, whe t he r a c t i ng i n a n i ndi vi dua l , f i duc i a r y or ot he r c a pa c i t y. " Pl a n” m e a ns a n
e m pl oye e pe ns i on be ne f i t pl a n whi c h i s c ove r e d by Ti t l e I V of ERI SA or s ubj e c t t o t he m i ni m um f undi ng s t a nda r ds unde r Se c t i on 412 of t he Code a s t o whi c h a ny Loa n Pa r t y or a ny ERI SA Af f i l i a t e m a y ha ve a ny l i a bi l i t y. " Pl e dge Agr e e m e nt ” m e a ns a n a m e nde d a nd r e s t a t e d pl e dge a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d he r e t o a s Exhi bi t E. " PR Ac c ount ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 6. " PR Ac c ount Adva nc e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 6. 2. " PR Ac c ount Bor r owe r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 6. " PR Ac c ount Pa ym e nt ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 6. 1. " Pr i c i ng Sc he dul e ” m e a ns t he Sc he dul e a t t a c he d he r e t o whi c h i s i de nt i f i e d a s s uc h. " Pr i m e Ra t e ” m e a ns a r a t e pe r a nnum e qua l t o t he pr i m e r a t e of i nt e r e s t a nnounc e d f r om t i m e t o t i m e by t he Age nt or i t s pa r e nt ( whi c h i s not ne c e s s a r i l y t he l owe s t r a t e c ha r ge d t o a ny c us t om e r ) , c ha ngi ng whe n a nd a s s a i d pr i m e r a t e c ha nge s . 32 115525625. 4 0063724- 00082 " Pr i nc i pa l ” m e a ns Si dne y D. De Boe r , Br ya n De Boe r or a not he r s uc c e s s or , or s uc c e s s or s , r e a s ona bl y
a c c e pt a bl e t o t he Age nt a nd t he Re qui r e d Le nde r s . " Pr o For m a ” m e a ns , wi t h r e s pe c t t o a ny t r a ns a c t i on, t ha t s uc h t r a ns a c t i on s ha l l be de e m e d t o ha ve oc c ur r e d a s of t he f i r s t da y of t he M e a s ur e m e nt Pe r i od e ndi ng a s of t he m os t r e c e nt qua r t e r e nd pr e c e di ng t he da t e of s uc h t r a ns a c t i on f or whi c h f i na nc i a l s t a t e m e nt i nf or m a t i on i s a va i l a bl e . Ea c h of t he t e r m s " Pr o For m a Ba s i s ” a nd " Pr o For m a Ef f e c t ” s ha l l ha ve a n a na l ogous m e a ni ng. " Pr ohi bi t e d Tr a ns a c t i on” m e a ns a ny pr ohi bi t e d t r a ns a c t i on wi t hi n t he m e a ni ng of Se c t i on 406 of ERI SA or Se c t i on 4975 of t he Code . " Pr ope r t i e s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 12. 6. " Pr o Ra t a Sha r e ” m e a ns , a s t he c ont e xt r e qui r e s ( a ) wi t h r e s pe c t t o t he Aggr e ga t e Le nde r Com m i t m e nt or Out s t a ndi ng Cr e di t Expos ur e of a ny Le nde r , ( i ) t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Aggr e ga t e Le nde r Com m i t m e nt by t he Aggr e ga t e Com m i t m e nt , or ( i i ) i f a l l of t he Com m i t m e nt s ha ve be e n t e r m i na t e d or ha ve e xpi r e d, t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Out s t a ndi ng Cr e di t Expos ur e a t s uc h t i m e
by t he Aggr e ga t e Out s t a ndi ng Cr e di t Expos ur e a t s uc h t i m e ; ( b) wi t h r e s pe c t t o t he Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt or Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e of a ny Le nde r ( i ) t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt by t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , or ( i i ) i f a l l Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt s ha ve be e n t e r m i na t e d or e xpi r e d, t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e by t he Aggr e ga t e Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e ; ( c ) wi t h r e s pe c t t o t he Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt or Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e of a ny Le nde r ( i ) t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt by t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt , or ( i i ) i f a l l Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt s ha ve be e n t e r m i na t e d or e xpi r e d, t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e by t he Aggr e ga t e Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n
Expos ur e ; ( d) wi t h r e s pe c t t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt or Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e of a ny Le nde r ( i ) t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt by t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , or ( i i ) i f a l l Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt s ha ve be e n t e r m i na t e d or e xpi r e d, t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e by t he Aggr e ga t e Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e ; or ( e ) wi t h r e s pe c t t o t he Re vol vi ng Loa n Com m i t m e nt or Out s t a ndi ng Re vol vi ng Loa n Expos ur e of a ny Le nde r , ( i ) t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h Le nde r ’ s Re vol vi ng Loa n Com m i t m e nt by t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt , or ( i i ) i f a l l Re vol vi ng Loa n Com m i t m e nt s ha ve be e n t e r m i na t e d or e xpi r e d t he pe r c e nt a ge obt a i ne d by di vi di ng s uc h 33 115525625. 4 0063724- 00082
Le nde r ’ s Out s t a ndi ng Re vol vi ng Loa n Expos ur e by t he Aggr e ga t e Out s t a ndi ng Re vol vi ng Loa n Expos ur e ; pr ovi de d, howe ve r t ha t whe n a De f a ul t i ng Le nde r s ha l l e xi s t , t he Com m i t m e nt s , Out s t a ndi ng Cr e di t Expos ur e , Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e , Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e , Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e a nd Out s t a ndi ng Re vol vi ng Loa n Expos ur e of t he De f a ul t i ng Le nde r s ha l l be di s r e ga r de d i n de t e r m i ni ng t he Aggr e ga t e Com m i t m e nt ( or Aggr e ga t e Out s t a ndi ng Cr e di t Expos ur e ) , Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt ( or Aggr e ga t e Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e ) , Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt ( or Aggr e ga t e Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e ) , Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt ( or Aggr e ga t e Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e ) or Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt ( or Aggr e ga t e Out s t a ndi ng Re vol vi ng Loa n Expos ur e ) . " Qua r t e r l y Pa ym e nt Da t e ” m e a ns t he t e nt h da y of e a c h J a nua r y, Apr i l , J ul y a nd Oc t obe r or , i f s uc h da y i s
not a Bus i ne s s Da y, t he ne xt s uc c e e di ng Bus i ne s s Da y. " Ra t e Adj us t m e nt Da t e ” m e a ns t he f i r s t da y of e a c h m ont h. " Re a l Es t a t e Subs i di a r y” m e a ns a ny Subs i di a r y t ha t doe s not own a ny a s s e t s ot he r t ha n r e a l e s t a t e , c a s h, a nd a s s e t s i nc i de nt a l t o t he ope r a t i on of s pe c i f i c r e a l e s t a t e . " Re a l Pr ope r t y” m e a ns r e a l pr ope r t y whi c h i s l oc a t e d i n t he Uni t e d St a t e s , i s owne d by a ny Re a l Es t a t e Subs i di a r y or De a l e r s hi p a nd i s oc c upi e d by t he Com pa ny or a Subs i di a r y. " Re a l l oc a t i on” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 17. 1. " Re a l l oc a t i on Re que s t ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 17. 2. " Re f e r e nc e Ti m e ” wi t h r e s pe c t t o a ny s e t t i ng of t he t he n- c ur r e nt Be nc hm a r k m e a ns ( A) ( 1) i f s uc h Be nc hm a r k i s Adj us t e d Te r m SOFR, 10: 00 a . m . ( Ce nt r a l t i m e ) on t he da y t ha t i s t wo Bus i ne s s Da ys be f or e t he da t e of s uc h s e t t i ng, ( 2) i f s uc h Be nc hm a r k i s Adj us t e d Da i l y Si m pl e SOFR, t he n 3: 00 p. m . ( Ne w Yor k Ci t y t i m e ) f our Bus i ne s s Da ys pr i or t o s uc h s e t t i ng a nd ( 3) i f s uc h Be nc hm a r k i s not Adj us t e d Te r m SOFR or Adj us t e d Da i l y Si m pl e SOFR, t he t i m e de t e r m i ne d
by t he Age nt i n i t s r e a s ona bl e di s c r e t i on or ( B) ( 1) i f s uc h Be nc hm a r k i s Da i l y Si m pl e SOFR, t he n 3: 00 p. m . ( Ne w Yor k Ci t y t i m e ) f our Bus i ne s s Da ys pr i or t o s uc h s e t t i ng a nd ( 2) i f s uc h Be nc hm a r k i s not Da i l y Si m pl e SOFR, t he n t he t i m e de t e r m i ne d by t he Adm i ni s t r a t i ve Age nt i n a c c or da nc e wi t h t he Be nc hm a r k Re pl a c e m e nt Conf or m i ng Cha nge s . " Re f undi ng Ne w Ve hi c l e Fl oor pl a n Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 2. 6( a ) . " Re f undi ng Re vol vi ng Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 4. 2. 6( a ) ( i ) . " Re f undi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 4. 6( a ) ( i ) . 34 115525625. 4 0063724- 00082 " Re f undi ng Us e d Ve hi c l e Fl oor pl a n Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 2. 6( a ) ( i ) . " Re gi s t e r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 17. 5. " Re gul a t i on D” m e a ns Re gul a t i on D of t he Boa r d of Gove r nor s of t he Fe de r a l Re s e r ve Sys t e m a s f r om t i m e t o t i m e i n e f f e c t a nd a ny s uc c e s s or t he r e t o or ot he r r e gul a t i on or of f i c i a l i nt e r pr e t a t i on of s a i d Boa r d of Gove r nor s r e l a t i ng t o r e s e r ve r e qui r e m e nt s a ppl i c a bl e t o
m e m be r ba nks of t he Fe de r a l Re s e r ve Sys t e m . " Re gul a t i on U” m e a ns Re gul a t i on U of t he Boa r d of Gove r nor s of t he Fe de r a l Re s e r ve Sys t e m a s f r om t i m e t o t i m e i n e f f e c t a nd a ny s uc c e s s or or ot he r r e gul a t i on or of f i c i a l i nt e r pr e t a t i on of s a i d Boa r d of Gove r nor s r e l a t i ng t o t he e xt e ns i on of c r e di t by ba nks f or t he pur pos e of pur c ha s i ng or c a r r yi ng m a r gi n s t oc ks a ppl i c a bl e t o m e m be r ba nks of t he Fe de r a l Re s e r ve Sys t e m . " Re i m bur s e m e nt Obl i ga t i ons ” m e a ns , a t a ny t i m e , t he a ggr e ga t e of a l l obl i ga t i ons of t he Re vol vi ng Loa n Bor r owe r t he n out s t a ndi ng t o r e i m bur s e t he LC I s s ue r f or a m ount s pa i d by t he LC I s s ue r i n r e s pe c t of a ny one or m or e dr a wi ngs unde r Le t t e r s of Cr e di t . " Re l a t e d Pr i nc i pa l Por t i on” m e a ns , wi t h r e s pe c t t o e a c h Ne w Ve hi c l e f i na nc e d wi t h a Ne w Ve hi c l e Loa n Adva nc e , t he pr i nc i pa l a m ount a dva nc e d unde r t hi s Agr e e m e nt t o f i na nc e t ha t Ve hi c l e . " Re l e va nt Gove r nm e nt a l Body” m e a ns t he Boa r d of Gove r nor s of t he Fe de r a l Re s e r ve Sys t e m or t he Fe de r a l Re s e r ve Ba nk of Ne w Yor k, or a c om m i t t e e of f i c i a l l y e ndor s e d or c onve ne d by t he
Boa r d of Gove r nor s of t he Fe de r a l Re s e r ve Sys t e m or t he Fe de r a l Re s e r ve Ba nk of Ne w Yor k, or a ny s uc c e s s or t he r e t o. " Re m ove d Fr a nc hi s e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 19. " Re por t a bl e Eve nt ” m e a ns a r e por t a bl e e ve nt a s de f i ne d i n Se c t i on 4043 of ERI SA a nd t he r e gul a t i ons i s s ue d unde r s uc h s e c t i on, wi t h r e s pe c t t o a Pl a n, e xc l udi ng, howe ve r , s uc h e ve nt s a s t o whi c h t he PBGC ha s by r e gul a t i on wa i ve d t he r e qui r e m e nt of Se c t i on 4043( a ) of ERI SA t ha t i t be not i f i e d wi t hi n 30 da ys of t he oc c ur r e nc e of s uc h e ve nt , pr ovi de d, howe ve r , t ha t a f a i l ur e t o m e e t t he m i ni m um f undi ng s t a nda r d of Se c t i on 412 of t he Code a nd of Se c t i on 302 of ERI SA s ha l l be a Re por t a bl e Eve nt r e ga r dl e s s of t he i s s ua nc e of a ny s uc h wa i ve r of t he not i c e r e qui r e m e nt i n a c c or da nc e wi t h e i t he r Se c t i on 4043( a ) of ERI SA or Se c t i on 412( d) of t he Code . " Re pr i c e Da t e ” m e a ns t he f i r s t da y of e a c h m ont h. " Re pur c ha s e Agr e e m e nt ” m e a ns a n a gr e e m e nt by a m a nuf a c t ur e r or di s t r i but or of Ne w Ve hi c l e s ( whi c h m a y be a s e pa r a t e a gr e e m e nt or m a y be i nc l ude d i n a Se l l e r Agr e e m e nt or
Pa ym e nt Com m i t m e nt ) , i n whi c h s uc h m a nuf a c t ur e r a gr e e s t o r e pur c ha s e Ne w Ve hi c l e s or i gi na l l y pur c ha s e d by a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p f r om s uc h m a nuf a c t ur e r , a l l i n f or m a nd s ubs t a nc e r e a s ona bl y a c c e pt a bl e t o t he Age nt . 35 115525625. 4 0063724- 00082
" Re qui r e d I nt e r c r e di t or Count e r pa r t y” m e a ns , wi t h r e s pe c t t o a n I nt e r c r e di t or Agr e e m e nt r e l a t i ng t o Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s : ( a ) e a c h Dua l Subs i di a r y Le nde r pr ovi di ng s uc h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s , or a n a ge nt a ut hor i z e d t o a c t on be ha l f of e a c h Dua l Subs i di a r y Le nde r wi t h r e s pe c t t o s uc h I nde bt e dne s s a nd ( b) i f r e qui r e d by t he Age nt , t he Com pa ny a nd/ or e a c h Dua l Subs i di a r y t ha t i s a bor r owe r or gua r a nt or of s uc h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s . " Re qui r e d Le nde r s ” m e a ns Le nde r s hol di ng i n t he a ggr e ga t e m or e t ha n 50% of t he Aggr e ga t e Com m i t m e nt or , i f t he Aggr e ga t e Com m i t m e nt ha s be e n t e r m i na t e d, Le nde r s hol di ng i n t he a ggr e ga t e m or e t ha n 50% of t he Aggr e ga t e Out s t a ndi ng Cr e di t Expos ur e pr ovi de d t ha t , Re qui r e d Le nde r s s ha l l a t no t i m e be l e s s t ha n t wo una f f i l i a t e d Le nde r s . The Com m i t m e nt s a nd Out s t a ndi ng Cr e di t Expos ur e of a ny De f a ul t i ng Le nde r s ha l l be di s r e ga r de d i n de t e r m i ni ng Re qui r e d Le nde r s . " Re qui r e d Re pa ym e nt Da t e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 2. 3. 3( b) . " Re s e r ve Am ount ” ha s
t he m e a ni ng s e t f or t h i n Se c t i on 4. 1. 9. " Re s ol ut i on Aut hor i t y” m e a ns a n EEA Re s ol ut i on Aut hor i t y or , wi t h r e s pe c t t o a ny UK Fi na nc i a l I ns t i t ut i on, a UK Re s ol ut i on Aut hor i t y. " Re s t r i c t e d Pa ym e nt ” m e a ns a ny di vi de nd or ot he r di s t r i but i on ( whe t he r i n c a s h, s e c ur i t i e s or ot he r pr ope r t y) wi t h r e s pe c t t o a ny Equi t y I nt e r e s t s i n a ny Loa n Pa r t y or a ny Subs i di a r y, or a ny pa ym e nt ( whe t he r i n c a s h, s e c ur i t i e s or ot he r pr ope r t y) , i nc l udi ng a ny s i nki ng f und or s i m i l a r de pos i t , on a c c ount of t he pur c ha s e , r e de m pt i on, r e t i r e m e nt , a c qui s i t i on, c a nc e l l a t i on or t e r m i na t i on of a ny s uc h Equi t y I nt e r e s t s i n a ny Loa n Pa r t y or a ny opt i on, wa r r a nt or ot he r r i ght t o a c qui r e a ny s uc h Equi t y I nt e r e s t s i n a ny Loa n Pa r t y. " Re vol vi ng Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 4. 1. 1. " Re vol vi ng Loa n Adva nc e ” m e a ns a bor r owi ng c ons i s t i ng of t he Re vol vi ng Loa ns t o be m a de by t he Le nde r s on a ny da t e . " Re vol vi ng Loa n Ava i l a bi l i t y” m e a ns , a s of a ny da t e of de t e r m i na t i on, a n a m ount e qua l t o ( a ) t he M a xi m um Re vol vi ng Loa n Am ount a t s uc h t i m e m i nus ( b) t he s um of t he
t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns , Re vol vi ng Swi ng Li ne Loa ns a nd LC Obl i ga t i ons . " Re vol vi ng Loa n Bor r owe r ” m e a ns t he Com pa ny, i n i t s c a pa c i t y a s a n obl i gor on t he Re vol vi ng Loa n Obl i ga t i ons a nd LC Obl i ga t i ons whi c h r e l a t e t o t he c r e di t f a c i l i t i e s de s c r i be d i n Ar t i c l e 4. " Re vol vi ng Loa n Bor r owi ng Ba s e ” m e a ns , a s of a ny da t e of de t e r m i na t i on: ( a ) a n a m ount e qua l t o t he s um , wi t hout dupl i c a t i on, on s uc h da t e of : ( i ) 100% of t he a m ount s ( e xc l udi ng c om m i s s i ons i nc l ude d i n c l a us e ( b) of t he de f i ni t i on of El i gi bl e Re c e i va bl e s ) owi ng t o t he 36 115525625. 4 0063724- 00082 De a l e r s hi ps i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t , whi c h a r e owe d t o t he De a l e r s hi ps by f i na nc i a l i ns t i t ut i ons or f i na nc e c om pa ni e s whi c h a r e not Af f i l i a t e s of a ny Loa n Pa r t y f or t he pur c ha s e by s uc h i ns t i t ut i ons of r e t a i l i ns t a l l m e nt c ont r a c t s a nd l e a s e s a r i s i ng f r om t he s a l e or l e a s e of Ne w Ve hi c l e s a nd Us e d Ve hi c l e s ( c ont r a c t s i n t r a ns i t ) , whi c h ha ve not r e m a i ne d unpa i d f or m or e t ha n 15 da ys . ( i i ) 80% of t he a m ount of
El i gi bl e Re c e i va bl e s . ( i i i ) 100% of t he s um of t he m a nuf a c t ur e r ’ s or di s t r i but or ’ s i nvoi c e s ( i nc l udi ng f r e i ght , a dve r t i s i ng a nd hol dba c ks ) f or El i gi bl e Ne w Ve hi c l e s . ( i v) 100% of t he a m ount of t he Us e d Ve hi c l e Bor r owi ng Ba s e . ( v) 75% of t he Va l ue of El i gi bl e Re a l Pr ope r t y; pr ovi de d, t ha t t hi s c om pone nt of t he Re vol vi ng Loa n Bor r owi ng Ba s e s ha l l not a t a ny t i m e e xc e e d $1, 000, 000, 000. 001, 000, 000, 000. ( vi ) 65% of ( A) t he ne t book va l ue of t he i nve nt or y of t he Com pa ny a nd i t s Subs i di a r i e s c ons i s t i ng of ne w pa r t s a nd a c c e s s or i e s i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t ; m i nus ( B) t he unpa i d a c qui s i t i on c os t owe d t o s e l l e r s or f i na nc e r s of s uc h i nve nt or y. ( vi i ) 40% of ( A) t he ne t book va l ue of e qui pm e nt ( e xc l udi ng f i xt ur e s , a i r c r a f t , a nd Se r vi c e Loa ne r Ve hi c l e s ) of t he Com pa ny a nd i t s Subs i di a r i e s i n whi c h t he Age nt ha s a pe r f e c t e d f i r s t pr i or i t y s e c ur i t y i nt e r e s t , m i nus ( B) t he pr i nc i pa l a m ount of i nde bt e dne s s or obl i ga t i ons t o a ny Pe r s on ( ot he r t ha n t he Obl i ga t i ons ) whi c h i s s e c ur e d by s uc h e qui pm e nt . ( b)
M i nus , t he s um of t he t he n out s t a ndi ng a ggr e ga t e pr i nc i pa l ba l a nc e of ( i ) Ne w Ve hi c l e Fl oor pl a n Loa ns l e s s t he s um of t he a ggr e ga t e a m ount he l d i n t he PR Ac c ount s , i n a n a m ount up t o $200, 000, 000, ( i i ) Ne w Ve hi c l e Swi ng Li ne Loa ns , ( i i i ) Us e d Ve hi c l e Fl oor pl a n Loa ns , ( i v) Us e d Ve hi c l e Swi ng Li ne Loa ns a nd ( v) Pa r i Pa s s u Funde d De bt . ( c ) Pl us , t he s um of t he t he n out s t a ndi ng a ggr e ga t e pr i nc i pa l ba l a nc e of Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns r e pa i d a s of a da t e wi t hi n f i ve ( 5) Bus i ne s s Da ys of t he da t e of de t e r m i na t i on ( ne t of a ddi t i ona l Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns bor r owe d) . Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y i n t hi s Agr e e m e nt , t he a m ount s s e t f or t h i n c l a us e s ( a ) ( i ) t hr ough ( a ) ( vi i ) a bove s ha l l e xc l ude a l l r e c e i va bl e s , Ve hi c l e s , r e a l pr ope r t y, i nve nt or y, e qui pm e nt a nd ot he r pr ope r t y a nd a s s e t s of a ny Si l o Subs i di a r y a nd a ny For e i gn Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y, pr ovi de d 37 115525625. 4 0063724- 00082
i n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d Ve hi c l e Bor r owi ng Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000. " Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e ” m e a ns a c e r t i f i c a t e s ubs t a nt i a l l y i n t he f or m a t t a c he d a s Exhi bi t C, or i n s uc h ot he r f or m a s i s a c c e pt a bl e t o t he Age nt . " Re vol vi ng Loa n Bor r owi ng Ra t e ” m e a ns t he s um of ( a ) Adj us t e d Da i l y Si m pl e SOFR, Adj us t e d Te r m SOFR or t he Te r m SOFR Al t e r na t i ve Ra t e , a s de s i gna t e d by t he Com pa ny f r om t i m e t o t i m e , pl us ( b) t he Re vol vi ng Loa n M a r gi n. " Re vol vi ng Loa n Com m i t m e nt ” m e a ns , f or e a c h Le nde r , t he obl i ga t i on of s uc h Le nde r t o m a ke Re vol vi ng Loa ns t o t he Re vol vi ng Loa n Bor r owe r , a nd pa r t i c i pa t e i n Re vol vi ng Swi ng Li ne Loa ns a nd Le t t e r s of Cr e di t i n a n a ggr e ga t e a m ount not e xc e e di ng t he a m ount s e t f or t h on Sc he dul e 1, a s s uc h a m ount m a y be m odi f i e d a s a r e s ul t of a ny a s s i gnm e nt or a s ot he r wi s e m odi f i e d f r om t i m e t o t i m e pur s ua nt t o Se c t i on 6. 17 or t he
ot he r pr ovi s i ons he r e of . " Re vol vi ng Loa n Com m i t m e nt Fe e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 4. 1. 7. " Re vol vi ng Loa n Com m i t m e nt Fe e Ra t e ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Re vol vi ng Loa n M a r gi n” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Re vol vi ng Loa n Obl i ga t i ons ” m e a ns a l l pr e s e nt a nd f ut ur e Re vol vi ng Loa ns , Re vol vi ng Swi ng Li ne Loa ns , LC Obl i ga t i ons , a nd ot he r de bt s , l i a bi l i t i e s , obl i ga t i ons , r e i m bur s e m e nt s , i nde m ni t i e s , c ove na nt s , wa r r a nt i e s , dut i e s a nd obl i ga t i ons r e l a t i ng t he r e t o of t he Re vol vi ng Loa n Bor r owe r t o t he Age nt a nd t he Le nde r s unde r t he LC Agr e e m e nt s , LC Appl i c a t i ons , t he Le t t e r s of Cr e di t , t hi s Agr e e m e nt , a nd t he ot he r Loa n Doc um e nt s , whe t he r now or he r e a f t e r e xi s t i ng or i nc ur r e d, whe t he r l i qui da t e d or unl i qui da t e d, whe t he r a bs ol ut e or c ont i nge nt , a nd i nc l udi ng wi t hout l i m i t a t i on pr i nc i pa l , i nt e r e s t , f e e s , At t or ne y Cos t s , e xpe ns e s a nd c ha r ge s r e l a t i ng t o a ny of t he f or e goi ng. " Re vol vi ng Swi ng Li ne Com m i t m e nt ” ( whi c h i s a s ubl i m i t of t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt ) m e a ns
a n a m ount e qua l t o $60, 000, 000. 0060, 000, 000. " Re vol vi ng Swi ng Li ne Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 4. 2. 1. " Ri s k- Ba s e d Ca pi t a l Gui de l i ne s ” m e a ns ( a ) t he r i s k- ba s e d c a pi t a l gui de l i ne s i n e f f e c t i n t he Uni t e d St a t e s on t he da t e of t hi s Agr e e m e nt , i nc l udi ng t r a ns i t i on r ul e s , a nd ( b) t he c or r e s pondi ng c a pi t a l r e gul a t i ons pr om ul ga t e d by r e gul a t or y a ut hor i t i e s out s i de t he Uni t e d St a t e s , i nc l udi ng t r a ns i t i on r ul e s , a nd, i n e a c h c a s e , a ny a m e ndm e nt s t o s uc h r e gul a t i ons . " S& P” m e a ns St a nda r d & Poor ’ s Ra t i ngs Gr oup, a St a nda r d & Poor ’ s Fi na nc i a l Se r vi c e s LLC bus i ne s s . 38 115525625. 4 0063724- 00082 " Sa nc t i ons ” m e a ns s a nc t i ons a dm i ni s t e r e d or e nf or c e d f r om t i m e t o t i m e by t he U. S. gove r nm e nt , i nc l udi ng t hos e a dm i ni s t e r e d by OFAC, t he U. S. De pa r t m e nt of St a t e , t he Uni t e d Na t i ons Se c ur i t y Counc i l , t he Eur ope a n Uni on, He r Hi s M a j e s t y’ s Tr e a s ur y or ot he r r e l e va nt s a nc t i ons a ut hor i t y. " Se c ur i t y Agr e e m e nt ” m e a ns a n a m e nde d a nd r e s t a t e d s e c ur i t y a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d he r e t o a s Exhi bi t F. " Se l l e r Agr e e m e nt ” m e a ns
a ny m a t e r i a l a gr e e m e nt be t we e n t he Com pa ny or a ny of i t s Subs i di a r i e s a nd a m a nuf a c t ur e r , di s t r i but or or ot he r s e l l e r of Ne w Ve hi c l e s ( i nc l udi ng wi t hout l i m i t a t i on Fr a nc hi s e Agr e e m e nt s , di s t r i but i on a gr e e m e nt s , f r a m e wor k a gr e e m e nt s , a nd t he l i ke ) . " Se l l e r Not e s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 6( m ) . " Se r vi c e Loa ne r Ve hi c l e ” m e a ns a Ve hi c l e t ha t i s obt a i ne d by a De a l e r s hi p di r e c t l y f r om a m a nuf a c t ur e r or di s t r i but or a nd whi c h i s us e d f or s hor t - t e r m r e nt a l i n t he or di na r y c our s e of bus i ne s s or a s a s e r vi c e l oa ne r . " Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e ” m e a ns , a s of a ny da t e of de t e r m i na t i on, a n a m ount e qua l t o t he s um , wi t hout dupl i c a t i on, on s uc h da t e of 85% of t he ne t book va l ue of El i gi bl e Se r vi c e Loa ne r Ve hi c l e s , pr ovi de d i n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d Ve hi c l e Bor r owi ng Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000. " Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e ” m e a ns a
c e r t i f i c a t e s ubs t a nt i a l l y i n t he f or m a t t a c he d a s Exhi bi t B- 2, or i n s uc h ot he r f or m a s i s a c c e pt a bl e t o t he Age nt . " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Adva nc e ” m e a ns a bor r owi ng c ons i s t i ng of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns t o be m a de by t he Le nde r s on a ny da t e . " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r ” m e a ns t he Com pa ny, i n i t s c a pa c i t y a s a n obl i gor on t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons whi c h r e l a t e t o t he c r e di t f a c i l i t i e s de s c r i be d i n Se c t i ons 3. 3 a nd 3. 4. " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e ” m e a ns t he s um of ( a ) Adj us t e d Da i l y Si m pl e SOFR, Adj us t e d Te r m SOFR or t he Te r m SOFR Al t e r na t i ve Ra t e , a s de s i gna t e d by t he Com pa ny f r om t i m e t o t i m e , pl us ( b) t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n M a r gi n. " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt ” m e a ns f or e a c h Le nde r , t he obl i ga t i on of s uc h Le nde r t o m a ke Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r a nd t o pa r t i c i pa t e i n Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , i n a n a ggr e ga t e a m ount not e xc e e di ng t he
a m ount s e t f or t h on Sc he dul e 1, a s s uc h a m ount m a y be m odi f i e d a s a r e s ul t of a ny a s s i gnm e nt or a s ot he r wi s e m odi f i e d f r om t i m e t o t i m e pur s ua nt t o t he pr ovi s i ons he r e of . 39 115525625. 4 0063724- 00082
" Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 3. 7. " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n DDA” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 4. 7( b) . " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 3. 1. " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n M a r gi n” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons ” m e a ns a l l pr e s e nt a nd f ut ur e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , a nd ot he r de bt s , l i a bi l i t i e s , obl i ga t i ons , r e i m bur s e m e nt s , i nde m ni t i e s , c ove na nt s , wa r r a nt i e s , dut i e s a nd obl i ga t i ons r e l a t i ng t he r e t o of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r t o t he Age nt a nd t he Le nde r s unde r t hi s Agr e e m e nt , a nd t he ot he r Loa n Doc um e nt s , whe t he r now or he r e a f t e r e xi s t i ng or i nc ur r e d, whe t he r l i qui da t e d or unl i qui da t e d, whe t he r a bs ol ut e or c ont i nge nt , a nd i nc l udi ng wi t hout l i m i t a t i on pr i nc i pa l ,
i nt e r e s t , f e e s , At t or ne y Cos t s , e xpe ns e s a nd c ha r ge s r e l a t i ng t o a ny of t he f or e goi ng. " Se r vi c e Loa ne r Ve hi c l e Swe e p Adva nc e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 4. 7( a ) . " Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Com m i t m e nt ” ( whi c h i s a s ubl i m i t of t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n Com m i t m e nt ) m e a ns a n a m ount e qua l t o $10, 000, 000. 0010, 000, 000. " Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 4. 1. " Shi f t ” m e a ns Shi f t Te c hnol ogi e s , I nc . , a De l a wa r e c or por a t i on. " Shi f t Fa c i l i t y” m e a ns a f l oor pl a n c r e di t f a c i l i t y or de bt f i na nc i ng pr ovi de d by one or m or e l e nde r s t o Shi f t ( a nd/ or one or m or e of i t s s ubs i di a r i e s ) i n a n a ggr e ga t e pr i nc i pa l a m ount not t o e xc e e d $50, 000, 000 a t a ny t i m e out s t a ndi ng, gua r a nt e e d i n whol e or i n pa r t by one or m or e Loa n Pa r t i e s . " Shi f t I nve s t m e nt s ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 6( q) . " Si l o Subs i di a r y” m e a ns a Subs i di a r y de s i gna t e d a s a " Si l o Subs i di a r y” i n wr i t i ng by t he Com pa ny t o t he Age nt f or t he pur pos e of i nc ur r i ng Funde d De bt pe r m i t t e d unde r
s ubs e c t i on ( o) of Se c t i on 13. 10, pr ovi de d t ha t i f , a t t he t i m e of s uc h de s i gna t i on, s uc h Subs i di a r y i s a Loa n Pa r t y: ( i ) s uc h Subs i di a r y s ha l l ha ve e xe c ut e d a nd de l i ve r e d t o t he Age nt a Si l o Subs i di a r y Te r m i na t i on Agr e e m e nt s ol e l y wi t h r e s pe c t t o i t s s t a t us a s a pa r t y t o t he Se c ur i t y Agr e e m e nt , t he Pl e dge Agr e e m e nt a nd a ny ot he r Col l a t e r a l Doc um e nt s a nd a s a Gr a nt or ( a s de f i ne d i n t he Se c ur i t y Agr e e m e nt a nd t he Pl e dge Agr e e m e nt ) a nd i t s s t a t us 40 115525625. 4 0063724- 00082 a s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r ( i t be i ng unde r s t ood t ha t s uc h Si l o Subs i di a r y Te r m i na t i on Agr e e m e nt s ha l l not t e r m i na t e s uc h Subs i di a r y’ s obl i ga t i ons unde r i t s Gua r a nt y, whi c h s ha l l r e m a i n i n f ul l f or c e a nd e f f e c t ) , ( i i ) t he Com pa ny s ha l l ha ve pr ovi de d t o t he Age nt a Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e a s of t he da t e of a nd a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on of s uc h Subs i di a r y a s a Si l o Subs i di a r y a nd c e r t i f yi ng t ha t a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on t he Re vol vi ng Loa n Ava i l a bi l i t y i s not l e s s t ha n $1. 00, ( i i i ) t he Com pa ny s ha l l ha ve pr ovi de d t o
t he Age nt a Us e d Ve hi c l e Loa n Bor r owi ng Ba s e Ce r t i f i c a t e a s of t he da t e of a nd a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on of s uc h Subs i di a r y a s a Si l o Subs i di a r y a nd de duc t i on of a l l Us e d Ve hi c l e s of s uc h Si l o Subs i di a r y f r om t he Us e d Ve hi c l e Bor r owi ng Ba s e , ( i v) t he Com pa ny s ha l l ha ve pr ovi de d t o t he Age nt a Se r vi c e Loa ne r Ve hi c l e Loa n Bor r owi ng Ba s e Ce r t i f i c a t e a s of t he da t e of a nd a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on of s uc h Subs i di a r y a s a Si l o Subs i di a r y a nd de duc t i on of a l l Se r vi c e Loa ne r Ve hi c l e s of s uc h Si l o Subs i di a r y f r om t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , ( v) t he Com pa ny or s uc h Subs i di a r y s ha l l ha ve r e pa i d i n f ul l t he Re l a t e d Pr i nc i pa l Por t i on, t oge t he r wi t h a c c r ue d a nd unpa i d i nt e r e s t t he r e on, wi t h r e s pe c t t o e a c h Ne w Ve hi c l e of s uc h Subs i di a r y f i na nc e d wi t h a Ne w Ve hi c l e Loa n Adva nc e , ( vi ) t he Com pa ny s ha l l ha ve r e pa i d Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns t o t he e xt e nt ne c e s s a r y s uc h t ha t , a f t e r gi vi ng e f f e c t t o s uc h r e pa ym e nt a nd t he de s i gna t i on of s uc h Subs i di a r y a s a Si l o Subs i di a r y a nd
de duc t i on of a l l Us e d Ve hi c l e s of s uc h Si l o Subs i di a r y f r om t he Us e d Ve hi c l e Bor r owi ng Ba s e , ( 1) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Us e d Ve hi c l e Fl oor pl a n Loa ns doe s not e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Us e d Ve hi c l e Fl oor pl a n Am ount , a nd ( 2) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Us e d Ve hi c l e Fl oor pl a n Loa ns , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Us e d Ve hi c l e Swi ng Li ne Loa ns , doe s not e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Us e d Ve hi c l e Fl oor pl a n Am ount , a nd ( vi i ) t he Com pa ny s ha l l ha ve r e pa i d Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns t o t he e xt e nt ne c e s s a r y s uc h t ha t , a f t e r gi vi ng e f f e c t t o s uc h r e pa ym e nt a nd t he de s i gna t i on of s uc h Subs i di a r y a s a Si l o Subs i di a r y a nd de duc t i on of a l l Se r vi c e Loa ne r Ve hi c l e s of s uc h Si l o Subs i di a r y f r om t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , ( 1) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns doe s not e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Se r vi c e
Loa ne r Ve hi c l e Fl oor pl a n Am ount , a nd ( 2) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , doe s not e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Am ount . Ef f e c t i ve upon a ny s uc h de s i gna t i on a nd s a t i s f a c t i on of t he c ondi t i ons s e t f or t h i n c l a us e s ( i ) , ( i i ) , ( i i i ) , ( i v) , ( v) , ( vi ) a nd ( vi i ) a bove , a ny Subs i di a r y s o de s i gna t e d s ha l l c e a s e t o be a Ne w Ve hi c l e 41 115525625. 4 0063724- 00082
Fl oor pl a n Bor r owe r unde r t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s , a nd t he De a l e r s hi p Loa n Li m i t ( i f a ny) f or s uc h Subs i di a r y s ha l l be de l e t e d. " Si l o Subs i di a r y Te r m i na t i on Agr e e m e nt ” wi t h r e s pe c t t o a Si l o Subs i di a r y, a n a gr e e m e nt s ubs t a nt i a l l y i n t he f or m a t t a c he d a s Exhi bi t H- 2. " Si m pl e SOFR Adj us t m e nt ” m e a ns a pe r c e nt a ge e qua l t o 0. 10% pe r a nnum . " SOFR” m e a ns , wi t h r e s pe c t t o a ny Bus i ne s s Da y, a r a t e pe r a nnum e qua l t o t he s e c ur e d ove r ni ght f i na nc i ng r a t e f or s uc h Bus i ne s s Da y publ i s he d by t he SOFR Adm i ni s t r a t or on t he SOFR Adm i ni s t r a t or ’ s W e bs i t e a t a ppr oxi m a t e l y 8: 00 a . m . ( Ne w Yor k Ci t y t i m e ) , or i n t he c a s e of a n upda t e t o s uc h r a t e by t he SOFR Adm i ni s t r a t or , a t a ppr oxi m a t e l y 2: 30 p. m . ( Ne w Yor k Ci t y t i m e ) on t he i m m e di a t e l y s uc c e e di ng Bus i ne s s Da y. " SOFR Adm i ni s t r a t or ” m e a ns t he Fe de r a l Re s e r ve Ba nk of Ne w Yor k ( or a s uc c e s s or a dm i ni s t r a t or of t he s e c ur e d ove r ni ght f i na nc i ng r a t e ) . " SOFR Adm i ni s t r a t or ’ s W e bs i t e ” m e a ns t he we bs i t e of t he Fe de r a l Re s e r ve Ba nk of Ne w Yor k, c ur r e nt l y a t ht t p: / / www. ne wyor kf e d. or g,
or a ny s uc c e s s or s our c e f or t he s e c ur e d ove r ni ght f i na nc i ng r a t e i de nt i f i e d a s s uc h by t he SOFR Adm i ni s t r a t or f r om t i m e t o t i m e . " SOFR I nt e r e s t Da y” ha s t he m e a ni ng s pe c i f i e d i n t he de f i ni t i on of " Adj us t e d Da i l y Si m pl e SOFR” . " SOFR Loa n” m e a ns a ny Da i l y Si m pl e SOFR Loa n, Te r m SOFR Loa n or Te r m SOFR Al t e r na t i ve Ra t e Loa n. " Sol ve nt ” m e a ns , wi t h r e s pe c t t o a ny Pe r s on on a ny da t e , t ha t on s uc h da t e ( a ) t he f a i r va l ue of t he a s s e t s of s uc h Pe r s on, a t a f a i r va l ua t i on i s gr e a t e r t ha n t he de bt s a nd l i a bi l i t i e s , s ubor di na t e d, c ont i nge nt or ot he r wi s e , of s uc h Pe r s on; ( b) t he pr e s e nt f a i r s a l e a bl e va l ue of t he a s s e t s of s uc h Pe r s on i s gr e a t e r t ha n t he a m ount t ha t wi l l be r e qui r e d t o pa y t he pr oba bl e l i a bi l i t y of s uc h Pe r s on on i t s de bt s a nd ot he r l i a bi l i t i e s , s ubor di na t e d, c ont i nge nt or ot he r wi s e , a s s uc h de bt s a nd ot he r l i a bi l i t i e s be c om e a bs ol ut e a nd m a t ur e d; ( c ) s uc h Pe r s on wi l l be a bl e t o pa y i t s de bt s a nd l i a bi l i t i e s , s ubor di na t e d, c ont i nge nt or ot he r wi s e , a s s uc h de bt s a nd l i a bi l i t i e s be c om e a bs ol ut e a nd m a t ur e d; ( d) s uc h Pe r s on doe s not
ha ve unr e a s ona bl y s m a l l c a pi t a l wi t h whi c h t o c onduc t t he bus i ne s s e s i n whi c h i t i s e nga ge d a s s uc h bus i ne s s e s a r e now c onduc t e d; a nd ( e ) s uc h Pe r s on doe s not i nt e nd t o, a nd doe s not be l i e ve t ha t i t wi l l i nc ur de bt s or l i a bi l i t i e s be yond i t s a bi l i t y t o pa y s uc h de bt s a nd l i a bi l i t i e s a s t he y m a t ur e , t a ki ng i nt o a c c ount t he t i m i ng of a nd a m ount s of c a s h t o be r e c e i ve d by i t a nd t he t i m i ng of t he a m ount s of c a s h t o be pa ya bl e on or i n r e s pe c t of i t s i nde bt e dne s s . " Spe c i a l Pur pos e Se c ur i t i z a t i on Subs i di a r y” m e a ns a di r e c t or i ndi r e c t Subs i di a r y of t he Com pa ny e s t a bl i s he d i n c onne c t i on wi t h a Ca na di a nFor e i gn Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on, a nd whi c h i s or ga ni z e d i n a m a nne r ( a s de t e r m i ne d by t he Com pa ny i n good f a i t h) i nt e nde d t o r e duc e t he l i ke l i hood t ha t i t woul d be s ubs t a nt i ve l y c ons ol i da t e d wi t h t he Com pa ny 42 115525625. 4 0063724- 00082 or a ny Subs i di a r y t he r e of i n t he e ve nt t he Com pa ny or a ny s uc h Subs i di a r y be c om e s s ubj e c t t o a pr oc e e di ng unde r t he U. S. Ba nkr upt c y Code ( or ot he r i ns ol ve nc y l a w) . " Spe c i f i e d Re pr e s e nt a t i ons ”
m e a ns t he r e pr e s e nt a t i ons a nd wa r r a nt i e s s e t f or t h i n Se c t i on 10. 1 ( s ol e l y wi t h r e s pe c t t o t he Com pa ny) , Se c t i on 10. 2 ( s ol e l y wi t h r e s pe c t t o t he Com pa ny) , Se c t i on 10. 11, Se c t i on 10. 19, Se c t i on 10. 20 ( s ol e l y wi t h r e s pe c t t o t he Com pa ny) , Se c t i on 10. 24, a nd Se c t i on 10. 25. " St a t e d Ra t e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 6. 11. " St oc khol de r s ’ Equi t y” m e a ns , a s of a ny da t e of de t e r m i na t i on, t he c ons ol i da t e d s t oc khol de r s ’ e qui t y of t he Com pa ny de t e r m i ne d i n a c c or da nc e wi t h GAAP. " Subor di na t e d De bt ” m e a ns uns e c ur e d i nde bt e dne s s of a Bor r owe r whi c h i s s ubor di na t e d t o t he pa ym e nt of t he Obl i ga t i ons by a n a gr e e m e nt a c c e pt a bl e t o t he Age nt a nd Re qui r e d Le nde r s a nd t ha t ha s s ubor di na t i on t e r m s , c ove na nt s , pr i c i ng a nd ot he r t e r m s t ha t ha ve be e n a ppr ove d i n wr i t i ng by t he Re qui r e d Le nde r s . " Subs i di a r y” of a Pe r s on m e a ns ( i ) a ny c or por a t i on Cont r ol l e d by s uc h Pe r s on or m or e t ha n 50% of t he out s t a ndi ng s e c ur i t i e s ha vi ng or di na r y vot i ng powe r of whi c h s ha l l a t t he t i m e be owne d, di r e c t l y or i ndi r e c t l y, by s uc h Pe r s on or by one or m or e of s uc h
Pe r s on’ s Subs i di a r i e s or by s uc h Pe r s on a nd one or m or e of i t s Subs i di a r i e s a nd ( i i ) a ny pa r t ne r s hi p, l i m i t e d l i a bi l i t y c om pa ny, a s s oc i a t i on, j oi nt ve nt ur e or ot he r bus i ne s s or ga ni z a t i on Cont r ol l e d by s uc h Pe r s on or m or e t ha n 50% of t he owne r s hi p i nt e r e s t s ha vi ng or di na r y vot i ng powe r of whi c h s ha l l a t t he t i m e be s o owne d. Unl e s s ot he r wi s e e xpr e s s l y pr ovi de d, a l l r e f e r e nc e s he r e i n t o a " Subs i di a r y” s ha l l m e a n a Subs i di a r y of t he Com pa ny. " Swa p” m e a ns ( a ) a ny a nd a l l r a t e s wa p t r a ns a c t i ons , ba s i s s wa ps , c r e di t de r i va t i ve t r a ns a c t i ons , f or wa r d r a t e t r a ns a c t i ons , c om m odi t y s wa ps , c om m odi t y opt i ons , f or wa r d c om m odi t y c ont r a c t s , e qui t y or e qui t y i nde x s wa ps or opt i ons , bond or bond pr i c e or bond i nde x s wa ps or opt i ons or f or wa r d bond or f or wa r d bond pr i c e or f or wa r d bond i nde x t r a ns a c t i ons , i nt e r e s t r a t e opt i ons , f or wa r d f or e i gn e xc ha nge t r a ns a c t i ons , c a p t r a ns a c t i ons , f l oor t r a ns a c t i ons , c ol l a r t r a ns a c t i ons , c ur r e nc y s wa p t r a ns a c t i ons , c r os s - c ur r e nc y r a t e s wa p t r a ns a c t i ons , c ur r e nc y opt i ons , f i xe d- pr i c e phys i c a l de l i ve r y c ont r a c t s , whe t he r
or not e xc ha nge t r a de d, or a ny ot he r s i m i l a r t r a ns a c t i ons or a ny c om bi na t i on of a ny of t he f or e goi ng ( i nc l udi ng a ny opt i ons t o e nt e r i nt o a ny of t he f or e goi ng) , whe t he r or not a ny s uc h t r a ns a c t i on i s gove r ne d by or s ubj e c t t o a ny m a s t e r a gr e e m e nt , i nc l udi ng a ny a gr e e m e nt , c ont r a c t or t r a ns a c t i on t ha t c ons t i t ut e s a " s wa p” wi t hi n t he m e a ni ng of s e c t i on 1a ( 47) of t he Com m odi t y Exc ha nge Ac t , a nd ( b) a ny a nd a l l t r a ns a c t i ons of a ny ki nd, a nd t he r e l a t e d c onf i r m a t i ons , whi c h a r e s ubj e c t t o t he t e r m s a nd c ondi t i ons of , or gove r ne d by, a ny f or m of m a s t e r a gr e e m e nt publ i s he d by t he I nt e r na t i ona l Swa ps a nd De r i va t i ve s As s oc i a t i on, I nc . , a ny I nt e r na t i ona l For e i gn Exc ha nge M a s t e r Agr e e m e nt or a ny ot he r m a s t e r a gr e e m e nt , i nc l udi ng a ny s uc h obl i ga t i ons or l i a bi l i t i e s unde r a ny s uc h m a s t e r a gr e e m e nt . " Swa p Obl i ga t i on” m e a ns , wi t h r e s pe c t t o a ny Pe r s on, a ny a nd a l l obl i ga t i ons , whe t he r a bs ol ut e or c ont i nge nt a nd hows oe ve r a nd whe ns oe ve r c r e a t e d, a r i s i ng, e vi de nc e d or a c qui r e d ( i nc l udi ng a l l r e ne wa l s , e xt e ns i ons a nd m odi f i c a t i ons t he r e of a nd
s ubs t i t ut i ons t he r e f or ) , unde r 43 115525625. 4 0063724- 00082
( i ) a ny a nd a l l Swa ps , a nd ( i i ) a ny a nd a l l c a nc e l l a t i ons , buy ba c ks , r e ve r s a l s , t e r m i na t i ons or a s s i gnm e nt s of a ny Swa p. " Swa p Te r m i na t i on Va l ue ” m e a ns i n r e s pe c t of a ny one or m or e Swa ps , a f t e r t a ki ng i nt o a c c ount t he e f f e c t of a ny l e ga l l y e nf or c e a bl e ne t t i ng a gr e e m e nt r e l a t i ng t o s uc h Swa ps , ( a ) f or a ny da t e a f t e r t he da t e s uc h Swa ps ha ve be e n c l os e d out a nd t e r m i na t i on va l ue ( s ) de t e r m i ne d i n a c c or da nc e t he r e wi t h, s uc h t e r m i na t i on va l ue ( s ) , a nd ( b) pr i or t o s uc h da t e t he Ne t M a r k- t o- M a r ke t Expos ur e wi t h r e s pe c t t he r e t o. " Swi ng Li ne Le nde r ” m e a ns U. S. Ba nk. " Swi ng Li ne Loa n” m e a ns a Ne w Ve hi c l e Swi ng Li ne Loa n, Us e d Ve hi c l e Swi ng Li ne Loa n, Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n or Re vol vi ng Swi ng Li ne Loa n. " Synt he t i c Le a s e ” m e a ns a ny l e a s e of goods or ot he r pr ope r t y, whe t he r r e a l or pe r s ona l , whi c h i s t r e a t e d a s a n ope r a t i ng l e a s e unde r GAAP a nd a s a l oa n or f i na nc i ng f or U. S. i nc om e t a x pur pos e s . " Ta ngi bl e Ne t W or t h” m e a ns , a s of a ny da t e , a n a m ount e qua l t o ( x) t he a m ount of s ha r e hol de r s ’ e qui t y, m i nus ( y) t he a m ount of
goodwi l l a nd ot he r i nt a ngi bl e a s s e t s , of Com pa ny a nd i t s Subs i di a r i e s , i n e a c h c a s e de t e r m i ne d a s of s uc h da t e on a c ons ol i da t e d ba s i s i n a c c or da nc e wi t h GAAP c ons i s t e nt l y a ppl i e d. " Ta xe s ” m e a ns a ny a nd a l l pr e s e nt or f ut ur e t a xe s , dut i e s , l e vi e s , i m pos t s , de duc t i ons , f e e s , a s s e s s m e nt s , c ha r ge s or wi t hhol di ngs , a nd a ny a nd a l l l i a bi l i t i e s wi t h r e s pe c t t o t he f or e goi ng, i nc l udi ng i nt e r e s t , a ddi t i ons t o t a x a nd pe na l t i e s a ppl i c a bl e t he r e t o. " Te r m SOFR” m e a ns t he r a t e pe r a nnum de t e r m i ne d by t he Age nt a s t he f or wa r d- l ooki ng t e r m r a t e ba s e d on SOFR. " Te r m SOFR Adj us t m e nt ” m e a ns a pe r c e nt a ge e qua l t o 0. 10% pe r a nnum . " Te r m SOFR Adm i ni s t r a t or ” m e a ns CM E Gr oup Be nc hm a r k Adm i ni s t r a t i on Lt d. ( or a s uc c e s s or a dm i ni s t r a t or of Te r m SOFR s e l e c t e d by t he Age nt i n i t s r e a s ona bl e di s c r e t i on) . " Te r m SOFR Adm i ni s t r a t or ’ s W e bs i t e ” m e a ns ht t ps : / / www. c m e gr oup. c om / m a r ke t - da t a / c m e - gr oup- be nc hm a r k- a dm i ni s t r a t i on/ t e r m - s of r . ht m l , or a ny s uc c e s s or s our c e f or Te r m SOFR i de nt i f i e d a s s uc h by t he Te r m SOFR Adm i ni s t r a t or f r om t i m e t o t i m e .
" Te r m SOFR Al t e r na t i ve Ra t e ” m e a ns t he gr e a t e r of ( a ) t he Fl oor , a nd ( b) t he s um of ( i ) t he one - m ont h f or wa r d- l ooki ng t e r m r a t e ba s e d on SOFR quot e d by t he Age nt f r om t he Te r m SOFR Adm i ni s t r a t or ’ s W e bs i t e ( or ot he r c om m e r c i a l l y a va i l a bl e s our c e pr ovi di ng s uc h quot a t i ons a s m a y be s e l e c t e d by t he Age nt f r om t i m e t o t i m e ) , whi c h s ha l l be t ha t one - m ont h Te r m SOFR r a t e i n e f f e c t t wo Bus i ne s s Da ys pr i or t o t he Ra t e Adj us t m e nt Da t e ; pr ovi de d t ha t i f t he one - m ont h f or wa r d- l ooki ng t e r m r a t e ba s e d on SOFR i s not publ i s he d on s uc h Bus i ne s s Da y due t o a hol i da y or ot he r c i r c um s t a nc e t ha t t he Age nt de e m s i n i t s s ol e di s c r e t i on t o be t e m por a r y, t he one - m ont h f or wa r d- l ooki ng t e r m r a t e ba s e d on SOFR s ha l l be t he one - m ont h 44 115525625. 4 0063724- 00082 f or wa r d- l ooki ng t e r m r a t e ba s e d on SOFR l a s t publ i s he d pr i or t o s uc h Bus i ne s s Da y pl us ( i i ) t he Te r m SOFR Adj us t m e nt . " Te r m SOFR Al t e r na t i ve Ra t e Loa n” m e a ns a ny Loa n be a r i ng i nt e r e s t a t a r a t e ba s e d on t he Te r m SOFR Al t e r na t i ve Ra t e . " Te r m SOFR Ba s e Ra t e ” m e a ns , f or t he r e l e va nt
I nt e r e s t Pe r i od t he Te r m SOFR r a t e quot e d by t he Age nt f r om t he Te r m SOFR Adm i ni s t r a t or ’ s W e bs i t e or t he a ppl i c a bl e Bl oom be r g s c r e e n ( or ot he r c om m e r c i a l l y a va i l a bl e s our c e pr ovi di ng s uc h quot a t i ons a s m a y be s e l e c t e d by t he Age nt f r om t i m e t o t i m e ) ( t he " Sc r e e n” ) f or s uc h I nt e r e s t Pe r i od, whi c h s ha l l be t he Te r m SOFR r a t e publ i s he d t wo Bus i ne s s Da ys be f or e t he f i r s t da y of s uc h I nt e r e s t Pe r i od ( s uc h Bus i ne s s Da y, t he " De t e r m i na t i on Da t e ” ) . I f a s of 5: 00 p. m . ( Ne w Yor k t i m e ) on a ny De t e r m i na t i on Da t e , t he Te r m SOFR r a t e i s not publ i s he d on t he Te r m SOFR Adm i ni s t r a t or ’ s W e bs i t e or t he Sc r e e n, t he n t he r a t e us e d wi l l be t ha t a s publ i s he d by t he Te r m SOFR Adm i ni s t r a t or or on t he Sc r e e n f or t he f i r s t pr e c e di ng Bus i ne s s Da y f or whi c h s uc h r a t e wa s publ i s he d on t he Te r m SOFR Adm i ni s t r a t or ’ s W e bs i t e or t he Sc r e e n s o l ong a s s uc h f i r s t pr e c e di ng Bus i ne s s Da y i s not m or e t ha n t hr e e ( 3) Bus i ne s s Da ys pr i or t o s uc h De t e r m i na t i on Da t e . " Te r m SOFR Loa n” m e a ns a ny Loa n be a r i ng i nt e r e s t a t a r a t e ba s e d on Adj us t e d Te r m SOFR.
" Te r m i na t i ng Bor r owe r ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 13. 1. 1( b) . " Te r m i na t i on Da t e ” m e a ns ( a ) Apr i l 29, 2026, ( b) i f m a t ur i t y i s e xt e nde d pur s ua nt t o Se c t i on 6. 18, s uc h e xt e nde d t e r m i na t i on da t e a s de t e r m i ne d pur s ua nt t o s uc h Se c t i on, pr ovi de d t ha t t he " Te r m i na t i on Da t e ” wi t h r e s pe c t t o a ny Non- Ext e ndi ng Le nde r ( i nc l udi ng wi t h r e s pe c t t o t he pa ym e nt of Obl i ga t i ons owi ng t o s uc h Le nde r ) s ha l l be t he l a t e s t da t e t ha t s uc h Le nde r ha s c ons e nt e d t o a s i t s Te r m i na t i on Da t e pur s ua nt t o Se c t i on 6. 18 ( or , i f s uc h Le nde r ha s not c ons e nt e d t o a ny s uc h e xt e ns i on, t he or i gi na l Te r m i na t i on Da t e a s i n e f f e c t on t he Cl os i ng Da t e ) ; pr ovi de d f ur t he r , howe ve r , t ha t , i n e a c h c a s e , i f s uc h da t e i s not a Bus i ne s s Da y, t he r e s pe c t i ve Te r m i na t i on Da t e s ha l l be t he ne xt pr e c e di ng Bus i ne s s Da y, or ( c ) a ny e a r l i e r da t e on whi c h t he Aggr e ga t e Com m i t m e nt i s r e duc e d t o z e r o or ot he r wi s e t e r m i na t e d pur s ua nt t o t he t e r m s he r e of . " Ti t l e Doc um e nt s ” m e a ns a l l m a nuf a c t ur e r ’ s c e r t i f i c a t e s of or i gi n, m a nuf a c t ur e r s ’ s t a t e m e nt s of or i gi n, c e r t i f i c a t e s of t i t l e ,
c e r t i f i c a t e s of owne r s hi p a nd a ny ot he r doc um e nt s e vi de nc i ng owne r s hi p of a m ot or ve hi c l e or t he t r a ns f e r of owne r s hi p of a m ot or ve hi c l e f r om a m a nuf a c t ur e r or a not he r de a l e r t o a De a l e r s hi p, a nd a l l wa r e hous e r e c e i pt s , bi l l s of l a di ng a nd ot he r ne got i a bl e doc um e nt s of t i t l e . " Tr a de - i n Li e n” m e a ns , wi t h r e s pe c t t o a Us e d Ve hi c l e t ha t a c us t om e r t r a de d i n t o t he Com pa ny or a ny Subs i di a r y t he r e of , a ny s e c ur i t y i nt e r e s t i n s uc h Us e d Ve hi c l e out s t a ndi ng a t t he t i m e s uc h Us e d Ve hi c l e wa s t r a de d, t ha t s e c ur e s a ny i nde bt e dne s s or obl i ga t i on t o a ny Pe r s on i nc ur r e d by s uc h c us t om e r , i nc l udi ng but not l i m i t e d t o a m ount s owi ng t o a ny hol de r of a ny l i e n or s e c ur i t y i nt e r e s t i n a Us e d Ve hi c l e a t t he t i m e i t i s t r a de d i n t o a ny De a l e r s hi p. 45 115525625. 4 0063724- 00082
" U. S. Ba nk” m e a ns U. S. Ba nk Na t i ona l As s oc i a t i on, a na t i ona l ba nki ng a s s oc i a t i on, i n i t s i ndi vi dua l c a pa c i t y, a nd i t s s uc c e s s or s . " U. S. Gove r nm e nt Se c ur i t i e s Bus i ne s s Da y” m e a ns a ny da y e xc e pt f or ( i ) a Sa t ur da y, ( i i ) a Sunda y or ( i i i ) a da y on whi c h t he Se c ur i t i e s I ndus t r y a nd Fi na nc i a l M a r ke t s As s oc i a t i on r e c om m e nds t ha t t he f i xe d i nc om e de pa r t m e nt s of i t s m e m be r s be c l os e d f or t he e nt i r e da y f or pur pos e s of t r a di ng i n Uni t e d St a t e s gove r nm e nt s e c ur i t i e s . " Una dj us t e d Be nc hm a r k Re pl a c e m e nt ” m e a ns t he a ppl i c a bl e Be nc hm a r k Re pl a c e m e nt e xc l udi ng t he r e l a t e d Be nc hm a r k Re pl a c e m e nt Adj us t m e nt . " Undi s c l os e d Adm i ni s t r a t i on” m e a ns i n r e l a t i on t o a Le nde r t he a ppoi nt m e nt of a n a dm i ni s t r a t or , pr ovi s i ona l l i qui da t or , c ons e r va t or , r e c e i ve r , t r us t e e , c us t odi a n or ot he r s i m i l a r of f i c i a l by a s upe r vi s or y a ut hor i t y or r e gul a t or unde r or ba s e d on t he l a w i n t he c ount r y whe r e s uc h Le nde r i s s ubj e c t t o hom e j ur i s di c t i on s upe r vi s i on i f Appl i c a bl e La w r e qui r e s t ha t s uc h a ppoi nt m e nt i s not t o be publ i c l y di s c l os e d. " UK Fi na nc i a l I ns t i t ut i on”
m e a ns a ny BRRD Unde r t a ki ng ( a s s uc h t e r m i s de f i ne d unde r t he PRA Rul e book ( a s a m e nde d f or m t i m e t o t i m e ) pr om ul ga t e d by t he Uni t e d Ki ngdom Pr ude nt i a l Re gul a t i on Aut hor i t y) or a ny pe r s on f a l l i ng wi t hi n I FPRU 11. 6 of t he FCA Ha ndbook ( a s a m e nde d f r om t i m e t o t i m e ) pr om ul ga t e d by t he Uni t e d Ki ngdom Fi na nc i a l Conduc t Aut hor i t y, whi c h i nc l ude s c e r t a i n c r e di t i ns t i t ut i ons a nd i nve s t m e nt f i r m s , a nd c e r t a i n a f f i l i a t e s of s uc h c r e di t i ns t i t ut i ons or i nve s t m e nt f i r m s . " UK Re s ol ut i on Aut hor i t y” m e a ns t he Ba nk of Engl a nd or a ny ot he r publ i c a dm i ni s t r a t i ve a ut hor i t y ha vi ng r e s pons i bi l i t y f or t he r e s ol ut i on of a ny UK Fi na nc i a l I ns t i t ut i on. " Us e d Ve hi c l e ” m e a ns a Ve hi c l e whi c h i s he l d by a De a l e r s hi p f or s a l e i n t he or di na r y c our s e of bus i ne s s a nd whi c h i s not a Ne w Ve hi c l e or Se r vi c e Loa ne r Ve hi c l e . " Us e d Ve hi c l e Bor r owi ng Ba s e ” m e a ns , a s of a ny da t e of de t e r m i na t i on, t he a m ount e qua l t o ( a ) 85% m ul t i pl i e d by ( b) t he a m ount de t e r m i ne d, wi t hout dupl i c a t i on, a s f ol l ows : ( a ) t he a ggr e ga t e ne t book va l ue of t he Us e d Ve hi c l e i nve nt or y of t he
Com pa ny a nd i t s Subs i di a r i e s ; m i nus ( b) t he a ggr e ga t e ne t book va l ue of s uc h Us e d Ve hi c l e s i n whi c h t he Age nt doe s not ha ve a pe r f e c t e d, f i r s t - pr i or i t y s e c ur i t y i nt e r e s t ( i nc l udi ng ( i ) Us e d Ve hi c l e s owne d by a ny Si l o Subs i di a r y a nd ( i i ) Us e d Ve hi c l e s owne d by a ny Dua l Subs i di a r y wi t h r e s pe c t t o whi c h t he Age nt doe s not ha ve a pe r f e c t e d, f i r s t - pr i or i t y s e c ur i t y i nt e r e s t ( ot he r t ha n Us e d Ve hi c l e s s ubj e c t t o Tr a de - i n Li e ns ) ) ; m i nus ( c ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l a m ount of i nde bt e dne s s s e c ur e d by Tr a de - i n Li e ns ; m i nus 46 115525625. 4 0063724- 00082 ( d) t he a ggr e ga t e ne t book va l ue of s uc h Us e d Ve hi c l e s t ha t a r e not ot he r wi s e El i gi bl e Ve hi c l e s . Not wi t hs t a ndi ng t he f or e goi ng, i n no e ve nt s ha l l t he a ggr e ga t e ne t book va l ue of t he El i gi bl e Ve hi c l e s c ons i s t i ng of m ot or c yc l e s i nc l ude d i n t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e , Us e d Ve hi c l e Bor r owi ng Ba s e a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e e xc e e d $25, 000, 000. " Us e d Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e ” m e a ns a c e r t i f i c a t e s ubs t a nt i a l l y i n t he f or m a t t a c he d a s Exhi bi t B- 1, or i n s uc h ot he r
f or m a s i s a c c e pt a bl e t o t he Age nt . " Us e d Ve hi c l e Fl oor pl a n Adva nc e ” m e a ns a bor r owi ng c ons i s t i ng of t he Us e d Ve hi c l e Fl oor pl a n Loa ns t o be m a de by t he Le nde r s on a ny da t e . " Us e d Ve hi c l e Fl oor pl a n Bor r owe r ” m e a ns t he Com pa ny, i n i t s c a pa c i t y a s a n obl i gor on t he Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons whi c h r e l a t e t o t he c r e di t f a c i l i t i e s de s c r i be d i n Se c t i ons 3. 1 a nd 3. 2. " Us e d Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e ” m e a ns t he s um of ( a ) Adj us t e d Da i l y Si m pl e SOFR, Adj us t e d Te r m SOFR or t he Te r m SOFR Al t e r na t i ve Ra t e , a s de s i gna t e d by t he Com pa ny f r om t i m e t o t i m e , pl us ( b) t he Us e d Ve hi c l e Fl oor pl a n M a r gi n. " Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt ” m e a ns f or e a c h Le nde r , t he obl i ga t i on of s uc h Le nde r t o m a ke Us e d Ve hi c l e Fl oor pl a n Loa ns t o t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r a nd t o pa r t i c i pa t e i n Us e d Ve hi c l e Swi ng Li ne Loa ns i n a n a ggr e ga t e a m ount not e xc e e di ng t he a m ount s e t f or t h on Sc he dul e 1, a s s uc h a m ount m a y be m odi f i e d a s a r e s ul t of a ny a s s i gnm e nt or a s ot he r wi s e m odi f i e d f r om t i m e t o t i m e pur s ua nt t o Se c t i on 6. 17 or t he ot he r
pr ovi s i ons he r e of . " Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 1. 7. " Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e ” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Us e d Ve hi c l e Fl oor pl a n DDA” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 2. 7( b) . " Us e d Ve hi c l e Fl oor pl a n Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 1. 1. " Us e d Ve hi c l e Fl oor pl a n M a r gi n” ha s t he m e a ni ng s e t f or t h i n t he Pr i c i ng Sc he dul e . " Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons ” m e a ns a l l pr e s e nt a nd f ut ur e Us e d Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , a nd ot he r de bt s , l i a bi l i t i e s , obl i ga t i ons , r e i m bur s e m e nt s , i nde m ni t i e s , c ove na nt s , wa r r a nt i e s , dut i e s a nd obl i ga t i ons r e l a t i ng t he r e t o of t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r t o t he Age nt a nd t he Le nde r s unde r t hi s Agr e e m e nt , a nd t he ot he r Loa n Doc um e nt s , whe t he r now or he r e a f t e r e xi s t i ng or i nc ur r e d, whe t he r l i qui da t e d or unl i qui da t e d, whe t he r a bs ol ut e or c ont i nge nt , a nd i nc l udi ng wi t hout l i m i t a t i on pr i nc i pa l , i nt e r e s t , f e e s , At t or ne y Cos t s , e xpe ns e s a nd c ha r ge s r e l a t i ng t o a ny of t he
f or e goi ng. 47 115525625. 4 0063724- 00082
" Us e d Ve hi c l e Swe e p Adva nc e ” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 2. 7( a ) . " Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt ” ( whi c h i s a s ubl i m i t of t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Loa n Com m i t m e nt ) m e a ns a n a m ount e qua l t o $30, 000, 000. 0030, 000, 000. " Us e d Ve hi c l e Swi ng Li ne Loa n” ha s t he m e a ni ng s e t f or t h i n Se c t i on 3. 2. 1. " Us e d Ve hi c l e / Re vol vi ng/ Se r vi c e Loa ne r Ve hi c l e M ont hl y Pa ym e nt Da t e ” m e a ns t he t we nt i e t h da y of e a c h m ont h, or i f s uc h da y i s not a Bus i ne s s Da y, t he ne xt Bus i ne s s Da y. " Va l ue ” m e a ns , wi t h r e s pe c t t o a ny Re a l Pr ope r t y, t he f a i r m a r ke t va l ue of t he a ppl i c a bl e r e a l pr ope r t y a s de t e r m i ne d by t he Age nt ba s e d upon a ppr a i s a l s or ot he r e va l ua t i ons a c c e pt a bl e t o t he Age nt a nd i n c om pl i a nc e wi t h a l l r e gul a t or y r e qui r e m e nt s . " Ve hi c l e ” m e a ns a n a ut om obi l e , t r uc k, va n, m ot or c yc l e , or ot he r m ot or ve hi c l e . " Ve hi c l e Re t a i l i ng Ac t i vi t i e s ” m e a ns a ny ne w a nd us e d Ve hi c l e r e t a i l i ng, r e nt i ng, l e a s i ng, f i na nc i ng, s e r vi c i ng, r e pa i r i ng a nd r e l a t e d or c om pl e m e nt a r y a c t i vi t i e s , i nc l udi ng but not l i m i t e d t o t he s e l l i ng of f i na nc e a nd
i ns ur a nc e r e l a t e d pr oduc t s a nd a f t e r m a r ke t pa r t s a nd a c c e s s or i e s . " W r i t e - Down a nd Conve r s i on Powe r s ” m e a ns , ( a ) wi t h r e s pe c t t o a ny EEA Re s ol ut i on Aut hor i t y, t he wr i t e - down a nd c onve r s i on powe r s of s uc h EEA Re s ol ut i on Aut hor i t y f r om t i m e t o t i m e unde r t he Ba i l - I n Le gi s l a t i on f or t he a ppl i c a bl e EEA M e m be r Count r y, whi c h wr i t e - down a nd c onve r s i on powe r s a r e de s c r i be d i n t he EU Ba i l - I n Le gi s l a t i on Sc he dul e , a nd ( b) wi t h r e s pe c t t o t he Uni t e d Ki ngdom , a ny powe r s of t he a ppl i c a bl e Re s ol ut i on Aut hor i t y unde r t he Ba i l - I n Le gi s l a t i on t o c a nc e l , r e duc e , m odi f y or c ha nge t he f or m of a l i a bi l i t y of a ny UK Fi na nc i a l I ns t i t ut i on or a ny c ont r a c t or i ns t r um e nt unde r whi c h t ha t l i a bi l i t y a r i s e s , t o c onve r t a l l or pa r t of t ha t l i a bi l i t y i nt o s ha r e s , s e c ur i t i e s or obl i ga t i ons of t ha t pe r s on or a ny ot he r pe r s on, t o pr ovi de t ha t a ny s uc h c ont r a c t or i ns t r um e nt i s t o ha ve e f f e c t a s i f a r i ght ha d be e n e xe r c i s e d unde r i t or t o s us pe nd a ny obl i ga t i on i n r e s pe c t of t ha t l i a bi l i t y or a ny of t he powe r s unde r t ha t Ba i l - I n Le gi s l a t i on t ha t a r e r e l a t e d t o or
a nc i l l a r y t o a ny of t hos e powe r s . 1. 2 Di vi s i ons . For a l l pur pos e s unde r t he Loa n Doc um e nt s , i n c onne c t i on wi t h a ny di vi s i on or pl a n of di vi s i on unde r De l a wa r e l a w ( or a ny c om pa r a bl e e ve nt unde r a di f f e r e nt j ur i s di c t i on’ s l a ws ) : ( a ) i f a ny a s s e t , r i ght , obl i ga t i on or l i a bi l i t y of a ny Pe r s on be c om e s t he a s s e t , r i ght , obl i ga t i on or l i a bi l i t y of a di f f e r e nt Pe r s on, t he n i t s ha l l be de e m e d t o ha ve be e n t r a ns f e r r e d f r om t he or i gi na l Pe r s on t o t he s ubs e que nt Pe r s on, a nd ( b) i f a ny ne w Pe r s on c om e s i nt o e xi s t e nc e , s uc h ne w Pe r s on s ha l l be de e m e d t o ha ve be e n or ga ni z e d on t he f i r s t da t e of i t s e xi s t e nc e by t he hol de r s of i t s Equi t y I nt e r e s t s a t s uc h t i m e . 1. 3 Ot he r I nt e r pr e t i ve Pr ovi s i ons . 1. 3. 1 Unl e s s ot he r wi s e s pe c i f i e d, t he wor ds " he r e i n, ” " he r e of , ” " he r e t o, ” " he r e unde r ” a nd s i m i l a r t e r m s r e f e r t o t hi s Agr e e m e nt a s a whol e a nd not t o a ny pa r t i c ul a r 48 115525625. 4 0063724- 00082 pr ovi s i on of t hi s Agr e e m e nt a nd s ubs e c t i on, Se c t i on, a nd e xhi bi t r e f e r e nc e s a r e t o t hi s Agr e e m e nt . 1. 3. 2 The wor d " or ” s ha l l not be e xc l us i ve ; t he s i ngul a r i nc l ude s t he
pl ur a l a nd t he pl ur a l i nc l ude s t he s i ngul a r ; t he m a s c ul i ne , t he f e m i ni ne a nd ne ut e r ge nde r , e a c h i nc l ude t he m a s c ul i ne , f e m i ni ne a nd ne ut e r ge nde r ; a nd t he wor d " i nc l udi ng” i s not l i m i t i ng a nd m e a ns " i nc l udi ng wi t hout l i m i t a t i on. ” 1. 3. 3 Re f e r e nc e s t o a ny Loa n Doc um e nt s ha l l m e a n s uc h Loa n Doc um e nt a s a m e nde d, m odi f i e d, s uppl e m e nt e d or e xt e nde d f r om t i m e t o t i m e a nd a ny num be r of s ubs t i t ut i ons , r e ne wa l s , r e s t a t e m e nt s , c ons ol i da t i ons , a nd r e pl a c e m e nt s t he r e of or t he r e f or . 1. 3. 4 Re f e r e nc e s t o gove r nm e nt a l l a ws , s t a t ut e s , or di na nc e s , r ul e s a nd r e gul a t i ons s ha l l be c ons t r ue d a s i nc l udi ng a l l a m e ndm e nt s , c ons ol i da t i ons a nd r e pl a c e m e nt s t he r e of or t he r e f or . 1. 3. 5 He a di ngs i n t hi s Agr e e m e nt a nd e a c h of t he ot he r Loa n Doc um e nt s a r e f or c onve ni e nc e of r e f e r e nc e onl y a nd a r e not pa r t of t he s ubs t a nc e he r e of or t he r e of . 1. 3. 6 Te r m s us e d he r e i n wi t hout de f i ni t i on whi c h a r e de f i ne d i n t he Uni f or m Com m e r c i a l Code s ha l l ha ve t he m e a ni ngs gi ve n t o t he m i n s uc h Uni f or m Com m e r c i a l Code . 1. 3. 7 Exc e pt a s pr ovi de d t o t he c ont r a r y i n t hi s
Agr e e m e nt or a ny ot he r Loa n Doc um e nt s , a l l a c c ount i ng t e r m s us e d i n t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s s ha l l be i nt e r pr e t e d a nd a l l a c c ount i ng de t e r m i na t i ons s ha l l be m a de i n a c c or da nc e wi t h GAAP, i n a m a nne r c ons i s t e nt wi t h t ha t us e d i n pr e pa r i ng t he f i na nc i a l s t a t e m e nt s r e f e r r e d t o i n Se c t i on 11. 2, e xc e pt t ha t a ny c a l c ul a t i on or de t e r m i na t i on whi c h i s t o be m a de on a c ons ol i da t e d ba s i s s ha l l be m a de f or t he Com pa ny a nd a l l of i t s Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r Subs i di a r i e s ) , i nc l udi ng t hos e Subs i di a r i e s , i f a ny, whi c h a r e unc ons ol i da t e d on t he Com pa ny’ s a udi t e d f i na nc i a l s t a t e m e nt s ; pr ovi de d, howe ve r t ha t , not wi t hs t a ndi ng a ny ot he r pr ovi s i on c ont a i ne d he r e i n, a l l t e r m s of a n a c c ount i ng or f i na nc i a l na t ur e us e d he r e i n s ha l l be c ons t r ue d, a nd a l l c om put a t i ons of a m ount s a nd r a t i os r e f e r r e d t o he r e i n s ha l l be m a de , wi t hout gi vi ng e f f e c t t o ( a ) a ny e l e c t i on unde r Ac c ount i ng St a nda r ds Codi f i c a t i on Se c t i on 825- 10- 25 ( or a ny ot he r Ac c ount i ng St a nda r ds Codi f i c a t i on or Fi na nc i a l
Ac c ount i ng St a nda r d ha vi ng a s i m i l a r r e s ul t or e f f e c t ) t o va l ue a ny i nde bt e dne s s or ot he r l i a bi l i t i e s of t he Com pa ny or a ny of i t s Subs i di a r i e s a t " f a i r va l ue , ” a s de f i ne d t he r e i n, or ( b) a ny t r e a t m e nt of I nde bt e dne s s i n r e s pe c t of c onve r t i bl e de bt i ns t r um e nt s unde r Fi na nc i a l Ac c ount i ng St a nda r ds Codi f i c a t i on Subt opi c 470- 20 ( or a ny ot he r Ac c ount i ng St a nda r ds Codi f i c a t i on or Fi na nc i a l Ac c ount i ng St a nda r d ha vi ng a s i m i l a r r e s ul t or e f f e c t ) t o va l ue a ny s uc h I nde bt e dne s s i n a r e duc e d or bi f ur c a t e d m a nne r a s de s c r i be d t he r e i n, a nd s uc h I nde bt e dne s s s ha l l a t a l l t i m e s be va l ue d a t t he f ul l s t a t e d pr i nc i pa l a m ount t he r e of . I f a t a ny t i m e a ny c ha nge i n GAAP woul d a f f e c t t he c om put a t i on of a ny f i na nc i a l c ove na nt or r e qui r e m e nt s e t f or t h i n a ny Loa n Doc um e nt , a nd t he Com pa ny, t he Age nt or t he Re qui r e d Le nde r s s ha l l s o r e que s t , t he Age nt , t he Le nde r s a nd t he Bor r owe r s s ha l l ne got i a t e i n good f a i t h t o a m e nd s uc h r a t i o or r e qui r e m e nt t o pr e s e r ve t he or i gi na l i nt e nt t he r e of i n l i ght of s uc h c ha nge i n GAAP ( s ubj e c t t o t he a ppr ova l of t he Re qui r e d
Le nde r s ) ; pr ovi de d t ha t , unt i l s o a m e nde d, ( i ) s uc h r a t i o or r e qui r e m e nt s ha l l c ont i nue t o be c om put e d i n a c c or da nc e wi t h GAAP pr i or t o s uc h c ha nge t he r e i n a nd ( i i ) t he Bor r owe r s s ha l l pr ovi de t o t he Age nt a nd 49 115525625. 4 0063724- 00082
t he Le nde r s r e c onc i l i a t i on s t a t e m e nt s s howi ng t he di f f e r e nc e i n s uc h c a l c ul a t i on, t oge t he r wi t h t he de l i ve r y of t he f i na nc i a l s t a t e m e nt s a nd ot he r doc um e nt s r e qui r e d unde r t hi s Agr e e m e nt or a s r e a s ona bl y r e que s t e d by t he Age nt . Not wi t hs t a ndi ng t he f or e goi ng, f or pur pos e s of de t e r m i ni ng c om pl i a nc e wi t h a ny c ove na nt ( i nc l udi ng t he c om put a t i on of a ny f i na nc i a l c ove na nt ) c ont a i ne d he r e i n, t he de t e r m i na t i on of whe t he r a l e a s e i s t o be t r e a t e d a n ope r a t i ng l e a s e or a c a pi t a l l e a s e s ha l l be m a de wi t hout gi vi ng e f f e c t t o a ny c ha nge i n a c c ount i ng f or l e a s e s pur s ua nt t o GAAP r e s ul t i ng f r om t he i m pl e m e nt a t i on of FASB ASC 842 ( Le a s e s ) . 1. 4 Ra t e s . The i nt e r e s t r a t e on SOFR Loa ns i s de t e r m i ne d by r e f e r e nc e t o SOFR or t he Te r m SOFR Ba s e Ra t e , whi c h i s de r i ve d f r om SOFR. The Age nt doe s not wa r r a nt or a c c e pt a ny r e s pons i bi l i t y f or , a nd s ha l l not ha ve a ny l i a bi l i t y wi t h r e s pe c t t o, ( a ) t he c ont i nua t i on of , a dm i ni s t r a t i on of , s ubm i s s i on of , c a l c ul a t i on of or a ny ot he r m a t t e r r e l a t e d t o SOFR, t he Te r m SOFR Ba s e Ra t e , or a ny c om pone nt de f i ni t i on
t he r e of or r a t e s r e f e r r e d t o i n t he de f i ni t i on t he r e of , or wi t h r e s pe c t t o a ny a l t e r na t i ve , s uc c e s s or or r e pl a c e m e nt r a t e t he r e t o ( i nc l udi ng a ny Be nc hm a r k Re pl a c e m e nt ) , i nc l udi ng whe t he r t he c om pos i t i on or c ha r a c t e r i s t i c s of a ny s uc h a l t e r na t i ve , s uc c e s s or or r e pl a c e m e nt r a t e ( i nc l udi ng a ny Be nc hm a r k Re pl a c e m e nt ) , a s i t m a y or m a y not be a dj us t e d pur s ua nt t o Se c t i on 7. 3( b) , wi l l be s i m i l a r t o, or pr oduc e t he s a m e va l ue or e c onom i c e qui va l e nc e of , or ha ve t he s a m e vol um e or l i qui di t y a s , SOFR, t he Te r m SOFR Ba s e Ra t e or a ny ot he r Be nc hm a r k pr i or t o i t s di s c ont i nua nc e or una va i l a bi l i t y, or ( b) t he e f f e c t , i m pl e m e nt a t i on or c om pos i t i on of a ny Be nc hm a r k Re pl a c e m e nt Conf or m i ng Cha nge s . The Age nt a nd i t s Af f i l i a t e s or ot he r r e l a t e d e nt i t i e s m a y e nga ge i n t r a ns a c t i ons t ha t a f f e c t t he c a l c ul a t i on of SOFR or t he Te r m SOFR Ba s e Ra t e , a ny a l t e r na t i ve , s uc c e s s or or r e pl a c e m e nt r a t e ( i nc l udi ng a ny Be nc hm a r k Re pl a c e m e nt ) or a ny r e l e va nt a dj us t m e nt s t he r e t o a nd s uc h t r a ns a c t i ons m a y be a dve r s e t o t he Com pa ny. The Age nt m a y s e l e c t
i nf or m a t i on s our c e s or s e r vi c e s i n i t s r e a s ona bl e di s c r e t i on t o a s c e r t a i n SOFR, t he Te r m SOFR Ba s e Ra t e , or a ny ot he r Be nc hm a r k, a ny c om pone nt de f i ni t i on t he r e of or r a t e s r e f e r r e d t o i n t he de f i ni t i on t he r e of , i n e a c h c a s e pur s ua nt t o t he t e r m s of t hi s Agr e e m e nt , a nd s ha l l ha ve no l i a bi l i t y t o t he Com pa ny, a ny Le nde r or a ny ot he r pe r s on or e nt i t y f or da m a ge s of a ny ki nd, i nc l udi ng di r e c t or i ndi r e c t , s pe c i a l , puni t i ve , i nc i de nt a l or c ons e que nt i a l da m a ge s , c os t s , l os s e s or e xpe ns e s ( whe t he r i n t or t , c ont r a c t or ot he r wi s e a nd whe t he r a t l a w or i n e qui t y) , f or a ny e r r or or c a l c ul a t i on of a ny s uc h r a t e ( or c om pone nt t he r e of ) pr ovi de d by a ny s uc h i nf or m a t i on s our c e or s e r vi c e . 1. 5 Li m i t e d Condi t i on Ac qui s i t i on. I n t he e ve nt t ha t t he Com pa ny not i f i e s t he Age nt i n wr i t i ng t ha t a ny pr opos e d Ac qui s i t i on i s a Li m i t e d Condi t i on Ac qui s i t i on a nd t ha t t he Com pa ny wi s he s t o t e s t t he c ondi t i ons t o s uc h Ac qui s i t i on a nd t he I nde bt e dne s s t ha t i s t o be us e d t o f i na nc e s uc h Ac qui s i t i on i n a c c or da nc e wi t h t hi s Se c t i on 1. 5, t he n, s o l ong a s a gr e e d t o by t he
Age nt a nd t he l e nde r s pr ovi di ng s uc h I nde bt e dne s s , t he f ol l owi ng pr ovi s i ons s ha l l a ppl y: ( a ) a ny c ondi t i on t o s uc h Li m i t e d Condi t i on Ac qui s i t i on or s uc h I nde bt e dne s s t ha t r e qui r e s t ha t no De f a ul t or Eve nt of De f a ul t s ha l l ha ve oc c ur r e d a nd be c ont i nui ng a t t he t i m e of s uc h Li m i t e d Condi t i on Ac qui s i t i on or t he i nc ur r e nc e of s uc h I nde bt e dne s s , s ha l l be s a t i s f i e d i f ( i ) no De f a ul t or Eve nt of De f a ul t s ha l l ha ve oc c ur r e d a nd be c ont i nui ng a t t he t i m e of t he e xe c ut i on of t he de f i ni t i ve pur c ha s e a gr e e m e nt , m e r ge r a gr e e m e nt or ot he r a c qui s i t i on 50 115525625. 4 0063724- 00082 a gr e e m e nt gove r ni ng s uc h Li m i t e d Condi t i on Ac qui s i t i on ( t he " LCA Te s t Da t e ” ) a nd ( i i ) no Eve nt of De f a ul t unde r a ny of Se c t i on 14. 1. 1, 14. 1. 8 or 14. 1. 9 s ha l l ha ve oc c ur r e d a nd be c ont i nui ng bot h i m m e di a t e l y be f or e a nd i m m e di a t e l y a f t e r gi vi ng e f f e c t t o s uc h Li m i t e d Condi t i on Ac qui s i t i on a nd a ny I nde bt e dne s s i nc ur r e d i n c onne c t i on t he r e wi t h ( i nc l udi ng a ny s uc h a ddi t i ona l I nde bt e dne s s ) ; ( b) a ny c ondi t i on t o s uc h Li m i t e d Condi t i on Ac qui s i t i on or s uc h I nde bt e dne s s t ha t t he
r e pr e s e nt a t i ons a nd wa r r a nt i e s i n t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s s ha l l be t r ue a nd c or r e c t a t t he t i m e of c ons um m a t i on of s uc h Li m i t e d Condi t i on Ac qui s i t i on or t he i nc ur r e nc e of s uc h I nde bt e dne s s s ha l l be de e m e d s a t i s f i e d i f ( i ) a l l r e pr e s e nt a t i ons a nd wa r r a nt i e s i n t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s a r e t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s ( e xc e pt f or a ny r e pr e s e nt a t i on a nd wa r r a nt y t ha t i s qua l i f i e d by m a t e r i a l i t y or r e f e r e nc e t o M a t e r i a l Adve r s e Ef f e c t , whi c h s uc h r e pr e s e nt a t i on a nd wa r r a nt y s ha l l be t r ue a nd c or r e c t i n a l l r e s pe c t s ) a s of t he LCA Te s t Da t e , or i f s uc h r e pr e s e nt a t i on s pe a ks a s of a n e a r l i e r da t e , a s of s uc h e a r l i e r da t e a nd ( i i ) a s of t he da t e of c ons um m a t i on of s uc h Li m i t e d Condi t i on Ac qui s i t i on, ( A) t he r e pr e s e nt a t i ons a nd wa r r a nt i e s unde r t he r e l e va nt de f i ni t i ve a gr e e m e nt gove r ni ng s uc h Li m i t e d Condi t i on Ac qui s i t i on a s a r e m a t e r i a l t o t he l e nde r s pr ovi di ng s uc h I nde bt e dne s s s ha l l be t r ue a nd c or r e c t , but onl y t o t he e xt e nt t ha t t he Com pa ny or i t s a ppl i c a bl e Subs i di a r y ha s t he r i ght
t o t e r m i na t e i t s obl i ga t i ons unde r s uc h a gr e e m e nt or ot he r wi s e de c l i ne t o c l os e s uc h Li m i t e d Condi t i on Ac qui s i t i on a s a r e s ul t of a br e a c h of s uc h r e pr e s e nt a t i ons a nd wa r r a nt i e s or t he f a i l ur e of t hos e r e pr e s e nt a t i ons a nd wa r r a nt i e s t o be t r ue a nd c or r e c t a nd ( B) t he Spe c i f i e d Re pr e s e nt a t i ons s ha l l be t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s ( e xc e pt f or a ny r e pr e s e nt a t i on a nd wa r r a nt y t ha t i s qua l i f i e d by m a t e r i a l i t y or r e f e r e nc e t o M a t e r i a l Adve r s e Ef f e c t , whi c h s uc h r e pr e s e nt a t i on a nd wa r r a nt y s ha l l be t r ue a nd c or r e c t i n a l l r e s pe c t s ) ; ( c ) a ny f i na nc i a l r a t i o t e s t or c ondi t i on t o be t e s t e d i n c onne c t i on wi t h s uc h Li m i t e d Condi t i on Ac qui s i t i on a nd t he a va i l a bi l i t y of s uc h I nde bt e dne s s wi l l be t e s t e d a s of t he LCA Te s t Da t e , i n e a c h c a s e , a f t e r gi vi ng e f f e c t t o t he r e l e va nt Li m i t e d Condi t i on Ac qui s i t i on a nd r e l a t e d i nc ur r e nc e of I nde bt e dne s s , on a Pr o For m a Ba s i s whe r e a ppl i c a bl e , a nd, f or t he a voi da nc e of doubt , ( i ) s uc h r a t i os a nd ba s ke t s s ha l l not be t e s t e d a t t he t i m e of c ons um m a t i on of s uc h Li m i t e d Condi t i on Ac qui s i t i on a nd ( i i ) i f
a ny of s uc h r a t i os a r e e xc e e de d or c ondi t i ons a r e not m e t f ol l owi ng t he LCA Te s t Da t e , but pr i or t o t he c l os i ng of s uc h Li m i t e d Condi t i on Ac qui s i t i on, a s a r e s ul t of f l uc t ua t i ons i n s uc h r a t i o or a m ount ( i nc l udi ng due t o f l uc t ua t i ons i n EBI TDAR of t he Com pa ny or t he Pe r s on s ubj e c t t o s uc h Li m i t e d Condi t i on Ac qui s i t i on) , a t or pr i or t o t he c ons um m a t i on of t he r e l e va nt t r a ns a c t i on or a c t i on, s uc h r a t i os wi l l not be de e m e d t o ha ve be e n e xc e e de d a nd s uc h c ondi t i ons wi l l not be de e m e d unm e t a s a r e s ul t of s uc h f l uc t ua t i ons s ol e l y f or pur pos e s of de t e r m i ni ng whe t he r t he r e l e va nt t r a ns a c t i on or a c t i on i s pe r m i t t e d t o be c ons um m a t e d or t a ke n; ( d) e xc e pt a s pr ovi de d i n t he ne xt s e nt e nc e , i n c onne c t i on wi t h a ny s ubs e que nt c a l c ul a t i on of a ny r a t i o or ba s ke t on or f ol l owi ng t he r e l e va nt LCA Te s t Da t e a nd pr i or t o t he e a r l i e r of t he da t e on whi c h s uc h Li m i t e d Condi t i on Ac qui s i t i on i s c ons um m a t e d a nd t he da t e t ha t t he de f i ni t i ve a gr e e m e nt f or s uc h Li m i t e d Condi t i on Ac qui s i t i on i s t e r m i na t e d or e xpi r e s wi t hout c ons um m a t i on of s uc h Li m i t e d
Condi t i on Ac qui s i t i on, a ny s uc h r a t i o or ba s ke t s ha l l be c a l c ul a t e d a s s um i ng s uc h Li m i t e d Condi t i on Ac qui s i t i on a nd ot he r t r a ns a c t i ons i n c onne c t i on t he r e wi t h ( i nc l udi ng t he i nc ur r e nc e or a s s um pt i on of I nde bt e dne s s ) ha ve not be e n c ons um m a t e d. Not wi t hs t a ndi ng t he f or e goi ng, a ny c a l c ul a t i on of a r a t i o i n c onne c t i on wi t h de t e r m i ni ng t he 51 115525625. 4 0063724- 00082
Appl i c a bl e M a r gi n a nd de t e r m i ni ng whe t he r or not t he Com pa ny i s i n c om pl i a nc e wi t h t he f i na nc i a l c ove na nt s s e t f or t h i n Se c t i on 11. 1 s ha l l , i n e a c h c a s e be c a l c ul a t e d a s s um i ng s uc h Li m i t e d Condi t i on Ac qui s i t i on a nd ot he r t r a ns a c t i ons i n c onne c t i on t he r e wi t h ( i nc l udi ng t he i nc ur r e nc e or a s s um pt i on of I nde bt e dne s s ) ha ve not be e n c ons um m a t e d. The f or e goi ng pr ovi s i ons s ha l l a ppl y wi t h s i m i l a r e f f e c t dur i ng t he pe nde nc y of m ul t i pl e Li m i t e d Condi t i on Ac qui s i t i ons s uc h t ha t e a c h of t he pos s i bl e s c e na r i os i s s e pa r a t e l y t e s t e d. ARTI CLE 2 NEW VEHI CLE FLOORPLAN LI NE OF CREDI T 2. 1 Ne w Ve hi c l e Fl oor pl a n Loa ns . 2. 1. 1 Ne w Ve hi c l e Fl oor pl a n Loa n Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , e a c h Le nde r s e ve r a l l y a nd not j oi nt l y a gr e e s t o m a ke l oa ns ( e a c h a " Ne w Ve hi c l e Fl oor pl a n Loa n” a nd c ol l e c t i ve l y, t he " Ne w Ve hi c l e Fl oor pl a n Loa ns ” ) t o t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s on a r e vol vi ng c r e di t ba s i s dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o but not i nc l udi ng t he Te r m i na t i on Da t e ; pr ovi de d t ha t ( a ) t he a ggr e ga t e
out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns m a de by e a c h Le nde r , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of s uc h Le nde r ’ s pa r t i c i pa t i ng i nt e r e s t i n t he Ne w Ve hi c l e Swi ng Li ne Loa ns , s ha l l not a t a ny t i m e e xc e e d a n a m ount e qua l t o s uc h Le nde r ’ s Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt ; ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Ne w Ve hi c l e Fl oor pl a n Loa ns s ha l l not a t a ny t i m e e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , a nd ( c ) e xc e pt a s s e t f or t h i n Se c t i on 2. 2. 7( b) , t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Ne w Ve hi c l e Fl oor pl a n Loa ns , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Ne w Ve hi c l e Swi ng Li ne Loa ns , s ha l l not a t a ny t i m e e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons he r e of , t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s m a y bor r ow, pr e pa y a nd r e bor r ow Ne w Ve hi c l e Fl oor pl a n Loa ns . 2. 1. 2 Pur pos e of Ne w Ve hi c l e Fl oor pl a n Loa ns . The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l us e t he pr oc e e ds of t he
Ne w Ve hi c l e Fl oor pl a n Loa ns t o f i na nc e El i gi bl e Ne w Ve hi c l e s owne d by t he Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps ( i nc l udi ng t o r e f i na nc e For m e r Le nde r Loa ns ) a nd t o r e f i na nc e Ne w Ve hi c l e Swi ng Li ne Loa ns . 2. 1. 3 Re que s t s f or Ne w Ve hi c l e Fl oor pl a n Loa ns . Subj e c t t o Se c t i on 2. 2. 6, whe ne ve r t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s wi s h t o obt a i n a Ne w Ve hi c l e Fl oor pl a n Loa n Adva nc e , t he Com pa ny s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) a t l e a s t one Bus i ne s s Da y pr i or t o t he da t e of t he r e que s t e d bor r owi ng. Suc h not i c e s ha l l s pe c i f y t he r e que s t e d bor r owi ng da t e ( whi c h m us t be a Bus i ne s s Da y) , t he a m ount of t he Ne w Ve hi c l e Fl oor pl a n Loa n Adva nc e , a nd i nc l ude a ny ot he r i nf or m a t i on a nd doc um e nt a t i on r e a s ona bl y r e que s t e d by t he Age nt , i nc l udi ng, but not l i m i t e d t o, t he m a ke , m ode l a nd ve hi c l e i de nt i f i c a t i on num be r of e a c h Ne w Ve hi c l e t o be f i na nc e d t he r e by. The Age nt wi l l pr om pt l y not i f y e a c h Le nde r of i t s r e c e i pt of a ny r e que s t f or a Ne w Ve hi c l e Fl oor pl a n Loa n Adva nc e a nd of t he a m ount of i t s Pr o Ra t a Sha r e of
s uc h Ne w Ve hi c l e Fl oor pl a n Loa n Adva nc e . 52 115525625. 4 0063724- 00082 2. 1. 4 Fundi ng of Ne w Ve hi c l e Fl oor pl a n Loa ns . I f t he Age nt not i f i e s t he Le nde r s of a r e que s t f or a Ne w Ve hi c l e Fl oor pl a n Loa n Adva nc e by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, e a c h Le nde r wi l l de l i ve r i t s Pr o Ra t a Sha r e of s uc h Ne w Ve hi c l e Fl oor pl a n Loa n Adva nc e t o t he Age nt by 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h not i f i c a t i on. 2. 1. 5 Ne w Ve hi c l e Fl oor pl a n Pa ym e nt s . ( a ) I nt e r e s t Pa ym e nt s . I nt e r e s t on t he unpa i d pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns s ha l l be pa i d m ont hl y by t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s i n a n a m ount e qua l t o a l l i nt e r e s t a c c r ue d dur i ng t he pr i or c a l e nda r m ont h. Suc h i nt e r e s t pa ym e nt s s ha l l be m a de on e a c h Ne w Ve hi c l e M ont hl y Pa ym e nt Da t e c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur f ol l owi ng t he Cl os i ng Da t e a nd c ont i nui ng t he r e a f t e r . Al l a c c r ue d i nt e r e s t out s t a ndi ng on t he Te r m i na t i on Da t e s ha l l be due a nd pa ya bl e i n f ul l on t he Te r m i na t i on Da t e . ( b) Vol unt a r y Pr i nc i pa l Pa ym e nt s . The Ne w Ve hi c l e
Fl oor pl a n Bor r owe r s m a y m a ke vol unt a r y r e pa ym e nt s of a l l or a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns i f t he Com pa ny gi ve s Age nt wr i t t e n or t e l e phoni c not i c e of s uc h vol unt a r y r e pa ym e nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) a t l e a s t one Bus i ne s s Da y pr i or t o t he da t e of s uc h r e pa ym e nt ; pr ovi de d t ha t e a c h s uc h vol unt a r y pr i nc i pa l r e pa ym e nt s ha l l be i n a m i ni m um a m ount of $1, 000, 000. 001, 000, 000 a nd i n m ul t i pl e s of $100, 000. 00100, 000 a bove s uc h a m ount unl e s s t he Ne w Ve hi c l e Fl oor pl a n Loa ns a r e be i ng r e pa i d i n f ul l . Suc h not i c e s ha l l s pe c i f y t he a nt i c i pa t e d da t e of t he vol unt a r y r e pa ym e nt a nd t he pr i nc i pa l a m ount of t he Ne w Ve hi c l e Fl oor pl a n Loa ns t ha t wi l l be r e pa i d on s uc h da t e . Any vol unt a r y r e pa ym e nt of t he Ne w Ve hi c l e Fl oor pl a n Loa ns t ha t i s r e c e i ve d by t he Age nt wi t hout s uc h not i c e s ha l l be de e m e d t o ha ve be e n r e c e i ve d by t he Age nt on t he Bus i ne s s Da y a f t e r s uc h pa ym e nt i s a c t ua l l y r e c e i ve d by t he Age nt a nd i nt e r e s t s ha l l a c c r ue on t he a m ount s s o r e pa i d t hr ough t he da t e of s uc h de e m e d
r e c e i pt . ( c ) Pr i nc i pa l Pa ym e nt a t M a t ur i t y. The e nt i r e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns pl us a l l i nt e r e s t a c c r ue d t he r e on s ha l l be due a nd pa ya bl e i n f ul l by t he Fl oor pl a n Bor r owe r s on t he Te r m i na t i on Da t e . ( d) Pr i nc i pa l Pa ym e nt Upon Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e . I f t he Com pa ny t e r m i na t e s t he de s i gna t i on of a Subs i di a r y a s a " Ne w Ve hi c l e Fl oor pl a n Bor r owe r ” wi t h r e s pe c t t o a ny Re m ove d Fr a nc hi s e i n a c c or da nc e wi t h Se c t i on 6. 19, t he n t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ( j oi nt l y a nd s e ve r a l l y) s ha l l r e pa y e a c h Ne w Ve hi c l e Fl oor pl a n Loa n a nd e a c h Ne w Ve hi c l e Swi ng Li ne Loa n wi t h r e s pe c t t o a ny Ne w Ve hi c l e t ha t i s s ubs e que nt l y f i na nc e d by Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s a t s uc h Re m ove d Fr a nc hi s e i m m e di a t e l y upon t he Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e . 2. 1. 6 Vol unt a r y Re duc t i on or Te r m i na t i on of Com m i t m e nt . The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s m a y f r om t i m e t o t i m e on a t l e a s t t e n ( 10) Bus i ne s s Da y’ s pr i or wr i t t e n not i c e by t he Com pa ny t o t he Age nt ( whi c h s ha l l pr om pt l y
a dvi s e e a c h Le nde r t he r e of ) pe r m a ne nt l y r e duc e t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt t o a n a m ount not l e s s t ha n t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns ( whi c h, f or pur pos e s of t hi s de t e r m i na t i on, s ha l l not be de e m e d t o be 53 115525625. 4 0063724- 00082
r e duc e d by a m ount s i n PR Ac c ount s ) . Conc ur r e nt l y wi t h a ny r e duc t i on of t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt t o z e r o, ( a ) no f ur t he r Ne w Ve hi c l e Fl oor pl a n Loa ns or Ne w Ve hi c l e Swi ng Li ne Loa ns wi l l be m a de , ( b) Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y a l l pr i nc i pa l a nd i nt e r e s t on t he Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns a nd a l l f e e s a nd ot he r a m ount s owi ng t o t he Age nt a nd t he Le nde r s , a nd ( c ) t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l de l i ve r t o t he Age nt f unds i n a n a m ount whi c h t he Age nt e s t i m a t e s i t or t he Swi ng Li ne Le nde r m a y be r e qui r e d t o pa y pur s ua nt t o Pa ym e nt Com m i t m e nt s whi c h m a y be pr e s e nt e d a f t e r t he Te r m i na t i on Da t e , s uc h c ol l a t e r a l t o be he l d i n t he Pa ym e nt Com m i t m e nt Col l a t e r a l Ac c ount . Al l r e duc t i ons of t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt s ha l l r e duc e t he Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt s pr o r a t a a m ong t he Le nde r s a c c or di ng t o t he i r r e s pe c t i ve Pr o Ra t a Sha r e s ; a nd e xc e pt a s ot he r wi s e s e t f or t h i n t he pr ovi s o t o t hi s Se c t i on 2. 1. 6, s ha l l r e duc e t he Ne w Ve hi c l e
Swi ng Li ne Com m i t m e nt i n pr opor t i on t o t he r e duc t i on of t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt ; pr ovi de d, howe ve r , t ha t ( unl e s s t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt i s r e duc e d t o l e s s t ha n s uc h a m ount ) , t he Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt s ha l l not be r e duc e d. 2. 1. 7 Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e . The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s a gr e e t o pa y t o t he Age nt , f or t he a c c ount of t he Le nde r s , a c om m i t m e nt f e e ( t he " Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e ” ) c a l c ul a t e d a t a pe r a nnum r a t e e qua l t o t he Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e on t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he s um of ( a ) t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns on e a c h da y ( i t be i ng unde r s t ood t ha t a ny por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns c e a s e s t o be out s t a ndi ng unde r t he Ne w Ve hi c l e Swi ng Li ne Loa ns a nd c om m e nc e s be i ng a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e unde r t he Ne w
Ve hi c l e Fl oor pl a n Loa ns on t he da t e t ha t t he Ne w Ve hi c l e Fl oor pl a n Loa ns a r e f unde d t o r e pa y s uc h por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns ) ; pl us ( b) t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns on e a c h da y; pr ovi de d t ha t , i f t he a ggr e ga t e a m ount of t he Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e f or a ny pe r i od t o t he Le nde r s ot he r t ha n t he Swi ng Li ne Le nde r ( a s s e t f or t h i n t he t hi r d s e nt e nc e of t hi s pa r a gr a ph) e xc e e ds t he a m ount c a l c ul a t e d unde r t hi s s e nt e nc e , t he n t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s a gr e e t o pa y t o t he Age nt , f or t he a c c ount of s uc h Le nde r s , s uc h a ddi t i ona l a m ount s s o t ha t e a c h Le nde r ot he r t ha n t he Swi ng Li ne Le nde r r e c e i ve s t he f ul l a m ount of Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e de s c r i be d i n t he t hi r d s e nt e nc e of t hi s pa r a gr a ph. The a c c r ue d Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e s ha l l be due a nd pa ya bl e i n a r r e a r s on e a c h Qua r t e r l y Pa ym e nt Da t e he r e a f t e r a nd on t he Te r m i na t i on Da t e f or t he t hr e e m ont h pe r i od or ot he r t i m e pe r i od
e ndi ng on t he l a s t da y of t he pr e c e di ng f i s c a l qua r t e r or on t he Te r m i na t i on Da t e . The Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e t o e a c h Le nde r ot he r t ha n t he Swi ng Li ne Le nde r s ha l l be ba s e d upon t he a m ount de t e r m i ne d by m ul t i pl yi ng s uc h Le nde r ’ s Pr o Ra t a Sha r e by t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns on e a c h da y. The Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e t o t he Le nde r whi c h i s t he Swi ng Li ne Le nde r s ha l l be ba s e d upon t he a m ount de t e r m i ne d by m ul t i pl yi ng s uc h Le nde r ’ s Pr o Ra t a Sha r e by t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns on e a c h da y a nd s ubt r a c t i ng f r om t ha t a m ount t he a ve r a ge da i l y out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns ; pr ovi de d, howe ve r , t ha t not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on of 54 115525625. 4 0063724- 00082
Se c t i on 2. 6, s ol e l y f or pur pos e s of c a l c ul a t i ng t he a m ount pa ya bl e t o Swi ng Li ne Le nde r , t he pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns s ha l l be de e m e d t o be r e duc e d by t he a ggr e ga t e ba l a nc e i n t he PR Ac c ount s , but i n no e ve nt s ha l l be r e duc e d t o l e s s t ha n z e r o. 2. 2 Ne w Ve hi c l e Swi ng Li ne Loa ns . 2. 2. 1 Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , t he Swi ng Li ne Le nde r s ha l l m a ke l oa ns ( e a c h, a " Ne w Ve hi c l e Swi ng Li ne Loa n” ) t o t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s on a r e vol vi ng c r e di t ba s i s dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o but not i nc l udi ng t he Te r m i na t i on Da t e ; pr ovi de d t ha t , e xc e pt a s s e t f or t h i n Se c t i on 2. 2. 7( b) , ( a ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns s ha l l not a t a ny t i m e e xc e e d t he Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt ; a nd ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Ne w Ve hi c l e Fl oor pl a n Loa ns m a de by a l l Le nde r s pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Ne w Ve hi c l e Swi ng Li ne Loa ns , s ha l l not a t a ny t i m e e xc e e d t he
Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons he r e of , t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s m a y bor r ow, pr e pa y a nd r e bor r ow Ne w Ve hi c l e Swi ng Li ne Loa ns . 2. 2. 2 Pur pos e of Ne w Ve hi c l e Swi ng Li ne Loa ns . The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l us e t he pr oc e e ds of t he Ne w Ve hi c l e Swi ng Li ne Loa ns t o f i na nc e El i gi bl e Ne w Ve hi c l e s ( i nc l udi ng t o r e f i na nc e For m e r Le nde r Loa ns ) . 2. 2. 3 Re que s t s f or Ne w Ve hi c l e Swi ng Li ne Loa ns . Subj e c t t o Se c t i ons 2. 2. 7 a nd 2. 6. 2, whe ne ve r t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s wi s h t o obt a i n a Ne w Ve hi c l e Swi ng Li ne Loa n, t he Com pa ny s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 1: 00 p. m . ( Pa c i f i c Ti m e ) on t he r e que s t e d da t e of s uc h Ne w Ve hi c l e Swi ng Li ne Loa n unl e s s Swi ng Li ne Le nde r a gr e e s i n e a c h i ns t a nc e , i n i t s s ol e di s c r e t i on, t o a s hor t e r t i m e pe r i od. Suc h not i c e s ha l l s pe c i f y t he r e que s t e d bor r owi ng da t e ( whi c h m us t be a Bus i ne s s Da y) a nd t he a m ount of t he Ne w Ve hi c l e Swi ng Li ne Loa n, a nd i nc l ude a ny ot he r i nf or m a t i on a nd doc um e nt a t i on r e a s ona bl y r e que s t e d by t he
Age nt , i nc l udi ng, but not l i m i t e d t o, t he m a ke , m ode l a nd ve hi c l e i de nt i f i c a t i on num be r of e a c h Ne w Ve hi c l e t o be f i na nc e d t he r e by. 2. 2. 4 Ne w Ve hi c l e Swi ng Li ne Loa n Pa ym e nt s . ( a ) I nt e r e s t Pa ym e nt s . I nt e r e s t on t he unpa i d pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns s ha l l be pa i d m ont hl y by t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s i n a n a m ount e qua l t o a l l i nt e r e s t a c c r ue d dur i ng t he pr i or c a l e nda r m ont h. Suc h i nt e r e s t pa ym e nt s s ha l l be m a de on e a c h Ne w Ve hi c l e M ont hl y Pa ym e nt Da t e c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur f ol l owi ng t he Cl os i ng Da t e a nd c ont i nui ng t he r e a f t e r . Al l a c c r ue d i nt e r e s t out s t a ndi ng on t he Te r m i na t i on Da t e s ha l l be due a nd pa ya bl e i n f ul l on t he Te r m i na t i on Da t e . ( b) Pr i nc i pa l Pa ym e nt s . The e nt i r e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns pl us a l l i nt e r e s t a c c r ue d t he r e on s ha l l be due a nd pa ya bl e i n f ul l by t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s on t he Te r m i na t i on Da t e . I n a ddi t i on, t he pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns s ha l l be due a nd pa ya bl e a s r e qui r e d by
Se c t i on 2. 2. 6. 55 115525625. 4 0063724- 00082
2. 2. 5 Pa r t i c i pa t i on i n Ne w Ve hi c l e Swi ng Li ne Loa ns . I m m e di a t e l y upon t he m a ki ng of a Ne w Ve hi c l e Swi ng Li ne Loa n by t he Swi ng Li ne Le nde r , t he Swi ng Li ne Le nde r s ha l l be de e m e d t o ha ve s ol d a nd t r a ns f e r r e d t o e a c h Le nde r a nd e a c h Le nde r s ha l l be de e m e d t o ha ve pur c ha s e d a nd r e c e i ve d f r om t he Swi ng Li ne Le nde r , wi t hout a ny f ur t he r a c t i on by a ny pa r t y, a n undi vi de d pa r t i c i pa t i ng i nt e r e s t i n e a c h Ne w Ve hi c l e Swi ng Li ne Loa n i n a n a m ount e qua l t o s uc h Le nde r ’ s Pr o Ra t a Sha r e ; pr ovi de d, howe ve r , t ha t ( a ) no Le nde r s ha l l be r e qui r e d t o f und i t s pa r t i c i pa t i on i n a ny Ne w Ve hi c l e Swi ng Li ne Loa n e xc e pt a s s e t f or t h i n Se c t i on 2. 2. 6( b) , a nd ( b) no Le nde r s ha l l be e nt i t l e d t o s ha r e i n a ny pa ym e nt s of pr i nc i pa l or i nt e r e s t i n r e s pe c t of i t s pa r t i c i pa t i on e xc e pt , wi t h r e s pe c t t o a ny pa r t i c i pa t i on f unde d by s uc h Le nde r , a s s e t f or t h he r e i n. Suc h pa r t i c i pa t i on s ha l l be s ubj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt . 2. 2. 6 Se t t l e m e nt of Ne w Ve hi c l e Swi ng Li ne Loa ns . ( a ) Re f undi ng of Loa ns . ( i ) Upon t he r e que s t of t he Swi ng Li ne Le nde r , t he Age nt
f r om t i m e t o t i m e s ha l l , on be ha l f of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ( a nd e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e by i r r e voc a bl y a ut hor i z e s t he Age nt t o s o a c t on i t s be ha l f ) r e que s t e a c h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s a Le nde r ) t o m a ke a Ne w Ve hi c l e Fl oor pl a n Loa n Adva nc e t o t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , i n a c c or da nc e wi t h t he pr ovi s i ons of t hi s Se c t i on 2. 2. 6( a ) , whi c h s ha l l be a ppl i e d t o r e pa y a l l or a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns ( e a c h s uc h Ne w Ve hi c l e Fl oor pl a n Loa n, a " Re f undi ng Ne w Ve hi c l e Fl oor pl a n Loa n” ) , i n a n a m ount e qua l t o t ha t Le nde r ’ s Pr o Ra t a Sha r e of a l l or a por t i on of t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns . ( i i ) W i t hout l i m i t i ng t he f or e goi ng, e a c h Le nde r a gr e e s t ha t t he Age nt m a y r e que s t t he Le nde r s t o m a ke Re f undi ng Ne w Ve hi c l e Fl oor pl a n Loa ns a t a ny t i m e i f ( A) a De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng, or ( B) i n t he j udgm e nt of Swi ng Li ne Le nde r , t a ki ng i nt o a c c ount t he out s t a ndi ng pr i nc i pa l
ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns , t he a nt i c i pa t e d us a ge of t he Ne w Ve hi c l e Swi ng Li ne Loa ns , s uc h Re f undi ng Ne w Ve hi c l e Fl oor pl a n Loa ns a r e r e a s ona bl y ne c e s s a r y t o e ns ur e t ha t t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns wi l l not a t a ny t i m e e xc e e d t he Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt ( i t be i ng unde r s t ood t ha t i n or de r t o a t t a i n s uc h obj e c t i ve , Swi ng Li ne Le nde r m a y r e que s t r e f undi ng of t he Ne w Ve hi c l e Swi ng Li ne Loa ns e ve n t hough t he pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns a t t he t i m e of s uc h r e que s t i s l e s s t ha n t he Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt ) . ( i i i ) I f t he Age nt m a ke s a r e que s t f or f undi ng unde r t hi s Se c t i on 2. 2. 6( a ) by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, t he Le nde r s wi l l de l i ve r t he r e qui r e d a m ount t o t he Age nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h r e que s t . The pr oc e e ds of a l l Re f undi ng Ne w Ve hi c l e Fl oor pl a n Loa ns s ha l l be pa i d by t he Age nt t o t he Swi ng Li ne Le nde r i n r e pa ym e nt of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he a ppl i c a bl e
Ne w Ve hi c l e Swi ng Li ne Loa ns . ( b) Fundi ng of Pa r t i c i pa t i ons . I n a ddi t i on t o t he r i ght of t he Swi ng Li ne Le nde r t o r e que s t r e f undi ng of t he Ne w Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 56 115525625. 4 0063724- 00082 2. 2. 6( a ) , upon t he r e que s t of t he Swi ng Li ne Le nde r , t he Age nt m a y r e que s t e a c h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s a Le nde r ) t o f und i t s pa r t i c i pa t i on i n t he Ne w Ve hi c l e Swi ng Li ne Loa ns by pa yi ng t o t he Age nt , f or t he a c c ount of t he Swi ng Li ne Le nde r , i t s Pr o Ra t a Sha r e of t he pr i nc i pa l a m ount of t he Ne w Ve hi c l e Swi ng Li ne Loa ns . I f t he Age nt m a ke s s uc h r e que s t by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, t he Le nde r s wi l l de l i ve r s uc h a m ount t o t he Age nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h r e que s t . Al l pa r t i c i pa t i ons f unde d by t he Le nde r s unde r t hi s Se c t i on 2. 2. 6( b) s ha l l be t r e a t e d a s t he f undi ng of Ne w Ve hi c l e Fl oor pl a n Loa ns f or pur pos e s of t he c a l c ul a t i on of t he Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e . I f a ny pa ym e nt pa i d t o a ny Le nde r wi t h r e s pe c t t o i t s
pa r t i c i pa t i ng i nt e r e s t i n a ny Ne w Ve hi c l e Swi ng Li ne Loa n i s t he r e a f t e r r e c ove r e d f r om or m us t be r e t ur ne d or pa i d ove r by Swi ng Li ne Le nde r f or a ny r e a s on, s uc h Le nde r wi l l pa y t o t he Age nt f or t he a c c ount of t he Swi ng Li ne Le nde r , s uc h Le nde r ’ s Pr o Ra t a Sha r e of s uc h a m ount a nd of a ny i nt e r e s t a nd ot he r a m ount s pa i d or pa ya bl e by t he Swi ng Li ne Le nde r wi t h r e s pe c t t o s uc h a m ount . The Age nt a gr e e s not t o r e que s t a ny f undi ng of t he Le nde r ’ s pa r t i c i pa t i ons i n t he Ne w Ve hi c l e Swi ng Li ne Loa ns unde r t hi s Se c t i on 2. 2. 6( b) a t a ny t i m e t ha t s uc h pa r t i c i pa t i ons m a y be l e ga l l y r e pa i d us i ng a dva nc e s of t he Ne w Ve hi c l e Fl oor pl a n Loa ns unde r Se c t i on 2. 2. 6( a ) . ( c ) Pa ym e nt t o Swi ng Li ne Le nde r . Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on of t hi s Agr e e m e nt ( i ) e xc e pt a s s e t f or t h i n c l a us e ( i i ) of t hi s Se c t i on 2. 2. 6( c ) a l l pa ym e nt s of pr i nc i pa l a nd i nt e r e s t on t he Ne w Ve hi c l e Swi ng Li ne Loa ns s ha l l be pa i d by t he Age nt s ol e l y t o t he Swi ng Li ne Le nde r ; a nd ( i i ) wi t h r e s pe c t t o e a c h pa r t i c i pa t i on i n Ne w Ve hi c l e Swi ng Li ne Loa ns whi c h i s f unde d by a ny Le nde r ,
s uc h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s Le nde r ) s ha l l be e nt i t l e d t o r e c e i ve i t s Pr o Ra t a Sha r e of pa ym e nt s of ( A) pr i nc i pa l on s uc h Ne w Ve hi c l e Swi ng Li ne Loa ns a nd ( B) i nt e r e s t on s uc h Ne w Ve hi c l e Swi ng Li ne Loa ns onl y f or t he pe r i od f ol l owi ng t he da t e s uc h pa r t i c i pa t i on i s f unde d. ( d) Obl i ga t i ons Unc ondi t i ona l . The obl i ga t i on of e a c h Le nde r t o m a ke Ne w Ve hi c l e Fl oor pl a n Loa ns t o r e pa y Ne w Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 2. 2. 6( a ) or t o f und i t s pa r t i c i pa t i on i nt e r e s t s i n Ne w Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 2. 2. 6( b) s ha l l be a bs ol ut e a nd unc ondi t i ona l a nd s ha l l not be a f f e c t e d by t he oc c ur r e nc e of a De f a ul t or Eve nt of De f a ul t , t he f a c t t ha t a ny one or m or e of t he c ondi t i ons i n Ar t i c l e 9 i s not s a t i s f i e d, t he t e r m i na t i on of t he a va i l a bi l i t y of Loa ns , t he f a c t t ha t s uc h Ne w Ve hi c l e Fl oor pl a n Loa n i s m a de a f t e r t he Te r m i na t i on Da t e i n c om pl i a nc e wi t h t he t e r m s of a Pa ym e nt Com m i t m e nt or t o r e f i na nc e Ne w Ve hi c l e Swi ng Li ne Loa ns m a de pr i or t o t he Te r m i na t i on Da t e , a ny de f e ns e , s e t of f ,
c ount e r c l a i m or c l a i m f or r e c oupm e nt of a ny Le nde r a ga i ns t Age nt or Swi ng Li ne Le nde r or a ny ot he r c i r c um s t a nc e , whe t he r or not s i m i l a r t o t he f or e goi ng. Not wi t hs t a ndi ng t he f or e goi ng, t he Le nde r s s ha l l not be r e qui r e d t o r e f i na nc e Ne w Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 2. 2. 6( a ) or t o f und t he i r pa r t i c i pa t i on i nt e r e s t s i n Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 2. 2. 6( b) ( i ) i f a f t e r gi vi ng e f f e c t t he r e t o, t he out s t a ndi ng pr i nc i pa l ba l a nc e of s uc h Le nde r ’ s Ne w Ve hi c l e Fl oor pl a n Loa ns woul d e xc e e d i t s Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , or ( i i ) wi t h r e s pe c t t o a ny por t i ons of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns t ha t a r e f unde d by Swi ng Li ne Le nde r a f t e r Age nt i s de e m e d t o ha ve knowl e dge or not i c e of t he oc c ur r e nc e of a De f a ul t or a f t e r t he Te r m i na t i on Da t e . 2. 2. 7 Adva nc e s Pur s ua nt t o Pa ym e nt Com m i t m e nt . 57 115525625. 4 0063724- 00082
( a ) I n a ddi t i on t o Ne w Ve hi c l e Swi ng Li ne Loa ns m a de pur s ua nt t o Se c t i on 2. 2. 3, e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a ut hor i z e s Age nt a nd Swi ng Li ne Le nde r t o m a ke pa ym e nt di r e c t l y t o m a nuf a c t ur e r s or di s t r i but or s of Ve hi c l e s i n pa ym e nt f or Ne w Ve hi c l e s pur c ha s e d by a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r , i n a c c or da nc e wi t h t he t e r m s a nd c ondi t i ons of t he a ppl i c a bl e Pa ym e nt Com m i t m e nt . Ea c h pa ym e nt pur s ua nt t o a Pa ym e nt Com m i t m e nt s ha l l c ons t i t ut e a Ne w Ve hi c l e Swi ng Li ne Loa n he r e unde r i n t he a m ount of s uc h pa ym e nt . The Age nt , i n i t s s ol e di s c r e t i on, ( i ) m a y r e vi s e a Pa ym e nt Com m i t m e nt a t a ny t i m e , whe t he r or not a De f a ul t ha s oc c ur r e d, by gi vi ng wr i t t e n not i c e t o t he a ppl i c a bl e m a nuf a c t ur e r or di s t r i but or a nd t he Com pa ny, a nd ( i i ) m a y t e r m i na t e or s us pe nd a Pa ym e nt Com m i t m e nt a t a ny t i m e , whe t he r or not a De f a ul t ha s oc c ur r e d, by gi vi ng wr i t t e n not i c e t o t he a ppl i c a bl e m a nuf a c t ur e r or di s t r i but or , a nd i f no De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng, t o t he Com pa ny. Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ha l l be a nd r e m a i n
j oi nt l y a nd s e ve r a l l y l i a bl e t o Swi ng Li ne Le nde r f or a l l pa ym e nt s m a de t o a m a nuf a c t ur e r or di s t r i but or pur s ua nt t o a Pa ym e nt Com m i t m e nt . The Age nt a nd t he Le nde r s do not a s s um e a ny r e s pons i bi l i t y f or ( a nd e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r ’ s obl i ga t i on t o r e pa y a ny Adva nc e he r e unde r wi l l not be a f f e c t e d or i m pa i r e d i n a ny wa y by) t he c or r e c t ne s s , va l i di t y, ge nui ne ne s s or s uf f i c i e nc y of a ny r e que s t f or pa ym e nt by a m a nuf a c t ur e r or di s t r i but or unde r a Pa ym e nt Com m i t m e nt , a ny doc um e nt s pe r t a i ni ng t he r e t o or t he e xi s t e nc e , c ha r a c t e r , qua nt i t y, qua l i t y, c ondi t i on, we i ght , va l ue or de l i ve r y of a ny Ve hi c l e s pur c ha s e d wi t h t he pr oc e e ds of a ny Adva nc e . I n t hi s r e ga r d, t he Age nt m a y c onc l us i ve l y pr e s um e a nd r e l y upon t he va l i di t y a nd t he a ppr opr i a t e ne s s of a ny pa ym e nt r e que s t by a m a nuf a c t ur e r or di s t r i but or unde r a Pa ym e nt Com m i t m e nt a nd a ny a nd a l l doc um e nt s or i nf or m a t i on r e l a t e d t he r e t o. Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on he r e of , t he Age nt m a y t a ke s uc h a c t i on a s i s ne c e s s a r y t o t e r m i na t e a ny Pa ym e nt Com m i t m e nt s up t o
t e n ( 10) da ys pr i or t o t he Te r m i na t i on Da t e , s o t ha t no Pa ym e nt Com m i t m e nt s s ha l l be c om e pa ya bl e l a t e r t ha n t he Te r m i na t i on Da t e or , a t t he Age nt ’ s di s c r e t i on, up t o t e n ( 10) da ys pr i or t he r e t o. ( b) The pa r t i e s a c knowl e dge t ha t , due t o Pa ym e nt Com m i t m e nt s wi t h Ve hi c l e m a nuf a c t ur e r s a nd di s t r i but or s , Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps m a y be r e qui r e d t o pur c ha s e Ne w Ve hi c l e s whi c h m a y c a us e t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns t o e xc e e d t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt a nd/ or t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns t o e xc e e d t he Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt . The Swi ng Li ne Le nde r m a y, a t i t s opt i on, but wi t hout a ny obl i ga t i on t o do s o, m a ke a Ne w Ve hi c l e Swi ng Li ne Loa n t o f und t he a m ount due unde r a ny Pa ym e nt Com m i t m e nt e ve n i f s uc h Ne w Ve hi c l e Swi ng Li ne Loa n woul d c a us e t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns t o e xc e e d t he Aggr e ga t e Ne w Ve hi c l e
Fl oor pl a n Com m i t m e nt a nd/ or t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Swi ng Li ne Loa ns t o e xc e e d t he Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt . The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y t he a m ount of s uc h e xc e s s t o t he Age nt upon de m a nd a s s e t f or t h i n Se c t i on 2. 3. 4. 2. 3 Te r m s Appl i c a bl e t o Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns . 2. 3. 1 Ne w Ve hi c l e Loa n Li m i t s . 58 115525625. 4 0063724- 00082 ( a ) The a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns s ha l l not a t a ny t i m e e xc e e d t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt . ( b) Ne w Ve hi c l e Loa ns s ha l l onl y be m a de t o f i na nc e El i gi bl e Ne w Ve hi c l e s owne d by a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p. The a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Loa ns m a de t o f i na nc e El i gi bl e Ne w Ve hi c l e s ( i nc l udi ng Fl e e t Ve hi c l e s a nd De m os ) owne d by a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p s ha l l not a t a ny t i m e e xc e e d t he l i m i t ( " De a l e r s hi p Loa n Li m i t ” ) f or s uc h Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p whi c h i s a gr e e d t o
be t we e n Age nt a nd t he Com pa ny f r om t i m e t o t i m e or , i f a ppl i c a bl e , a ny m a nuf a c t ur e r , di s t r i but or , de a l e r s hi p l oc a t i on or ot he r s ubl i m i t s e t f or t h wi t hi n s uc h l i m i t ( " De a l e r s hi p Subl i m i t ” ) . ( c ) No m or e t ha n 10 De m os owne d by a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p or de a l e r s hi p l oc a t i on of a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p m a y be f i na nc e d a t a ny one t i m e . ( d) No Ne w Ve hi c l e Loa n Adva nc e t o f i na nc e El i gi bl e Ne w Ve hi c l e s ( i nc l udi ng Fl e e t Ve hi c l e s a nd De m os ) s ha l l e xc e e d a n a m ount e qua l t o 100% of t he a m ount of t he m a nuf a c t ur e r ’ s or di s t r i but or ’ s i nvoi c e ( i nc l udi ng f r e i ght , a dve r t i s i ng a nd hol dba c ks ) f or s uc h Ve hi c l e s . No Ne w Ve hi c l e Loa n Adva nc e t o r e f i na nc e For m e r Le nde r Loa ns s ha l l e xc e e d a n a m ount e qua l t o t he a m ount c a l c ul a t e d i n a c c or da nc e wi t h t he pr e c e di ng s e nt e nc e . 2. 3. 2 Cha nge s t o Ne w Ve hi c l e Fl oor pl a n Li m i t s a nd Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps . The Age nt a nd t he Com pa ny m a y f r om t i m e t o t i m e a gr e e ( wi t hout r e qui r i ng t he c ons e nt of a ny Le nde r or a ny ot he r Bor r owe r ) t o ( a ) i nc r e a s e or de c r e a s e t he De a l e r s hi p Loa n Li m i t
( or a ny De a l e r s hi p Subl i m i t ) f or a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p, ( b) c ha nge t he pe r m i t t e d m a nuf a c t ur e r s , di s t r i but or s or br a nds l i s t e d f or a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p; a nd ( c ) a dd or de l e t e Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps a nd e s t a bl i s h De a l e r s hi p Loa n Li m i t s a nd pe r m i t t e d m a nuf a c t ur e r s , di s t r i but or s a nd br a nds f or a ddi t i ona l Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps . 2. 3. 3 Addi t i ona l Re qui r e d Pa ym e nt s . I n a ddi t i on t o pa ym e nt s r e qui r e d by Se c t i ons 2. 1. 5( a ) , 2. 1. 5( c ) , 2. 2. 4( a ) , 2. 2. 4( b) , 2. 2. 6, a nd t he ot he r pr ovi s i ons he r e of , Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l a l s o r e pa y t he Ne w Ve hi c l e Loa ns a s f ol l ows ( whi c h pa ym e nt s do not r e qui r e pr i or not i c e t o t he Age nt or Le nde r s ) : ( a ) Sa l e of Ve hi c l e s . ( i ) The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y t o t he Age nt t he e nt i r e Re l a t e d Pr i nc i pa l Por t i on f or e a c h f i na nc e d Ne w Ve hi c l e ( e xc e pt Fl e e t Ve hi c l e s a nd De e m e d Sa l e s ) wi t hi n f i ve Bus i ne s s Da ys f ol l owi ng t he da t e of s a l e or l e a s e of s uc h Ne w Ve hi c l e ; a nd ( i i ) Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y t o t he Age nt t he e nt i r e Re l a t e d
Pr i nc i pa l Por t i on f or e a c h f i na nc e d Fl e e t Ve hi c l e by t he e a r l i e r of ( A) 3 Bus i ne s s Da ys f ol l owi ng a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p’ s r e c e i pt of pr oc e e ds f r om t he s a l e of s uc h Fl e e t Ve hi c l e , or ( B) ( 1) 45 c a l e nda r da ys f ol l owi ng t he da t e of s a l e of a ny Fl e e t Ve hi c l e s ol d t o a gove r nm e nt a l a ge nc y, or ( 2) 30 c a l e nda r da ys f ol l owi ng t he da t e of s a l e of a ny ot he r Fl e e t Ve hi c l e . 59 115525625. 4 0063724- 00082
( b) Uns ol d Ne w Ve hi c l e s . I f a ny Ne w Ve hi c l e ha s not be e n pr e vi ous l y s ol d, t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y t he e nt i r e Re l a t e d Pr i nc i pa l Por t i on f or s uc h Ne w Ve hi c l e t o t he Age nt on t he f i r s t Ne w Ve hi c l e M ont hl y Pa ym e nt Da t e whi c h i s a t l e a s t one ye a r f ol l owi ng t he Ne w Ve hi c l e Loa n Adva nc e Da t e f or s uc h Ne w Ve hi c l e ( " Re qui r e d Re pa ym e nt Da t e ” ) . Not wi t hs t a ndi ng t he f or e goi ng, t he Re l a t e d Pr i nc i pa l Por t i on f or uns ol d Ne w Ve hi c l e s r e pr e s e nt i ng up t o 5% of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Loa ns m a y r e m a i n unpa i d f ol l owi ng t he Re qui r e d Re pa ym e nt Da t e ; pr ovi de d t ha t t he Re l a t e d Pr i nc i pa l Por t i on f or e a c h uns ol d Ne w Ve hi c l e m us t be r e pa i d no l a t e r t ha n t he t hi r d Ne w Ve hi c l e M ont hl y Pa ym e nt Da t e f ol l owi ng t he Re qui r e d Re pa ym e nt Da t e f or s uc h Ne w Ve hi c l e . ( c ) De e m e d Sa l e s . I f a De e m e d Sa l e of a Ne w Ve hi c l e f i na nc e d by t he Le nde r s oc c ur s , t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y t o t he Age nt t he Re l a t e d Pr i nc i pa l Por t i on f or s uc h Ve hi c l e no l a t e r t ha n 6 Bus i ne s s Da ys f ol l owi ng t he da t e of a ny De e m e d Sa l e . A
" De e m e d Sa l e ” m e a ns a ny of t he f ol l owi ng: ( i ) A Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p di s pos e s of a Ne w Ve hi c l e by t r a de wi t h a not he r de a l e r or ot he r di s pos i t i on, ot he r t ha n a s a l e i n t he or di na r y c our s e of s uc h Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p’ s bus i ne s s , r e ga r dl e s s of whe t he r a ny pa ym e nt i s due t o be m a de by or t o s uc h Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p i n r e s pe c t of s uc h t r a de or ot he r di s pos i t i on. ( i i ) The Ne w Ve hi c l e c e a s e s t o m e e t t he c r i t e r i a c ont a i ne d i n t he de f i ni t i on of " El i gi bl e Ne w Ve hi c l e ” i n t hi s Agr e e m e nt . ( i i i ) Age nt r e a s ona bl y de t e r m i ne s t ha t t he f a i r m a r ke t va l ue of a Ne w Ve hi c l e ha s s i gni f i c a nt l y de c l i ne d, r e ga r dl e s s of t he r e a s on. 2. 3. 4 Addi t i ona l Pa ym e nt s . The Age nt a nd t he Le nde r s s ha l l ha ve no obl i ga t i on wha t s oe ve r , a nd t he y ha ve no pr e s e nt i nt e nt i on, t o m a ke a ny Ne w Ve hi c l e Fl oor pl a n Loa n or Ne w Ve hi c l e Swi ng Li ne Loa n a f t e r t he Te r m i na t i on Da t e or whi c h woul d c a us e t he pr i nc i pa l a m ount out s t a ndi ng unde r t hi s Agr e e m e nt t o e xc e e d a ny of t he l i m i t a t i ons s t a t e d i n t hi s Agr e e m e nt . The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s a r e a nd
s ha l l be a nd r e m a i n unc ondi t i ona l l y j oi nt l y a nd s e ve r a l l y l i a bl e t o t he Le nde r s f or , a nd t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s he r e by j oi nt l y a nd s e ve r a l l y pr om i s e t o pa y t o t he Age nt f or t he a c c ount of t he Le nde r s t he a m ount of a l l Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons he r e unde r , i nc l udi ng wi t hout l i m i t a t i on Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns i n e xc e s s of t he Swi ng Li ne Com m i t m e nt a nd/ or t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt ( whe t he r f unde d pur s ua nt t o Pa ym e nt Com m i t m e nt s or ot he r wi s e ) a nd Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns m a de a f t e r t he Te r m i na t i on Da t e . The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y t o t he Age nt : ( a ) upon de m a nd, or i f e a r l i e r i m m e di a t e l y upon be c om i ng a wa r e of t he ove r a dva nc e , t he a m ount of a ny Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns i n e xc e s s of a ny l i m i t a t i on c ont a i ne d i n t hi s Agr e e m e nt ; a nd ( b) upon de m a nd, t he a m ount of a ny Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns m a de a f t e r t he Te r m i na t i on Da t e ; t oge t he r
wi t h i nt e r e s t on t he pr i nc i pa l a m ount of s uc h Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns , a s s e t f or t h he r e i n. 60 115525625. 4 0063724- 00082 2. 3. 5 Pa ym e nt Com m i t m e nt Col l a t e r a l Ac c ount . At a ny t i m e a f t e r t he Te r m i na t i on Da t e or , i f e a r l i e r , t he da t e on whi c h t he a va i l a bi l i t y of Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns i s t e r m i na t e d, t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l de l i ve r t o t he Age nt f unds i n a n a m ount e qua l t o t he a m ount whi c h t he Age nt or Swi ng Li ne Le nde r e s t i m a t e s i t m a y be r e qui r e d t o pa y t o m a nuf a c t ur e r s a nd di s t r i but or s pur s ua nt t o Pa ym e nt Com m i t m e nt s whi c h m a y be pr e s e nt e d on or a f t e r s uc h da t e . Suc h f unds s ha l l be he l d i n a non- i nt e r e s t be a r i ng de pos i t a c c ount ( " Pa ym e nt Com m i t m e nt Col l a t e r a l Ac c ount ” ) a s a ddi t i ona l Col l a t e r a l f or t he i nde bt e dne s s of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s t o t he Le nde r s . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e by gr a nt s t o t he Age nt , f or t he be ne f i t of t he Le nde r s , a s e c ur i t y i nt e r e s t i n s uc h f unds a nd s uc h a c c ount t o s e c ur e a l l Ne w Ve hi c l e
Fl oor pl a n Obl i ga t i ons . 2. 4 Ne w Ve hi c l e Fl oor pl a n Bor r owe r s . 2. 4. 1 J oi nt a nd Se ve r a l Li a bi l i t y. Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ha l l be j oi nt l y a nd s e ve r a l l y l i a bl e ( e a c h a s a pr i m a r y obl i gor a nd not m e r e l y a s a s ur e t y or a c c om m oda t i on m a ke r ) f or r e pa ym e nt of t he Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns , a nd pa ym e nt a nd pe r f or m a nc e of a l l Obl i ga t i ons of a Ne w Ve hi c l e Fl oor pl a n Bor r owe r a nd/ or t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s t o t he Age nt a nd t he Le nde r s unde r t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s . W i t hout l i m i t i ng t he f or e goi ng, e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a c knowl e dge s a nd a gr e e s t ha t e a c h of t he m i s j oi nt l y a nd s e ve r a l l y l i a bl e f or a l l Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons , e ve n i f a n i nvoi c e , bi l l i ng or ot he r r e que s t f or pa ym e nt of s om e or a l l of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons i s a ddr e s s e d t o, or s t a t e d t o be pa ya bl e by one or m or e , but l e s s t ha n a l l of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r j oi nt l y a nd s e ve r a l l y pr om i s e s t o pa y t o t he Age nt , f or t he
a c c ount of t he Le nde r s ( i nc l udi ng Swi ng Li ne Le nde r ) , i n a c c or da nc e wi t h t he t e r m s of t hi s Agr e e m e nt , a nd t he ot he r Loa n Doc um e nt s , t he pr i nc i pa l a m ount of t he Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns , pl us i nt e r e s t t he r e on, pl us a l l ot he r Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ha l l be j oi nt l y a nd s e ve r a l l y l i a bl e a nd r e s pons i bl e f or a l l Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd pa ym e nt a nd pe r f or m a nc e of a l l t e r m s , c ondi t i ons , obl i ga t i ons a nd a gr e e m e nt s a ppl i c a bl e t o a Ne w Ve hi c l e Fl oor pl a n Bor r owe r or Ne w Ve hi c l e Fl oor pl a n Bor r owe r s unde r t he Loa n Doc um e nt s . 2. 4. 2 M a xi m um Li a bi l i t y. Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on of t hi s Agr e e m e nt or t he ot he r Loa n Doc um e nt s , t he l i a bi l i t y of e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r wi t h r e s pe c t t o t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons s ha l l be l i m i t e d t o a n a ggr e ga t e a m ount e qua l t o t he l a r ge s t a m ount t ha t woul d not r e nde r i t s obl i ga t i ons he r e unde r s ubj e c t t o a voi da nc e a s a f r a udul e nt t r a ns f e r or f r a udul e nt c onve ya nc e ( or s i m i l a r t e r m ) unde r a ny
a ppl i c a bl e f e de r a l or s t a t e l a w ( i nc l udi ng Se c t i on 548 of t he Ba nkr upt c y Code of t he Uni t e d St a t e s or a ny s uc c e s s or pr ovi s i on) ; pr ovi de d, howe ve r t ha t r e l e a s e or r e duc t i on of t he l i a bi l i t i e s of one Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ha l l not r e l e a s e or r e duc e t he l i a bi l i t y of a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r f or pa ym e nt a nd pe r f or m a nc e of a l l Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons . 2. 4. 3 Appoi nt m e nt of Com pa ny. Ea c h Subs i di a r y t ha t i s or be c om e s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e by i r r e voc a bl y a ppoi nt s t he Com pa ny t o a c t on i t s be ha l f i n i t s c a pa c i t y a s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r f or a l l pur pos e s r e l e va nt t o t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s . W i t hout l i m i t i ng t he f or e goi ng, e a c h Ne w Ve hi c l e Fl oor pl a n 61 115525625. 4 0063724- 00082
Bor r owe r a ut hor i z e s t he Com pa ny, on i t s be ha l f , t o gi ve a nd r e c e i ve not i c e s , t o r e que s t Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns , t o e xe c ut e a nd de l i ve r a l l doc um e nt s , i ns t r um e nt s , a gr e e m e nt s , r e por t s , a nd c e r t i f i c a t e s r e qui r e d he r e unde r ( i nc l udi ng wi t hout l i m i t a t i on Bor r owe r J oi nde r Agr e e m e nt s a nd Exi s t i ng Subs i di a r y J oi nde r Agr e e m e nt s ) , t o m a ke a ny e l e c t i on or de c i s i on whi c h i s r e qui r e d of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , a nd t o r e c e i ve a nd/ or di r e c t t he r e c e i pt of t he pr oc e e ds of a ny Ne w Ve hi c l e Fl oor pl a n Loa ns or Ne w Ve hi c l e Swi ng Li ne Loa ns . Any a c knowl e dge m e nt , c ons e nt , di r e c t i on, c e r t i f i c a t i on, a gr e e m e nt or ot he r a c t i on whi c h m i ght ot he r wi s e be va l i d or e f f e c t i ve onl y i f gi ve n or t a ke n by a l l Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , or by a ny one or m or e of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , s ha l l be va l i d a nd e f f e c t i ve i f gi ve n or t a ke n onl y by t he Com pa ny, whe t he r or not a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r a l s o j oi ns t he r e i n. Any not i c e , de m a nd, c ons e nt , a c knowl e dgm e nt , di r e c t i on, c e r t i f i c a t i on or ot he r
c om m uni c a t i on de l i ve r e d t o t he Com pa ny a s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r i n a c c or da nc e wi t h t he t e r m s of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s s ha l l be de e m e d t o ha ve be e n de l i ve r e d t o t he Com pa ny a nd e a c h ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r ot he r t ha n t he Com pa ny a gr e e s t ha t e a c h not i c e , e l e c t i on, r e pr e s e nt a t i on a nd wa r r a nt y, c ove na nt , a gr e e m e nt a nd unde r t a ki ng m a de on i t s be ha l f by t he Com pa ny s ha l l be de e m e d f or a l l pur pos e s t o ha ve be e n m a de by s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a nd s ha l l be bi ndi ng upon a nd e nf or c e a bl e a ga i ns t s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r t o t he s a m e e xt e nt a s i f t he s a m e ha d be e n m a de di r e c t l y by s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r . Not wi t hs t a ndi ng t he f or e goi ng, t he Age nt a nd t he Le nde r s m a y a t a ny t i m e a nd f r om t i m e t o t i m e r e qui r e a ny one or m or e of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s t o j oi n i n or t a ke a ny a c t i on whi c h t he Com pa ny i s a ut hor i z e d t o t a ke a l one . 2. 4. 4 W a i ve r s . ( a ) Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a c knowl e dge s t ha t t he Ne w Ve hi c l e
Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns he r e i n wi l l or m a y be m a de f or t he be ne f i t of t he ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r s a s we l l a s s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a nd, i n f ul l r e c ogni t i on of t ha t f a c t , e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r c ons e nt s a nd a gr e e s t ha t t he Age nt a nd t he Le nde r s m a y, a t a ny t i m e a nd f r om t i m e t o t i m e , wi t hout not i c e or de m a nd, a nd wi t hout a f f e c t i ng t he e nf or c e a bi l i t y of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s , or t he l i a bi l i t y of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e unde r or t he r e unde r : ( i ) s uppl e m e nt , m odi f y, a m e nd, e xt e nd, r e ne w, a c c e l e r a t e or ot he r wi s e c ha nge t he t i m e f or pa ym e nt or t he t e r m s of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons or a ny pa r t t he r e of , i nc l udi ng a ny i nc r e a s e or de c r e a s e of t he r a t e s of i nt e r e s t t he r e on; ( i i ) s uppl e m e nt , m odi f y, a m e nd or wa i ve , or e nt e r i nt o or gi ve a ny a gr e e m e nt , a ppr ova l or c ons e nt wi t h r e s pe c t t o, t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons or a ny pa r t t he r e of , or a ny of t he Loa n Doc um e nt s or a ny a ddi t i ona l s e c ur i t y or gua r a nt i e s , or a ny
c ondi t i on, c ove na nt , de f a ul t , r e m e dy, r i ght , r e pr e s e nt a t i on or t e r m t he r e of or t he r e unde r ; ( i i i ) a c c e pt ne w or a ddi t i ona l i ns t r um e nt s , doc um e nt s or a gr e e m e nt s i n e xc ha nge f or or r e l a t i ve t o a ny of t he Loa n Doc um e nt s or t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons or a ny pa r t t he r e of ; ( i v) a c c e pt pa r t i a l pa ym e nt s on t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons ; ( v) r e c e i ve a nd hol d a ddi t i ona l s e c ur i t y or gua r a nt i e s f or t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons or a ny pa r t t he r e of ; ( vi ) r e l e a s e , r e c onve y, t e r m i na t e , wa i ve , a ba ndon, f a i l t o pe r f e c t , s ubor di na t e , e xc ha nge , s ubs t i t ut e , t r a ns f e r a nd/ or e nf or c e a ny s e c ur i t y or gua r a nt i e s , a nd a ppl y a ny s e c ur i t y a nd di r e c t t he or de r or m a nne r of s a l e t he r e of a s t he Age nt i n i t s s ol e a nd a bs ol ut e di s c r e t i on m a y de t e r m i ne ; ( vi i ) r e l e a s e a ny Pe r s on f r om a ny pe r s ona l 62 115525625. 4 0063724- 00082 l i a bi l i t y wi t h r e s pe c t t o t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons or a ny pa r t t he r e of ; ( vi i i ) s e t t l e , r e l e a s e on t e r m s s a t i s f a c t or y t o t he Age nt or by ope r a t i on of Appl i c a bl e La w or ot he r wi s e l i qui da t e or e nf or c e a ny Ne w Ve hi c l e
Fl oor pl a n Obl i ga t i ons a nd a ny s e c ur i t y or gua r a nt y i n a ny m a nne r ; ( i x) c ons e nt t o t he t r a ns f e r of a ny s e c ur i t y a nd bi d a nd pur c ha s e a t a ny s a l e ; a nd/ or ( x) c ons e nt t o t he m e r ge r , c ha nge or a ny ot he r r e s t r uc t ur i ng or t e r m i na t i on of t he c or por a t e or ot he r e xi s t e nc e of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on, a nd c or r e s pondi ngl y r e s t r uc t ur e t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons , a nd a ny s uc h m e r ge r , c ha nge , r e s t r uc t ur i ng or t e r m i na t i on s ha l l not a f f e c t t he l i a bi l i t y of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e unde r , or unde r a ny ot he r Loa n Doc um e nt t o whi c h a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r i s a pa r t y, or a f f e c t t he e nf or c e a bi l i t y he r e of or t he r e of wi t h r e s pe c t t o a l l or a ny pa r t of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons . ( b) The Age nt m a y e nf or c e t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s i nde pe nde nt l y a s t o e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a nd i nde pe nde nt l y of a ny ot he r r e m e dy or s e c ur i t y t he Age nt or a ny Le nde r a t a ny t i m e m a y ha ve or hol d i n c onne c t i on wi t h t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons , a nd i t s ha l l not be
ne c e s s a r y f or t he Age nt t o m a r s ha l a s s e t s i n f a vor of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on or t o pr oc e e d upon or a ga i ns t a nd/ or e xha us t a ny ot he r s e c ur i t y or r e m e dy be f or e pr oc e e di ng a ga i ns t a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r e xpr e s s l y wa i ve s a ny r i ght t o r e qui r e t he Age nt t o m a r s ha l a s s e t s i n f a vor of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on or t o pr oc e e d a ga i ns t a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny Col l a t e r a l pr ovi de d by a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r , a nd a gr e e s t ha t t he Age nt m a y pr oc e e d a ga i ns t Ne w Ve hi c l e Fl oor pl a n Bor r owe r s a nd/ or t he Col l a t e r a l i n s uc h or de r a s i t s ha l l de t e r m i ne i n i t s s ol e a nd a bs ol ut e di s c r e t i on. To t he e xt e nt pe r m i t t e d by Appl i c a bl e La w, t he Age nt a nd t he Le nde r s m a y f i l e a s e pa r a t e a c t i on or a c t i ons a ga i ns t a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r , whe t he r a c t i on i s br ought or pr os e c ut e d wi t h r e s pe c t a ga i ns t a ny ot he r Pe r s on, or whe t he r a ny ot he r Pe r s on i s j oi ne d i n a ny s uc h a c t i on or a c t i ons . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r
a gr e e s t ha t t he Age nt , t he Le nde r s a nd e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a nd Af f i l i a t e of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r m a y de a l wi t h e a c h ot he r i n c onne c t i on wi t h t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons or ot he r wi s e , or a l t e r a ny c ont r a c t s or a gr e e m e nt s now or he r e a f t e r e xi s t i ng be t we e n a ny of t he m , i n a ny m a nne r wha t s oe ve r , a l l wi t hout i n a ny wa y a l t e r i ng or a f f e c t i ng t he e nf or c e a bi l i t y of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s or t he l i a bi l i t y of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ha l l a t a l l t i m e s r e m a i n l i a bl e f or t he f ul l a m ount of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons e ve n t hough t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons , i nc l udi ng a ny pa r t t he r e of or a ny ot he r s e c ur i t y or gua r a nt y t he r e f or , m a y be or he r e a f t e r m a y be c om e i nva l i d or ot he r wi s e une nf or c e a bl e a s a ga i ns t a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r , or a ny one or m or e of t he m or a ny ot he r Pe r s on a nd whe t he r or not a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on s ha l l ha ve a ny pe r s ona l l i a bi l i t y wi t h r e s pe c t t he r e t o.
To t he f ul l e s t e xt e nt pe r m i t t e d by Appl i c a bl e La w, e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r e xpr e s s l y wa i ve s a ny a nd a l l de f e ns e s now or he r e a f t e r a r i s i ng or a s s e r t e d by r e a s on of ( i ) a ny di s a bi l i t y or ot he r de f e ns e of a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on wi t h r e s pe c t t o t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons , ( i i ) t he une nf or c e a bi l i t y or i nva l i di t y of a ny s e c ur i t y or gua r a nt y f or t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons or t he l a c k of pe r f e c t i on or c ont i nui ng pe r f e c t i on or f a i l ur e of pr i or i t y of a ny s e c ur i t y f or t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons , ( i i i ) t he c e s s a t i on f r om a ny c a us e wha t s oe ve r of t he l i a bi l i t y of a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on ( ot he r t ha n by r e a s on of t he f ul l pa ym e nt a nd pe r f or m a nc e of a l l Ne w Ve hi c l e Fl oor pl a n 63 115525625. 4 0063724- 00082
Obl i ga t i ons ) , ( i v) a ny f a i l ur e of t he Age nt t o m a r s ha l a s s e t s i n f a vor of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on, ( v) e xc e pt a s ot he r wi s e pr ovi de d i n t hi s Agr e e m e nt , or i n t he ot he r Loa n Doc um e nt s , a ny f a i l ur e of t he Age nt t o gi ve not i c e of s a l e or ot he r di s pos i t i on of Col l a t e r a l t o a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on or a ny de f e c t i n a ny not i c e t ha t m a y be gi ve n i n c onne c t i on wi t h a ny s a l e or di s pos i t i on of Col l a t e r a l , ( vi ) a ny a c t or om i s s i on of t he Age nt or a ny Le nde r or ot he r s t ha t di r e c t l y or i ndi r e c t l y r e s ul t s i n or a i ds t he di s c ha r ge or r e l e a s e of a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on or t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons or a ny s e c ur i t y or gua r a nt y t he r e f or by ope r a t i on of Appl i c a bl e La w or ot he r wi s e , ( vi i ) a ny Appl i c a bl e La w whi c h pr ovi de s t ha t t he obl i ga t i on of a s ur e t y or gua r a nt or m us t ne i t he r be l a r ge r i n a m ount nor i n ot he r r e s pe c t s m or e bur de ns om e t ha n t ha t of t he pr i nc i pa l or whi c h r e duc e s a s ur e t y’ s or gua r a nt or ’ s obl i ga t i on i n pr opor t i on t o t he pr i nc i pa l
obl i ga t i on, ( vi i i ) a ny f a i l ur e of t he Age nt or a ny Le nde r t o f i l e or e nf or c e a c l a i m i n a ny ba nkr upt c y or ot he r pr oc e e di ng wi t h r e s pe c t t o a ny Pe r s on, ( i x) a ny e l e c t i on m a de by t he Age nt or a ny Le nde r i n a ny ba nkr upt c y pr oc e e di ng of a ny Pe r s on, ( x) a ny e xt e ns i on of c r e di t or t he gr a nt of a ny s e c ur i t y i nt e r e s t unde r a ny pr ovi s i on of t he Uni t e d St a t e s Ba nkr upt c y Code , ( xi ) a ny us e of c a s h c ol l a t e r a l unde r t he Uni t e d St a t e s Ba nkr upt c y Code , ( xi i ) a ny a gr e e m e nt or s t i pul a t i on wi t h r e s pe c t t o t he pr ovi s i on of a de qua t e pr ot e c t i on i n a ny ba nkr upt c y pr oc e e di ng of a ny Pe r s on, ( xi i i ) t he a voi da nc e of a ny s e c ur i t y i n f a vor of t he Age nt or t he Le nde r s f or a ny r e a s on, ( xi v) a ny ba nkr upt c y, i ns ol ve nc y, r e or ga ni z a t i on, a r r a nge m e nt , r e a dj us t m e nt of de bt , l i qui da t i on or di s s ol ut i on pr oc e e di ng c om m e nc e d by or a ga i ns t a ny Pe r s on, i nc l udi ng a ny di s c ha r ge of , or ba r or s t a y a ga i ns t c ol l e c t i ng, a l l or a ny of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons ( or a ny i nt e r e s t t he r e on) i n or a s a r e s ul t of a ny s uc h pr oc e e di ng, ( xv) t o t he e xt e nt pe r m i t t e d, t he be ne f i t s of a ny
f or m of one - a c t i on r ul e unde r a ny Appl i c a bl e La w, or ( xvi ) a ny a c t i on t a ke n by t he Age nt or a ny Le nde r t ha t i s a ut hor i z e d by t hi s Agr e e m e nt or a ny pr ovi s i on of a ny ot he r Loa n Doc um e nt . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r e xpr e s s l y wa i ve s a ny r i ght t o e nf or c e a ny r e m e dy t ha t t he Age nt or a ny Le nde r now ha s or he r e a f t e r m a y ha ve a ga i ns t a ny ot he r Pe r s on a nd wa i ve s t he be ne f i t of , or a ny r i ght t o pa r t i c i pa t e i n, a ny Col l a t e r a l now or he r e a f t e r he l d by t he Age nt or a ny Le nde r . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r wa i ve s a l l r i ght s a nd de f e ns e s a r i s i ng out of a n e l e c t i on of r e m e di e s by t he Age nt or a ny Le nde r , e ve n t hough t ha t e l e c t i on of r e m e di e s , s uc h a s a nonj udi c i a l f or e c l os ur e wi t h r e s pe c t t o s e c ur i t y f or t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons ha s de s t r oye d s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r ’ s r i ght s of s ubr oga t i on a nd r e i m bur s e m e nt a ga i ns t t he pr i nc i pa l . 2. 4. 5 Condi t i on of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r r e pr e s e nt s a nd wa r r a nt s t o t he Age nt a nd t he Le nde r s t ha t s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r ha s
e s t a bl i s he d a de qua t e m e a ns of obt a i ni ng f r om t he ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , on a c ont i nui ng ba s i s , f i na nc i a l a nd ot he r i nf or m a t i on pe r t a i ni ng t o t he bus i ne s s e s , ope r a t i ons a nd c ondi t i on ( f i na nc i a l a nd ot he r wi s e ) of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s a nd t he i r pr ope r t i e s , a nd e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r now i s a nd he r e a f t e r wi l l be c om pl e t e l y f a m i l i a r wi t h t he bus i ne s s e s , ope r a t i ons a nd c ondi t i on ( f i na nc i a l a nd ot he r wi s e ) of t he ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r s a nd t he i r pr ope r t i e s . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e by e xpr e s s l y wa i ve s a nd r e l i nqui s he s a ny dut y on t he pa r t of t he Age nt a nd t he Le nde r s ( s houl d a ny s uc h dut y e xi s t ) t o di s c l os e t o s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a ny m a t t e r , f a c t or t hi ng r e l a t e d t o t he bus i ne s s e s , ope r a t i ons or c ondi t i on ( f i na nc i a l or ot he r wi s e ) of a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or i t s pr ope r t i e s , whe t he r now known or he r e a f t e r known by t he Age nt or a ny Le nde r dur i ng t he l i f e of t hi s Agr e e m e nt . W i t h r e s pe c t t o a ny of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons , t he Age nt a nd
t he Le nde r s ne e d 64 115525625. 4 0063724- 00082 not i nqui r e i nt o t he powe r s of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r or t he of f i c e r s or e m pl oye e s a c t i ng or pur por t i ng t o a c t on i t s be ha l f , a nd e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ha l l be l i a bl e f or a l l Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons m a de or c r e a t e d i n good f a i t h r e l i a nc e upon t he pr of e s s e d e xe r c i s e of s uc h powe r s . 2. 4. 6 Li e ns on Re a l Pr ope r t y. I n t he e ve nt t ha t a l l or a ny pa r t of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons a t a ny t i m e a r e s e c ur e d by a ny one or m or e de e ds of t r us t or m or t ga ge s or ot he r i ns t r um e nt s c r e a t i ng or gr a nt i ng Li e ns on a ny i nt e r e s t s i n r e a l pr ope r t y, e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a ut hor i z e s t he Age nt , upon t he oc c ur r e nc e of a nd dur i ng t he c ont i nua nc e of a ny Eve nt of De f a ul t , a t i t s s ol e opt i on, wi t hout not i c e or de m a nd a nd wi t hout a f f e c t i ng a ny Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons of a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r , t he e nf or c e a bi l i t y of t hi s Agr e e m e nt , or t he va l i di t y or e nf or c e a bi l i t y of a ny s e c ur i t y i nt e r e s t s of t he Age nt on a ny Col l a t e r a l , t o f or e c l os e a ny or a l l of
s uc h de e ds of t r us t or m or t ga ge s or ot he r i ns t r um e nt s by j udi c i a l or nonj udi c i a l s a l e . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r e xpr e s s l y wa i ve s a ny de f e ns e s t o t he e nf or c e m e nt of a ny s e c ur i t y i nt e r e s t s c r e a t e d by a ny Col l a t e r a l Doc um e nt s or t o t he r e c ove r y by t he Age nt or a ny Le nde r a ga i ns t a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny gua r a nt or or a ny ot he r Pe r s on l i a bl e t he r e f or of a ny de f i c i e nc y a f t e r a j udi c i a l or nonj udi c i a l f or e c l os ur e or s a l e , e ve n t hough s uc h a f or e c l os ur e or s a l e m a y i m pa i r t he s ubr oga t i on r i ght s of s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a nd m a y pr e c l ude s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r f r om obt a i ni ng r e i m bur s e m e nt or c ont r i but i on f r om a ny ot he r Pe r s on. Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r e xpr e s s l y wa i ve s a ny r i ght t o r e c e i ve not i c e of a ny j udi c i a l or nonj udi c i a l f or e c l os ur e or s a l e of a ny r e a l pr ope r t y or i nt e r e s t t he r e i n whi c h i s owne d by a not he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny ot he r Pe r s on a nd i s s ubj e c t t o a ny s uc h de e ds of t r us t or m or t ga ge s or ot he r i ns t r um e nt s a nd a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r ’ s f a i l ur e
t o r e c e i ve a ny s uc h not i c e s ha l l not i m pa i r or a f f e c t s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r ’ s obl i ga t i ons he r e unde r or t he e nf or c e a bi l i t y of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s . 2. 4. 7 W a i ve r of Ri ght s of Subr oga t i on. Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y e l s e whe r e c ont a i ne d he r e i n or i n a ny ot he r Loa n Doc um e nt t o whi c h a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r i s a pa r t y, e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e by wa i ve s wi t h r e s pe c t t o e a c h ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r a nd i t s s uc c e s s or s a nd a s s i gns ( i nc l udi ng a ny s ur e t y) , a ny a nd a l l r i ght s a t l a w or i n e qui t y t o s ubr oga t i on, t o r e i m bur s e m e nt , t o i nde m ni t y, t o e xone r a t i on, t o c ont r i but i on, t o s e t of f or t o a ny ot he r r i ght s t ha t c oul d a c c r ue t o a s ur e t y a ga i ns t a pr i nc i pa l , t o a gua r a nt or a ga i ns t a m a ke r or obl i gor , t o a n a c c om m oda t i on pa r t y a ga i ns t t he pa r t y a c c om m oda t e d, or t o a hol de r or t r a ns f e r e e a ga i ns t a m a ke r whi c h a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r m a y ha ve or he r e a f t e r a c qui r e a ga i ns t a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r i n c onne c t i on wi t h or a s a r e s ul t of s uc h
Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ’ e xe c ut i on, de l i ve r y a nd/ or pe r f or m a nc e of t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt t o whi c h a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r i s a pa r t y, i n e a c h c a s e , unt i l t he f ul l a nd f i na l pa ym e nt of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd t e r m i na t i on of t he Com m i t m e nt s unde r t hi s Agr e e m e nt . Unt i l t he f ul l a nd f i na l pa ym e nt of t he Ne w Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd t he t e r m i na t i on of t he Com m i t m e nt s unde r t hi s Agr e e m e nt , e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a gr e e s t ha t i t s ha l l not ha ve or a s s e r t a ny s uc h r i ght s a ga i ns t a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or i t s s uc c e s s or s a nd a s s i gns ( i nc l udi ng a ny s ur e t y) whi c h i s di r e c t l y or i ndi r e c t l y a c r e di t or of a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r or a ny s ur e t y f or a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r , e i t he r di r e c t l y or a s a n 65 115525625. 4 0063724- 00082
a t t e m pt e d s e t of f t o a ny a c t i on c om m e nc e d a ga i ns t a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r by a ny ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r ( a s a bor r owe r or i n a ny ot he r c a pa c i t y) . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e by a c knowl e dge s a nd a gr e e s t ha t t hi s wa i ve r i s i nt e nde d t o be ne f i t t he Age nt a nd t he Le nde r s a nd s ha l l not l i m i t or ot he r wi s e a f f e c t i t s l i a bi l i t y he r e unde r , unde r a ny ot he r Loa n Doc um e nt t o whi c h a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r i s a pa r t y, or t he e nf or c e a bi l i t y he r e of or t he r e of . 2. 4. 8 W a i ve r of Di s c ha r ge . W i t hout l i m i t i ng t he ge ne r a l i t y of t he f or e goi ng, t o t he f ul l e s t e xt e nt pe r m i t t e d by Appl i c a bl e La w, e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r he r e by wa i ve s di s c ha r ge ba s e d upon a l l de f e ns e s ba s e d on s ur e t ys hi p or i m pa i r m e nt of c ol l a t e r a l . 2. 4. 9 Unde r s t a ndi ngs wi t h Re s pe c t t o W a i ve r s a nd Cons e nt s . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r wa r r a nt s a nd a gr e e s t ha t e a c h of t he wa i ve r s a nd c ons e nt s s e t f or t h he r e i n a r e m a de a f t e r c ons ul t a t i on wi t h l e ga l c ouns e l a nd wi t h f ul l knowl e dge of t he i r s i gni f i c a nc e a nd c ons e que nc e s , wi t h t he
unde r s t a ndi ng t ha t e ve nt s gi vi ng r i s e t o a ny de f e ns e or r i ght wa i ve d m a y di m i ni s h, de s t r oy or ot he r wi s e a dve r s e l y a f f e c t r i ght s whi c h s uc h Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ot he r wi s e m a y ha ve a ga i ns t t he ot he r Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , t he Age nt , a ny Le nde r , or a ga i ns t Col l a t e r a l , a nd t ha t , unde r t he c i r c um s t a nc e s , t he wa i ve r s a nd c ons e nt s he r e i n gi ve n a r e r e a s ona bl e . I f a ny of t he wa i ve r s or c ons e nt s he r e i n i s de t e r m i ne d t o be c ont r a r y t o a ny Appl i c a bl e La w or publ i c pol i c y, s uc h wa i ve r s a nd c ons e nt s s ha l l be e f f e c t i ve t o t he m a xi m um e xt e nt pe r m i t t e d by Appl i c a bl e La w. 2. 4. 10 M ut ua l Be ne f i t . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r a gr e e s t ha t t he c r e di t a c c om m oda t i ons t o be e xt e nde d by t he Le nde r s unde r t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s a r e of be ne f i t t o e a c h of t he m , t ha t e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r i s a di r e c t a nd i ndi r e c t be ne f i c i a r y of t he va l ue gi ve n t he r e unde r , a nd e a c h e xt e ns i on of c r e di t unde r t hi s Agr e e m e nt , a nd t he ot he r Loa n Doc um e nt s wi l l be of s ubs t a nt i a l be ne f i t t o e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r .
2. 5 Addi t i on of Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps . ( a ) I f , on or a f t e r t he Cl os i ng Da t e , a ny ne w De a l e r s hi p ( ot he r t ha n a Ca na di a nFor e i gn De a l e r s hi p, Dua l Subs i di a r y or Si l o Subs i di a r y) i s e s t a bl i s he d or a ny e xi s t i ng De a l e r s hi p ( ot he r t ha n a Ca na di a nFor e i gn De a l e r s hi p, Dua l Subs i di a r y or Si l o Subs i di a r y) r e qui r e s f i na nc i ng f or i t s Ne w Ve hi c l e s , t he Com pa ny s ha l l de l i ve r t o t he Age nt a wr i t t e n not i c e s pe c i f yi ng t he na m e of t he a ddi t i ona l Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p, t he pr opos e d De a l e r s hi p Loa n Li m i t f or s uc h De a l e r s hi p, t he a ppl i c a bl e m a nuf a c t ur e r s t o be f i na nc e d f or s uc h De a l e r s hi p a nd a ny ot he r i nf or m a t i on r e que s t e d by t he Age nt . Upon a ppr ova l by t he Age nt , e s t a bl i s hm e nt of a De a l e r s hi p Loa n Li m i t a nd, i f a ppl i c a bl e , De a l e r s hi p Loa n Subl i m i t ( s ) , a nd s a t i s f a c t i on of t he r e qui r e m e nt s i n Se c t i on 9. 3, s uc h De a l e r s hi p s ha l l be c om e a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p a nd e nt i t l e d t o f i na nc e El i gi bl e Ne w Ve hi c l e s he r e unde r . For pur pos e s of c l a r i f i c a t i on, no De a l e r s hi p ( ot he r t ha n a Ca na di a nFor e i gn De a l e r s hi p, Dua l Subs i di a r y, Si l o Subs i di a r y
or a De a l e r s hi p t ha t i s f i na nc i ng i t s Ne w Ve hi c l e s wi t h t he pr oc e e ds of I nde bt e dne s s pe r m i t t e d unde r Se c t i ons 13. 10( o) or ( s ) ) s ha l l i nc ur a ny i nde bt e dne s s t o f i na nc e Ne w Ve hi c l e s , e xc e pt f or Ne w Ve hi c l e Fl oor pl a n Loa ns unde r t hi s Agr e e m e nt , wi t hout t he c ons e nt of t he Age nt a nd t he Le nde r s . 66 115525625. 4 0063724- 00082 ( b) I f a ny ne w Ca na di a n De a l e r s hi p i s e s t a bl i s he d or a ny e xi s t i ng Ca na di a n De a l e r s hi p r e qui r e s f i na nc i ng f or i t s Ne w Ve hi c l e s , t he Com pa ny m a y de l i ve r t o t he Age nt a wr i t t e n not i c e s pe c i f yi ng t he na m e of t he a ddi t i ona l Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p, t he pr opos e d De a l e r s hi p Loa n Li m i t f or s uc h De a l e r s hi p, t he a ppl i c a bl e m a nuf a c t ur e r s t o be f i na nc e d f or s uc h De a l e r s hi p a nd a ny ot he r i nf or m a t i on r e que s t e d by t he Age nt . Upon a ppr ova l by a l l Le nde r s , i n e a c h Le nde r ’ s s ol e di s c r e t i on, e s t a bl i s hm e nt of a De a l e r s hi p Loa n Li m i t a nd, i f a ppl i c a bl e , De a l e r s hi p Loa n Subl i m i t ( s ) , a nd s a t i s f a c t i on of t he r e qui r e m e nt s i n Se c t i on 9. 3, s uc h Ca na di a n De a l e r s hi p s ha l l be c om e a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p a nd e nt i t l e d t o f i na nc e
El i gi bl e Ne w Ve hi c l e s he r e unde r . 2. 6. PR Ac c ount . I n a ddi t i on t o a ny pa ym e nt s ot he r wi s e r e qui r e d by t hi s Agr e e m e nt , t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s m a y r e duc e t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns by m e a ns of one or m or e f l oor i ng l i ne pr i nc i pa l r e duc t i on a c c ount s ( e a c h, a " PR Ac c ount ” ) . At t he Com pa ny’ s r e que s t , t he Age nt wi l l e s t a bl i s h a PR Ac c ount f or a Ne w Ve hi c l e Fl oor pl a n Bor r owe r ( e a c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r ha vi ng a PR Ac c ount , a " PR Ac c ount Bor r owe r ” ) f or t he s ol e pur pos e of r e c or di ng vol unt a r y r e duc t i ons i n pr i nc i pa l . A PR Ac c ount i s not a de pos i t a c c ount , a nd PR Ac c ount Bor r owe r s s ha l l ha ve no r i ght or i nt e r e s t i n a ny ba l a nc e i n s uc h a c c ount , e xc e pt a s e xpr e s s l y pr ovi de d i n t hi s Se c t i on 2. 6. Ea c h PR Ac c ount i s s ubj e c t t o t he f ol l owi ng pr ovi s i ons . 2. 6. 1 PR Ac c ount Pa ym e nt s . A PR Ac c ount Bor r owe r , a t i t s di s c r e t i on, m a y m a ke pa ym e nt s t o a PR Ac c ount ( e a c h, a " PR Ac c ount Pa ym e nt ” ) a t a ny t i m e , s ubj e c t t o t he pr ovi s i ons of s ubs e c t i ons 2. 6. 3 a nd 2. 6. 7 of t hi s Se c t i on 2. 6 a nd f ur t he r s ubj e c t
t o t he f ol l owi ng c ondi t i ons : ( a ) Al l pa ym e nt s i nt o a PR Ac c ount m us t be m a de a s t r a ns f e r s of c ol l e c t e d f unds f r om a de pos i t a c c ount of a PR Ac c ount Bor r owe r wi t h t he Age nt . ( b) Pa ym e nt s i nt o a PR Ac c ount m us t be i n a m ount s of a t l e a s t $1, 000, 000. 001, 000, 000. ( c ) The ba l a nc e i n a PR Ac c ount m a y not a t a ny t i m e e xc e e d t he a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns . I f t he a m ount i n a PR Ac c ount e xc e e ds t he m a xi m um a m ount pe r m i t t e d he r e unde r , t he Age nt i s a ut hor i z e d t o m a ke a PR Ac c ount Adva nc e ( de f i ne d be l ow) i n t he a m ount of a ny s uc h e xc e s s a nd de pos i t s uc h a m ount i n a de pos i t a c c ount of t he a ppl i c a bl e PR Ac c ount Bor r owe r wi t h t he Age nt . Not wi t hs t a ndi ng t he f or e goi ng, a ny PR Ac c ount s i n e xi s t e nc e on or pr i or t o t he Cl os i ng Da t e m a y be c ons ol i da t e d i nt o a s i ngl e PR Ac c ount i n t he na m e of t he Com pa ny on be ha l f of e a c h PR Ac c ount Bor r owe r . 2. 6. 2 PR Ac c ount Adva nc e s . The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s m a y r e - bor r ow a ny ba l a nc e i n a PR Ac c ount a s a Ne w Ve hi c l e Fl oor pl a n Loa n ( a " PR Ac c ount Adva nc e ” ) a t
a ny t i m e dur i ng t he t e r m of t hi s Agr e e m e nt , s ubj e c t t o t he pr ovi s i ons of s ubs e c t i ons 2. 6. 3 a nd 2. 6. 6 of t hi s Se c t i on 2. 6 a nd f ur t he r s ubj e c t t o t he f ol l owi ng c ondi t i ons : 67 115525625. 4 0063724- 00082
( a ) No Eve nt of De f a ul t s ha l l ha ve oc c ur r e d a nd be c ont i nui ng unde r t hi s Agr e e m e nt . ( b) PR Ac c ount Adva nc e s m us t be i n a m ount s of a t l e a s t $1, 000, 000. 001, 000, 000, e xc e pt t he Com pa ny ( on be ha l f of a PR Ac c ount Bor r owe r ) m a y r e que s t a PR Ac c ount Adva nc e i n t he a m ount of t he r e m a i ni ng ba l a nc e i n a PR Ac c ount i f t he r e m a i ni ng ba l a nc e i s l e s s t ha n $1, 000, 000. 001, 000, 000; pr ovi de d, howe ve r , t ha t PR Ac c ount Adva nc e s m a de by t he Age nt pur s ua nt t o s ubs e c t i ons 2. 6. 1 a nd 2. 6. 7 of t hi s Se c t i on 2. 6 s ha l l not be s o l i m i t e d. 2. 6. 3 Re que s t s f or PR Ac c ount Pa ym e nt s a nd Adva nc e s . W he ne ve r a PR Ac c ount Bor r owe r wi s he s t o m a ke a PR Ac c ount Pa ym e nt or obt a i n a PR Ac c ount Adva nc e , t he Com pa ny s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c t i m e ) a t l e a s t one Bus i ne s s Da y pr i or t o t he da t e of t he r e que s t e d PR Ac c ount Pa ym e nt or PR Ac c ount Adva nc e . Suc h not i c e s ha l l s pe c i f y t he a m ount of , a nd r e que s t e d da t e of , t he r e que s t e d PR Ac c ount Pa ym e nt or PR Ac c ount Adva nc e a nd i nc l ude a ny ot he r i nf or m a t i on r e que s t e d by t he Age nt .
2. 6. 4 Li m i t a t i on on Tr a ns a c t i ons i n PR Ac c ount . The t ot a l num be r of pa ym e nt s t o a nd a dva nc e s f r om a PR Ac c ount s ha l l not e xc e e d 6 t r a ns a c t i ons pe r c a l e nda r m ont h i n t he a ggr e ga t e . 2. 6. 5 Appl i c a t i on of PR Ac c ount Ba l a nc e . The ba l a nc e i n a l l PR Ac c ount s s ha l l be a ppl i e d t o r e duc e t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns f or t he pur pos e of c om put a t i on of i nt e r e s t onl y, a nd s ha l l i n no wa y l i m i t or m odi f y t he pr i nc i pa l pa ym e nt r e qui r e m e nt s s e t f or t h e l s e whe r e i n t hi s Agr e e m e nt . Not wi t hs t a ndi ng a ny ot he r pr ovi s i on i n t hi s Se c t i on 2. 6, e xc e pt a s s e t f or t h i n t he l a s t s e nt e nc e of Se c t i on 2. 1. 7 wi t h r e s pe c t t o t he Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e t o Swi ng Li ne Le nde r , t he ba l a nc e i n a PR Ac c ount m a y not be us e d t o r e duc e a ny pr i nc i pa l a m ount out s t a ndi ng f or pur pos e s of de t e r m i ni ng a ny r e m a i ni ng a va i l a bi l i t y unde r t he l i ne s of c r e di t e s t a bl i s he d by Se c t i ons 2. 1 or 2. 2 of t hi s Agr e e m e nt or a ny of t he ot he r l i m i t a t i ons s t a t e d i n t hi s Agr e e m e nt . 2. 6. 6 Re c or d of PR Ac c ount . Al l pa ym e nt s i nt o a PR
Ac c ount a nd a l l PR Ac c ount Adva nc e s s ha l l be r e c or de d on t he Age nt ’ s books . 2. 6. 7 Te r m i na t i on of PR Ac c ount s . The Age nt a nd t he Com pa ny on be ha l f of t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , m a y m ut ua l l y a gr e e t o t e r m i na t e t hi s Se c t i on 2. 6 a t s uc h t i m e a s i s a gr e e d upon be t we e n t he m . I n a ddi t i on, t he Age nt m a y t e r m i na t e t hi s Se c t i on 2. 6: ( a ) wi t hout pr i or not i c e upon t he oc c ur r e nc e ( or a t a ny t i m e dur i ng t he c ont i nua t i on) of a n Eve nt of De f a ul t or ( b) upon 30 da ys ’ not i c e t o t he Com pa ny i f t he r e a s on f or t he t e r m i na t i on i s t ha t t he Age nt ha s de c i de d not t o of f e r PR Ac c ount s t o i t s c us t om e r s ge ne r a l l y or t ha t t he Age nt i s pr ohi bi t e d or r e s t r i c t e d by l a w or r e gul a t i on f r om of f e r i ng PR Ac c ount s . Pr ovi de d t ha t no Eve nt of De f a ul t e xi s t s , upon t e r m i na t i on of t hi s Se c t i on 2. 6, t he Age nt s ha l l m a ke a PR Ac c ount Adva nc e i n a n a m ount e qua l t o t he ba l a nc e i n e a c h PR Ac c ount a nd de pos i t s uc h a m ount i n a de pos i t a c c ount of t he a ppl i c a bl e Ne w Ve hi c l e Fl oor pl a n Bor r owe r wi t h t he Age nt . I f a n Eve nt of De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng, t he n upon
t e r m i na t i on of t hi s Se c t i on 2. 6, PR Ac c ount Bor r owe r s s ha l l ha ve no f ur t he r r i ght t o r e c e i ve a ny PR Ac c ount Adva nc e s a nd t he Age nt m a y 68 115525625. 4 0063724- 00082 a ppl y t he ba l a nc e i n a ny PR Ac c ount t o t he Obl i ga t i ons i n a c c or da nc e wi t h t he pr ovi s i ons of t hi s Agr e e m e nt . ARTI CLE 3 USED VEHI CLE FLOORPLAN AND SERVI CE LOANER VEHI CLE FLOORPLAN LI NE OF CREDI T 3. 1 Us e d Ve hi c l e Fl oor pl a n Loa ns . 3. 1. 1 Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , e a c h Le nde r s e ve r a l l y a nd not j oi nt l y a gr e e s t o m a ke l oa ns ( e a c h a " Us e d Ve hi c l e Fl oor pl a n Loa n” ) t o t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r on a r e vol vi ng c r e di t ba s i s dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o but not i nc l udi ng t he Te r m i na t i on Da t e ; pr ovi de d t ha t ( a ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns m a de by e a c h Le nde r , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of s uc h Le nde r ’ s pa r t i c i pa t i ng i nt e r e s t i n t he Us e d Ve hi c l e Swi ng Li ne Loa ns s ha l l not a t a ny t i m e e xc e e d a n a m ount e qua l t o s uc h Le nde r ’ s Us e d Ve hi c l e
Fl oor pl a n Com m i t m e nt ; ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Us e d Ve hi c l e Fl oor pl a n Loa ns s ha l l not a t a ny t i m e e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Us e d Ve hi c l e Fl oor pl a n Am ount , a nd ( c ) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Us e d Ve hi c l e Fl oor pl a n Loa ns , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Us e d Ve hi c l e Swi ng Li ne Loa ns , s ha l l not a t a ny t i m e e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Us e d Ve hi c l e Fl oor pl a n Am ount . Subj e c t t o t he t e r m s a nd c ondi t i ons he r e of , Bor r owe r m a y bor r ow, pr e pa y a nd r e bor r ow Us e d Ve hi c l e Fl oor pl a n Loa ns . 3. 1. 2 Pur pos e of Us e d Ve hi c l e Fl oor pl a n Loa ns . The Us e d Ve hi c l e Fl oor pl a n Bor r owe r s ha l l us e t he pr oc e e ds of t he Us e d Ve hi c l e Fl oor pl a n Loa ns t o f i na nc e Us e d Ve hi c l e s owne d by a De a l e r s hi p a nd t o r e f i na nc e Us e d Ve hi c l e Swi ng Li ne Loa ns . Us e d Ve hi c l e Fl oor pl a n Loa ns t o a ny Ca na di a n De a l e r s hi p, or t o a ny De a l e r s hi p or Subs i di a r y t ha t i s l oc a t e d i n or doe s f i na nc i ng of Us e d Ve hi c l e s i n Ca na da , m us t be a ppr ove d i n a dva nc e by a l l Le nde r s , i n e a c h Le nde r ’ s s ol e
di s c r e t i on. 3. 1. 3 Re que s t s f or Us e d Ve hi c l e Fl oor pl a n Loa ns . W he ne ve r t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r wi s he s t o obt a i n a Us e d Ve hi c l e Fl oor pl a n Adva nc e , i t s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) a t l e a s t one Bus i ne s s Da y pr i or t o t he da t e of t he r e que s t e d bor r owi ng. Suc h not i c e s ha l l s pe c i f y t he r e que s t e d bor r owi ng da t e ( whi c h m us t be a Bus i ne s s Da y) , t he a m ount of t he Us e d Ve hi c l e Fl oor pl a n Loa n Adva nc e , a nd i nc l ude a ny ot he r i nf or m a t i on a nd doc um e nt a t i on r e a s ona bl y r e que s t e d by t he Age nt . The Age nt wi l l pr om pt l y not i f y e a c h Le nde r of i t s r e c e i pt of a ny r e que s t f or a Us e d Ve hi c l e Fl oor pl a n Adva nc e a nd of t he a m ount of i t s Pr o Ra t a Sha r e of s uc h Us e d Ve hi c l e Fl oor pl a n Adva nc e . Ea c h Us e d Ve hi c l e Fl oor pl a n Adva nc e s ha l l be i n a m i ni m um a m ount of $1, 000, 000. 001, 000, 000 a nd i n m ul t i pl e s of $100, 000. 00100, 000 a bove s uc h a m ount . 3. 1. 4 Fundi ng of Us e d Ve hi c l e Fl oor pl a n Loa ns . I f t he Age nt not i f i e s t he Le nde r s of a r e que s t f or a Us e d Ve hi c l e Fl oor pl a n Adva nc e by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny
69 115525625. 4 0063724- 00082
Bus i ne s s Da y, e a c h Le nde r wi l l de l i ve r i t s Pr o Ra t a Sha r e of s uc h Us e d Ve hi c l e Fl oor pl a n Adva nc e t o t he Age nt by 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h not i f i c a t i on. 3. 1. 5 Us e d Ve hi c l e Fl oor pl a n Pa ym e nt s . ( a ) I nt e r e s t Pa ym e nt s . I nt e r e s t on t he unpa i d pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns s ha l l be pa i d m ont hl y by t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r i n a n a m ount e qua l t o a l l i nt e r e s t a c c r ue d dur i ng t he pr i or c a l e nda r m ont h. Suc h i nt e r e s t pa ym e nt s s ha l l be m a de on e a c h Us e d Ve hi c l e / Re vol vi ng/ Se r vi c e Loa ne r Ve hi c l e M ont hl y Pa ym e nt Da t e c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur f ol l owi ng t he Cl os i ng Da t e a nd c ont i nui ng t he r e a f t e r . Al l a c c r ue d i nt e r e s t out s t a ndi ng on t he Te r m i na t i on Da t e s ha l l be due a nd pa ya bl e i n f ul l on t he Te r m i na t i on Da t e . ( b) Vol unt a r y Pr i nc i pa l Pa ym e nt s . The Us e d Ve hi c l e Fl oor pl a n Bor r owe r m a y m a ke vol unt a r y r e pa ym e nt s of a l l or a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns i f t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r gi ve s Age nt wr i t t e n or
t e l e phoni c not i c e of s uc h vol unt a r y r e pa ym e nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) a t l e a s t one Bus i ne s s Da y pr i or t o t he da t e of s uc h r e pa ym e nt ; pr ovi de d t ha t e a c h s uc h vol unt a r y pr i nc i pa l r e pa ym e nt s ha l l be i n a m i ni m um a m ount of $1, 000, 000. 001, 000, 000 a nd i n m ul t i pl e s of $100, 000. 00100, 000 a bove s uc h a m ount unl e s s t he Us e d Ve hi c l e Fl oor pl a n Loa ns a r e be i ng r e pa i d i n f ul l . Suc h not i c e s ha l l s pe c i f y t he a nt i c i pa t e d da t e of t he vol unt a r y r e pa ym e nt a nd t he pr i nc i pa l a m ount of t he Us e d Ve hi c l e Fl oor pl a n Loa ns t ha t wi l l be r e pa i d on s uc h da t e . Any vol unt a r y r e pa ym e nt of t he Us e d Ve hi c l e Fl oor pl a n Loa ns t ha t i s r e c e i ve d by t he Age nt wi t hout s uc h not i c e s ha l l be de e m e d t o ha ve be e n r e c e i ve d by t he Age nt on t he Bus i ne s s Da y a f t e r s uc h pa ym e nt i s a c t ua l l y r e c e i ve d by t he Age nt a nd i nt e r e s t s ha l l a c c r ue on t he a m ount s s o r e pa i d t hr ough t he da t e of s uc h de e m e d r e c e i pt . ( c ) Pr i nc i pa l Pa ym e nt a t M a t ur i t y. The e nt i r e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns pl us a l l i nt e r e s t a c c r ue d t he r e on s ha l l be due a nd pa ya bl e
i n f ul l by t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r on t he Te r m i na t i on Da t e . ( d) Pr i nc i pa l Pa ym e nt Upon Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e . I f t he Com pa ny de s i gna t e s a Subs i di a r y a s a Dua l Subs i di a r y i n a c c or da nc e wi t h Se c t i on 6. 19, t he n t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r s ha l l r e pa y e a c h Us e d Ve hi c l e Fl oor pl a n Loa n a nd e a c h Us e d Ve hi c l e Swi ng Li ne Loa n wi t h r e s pe c t t o a ny Us e d Ve hi c l e t ha t i s s ubs e que nt l y f i na nc e d by Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s i m m e di a t e l y upon t he Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e . 3. 1. 6 Vol unt a r y Re duc t i on or Te r m i na t i on of Com m i t m e nt . The Us e d Ve hi c l e Fl oor pl a n Bor r owe r m a y f r om t i m e t o t i m e on a t l e a s t t e n ( 10) Bus i ne s s Da y’ s pr i or wr i t t e n not i c e t o t he Age nt ( whi c h s ha l l pr om pt l y a dvi s e e a c h Le nde r t he r e of ) pe r m a ne nt l y r e duc e t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt t o a n a m ount not l e s s t ha n t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns . Conc ur r e nt l y wi t h a ny r e duc t i on of t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n
Com m i t m e nt t o z e r o, ( a ) no f ur t he r Us e d Ve hi c l e Fl oor pl a n Loa ns or Us e d Ve hi c l e Swi ng Li ne Loa ns wi l l be m a de , a nd ( b) t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r s ha l l pa y a l l pr i nc i pa l a nd i nt e r e s t on t he Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns a nd a l l f e e s 70 115525625. 4 0063724- 00082 a nd ot he r a m ount s owi ng t o t he Age nt a nd t he Le nde r s . Al l r e duc t i ons of t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt s ha l l r e duc e t he Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt s pr o r a t a a m ong t he Le nde r s a c c or di ng t o t he i r r e s pe c t i ve Pr o Ra t a Sha r e s ; a nd e xc e pt a s ot he r wi s e s e t f or t h i n t he pr ovi s o t o t hi s Se c t i on 3. 1. 6, s ha l l r e duc e t he Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt i n pr opor t i on t o t he r e duc t i on of t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt ; pr ovi de d, howe ve r , t ha t ( unl e s s t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt i s r e duc e d t o l e s s t ha n s uc h a m ount ) , t he Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt s ha l l not be r e duc e d. 3. 1. 7 Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e . The Us e d Ve hi c l e Fl oor pl a n Bor r owe r a gr e e s t o pa y t o t he
Age nt , f or t he a c c ount of t he Le nde r s , a c om m i t m e nt f e e ( t he " Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e ” ) c a l c ul a t e d a t a pe r a nnum r a t e e qua l t o t he Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e on t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he s um of ( a ) t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns on e a c h da y ( i t be i ng unde r s t ood t ha t a ny por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns c e a s e s t o be out s t a ndi ng unde r t he Us e d Ve hi c l e Swi ng Li ne Loa ns a nd c om m e nc e s be i ng a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e unde r t he Us e d Ve hi c l e Fl oor pl a n Loa ns on t he da t e t ha t t he Us e d Ve hi c l e Fl oor pl a n Loa ns a r e f unde d t o r e pa y s uc h por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns ) ; pl us ( b) t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns on e a c h da y; pr ovi de d t ha t , i f t he a ggr e ga t e a m ount of t he Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e f or
a ny pe r i od t o t he Le nde r s ot he r t ha n t he Swi ng Li ne Le nde r ( a s s e t f or t h i n t he t hi r d s e nt e nc e of t hi s pa r a gr a ph) e xc e e ds t he a m ount c a l c ul a t e d unde r t hi s s e nt e nc e , t he n t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r a gr e e s t o pa y t o t he Age nt , f or t he a c c ount of s uc h Le nde r s , s uc h a ddi t i ona l a m ount s s o t ha t e a c h Le nde r ot he r t ha n t he Swi ng Li ne Le nde r r e c e i ve s t he f ul l a m ount of Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e de s c r i be d i n t he t hi r d s e nt e nc e of t hi s pa r a gr a ph. The a c c r ue d Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e s ha l l be due a nd pa ya bl e i n a r r e a r s on e a c h Qua r t e r l y Pa ym e nt Da t e he r e a f t e r a nd on t he Te r m i na t i on Da t e f or t he t hr e e m ont h pe r i od or ot he r t i m e pe r i od e ndi ng on t he l a s t da y of t he pr e c e di ng f i s c a l qua r t e r or on t he Te r m i na t i on Da t e . The Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e t o e a c h Le nde r ot he r t ha n t he Swi ng Li ne Le nde r s ha l l be ba s e d upon t he a m ount de t e r m i ne d by m ul t i pl yi ng s uc h Le nde r ’ s Pr o Ra t a Sha r e by t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he a c t ua l
a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns on e a c h da y. The Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e t o t he Le nde r whi c h i s t he Swi ng Li ne Le nde r s ha l l be ba s e d upon t he a m ount de t e r m i ne d by m ul t i pl yi ng s uc h Le nde r ’ s Pr o Ra t a Sha r e by t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns on e a c h da y a nd s ubt r a c t i ng f r om t ha t a m ount t he a ve r a ge da i l y out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns . 3. 1. 8 Addi t i ona l Pa ym e nt s . The Le nde r s s ha l l ha ve no obl i ga t i on wha t s oe ve r , a nd t he y ha ve no pr e s e nt i nt e nt i on, t o m a ke a ny Us e d Ve hi c l e Fl oor pl a n Loa n or Us e d Ve hi c l e Swi ng Li ne Loa n a f t e r t he Te r m i na t i on Da t e or whi c h woul d c a us e t he pr i nc i pa l a m ount out s t a ndi ng unde r t hi s Agr e e m e nt t o e xc e e d a ny of t he l i m i t a t i ons s t a t e d i n t hi s Agr e e m e nt . Not wi t hs t a ndi ng t he f or e goi ng, t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r i s a nd s ha l l be a nd r e m a i n unc ondi t i ona l l y l i a bl e t o
t he Le nde r s f or , a nd t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r he r e by pr om i s e s t o pa y t o t he Age nt f or t he a c c ount of t he Le nde r s t he a m ount of a l l Us e d Ve hi c l e 71 115525625. 4 0063724- 00082
Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , a nd ot he r Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons he r e unde r , i nc l udi ng wi t hout l i m i t a t i on Loa ns i n e xc e s s of t he l i m i t a t i ons s e t f or t h he r e i n a nd Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns m a de a f t e r t he Te r m i na t i on Da t e . The Us e d Ve hi c l e Fl oor pl a n Bor r owe r s ha l l pa y t o t he Age nt : ( a ) upon de m a nd, or i f e a r l i e r i m m e di a t e l y upon be c om i ng a wa r e of t he ove r a dva nc e , t he a m ount of a ny Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns i n e xc e s s of a ny l i m i t a t i on c ont a i ne d i n t hi s Agr e e m e nt ; a nd ( b) upon de m a nd, t he a m ount of a ny Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns m a de a f t e r t he Te r m i na t i on Da t e ; t oge t he r wi t h i nt e r e s t on t he pr i nc i pa l a m ount of s uc h Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns , a s s e t f or t h he r e i n. 3. 2 Us e d Ve hi c l e Swi ng Li ne Loa ns . 3. 2. 1 Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , t he Swi ng Li ne Le nde r s ha l l m a ke l oa ns ( e a c h, a " Us e d Ve hi c l e Swi ng Li ne
Loa n” ) t o t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r on a r e vol vi ng c r e di t ba s i s dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o but not i nc l udi ng t he Te r m i na t i on Da t e ; pr ovi de d t ha t ( a ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns s ha l l not a t a ny t i m e e xc e e d t he Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt ; a nd ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Us e d Ve hi c l e Fl oor pl a n Loa ns m a de by a l l Le nde r s pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Us e d Ve hi c l e Swi ng Li ne Loa ns , s ha l l not a t a ny t i m e e xc e e d t he M a xi m um Us e d Ve hi c l e Fl oor pl a n Am ount . Subj e c t t o t he t e r m s a nd c ondi t i ons he r e of , t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r m a y bor r ow, pr e pa y a nd r e bor r ow Us e d Ve hi c l e Swi ng Li ne Loa ns . 3. 2. 2 Pur pos e of Us e d Ve hi c l e Swi ng Li ne Loa ns . The Us e d Ve hi c l e Fl oor pl a n Bor r owe r s ha l l us e t he pr oc e e ds of Us e d Ve hi c l e Swi ng Li ne Loa ns f or pur pos e s pe r m i t t e d by Se c t i on 3. 1. 2 a nd t o f und Us e d Ve hi c l e Swe e p Adva nc e s pur s ua nt t o Se c t i on 3. 2. 7. 3. 2. 3 Re que s t s f or Us e d Ve hi c l e Swi ng Li ne Loa ns . Exc e pt a s s e t f or t h i n Se c t i on 3. 2. 7,
whe ne ve r t he Us e d Ve hi c l e Fl oor pl a n Loa n Bor r owe r wi s he s t o obt a i n a Us e d Ve hi c l e Swi ng Li ne Loa n, t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 1: 00 p. m . ( Pa c i f i c Ti m e ) on t he r e que s t e d da t e of s uc h Us e d Ve hi c l e Swi ng Li ne Loa n, unl e s s Swi ng Li ne Le nde r a gr e e s i n e a c h i ns t a nc e , i n i t s s ol e di s c r e t i on, t o a s hor t e r t i m e pe r i od. Suc h not i c e s ha l l s pe c i f y t he r e que s t e d bor r owi ng da t e ( whi c h m us t be a Bus i ne s s Da y) a nd t he a m ount of t he Us e d Ve hi c l e Swi ng Li ne Loa n a nd i nc l ude a ny ot he r doc um e nt a t i on a nd i nf or m a t i on r e a s ona bl y r e que s t e d by t he Age nt . 3. 2. 4 Us e d Ve hi c l e Swi ng Li ne Loa n Pa ym e nt s . ( a ) I nt e r e s t Pa ym e nt s . I nt e r e s t on t he unpa i d pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns s ha l l be pa i d m ont hl y by t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r i n a n a m ount e qua l t o a l l i nt e r e s t a c c r ue d dur i ng t he pr i or c a l e nda r m ont h. Suc h i nt e r e s t pa ym e nt s s ha l l be m a de on e a c h Us e d Ve hi c l e / Re vol vi ng/ Se r vi c e Loa ne r Ve hi c l e M ont hl y Pa ym e nt Da t e c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur
f ol l owi ng t he Cl os i ng Da t e a nd c ont i nui ng t he r e a f t e r . Al l a c c r ue d i nt e r e s t out s t a ndi ng on t he Te r m i na t i on Da t e s ha l l be due a nd pa ya bl e i n f ul l on t he Te r m i na t i on Da t e . 72 115525625. 4 0063724- 00082 ( b) Pr i nc i pa l Pa ym e nt s . The e nt i r e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns pl us a l l i nt e r e s t a c c r ue d t he r e on s ha l l be due a nd pa ya bl e i n f ul l by t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r on t he Te r m i na t i on Da t e . I n a ddi t i on, t he pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns s ha l l be due a nd pa ya bl e a s r e qui r e d by Se c t i on 3. 2. 6. 3. 2. 5 Pa r t i c i pa t i on i n Us e d Ve hi c l e Swi ng Li ne Loa ns . I m m e di a t e l y upon t he m a ki ng of a Us e d Ve hi c l e Swi ng Li ne Loa n by t he Swi ng Li ne Le nde r , t he Swi ng Li ne Le nde r s ha l l be de e m e d t o ha ve s ol d a nd t r a ns f e r r e d t o e a c h Le nde r a nd e a c h Le nde r s ha l l be de e m e d t o ha ve pur c ha s e d a nd r e c e i ve d f r om t he Swi ng Li ne Le nde r , wi t hout a ny f ur t he r a c t i on by a ny pa r t y, a n undi vi de d pa r t i c i pa t i ng i nt e r e s t i n e a c h Us e d Ve hi c l e Swi ng Li ne Loa n i n a n a m ount e qua l t o s uc h Le nde r ’ s Pr o Ra t a Sha r e ; pr ovi de d,
howe ve r , t ha t ( a ) no Le nde r s ha l l be r e qui r e d t o f und i t s pa r t i c i pa t i on i n a ny Us e d Ve hi c l e Swi ng Li ne Loa n e xc e pt a s s e t f or t h i n Se c t i on 3. 2. 6( b) , a nd ( b) no Le nde r s ha l l be e nt i t l e d t o s ha r e i n a ny pa ym e nt s of pr i nc i pa l or i nt e r e s t i n r e s pe c t of i t s pa r t i c i pa t i on e xc e pt , wi t h r e s pe c t t o a ny pa r t i c i pa t i on f unde d by s uc h Le nde r , a s s e t f or t h he r e i n. Suc h pa r t i c i pa t i on s ha l l be s ubj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt . 3. 2. 6 Se t t l e m e nt of Us e d Ve hi c l e Swi ng Li ne Loa ns . ( a ) Re f undi ng of Loa ns . ( i ) Upon t he r e que s t of t he Swi ng Li ne Le nde r , t he Age nt f r om t i m e t o t i m e s ha l l , on be ha l f of t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r ( a nd t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r he r e by i r r e voc a bl y a ut hor i z e s t he Age nt t o s o a c t on i t s be ha l f ) r e que s t e a c h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s a Le nde r ) t o m a ke a Us e d Ve hi c l e Fl oor pl a n Loa n t o t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r , i n a c c or da nc e wi t h t he pr ovi s i ons of t hi s Se c t i on 3. 2. 6( a ) , whi c h s ha l l be a ppl i e d t o r e pa y a l l or a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he
Us e d Ve hi c l e Swi ng Li ne Loa ns ( e a c h s uc h Us e d Ve hi c l e Fl oor pl a n Loa n, a " Re f undi ng Us e d Ve hi c l e Fl oor pl a n Loa n” ) , i n a n a m ount e qua l t o t ha t Le nde r ’ s Pr o Ra t a Sha r e of a l l or a por t i on of t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns . ( i i ) W i t hout l i m i t i ng t he f or e goi ng, e a c h Le nde r a gr e e s t ha t t he Age nt m a y r e que s t t he Le nde r s t o m a ke Re f undi ng Us e d Ve hi c l e Fl oor pl a n Loa ns a t a ny t i m e i f ( A) a De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng, or ( B) i n t he j udgm e nt of Swi ng Li ne Le nde r , t a ki ng i nt o a c c ount t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns a nd t he a nt i c i pa t e d us a ge of t he Us e d Ve hi c l e Swi ng Li ne Loa ns , a nd t he ope r a t i on of t he Cr e di t Swe e p pur s ua nt t o Se c t i on 3. 2. 7, s uc h Re f undi ng Us e d Ve hi c l e Fl oor pl a n Loa ns a r e r e a s ona bl y ne c e s s a r y t o e ns ur e t ha t t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns wi l l not a t a ny t i m e e xc e e d t he Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt or s uc h l e s s e r a m ount a s i s pe r m i t t e d t o be out s t a ndi ng on t he Us e d Ve hi c l e Swi ng Li ne Loa ns a t
s uc h t i m e ( i t be i ng unde r s t ood t ha t i n or de r t o a t t a i n s uc h obj e c t i ve , Swi ng Li ne Le nde r m a y r e que s t r e f undi ng of t he Us e d Ve hi c l e Swi ng Li ne Loa ns e ve n t hough t he pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns a t t he t i m e of s uc h r e que s t i s l e s s t ha n t he Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt or t he a m ount pe r m i t t e d t o be out s t a ndi ng on t he Us e d Ve hi c l e Swi ng Li ne Loa ns ) . 73 115525625. 4 0063724- 00082
( i i i ) I f t he Age nt m a ke s a r e que s t f or f undi ng unde r t hi s Se c t i on 3. 2. 7( a ) by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, t he Le nde r s wi l l de l i ve r t he r e qui r e d a m ount t o t he Age nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h r e que s t . The pr oc e e ds of a l l Re f undi ng Us e d Ve hi c l e Fl oor pl a n Loa ns s ha l l be pa i d by t he Age nt t o t he Swi ng Li ne Le nde r i n r e pa ym e nt of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he a ppl i c a bl e Us e d Ve hi c l e Swi ng Li ne Loa ns . ( b) Fundi ng of Pa r t i c i pa t i ons . I n a ddi t i on t o t he r i ght of t he Swi ng Li ne Le nde r t o r e que s t r e f undi ng of t he Us e d Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 2. 6( a ) , upon t he r e que s t of t he Swi ng Li ne Le nde r , t he Age nt m a y r e que s t e a c h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s a Le nde r ) t o f und i t s pa r t i c i pa t i on i n t he Us e d Ve hi c l e Swi ng Li ne Loa ns by pa yi ng t o t he Age nt , f or t he a c c ount of t he Swi ng Li ne Le nde r , i t s Pr o Ra t a Sha r e of t he pr i nc i pa l a m ount of t he Us e d Ve hi c l e Swi ng Li ne Loa ns . I f t he Age nt m a ke s s uc h r e que s t by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny
Bus i ne s s Da y, t he Le nde r s wi l l de l i ve r s uc h a m ount t o t he Age nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h r e que s t . Al l pa r t i c i pa t i ons f unde d by t he Le nde r s unde r t hi s Se c t i on 3. 2. 6( b) s ha l l be t r e a t e d a s t he f undi ng of t he Re vol vi ng Loa ns f or pur pos e s of t he c a l c ul a t i on of t he Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e . I f a ny pa ym e nt pa i d t o a ny Le nde r wi t h r e s pe c t t o i t s pa r t i c i pa t i ng i nt e r e s t i n a ny Us e d Ve hi c l e Swi ng Li ne Loa n i s t he r e a f t e r r e c ove r e d f r om or m us t be r e t ur ne d or pa i d ove r by Swi ng Li ne Le nde r f or a ny r e a s on, s uc h Le nde r wi l l pa y t o t he Age nt f or t he a c c ount of t he Swi ng Li ne Le nde r , s uc h Le nde r ’ s Pr o Ra t a Sha r e of s uc h a m ount a nd of a ny i nt e r e s t a nd ot he r a m ount s pa i d or pa ya bl e by t he Swi ng Li ne Le nde r wi t h r e s pe c t t o s uc h a m ount . The Age nt a gr e e s not t o r e que s t a ny f undi ng of t he Le nde r ’ s pa r t i c i pa t i ons i n t he Us e d Ve hi c l e Swi ng Li ne Loa ns unde r t hi s Se c t i on 3. 2. 6( b) a t a ny t i m e t ha t s uc h pa r t i c i pa t i ons m a y be l e ga l l y r e pa i d us i ng a dva nc e s of Us e d Ve hi c l e Fl oor pl a n Loa ns unde r Se c t i on
3. 2. 6( a ) . ( c ) Pa ym e nt t o Swi ng Li ne Le nde r . Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on of t hi s Agr e e m e nt ( i ) e xc e pt a s s e t f or t h i n c l a us e ( i i ) of t hi s Se c t i on 3. 2. 6( c ) a l l pa ym e nt s of pr i nc i pa l a nd i nt e r e s t on t he Us e d Ve hi c l e Swi ng Li ne Loa ns s ha l l be pa i d by t he Age nt s ol e l y t o t he Swi ng Li ne Le nde r ; a nd ( i i ) wi t h r e s pe c t t o e a c h pa r t i c i pa t i on i n Us e d Ve hi c l e Swi ng Li ne Loa ns whi c h i s f unde d by a ny Le nde r , s uc h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s Le nde r ) s ha l l be e nt i t l e d t o r e c e i ve i t s Pr o Ra t a Sha r e of pa ym e nt s of ( A) pr i nc i pa l on s uc h Us e d Ve hi c l e Swi ng Li ne Loa ns a nd ( B) i nt e r e s t on s uc h Us e d Ve hi c l e Swi ng Li ne Loa ns onl y f or t he pe r i od f ol l owi ng t he da t e s uc h pa r t i c i pa t i on i s f unde d. ( d) Obl i ga t i ons Unc ondi t i ona l . The obl i ga t i on of e a c h Le nde r t o m a ke Us e d Ve hi c l e Fl oor pl a n Loa ns t o r e pa y Us e d Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 2. 6( a ) or t o f und i t s pa r t i c i pa t i on i nt e r e s t s i n Us e d Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 2. 6( b) s ha l l be a bs ol ut e a nd unc ondi t i ona l a nd s ha l l not be a f f e c t e d by t he oc c ur r e nc e
of a De f a ul t or Eve nt of De f a ul t , t he f a c t t ha t a ny one or m or e of t he c ondi t i ons i n Ar t i c l e 9 i s not s a t i s f i e d, t he t e r m i na t i on of t he a va i l a bi l i t y of Loa ns , t he f a c t t ha t s uc h Us e d Ve hi c l e Fl oor pl a n Loa n i s m a de a f t e r t he Te r m i na t i on Da t e t o r e f i na nc e Us e d Ve hi c l e Swi ng Li ne Loa ns m a de pr i or t o t he Te r m i na t i on Da t e , a ny de f e ns e , s e t of f , c ount e r c l a i m or c l a i m f or r e c oupm e nt of a ny Le nde r a ga i ns t Age nt or Swi ng Li ne Le nde r or a ny ot he r c i r c um s t a nc e , whe t he r or not s i m i l a r t o t he f or e goi ng. Not wi t hs t a ndi ng t he f or e goi ng, t he Le nde r s s ha l l not be r e qui r e d t o r e pa y Us e d Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 2. 6( a ) or t o f und t he i r pa r t i c i pa t i on i nt e r e s t s i n Us e d Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 2. 6( b) wi t h 74 115525625. 4 0063724- 00082 r e s pe c t t o a ny por t i ons of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Swi ng Li ne Loa ns t ha t a r e f unde d by Swi ng Li ne Le nde r a f t e r Age nt i s de e m e d t o ha ve knowl e dge or not i c e of t he oc c ur r e nc e of a De f a ul t or a f t e r t he Te r m i na t i on Da t e . 3. 2. 7 Cr e di t Swe e p. ( a ) Not wi t hs t a ndi ng
t he pr ovi s i ons of Se c t i on 3. 2. 3, i n a ddi t i on t o Us e d Ve hi c l e Swi ng Li ne Loa ns r e que s t e d pur s ua nt t o Se c t i on 3. 2. 3, t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r m a y a l s o obt a i n a nd r e pa y Us e d Ve hi c l e Swi ng Li ng Loa ns i n a c c or da nc e wi t h t he pr ovi s i ons of t hi s Se c t i on 3. 2. 7 ( e a c h, a " Us e d Ve hi c l e Swe e p Adva nc e ” ) . Us e d Ve hi c l e Swe e p Adva nc e s s ha l l be Us e d Ve hi c l e Swi ng Li ne Loa ns . ( b) Funds m a y be t r a ns f e r r e d be t we e n one or m or e de pos i t a c c ount s m a i nt a i ne d by t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r wi t h t he Age nt ( e a c h, a " Us e d Ve hi c l e Fl oor pl a n DDA” ) a nd t he Swi ng Li ne Loa ns . Col l e c t e d f unds i n t he Us e d Ve hi c l e Fl oor pl a n DDA m a y be t r a ns f e r r e d t o t he Us e d Ve hi c l e Swi ng Li ne Loa ns t o r e duc e t he out s t a ndi ng pr i nc i pa l ba l a nc e t he r e of a nd Us e d Ve hi c l e Swe e p Adva nc e s m a y be m a de t o m a i nt a i n a n a gr e e d upon c ol l e c t e d ba l a nc e i n t he Us e d Ve hi c l e Fl oor pl a n DDA. ( c ) Al l Us e d Ve hi c l e Swe e p Adva nc e s s ha l l be de e m e d t o ha ve be e n r e que s t e d by t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r a nd s ha l l be s ubj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt a nd t he ot he r Loa n
Doc um e nt s , a nd s ha l l a l s o be s ubj e c t t o t he Age nt ’ s de pos i t a c c ount , t r e a s ur y m a na ge m e nt a nd ot he r a gr e e m e nt s wi t h t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r ; pr ovi de d, howe ve r , t ha t i f t he r e i s a ny c onf l i c t be t we e n t he t e r m s of s uc h a gr e e m e nt s a nd t he Loa n Doc um e nt s , t he t e r m s of t he Loa n Doc um e nt s s ha l l c ont r ol . ( d) The Us e d Ve hi c l e Fl oor pl a n Bor r owe r m a y t e r m i na t e t hi s s e r vi c e by wr i t t e n not i c e e xe c ut e d by t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r a nd de l i ve r e d t o t he Age nt . The Age nt m a y c ha nge t he t e r m s or di s c ont i nue t hi s s e r vi c e a t a ny t i m e upon wr i t t e n not i c e t o t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r . ( e ) The Us e d Ve hi c l e Fl oor pl a n Bor r owe r s ha l l pa y s uc h f e e s f or t hi s s we e p s e r vi c e a s m a y be di s c l os e d t o t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r by t he Age nt . Suc h f e e s s ha l l be f or t he s ol e a c c ount of t he Age nt . 3. 3 Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns . 3. 3. 1 Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , e a c h Le nde r s e ve r a l l y a nd not j oi nt l y a gr e e s t o m a ke l oa ns ( e a c h a " Se r vi c e Loa ne r
Ve hi c l e Fl oor pl a n Loa n” ) t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r on a r e vol vi ng c r e di t ba s i s dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o but not i nc l udi ng t he Te r m i na t i on Da t e ; pr ovi de d t ha t ( a ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns m a de by e a c h Le nde r , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of s uc h Le nde r ’ s pa r t i c i pa t i ng i nt e r e s t i n t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns s ha l l not a t a ny t i m e e xc e e d a n a m ount e qua l t o s uc h Le nde r ’ s Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt ; ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns s ha l l not a t a ny t i m e e xc e e d, i n t he 75 115525625. 4 0063724- 00082
a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Am ount , a nd ( c ) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , s ha l l not a t a ny t i m e e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Am ount . Subj e c t t o t he t e r m s a nd c ondi t i ons he r e of , Bor r owe r m a y bor r ow, pr e pa y a nd r e bor r ow Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns . 3. 3. 2 Pur pos e of Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns . The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r s ha l l us e t he pr oc e e ds of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns t o f i na nc e Se r vi c e Loa ne r Ve hi c l e s owne d by a De a l e r s hi p a nd t o r e f i na nc e Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . 3. 3. 3 Re que s t s f or Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns . W he ne ve r t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r wi s he s t o obt a i n a Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Adva nc e , i t s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e )
a t l e a s t one Bus i ne s s Da y pr i or t o t he da t e of t he r e que s t e d bor r owi ng. Suc h not i c e s ha l l s pe c i f y t he r e que s t e d bor r owi ng da t e ( whi c h m us t be a Bus i ne s s Da y) , t he a m ount of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n Adva nc e , a nd i nc l ude a ny ot he r i nf or m a t i on a nd doc um e nt a t i on r e a s ona bl y r e que s t e d by t he Age nt . The Age nt wi l l pr om pt l y not i f y e a c h Le nde r of i t s r e c e i pt of a ny r e que s t f or a Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Adva nc e a nd of t he a m ount of i t s Pr o Ra t a Sha r e of s uc h Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Adva nc e . Ea c h Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Adva nc e s ha l l be i n a m i ni m um a m ount of $1, 000, 000. 001, 000, 000 a nd i n m ul t i pl e s of $100, 000. 00100, 000 a bove s uc h a m ount . 3. 3. 4 Fundi ng of Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns . I f t he Age nt not i f i e s t he Le nde r s of a r e que s t f or a Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Adva nc e by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, e a c h Le nde r wi l l de l i ve r i t s Pr o Ra t a Sha r e of s uc h Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Adva nc e t o t he Age nt by 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h
not i f i c a t i on. 3. 3. 5 Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Pa ym e nt s . ( a ) I nt e r e s t Pa ym e nt s . I nt e r e s t on t he unpa i d pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns s ha l l be pa i d m ont hl y by t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r i n a n a m ount e qua l t o a l l i nt e r e s t a c c r ue d dur i ng t he pr i or c a l e nda r m ont h. Suc h i nt e r e s t pa ym e nt s s ha l l be m a de on e a c h Us e d Ve hi c l e / Re vol vi ng/ Se r vi c e Loa ne r Ve hi c l e M ont hl y Pa ym e nt Da t e c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur f ol l owi ng t he Cl os i ng Da t e a nd c ont i nui ng t he r e a f t e r . Al l a c c r ue d i nt e r e s t out s t a ndi ng on t he Te r m i na t i on Da t e s ha l l be due a nd pa ya bl e i n f ul l on t he Te r m i na t i on Da t e . ( b) Vol unt a r y Pr i nc i pa l Pa ym e nt s . The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r m a y m a ke vol unt a r y r e pa ym e nt s of a l l or a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns i f t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r gi ve s Age nt wr i t t e n or t e l e phoni c not i c e of s uc h vol unt a r y r e pa ym e nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) a t l e a s t one Bus i ne s s Da y
pr i or t o t he da t e of s uc h r e pa ym e nt ; pr ovi de d t ha t e a c h s uc h vol unt a r y pr i nc i pa l r e pa ym e nt s ha l l be i n a m i ni m um a m ount of $1, 000, 000. 001, 000, 000 a nd i n m ul t i pl e s of $100, 000. 00100, 000 a bove s uc h a m ount 76 115525625. 4 0063724- 00082 unl e s s t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a r e be i ng r e pa i d i n f ul l . Suc h not i c e s ha l l s pe c i f y t he a nt i c i pa t e d da t e of t he vol unt a r y r e pa ym e nt a nd t he pr i nc i pa l a m ount of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns t ha t wi l l be r e pa i d on s uc h da t e . Any vol unt a r y r e pa ym e nt of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns t ha t i s r e c e i ve d by t he Age nt wi t hout s uc h not i c e s ha l l be de e m e d t o ha ve be e n r e c e i ve d by t he Age nt on t he Bus i ne s s Da y a f t e r s uc h pa ym e nt i s a c t ua l l y r e c e i ve d by t he Age nt a nd i nt e r e s t s ha l l a c c r ue on t he a m ount s s o r e pa i d t hr ough t he da t e of s uc h de e m e d r e c e i pt . ( c ) Pr i nc i pa l Pa ym e nt a t M a t ur i t y. The e nt i r e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns pl us a l l i nt e r e s t a c c r ue d t he r e on s ha l l be due a nd pa ya bl e i n f ul l by t he Se r vi c e Loa ne r Ve hi c l e
Fl oor pl a n Bor r owe r on t he Te r m i na t i on Da t e . ( d) Pr i nc i pa l Pa ym e nt Upon Dua l Subs i di a r y. Fi na nc i ng Com m e nc e m e nt Da t e . I f t he Com pa ny de s i gna t e s a Subs i di a r y a s a Dua l Subs i di a r y i n a c c or da nc e wi t h Se c t i on 6. 19, t he n t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r s ha l l r e pa y e a c h Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n a nd e a c h Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n wi t h r e s pe c t t o a ny Se r vi c e Loa ne r Ve hi c l e t ha t i s s ubs e que nt l y f i na nc e d by Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s i m m e di a t e l y upon t he Dua l Subs i di a r y Fi na nc i ng Com m e nc e m e nt Da t e . 3. 3. 6 Vol unt a r y Re duc t i on or Te r m i na t i on of Com m i t m e nt . The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r m a y f r om t i m e t o t i m e on a t l e a s t t e n ( 10) Bus i ne s s Da y’ s pr i or wr i t t e n not i c e t o t he Age nt ( whi c h s ha l l pr om pt l y a dvi s e e a c h Le nde r t he r e of ) pe r m a ne nt l y r e duc e t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt t o a n a m ount not l e s s t ha n t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . Conc ur r e nt l y wi t h
a ny r e duc t i on of t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt t o z e r o, ( a ) no f ur t he r Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns or Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns wi l l be m a de , a nd ( b) t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r s ha l l pa y a l l pr i nc i pa l a nd i nt e r e s t on t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a nd a l l f e e s a nd ot he r a m ount s owi ng t o t he Age nt a nd t he Le nde r s . Al l r e duc t i ons of t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt s ha l l r e duc e t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt s pr o r a t a a m ong t he Le nde r s a c c or di ng t o t he i r r e s pe c t i ve Pr o Ra t a Sha r e s ; a nd e xc e pt a s ot he r wi s e s e t f or t h i n t he pr ovi s o t o t hi s Se c t i on 3. 3. 6, s ha l l r e duc e t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Com m i t m e nt i n pr opor t i on t o t he r e duc t i on of t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt ; pr ovi de d, howe ve r , t ha t ( unl e s s t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt i s r e duc e d t o l e s s t ha n s uc h a m ount ) , t he Se r vi c e Loa ne r Ve hi c l e Swi ng
Li ne Com m i t m e nt s ha l l not be r e duc e d. 3. 3. 7 Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e . The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r a gr e e s t o pa y t o t he Age nt , f or t he a c c ount of t he Le nde r s , a c om m i t m e nt f e e ( t he " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e ” ) c a l c ul a t e d a t a pe r a nnum r a t e e qua l t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e on t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he s um of ( a ) t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns on e a c h da y ( i t be i ng unde r s t ood t ha t a ny por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns c e a s e s t o be out s t a ndi ng 77 115525625. 4 0063724- 00082
unde r t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a nd c om m e nc e s be i ng a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e unde r t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns on t he da t e t ha t t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a r e f unde d t o r e pa y s uc h por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns ) ; pl us ( b) t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns on e a c h da y; pr ovi de d t ha t , i f t he a ggr e ga t e a m ount of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e f or a ny pe r i od t o t he Le nde r s ot he r t ha n t he Swi ng Li ne Le nde r ( a s s e t f or t h i n t he t hi r d s e nt e nc e of t hi s pa r a gr a ph) e xc e e ds t he a m ount c a l c ul a t e d unde r t hi s s e nt e nc e , t he n t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r a gr e e s t o pa y t o t he Age nt , f or t he a c c ount of s uc h Le nde r s , s uc h a ddi t i ona l a m ount s s o t ha t e a c h Le nde r ot he r t ha n t he Swi ng Li ne Le nde r r e c e i ve s t he f ul l a m ount of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e de s c r i be d i n t he t hi r d s e nt e nc e of t hi s pa r a gr a ph.
The a c c r ue d Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e s ha l l be due a nd pa ya bl e i n a r r e a r s on e a c h Qua r t e r l y Pa ym e nt Da t e he r e a f t e r a nd on t he Te r m i na t i on Da t e f or t he t hr e e m ont h pe r i od or ot he r t i m e pe r i od e ndi ng on t he l a s t da y of t he pr e c e di ng f i s c a l qua r t e r or on t he Te r m i na t i on Da t e . The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e t o e a c h Le nde r ot he r t ha n t he Swi ng Li ne Le nde r s ha l l be ba s e d upon t he a m ount de t e r m i ne d by m ul t i pl yi ng s uc h Le nde r ’ s Pr o Ra t a Sha r e by t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns on e a c h da y. The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e pa ya bl e t o t he Le nde r whi c h i s t he Swi ng Li ne Le nde r s ha l l be ba s e d upon t he a m ount de t e r m i ne d by m ul t i pl yi ng s uc h Le nde r ’ s Pr o Ra t a Sha r e by t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt e xc e e ds t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l
ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns on e a c h da y a nd s ubt r a c t i ng f r om t ha t a m ount t he a ve r a ge da i l y out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . 3. 3. 8 Addi t i ona l Pa ym e nt s . The Le nde r s s ha l l ha ve no obl i ga t i on wha t s oe ve r , a nd t he y ha ve no pr e s e nt i nt e nt i on, t o m a ke a ny Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n or Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n a f t e r t he Te r m i na t i on Da t e or whi c h woul d c a us e t he pr i nc i pa l a m ount out s t a ndi ng unde r t hi s Agr e e m e nt t o e xc e e d a ny of t he l i m i t a t i ons s t a t e d i n t hi s Agr e e m e nt . Not wi t hs t a ndi ng t he f or e goi ng, t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r i s a nd s ha l l be a nd r e m a i n unc ondi t i ona l l y l i a bl e t o t he Le nde r s f or , a nd t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r he r e by pr om i s e s t o pa y t o t he Age nt f or t he a c c ount of t he Le nde r s t he a m ount of a l l Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , a nd ot he r Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons he r e unde r , i nc l udi ng wi t hout l i m i t a t i on Loa ns i n e xc e s s of t he l i m i t a t i ons
s e t f or t h he r e i n a nd Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns m a de a f t e r t he Te r m i na t i on Da t e . The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r s ha l l pa y t o t he Age nt : ( a ) upon de m a nd, or i f e a r l i e r i m m e di a t e l y upon be c om i ng a wa r e of t he ove r a dva nc e , t he a m ount of a ny Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns i n e xc e s s of a ny l i m i t a t i on c ont a i ne d i n t hi s Agr e e m e nt ; a nd ( b) upon de m a nd, t he a m ount of a ny Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns m a de a f t e r t he Te r m i na t i on Da t e ; t oge t he r wi t h i nt e r e s t on t he pr i nc i pa l a m ount of s uc h Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , a s s e t f or t h he r e i n. 3. 4 Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . 78 115525625. 4 0063724- 00082 3. 4. 1 Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , t he Swi ng Li ne Le nde r s ha l l m a ke l oa ns ( e a c h, a " Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n” ) t o t he
Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r on a r e vol vi ng c r e di t ba s i s dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o but not i nc l udi ng t he Te r m i na t i on Da t e ; pr ovi de d t ha t ( a ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns s ha l l not a t a ny t i m e e xc e e d t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Com m i t m e nt ; a nd ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns m a de by a l l Le nde r s pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , s ha l l not a t a ny t i m e e xc e e d t he M a xi m um Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Am ount . Subj e c t t o t he t e r m s a nd c ondi t i ons he r e of , t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r m a y bor r ow, pr e pa y a nd r e bor r ow Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . 3. 4. 2 Pur pos e of Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r s ha l l us e t he pr oc e e ds of Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns f or pur pos e s pe r m i t t e d by Se c t i on 3. 3. 2 a nd t o f und Se r vi c e Loa ne r Ve hi c l e Swe e p Adva nc e s pur s ua nt t o
Se c t i on 3. 4. 7. 3. 4. 3 Re que s t s f or Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . Exc e pt a s s e t f or t h i n Se c t i on 3. 4. 7, whe ne ve r t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n Bor r owe r wi s he s t o obt a i n a Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n, t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 1: 00 p. m . ( Pa c i f i c Ti m e ) on t he r e que s t e d da t e of s uc h Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n, unl e s s Swi ng Li ne Le nde r a gr e e s i n e a c h i ns t a nc e , i n i t s s ol e di s c r e t i on, t o a s hor t e r t i m e pe r i od. Suc h not i c e s ha l l s pe c i f y t he r e que s t e d bor r owi ng da t e ( whi c h m us t be a Bus i ne s s Da y) a nd t he a m ount of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n a nd i nc l ude a ny ot he r doc um e nt a t i on a nd i nf or m a t i on r e a s ona bl y r e que s t e d by t he Age nt . 3. 4. 4 Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n Pa ym e nt s . ( a ) I nt e r e s t Pa ym e nt s . I nt e r e s t on t he unpa i d pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns s ha l l be pa i d m ont hl y by t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r i n a n a m ount e qua l t o a l l i nt e r e s t a c c r ue d dur i ng t he
pr i or c a l e nda r m ont h. Suc h i nt e r e s t pa ym e nt s s ha l l be m a de on e a c h Us e d Ve hi c l e / Re vol vi ng/ Se r vi c e Loa ne r Ve hi c l e M ont hl y Pa ym e nt Da t e c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur f ol l owi ng t he Cl os i ng Da t e a nd c ont i nui ng t he r e a f t e r . Al l a c c r ue d i nt e r e s t out s t a ndi ng on t he Te r m i na t i on Da t e s ha l l be due a nd pa ya bl e i n f ul l on t he Te r m i na t i on Da t e . ( b) Pr i nc i pa l Pa ym e nt s . The e nt i r e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns pl us a l l i nt e r e s t a c c r ue d t he r e on s ha l l be due a nd pa ya bl e i n f ul l by t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r on t he Te r m i na t i on Da t e . I n a ddi t i on, t he pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns s ha l l be due a nd pa ya bl e a s r e qui r e d by Se c t i on 3. 4. 6. 3. 4. 5 Pa r t i c i pa t i on i n Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . I m m e di a t e l y upon t he m a ki ng of a Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n by t he Swi ng Li ne Le nde r , t he Swi ng Li ne Le nde r s ha l l be de e m e d t o ha ve s ol d a nd t r a ns f e r r e d t o e a c h Le nde r a nd 79 115525625. 4 0063724- 00082
e a c h Le nde r s ha l l be de e m e d t o ha ve pur c ha s e d a nd r e c e i ve d f r om t he Swi ng Li ne Le nde r , wi t hout a ny f ur t he r a c t i on by a ny pa r t y, a n undi vi de d pa r t i c i pa t i ng i nt e r e s t i n e a c h Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n i n a n a m ount e qua l t o s uc h Le nde r ’ s Pr o Ra t a Sha r e ; pr ovi de d, howe ve r , t ha t ( a ) no Le nde r s ha l l be r e qui r e d t o f und i t s pa r t i c i pa t i on i n a ny Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n e xc e pt a s s e t f or t h i n Se c t i on 3. 4. 6( b) , a nd ( b) no Le nde r s ha l l be e nt i t l e d t o s ha r e i n a ny pa ym e nt s of pr i nc i pa l or i nt e r e s t i n r e s pe c t of i t s pa r t i c i pa t i on e xc e pt , wi t h r e s pe c t t o a ny pa r t i c i pa t i on f unde d by s uc h Le nde r , a s s e t f or t h he r e i n. Suc h pa r t i c i pa t i on s ha l l be s ubj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt . 3. 4. 6 Se t t l e m e nt of Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . ( a ) Re f undi ng of Loa ns . ( i ) Upon t he r e que s t of t he Swi ng Li ne Le nde r , t he Age nt f r om t i m e t o t i m e s ha l l , on be ha l f of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r ( a nd t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r he r e by i r r e voc a bl y a ut hor i z e s t he Age nt t o s o a c t on i t s
be ha l f ) r e que s t e a c h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s a Le nde r ) t o m a ke a Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r , i n a c c or da nc e wi t h t he pr ovi s i ons of t hi s Se c t i on 3. 4. 6( a ) , whi c h s ha l l be a ppl i e d t o r e pa y a l l or a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns ( e a c h s uc h Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n, a " Re f undi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n” ) , i n a n a m ount e qua l t o t ha t Le nde r ’ s Pr o Ra t a Sha r e of a l l or a por t i on of t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . ( i i ) W i t hout l i m i t i ng t he f or e goi ng, e a c h Le nde r a gr e e s t ha t t he Age nt m a y r e que s t t he Le nde r s t o m a ke Re f undi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a t a ny t i m e i f ( A) a De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng, or ( B) i n t he j udgm e nt of Swi ng Li ne Le nde r , t a ki ng i nt o a c c ount t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a nd t he a nt i c i pa t e d us a ge of t he Se r vi c e Loa ne r Ve hi c l e
Swi ng Li ne Loa ns , a nd t he ope r a t i on of t he Cr e di t Swe e p pur s ua nt t o Se c t i on 3. 4. 7, s uc h Re f undi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a r e r e a s ona bl y ne c e s s a r y t o e ns ur e t ha t t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns wi l l not a t a ny t i m e e xc e e d t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Com m i t m e nt or s uc h l e s s e r a m ount a s i s pe r m i t t e d t o be out s t a ndi ng on t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a t s uc h t i m e ( i t be i ng unde r s t ood t ha t i n or de r t o a t t a i n s uc h obj e c t i ve , Swi ng Li ne Le nde r m a y r e que s t r e f undi ng of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns e ve n t hough t he pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a t t he t i m e of s uc h r e que s t i s l e s s t ha n t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Com m i t m e nt or t he a m ount pe r m i t t e d t o be out s t a ndi ng on t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns ) . ( i i i ) I f t he Age nt m a ke s a r e que s t f or f undi ng unde r t hi s Se c t i on 3. 4. 7( a ) by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, t he Le nde r s wi l l de l i ve r t he r e qui r e d a m ount t o t he Age nt no
l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h r e que s t . The pr oc e e ds of a l l Re f undi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns s ha l l be pa i d by t he Age nt t o t he Swi ng Li ne Le nde r i n r e pa ym e nt of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he a ppl i c a bl e Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . 80 115525625. 4 0063724- 00082 ( b) Fundi ng of Pa r t i c i pa t i ons . I n a ddi t i on t o t he r i ght of t he Swi ng Li ne Le nde r t o r e que s t r e f undi ng of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 4. 6( a ) , upon t he r e que s t of t he Swi ng Li ne Le nde r , t he Age nt m a y r e que s t e a c h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s a Le nde r ) t o f und i t s pa r t i c i pa t i on i n t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns by pa yi ng t o t he Age nt , f or t he a c c ount of t he Swi ng Li ne Le nde r , i t s Pr o Ra t a Sha r e of t he pr i nc i pa l a m ount of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . I f t he Age nt m a ke s s uc h r e que s t by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, t he Le nde r s wi l l de l i ve r s uc h a m ount t o t he Age nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on
t he Bus i ne s s Da y a f t e r s uc h r e que s t . Al l pa r t i c i pa t i ons f unde d by t he Le nde r s unde r t hi s Se c t i on 3. 4. 6( b) s ha l l be t r e a t e d a s t he f undi ng of t he Re vol vi ng Loa ns f or pur pos e s of t he c a l c ul a t i on of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e . I f a ny pa ym e nt pa i d t o a ny Le nde r wi t h r e s pe c t t o i t s pa r t i c i pa t i ng i nt e r e s t i n a ny Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa n i s t he r e a f t e r r e c ove r e d f r om or m us t be r e t ur ne d or pa i d ove r by Swi ng Li ne Le nde r f or a ny r e a s on, s uc h Le nde r wi l l pa y t o t he Age nt f or t he a c c ount of t he Swi ng Li ne Le nde r , s uc h Le nde r ’ s Pr o Ra t a Sha r e of s uc h a m ount a nd of a ny i nt e r e s t a nd ot he r a m ount s pa i d or pa ya bl e by t he Swi ng Li ne Le nde r wi t h r e s pe c t t o s uc h a m ount . The Age nt a gr e e s not t o r e que s t a ny f undi ng of t he Le nde r ’ s pa r t i c i pa t i ons i n t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns unde r t hi s Se c t i on 3. 4. 6( b) a t a ny t i m e t ha t s uc h pa r t i c i pa t i ons m a y be l e ga l l y r e pa i d us i ng a dva nc e s of Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns unde r Se c t i on 3. 4. 6( a ) . ( c ) Pa ym e nt t o Swi ng Li ne Le nde r . Not wi t hs t a ndi ng a ny c ont r a r y
pr ovi s i on of t hi s Agr e e m e nt ( i ) e xc e pt a s s e t f or t h i n c l a us e ( i i ) of t hi s Se c t i on 3. 4. 6( c ) a l l pa ym e nt s of pr i nc i pa l a nd i nt e r e s t on t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns s ha l l be pa i d by t he Age nt s ol e l y t o t he Swi ng Li ne Le nde r ; a nd ( i i ) wi t h r e s pe c t t o e a c h pa r t i c i pa t i on i n Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns whi c h i s f unde d by a ny Le nde r , s uc h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s Le nde r ) s ha l l be e nt i t l e d t o r e c e i ve i t s Pr o Ra t a Sha r e of pa ym e nt s of ( A) pr i nc i pa l on s uc h Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a nd ( B) i nt e r e s t on s uc h Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns onl y f or t he pe r i od f ol l owi ng t he da t e s uc h pa r t i c i pa t i on i s f unde d. ( d) Obl i ga t i ons Unc ondi t i ona l . The obl i ga t i on of e a c h Le nde r t o m a ke Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns t o r e pa y Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 4. 6( a ) or t o f und i t s pa r t i c i pa t i on i nt e r e s t s i n Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 4. 6( b) s ha l l be a bs ol ut e a nd unc ondi t i ona l a nd s ha l l not be a f f e c t e d by t he oc c ur r e nc e of
a De f a ul t or Eve nt of De f a ul t , t he f a c t t ha t a ny one or m or e of t he c ondi t i ons i n Ar t i c l e 9 i s not s a t i s f i e d, t he t e r m i na t i on of t he a va i l a bi l i t y of Loa ns , t he f a c t t ha t s uc h Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa n i s m a de a f t e r t he Te r m i na t i on Da t e t o r e f i na nc e Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns m a de pr i or t o t he Te r m i na t i on Da t e , a ny de f e ns e , s e t of f , c ount e r c l a i m or c l a i m f or r e c oupm e nt of a ny Le nde r a ga i ns t Age nt or Swi ng Li ne Le nde r or a ny ot he r c i r c um s t a nc e , whe t he r or not s i m i l a r t o t he f or e goi ng. Not wi t hs t a ndi ng t he f or e goi ng, t he Le nde r s s ha l l not be r e qui r e d t o r e pa y Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 4. 6( a ) or t o f und t he i r pa r t i c i pa t i on i nt e r e s t s i n Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 3. 4. 6( b) wi t h r e s pe c t t o a ny por t i ons of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns t ha t a r e f unde d by Swi ng Li ne Le nde r a f t e r Age nt i s de e m e d t o ha ve knowl e dge or not i c e of t he oc c ur r e nc e of a De f a ul t or a f t e r t he Te r m i na t i on Da t e . 81 115525625. 4 0063724-
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3. 4. 7 Cr e di t Swe e p. ( a ) Not wi t hs t a ndi ng t he pr ovi s i ons of Se c t i on 3. 4. 3, i n a ddi t i on t o Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns r e que s t e d pur s ua nt t o Se c t i on 3. 4. 3, t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r m a y a l s o obt a i n a nd r e pa y Se r vi c e Loa ne r Ve hi c l e Swi ng Li ng Loa ns i n a c c or da nc e wi t h t he pr ovi s i ons of t hi s Se c t i on 3. 4. 7 ( e a c h, a " Se r vi c e Loa ne r Ve hi c l e Swe e p Adva nc e ” ) . Se r vi c e Loa ne r Ve hi c l e Swe e p Adva nc e s s ha l l be Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . ( b) Funds m a y be t r a ns f e r r e d be t we e n one or m or e de pos i t a c c ount s m a i nt a i ne d by t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r wi t h t he Age nt ( e a c h, a " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n DDA” ) a nd t he Swi ng Li ne Loa ns . Col l e c t e d f unds i n t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n DDA m a y be t r a ns f e r r e d t o t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns t o r e duc e t he out s t a ndi ng pr i nc i pa l ba l a nc e t he r e of a nd Se r vi c e Loa ne r Ve hi c l e Swe e p Adva nc e s m a y be m a de t o m a i nt a i n a n a gr e e d upon c ol l e c t e d ba l a nc e i n t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n DDA. ( c ) Al l Se r vi c e Loa ne r Ve hi c l e Swe e p Adva nc e s
s ha l l be de e m e d t o ha ve be e n r e que s t e d by t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r a nd s ha l l be s ubj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s , a nd s ha l l a l s o be s ubj e c t t o t he Age nt ’ s de pos i t a c c ount , t r e a s ur y m a na ge m e nt a nd ot he r a gr e e m e nt s wi t h t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r ; pr ovi de d, howe ve r , t ha t i f t he r e i s a ny c onf l i c t be t we e n t he t e r m s of s uc h a gr e e m e nt s a nd t he Loa n Doc um e nt s , t he t e r m s of t he Loa n Doc um e nt s s ha l l c ont r ol . ( d) The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r m a y t e r m i na t e t hi s s e r vi c e by wr i t t e n not i c e e xe c ut e d by t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r a nd de l i ve r e d t o t he Age nt . The Age nt m a y c ha nge t he t e r m s or di s c ont i nue t hi s s e r vi c e a t a ny t i m e upon wr i t t e n not i c e t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r . ( e ) The Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r s ha l l pa y s uc h f e e s f or t hi s s we e p s e r vi c e a s m a y be di s c l os e d t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r by t he Age nt . Suc h f e e s s ha l l be f or t he s ol e a c c ount of t he Age nt .
ARTI CLE 4 REVOLVI NG LI NE OF CREDI T 4. 1 Re vol vi ng Loa ns . 4. 1. 1 Re vol vi ng Loa n Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , e a c h Le nde r s e ve r a l l y a nd not j oi nt l y a gr e e s t o m a ke l oa ns ( e a c h a " Re vol vi ng Loa n” ) t o t he Re vol vi ng Loa n Bor r owe r on a r e vol vi ng c r e di t ba s i s dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o but not i nc l udi ng t he Te r m i na t i on Da t e ; pr ovi de d t ha t ( a ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns m a de by e a c h Le nde r , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of s uc h Le nde r ’ s pa r t i c i pa t i ng i nt e r e s t i n t he Re vol vi ng Swi ng Li ne Loa ns a nd Le t t e r s of Cr e di t s ha l l not a t a ny t i m e e xc e e d a n a m ount e qua l t o s uc h Le nde r ’ s Re vol vi ng Loa n Com m i t m e nt ; ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Re vol vi ng Loa ns s ha l l not a t a ny t i m e 82 115525625. 4 0063724- 00082 e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Re vol vi ng Loa n Am ount , a nd ( c ) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Re vol vi ng Loa ns , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Re vol vi ng Swi ng Li ne Loa ns , pl us t he LC
Obl i ga t i ons s ha l l not a t a ny t i m e e xc e e d, i n t he a ggr e ga t e , a s t o a l l Le nde r s , t he M a xi m um Re vol vi ng Loa n Am ount . Subj e c t t o t he t e r m s a nd c ondi t i ons he r e of , Bor r owe r m a y bor r ow, pr e pa y a nd r e bor r ow Re vol vi ng Loa ns . 4. 1. 2 Pur pos e of Re vol vi ng Loa ns . The Re vol vi ng Loa n Bor r owe r s ha l l us e t he pr oc e e ds of t he Re vol vi ng Loa ns , f or Pe r m i t t e d Ac qui s i t i ons , c a pi t a l e xpe ndi t ur e s , i t s ge ne r a l c or por a t e pur pos e s a nd t o r e f i na nc e Re vol vi ng Swi ng Li ne Loa ns . 4. 1. 3 Re que s t s f or Re vol vi ng Loa ns . W he ne ve r t he Re vol vi ng Loa n Bor r owe r wi s he s t o obt a i n a Re vol vi ng Loa n Adva nc e , i t s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) a t l e a s t one Bus i ne s s Da y pr i or t o t he da t e of t he r e que s t e d bor r owi ng. Suc h not i c e s ha l l s pe c i f y t he r e que s t e d bor r owi ng da t e ( whi c h m us t be a Bus i ne s s Da y) , t he a m ount of t he Re vol vi ng Loa n Adva nc e , a nd i nc l ude a ny ot he r i nf or m a t i on a nd doc um e nt a t i on r e a s ona bl y r e que s t e d by t he Age nt . The Age nt wi l l pr om pt l y not i f y e a c h Le nde r of i t s r e c e i pt of a ny r e que s t f or a Re vol vi ng Loa n Adva nc e a nd of
t he a m ount of i t s Pr o Ra t a Sha r e of s uc h Re vol vi ng Loa n Adva nc e . Ea c h Re vol vi ng Loa n Adva nc e s ha l l be i n a m i ni m um a m ount of $1, 000, 000. 001, 000, 000 a nd i n m ul t i pl e s of $100, 000. 00100, 000 a bove s uc h a m ount . 4. 1. 4 Fundi ng of Re vol vi ng Loa ns . I f t he Age nt not i f i e s t he Le nde r s of a r e que s t f or a Re vol vi ng Loa n Adva nc e by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, e a c h Le nde r wi l l de l i ve r i t s Pr o Ra t a Sha r e of s uc h Re vol vi ng Loa n Adva nc e t o t he Age nt by 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h not i f i c a t i on. 4. 1. 5 Re vol vi ng Loa n Pa ym e nt s . ( a ) I nt e r e s t Pa ym e nt s . I nt e r e s t on t he unpa i d pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns s ha l l be pa i d m ont hl y by t he Re vol vi ng Loa n Bor r owe r i n a n a m ount e qua l t o a l l i nt e r e s t a c c r ue d dur i ng t he pr i or c a l e nda r m ont h. Suc h i nt e r e s t pa ym e nt s s ha l l be m a de on e a c h Us e d Ve hi c l e / Re vol vi ng/ Se r vi c e Loa ne r Ve hi c l e M ont hl y Pa ym e nt Da t e c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur f ol l owi ng t he Cl os i ng Da t e a nd c ont i nui ng t he r e a f t e r . Al l a c c r ue d i nt e r e s t out s t a ndi ng on t he Te r m i na t i on Da t e
s ha l l be due a nd pa ya bl e i n f ul l on t he Te r m i na t i on Da t e . ( b) Vol unt a r y Pr i nc i pa l Pa ym e nt s . The Re vol vi ng Loa n Bor r owe r m a y m a ke vol unt a r y r e pa ym e nt s of a l l or a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns i f t he Re vol vi ng Loa n Bor r owe r gi ve s Age nt wr i t t e n or t e l e phoni c not i c e of s uc h vol unt a r y r e pa ym e nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) a t l e a s t one Bus i ne s s Da y pr i or t o t he da t e of s uc h r e pa ym e nt ; pr ovi de d t ha t e a c h s uc h vol unt a r y pr i nc i pa l r e pa ym e nt s ha l l be i n a m i ni m um a m ount of $1, 000, 000. 001, 000, 000 a nd i n m ul t i pl e s of $100, 000. 00100, 000 a bove s uc h a m ount unl e s s t he Re vol vi ng Loa ns a r e be i ng r e pa i d i n f ul l . Suc h not i c e s ha l l s pe c i f y t he a nt i c i pa t e d da t e of t he vol unt a r y r e pa ym e nt a nd t he pr i nc i pa l a m ount of t he Re vol vi ng Loa ns t ha t wi l l be r e pa i d on s uc h da t e . Any vol unt a r y r e pa ym e nt of t he Re vol vi ng Loa ns t ha t i s r e c e i ve d by t he Age nt wi t hout s uc h not i c e s ha l l be de e m e d t o ha ve be e n r e c e i ve d by t he Age nt 83 115525625. 4 0063724- 00082
on t he Bus i ne s s Da y a f t e r s uc h pa ym e nt i s a c t ua l l y r e c e i ve d by t he Age nt a nd i nt e r e s t s ha l l a c c r ue on t he a m ount s s o r e pa i d t hr ough t he da t e of s uc h de e m e d r e c e i pt . ( c ) Pr i nc i pa l Pa ym e nt a t M a t ur i t y. The e nt i r e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns pl us a l l i nt e r e s t a c c r ue d t he r e on s ha l l be due a nd pa ya bl e i n f ul l by t he Re vol vi ng Loa n Bor r owe r on t he Te r m i na t i on Da t e . 4. 1. 6 Vol unt a r y Re duc t i on or Te r m i na t i on of Com m i t m e nt . The Re vol vi ng Loa n Bor r owe r m a y f r om t i m e t o t i m e on a t l e a s t t e n ( 10) Bus i ne s s Da y’ s pr i or wr i t t e n not i c e t o t he Age nt ( whi c h s ha l l pr om pt l y a dvi s e e a c h Le nde r t he r e of ) pe r m a ne nt l y r e duc e t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt t o a n a m ount not l e s s t ha n t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns pl us t he LC Obl i ga t i ons . Conc ur r e nt l y wi t h a ny r e duc t i on of t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt t o z e r o, ( a ) no f ur t he r Re vol vi ng Loa ns or Re vol vi ng Swi ng Li ne Loa ns wi l l be m a de a nd no f ur t he r Le t t e r s of Cr e di t wi l l be i s s ue d, ( b) t he Re vol vi ng
Loa n Bor r owe r s ha l l pa y a l l pr i nc i pa l a nd i nt e r e s t on t he Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns a nd a l l f e e s a nd ot he r a m ount s owi ng t o t he Age nt a nd t he Le nde r s , a nd ( c ) t he Re vol vi ng Loa n Bor r owe r s ha l l gr a nt t o t he Age nt a s e c ur i t y i nt e r e s t i n c a s h c ol l a t e r a l t o be he l d i n t he LC Col l a t e r a l Ac c ount i n a n a m ount e qua l t o t he LC Obl i ga t i ons a t s uc h t i m e . Al l r e duc t i ons of t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt s ha l l r e duc e t he Re vol vi ng Loa n Com m i t m e nt s pr o r a t a a m ong t he Le nde r s a c c or di ng t o t he i r r e s pe c t i ve Pr o Ra t a Sha r e s ; a nd e xc e pt a s ot he r wi s e s e t f or t h i n t he pr ovi s o t o t hi s Se c t i on 4. 1. 6, s ha l l r e duc e t he Re vol vi ng Swi ng Li ne Com m i t m e nt i n pr opor t i on t o t he r e duc t i on of t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt ; pr ovi de d, howe ve r , t ha t ( unl e s s t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt i s r e duc e d t o l e s s t ha n s uc h a m ount ) , t he Re vol vi ng Swi ng Li ne Com m i t m e nt s ha l l not be r e duc e d. 4. 1. 7 Re vol vi ng Loa n Com m i t m e nt Fe e . The Re vol vi ng Loa n Bor r owe r a gr e e s t o pa y t o t he Age nt , f or t he a c c ount of t he Le nde r s , a
c om m i t m e nt f e e ( t he " Re vol vi ng Loa n Com m i t m e nt Fe e ” ) c a l c ul a t e d a t a pe r a nnum r a t e e qua l t o t he Re vol vi ng Loa n Com m i t m e nt Fe e Ra t e on t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt e xc e e ds t he s um of ( a ) t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns on e a c h da y ( i t be i ng unde r s t ood t ha t a ny por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns c e a s e s t o be out s t a ndi ng unde r t he Re vol vi ng Swi ng Li ne Loa ns a nd c om m e nc e s be i ng a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e unde r t he Re vol vi ng Loa ns on t he da t e t ha t t he Re vol vi ng Loa ns a r e f unde d t o r e pa y s uc h por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns ) ; pl us ( b) t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns pl us t he LC Obl i ga t i ons on e a c h da y; pr ovi de d t ha t , i f t he a ggr e ga t e a m ount of t he Re vol vi ng Loa n Com m i t m e nt Fe e pa ya bl e f or a ny pe r i od t o t he Le nde r s ot he r t ha n t he Swi ng Li ne Le nde r ( a s s e t f or t h i n t he t hi r d s e nt e nc e of t hi s
pa r a gr a ph) e xc e e ds t he a m ount c a l c ul a t e d unde r t hi s s e nt e nc e , t he n t he Re vol vi ng Loa n Bor r owe r a gr e e s t o pa y t o t he Age nt , f or t he a c c ount of s uc h Le nde r s , s uc h a ddi t i ona l a m ount s s o t ha t e a c h Le nde r ot he r t ha n t he Swi ng Li ne Le nde r r e c e i ve s t he f ul l a m ount of Re vol vi ng Loa n Com m i t m e nt Fe e de s c r i be d i n t he t hi r d s e nt e nc e of t hi s pa r a gr a ph. The a c c r ue d Re vol vi ng Loa n Com m i t m e nt Fe e s ha l l be due a nd pa ya bl e i n a r r e a r s on e a c h Qua r t e r l y Pa ym e nt Da t e he r e a f t e r a nd on t he Te r m i na t i on Da t e f or t he t hr e e m ont h pe r i od or ot he r t i m e pe r i od e ndi ng on t he l a s t da y of t he pr e c e di ng f i s c a l qua r t e r or on t he Te r m i na t i on Da t e . The Re vol vi ng Loa n Com m i t m e nt Fe e pa ya bl e t o e a c h Le nde r ot he r t ha n t he Swi ng Li ne 84 115525625. 4 0063724- 00082 Le nde r s ha l l be ba s e d upon t he a m ount de t e r m i ne d by m ul t i pl yi ng s uc h Le nde r ’ s Pr o Ra t a Sha r e by t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt e xc e e ds t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns pl us t he LC Obl i ga t i ons on e a c h da y. The Re vol vi ng Loa n
Com m i t m e nt Fe e pa ya bl e t o t he Le nde r whi c h i s t he Swi ng Li ne Le nde r s ha l l be ba s e d upon t he a m ount de t e r m i ne d by m ul t i pl yi ng s uc h Le nde r ’ s Pr o Ra t a Sha r e by t he a ve r a ge da i l y a m ount by whi c h t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt e xc e e ds t he a c t ua l a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns pl us t he LC Obl i ga t i ons on e a c h da y a nd s ubt r a c t i ng f r om t ha t a m ount t he a ve r a ge da i l y out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns . 4. 1. 8 Addi t i ona l Pa ym e nt s . The Le nde r s s ha l l ha ve no obl i ga t i on wha t s oe ve r , a nd t he y ha ve no pr e s e nt i nt e nt i on, t o m a ke a ny Re vol vi ng Loa n or Re vol vi ng Swi ng Li ne Loa n a f t e r t he Te r m i na t i on Da t e or whi c h woul d c a us e t he pr i nc i pa l a m ount out s t a ndi ng unde r t hi s Agr e e m e nt t o e xc e e d a ny of t he l i m i t a t i ons s t a t e d i n t hi s Agr e e m e nt . Not wi t hs t a ndi ng t he f or e goi ng, t he Re vol vi ng Loa n Bor r owe r i s a nd s ha l l be a nd r e m a i n unc ondi t i ona l l y l i a bl e t o t he Le nde r s f or , a nd t he Re vol vi ng Loa n Bor r owe r he r e by pr om i s e s t o pa y t o t he Age nt f or t he a c c ount of t he Le nde r s t he a m ount of a l l
Re vol vi ng Loa ns , Re vol vi ng Swi ng Li ne Loa ns , LC Obl i ga t i ons a nd ot he r Re vol vi ng Loa n Obl i ga t i ons he r e unde r , i nc l udi ng wi t hout l i m i t a t i on Loa ns i n e xc e s s of t he l i m i t a t i ons s e t f or t h he r e i n a nd Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns m a de a f t e r t he Te r m i na t i on Da t e . The Re vol vi ng Loa n Bor r owe r s ha l l pa y t o t he Age nt : ( a ) upon de m a nd, or i f e a r l i e r i m m e di a t e l y upon be c om i ng a wa r e of t he ove r a dva nc e , t he a m ount of a ny Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns a nd LC Obl i ga t i ons i n e xc e s s of a ny l i m i t a t i on c ont a i ne d i n t hi s Agr e e m e nt ; a nd ( b) upon de m a nd, t he a m ount of a ny Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns m a de a f t e r t he Te r m i na t i on Da t e ; t oge t he r wi t h i nt e r e s t on t he pr i nc i pa l a m ount of s uc h Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns a nd LC Obl i ga t i ons , a s s e t f or t h he r e i n. 4. 1. 9 Re s e r ve Am ount . ( a ) I n a ddi t i on t o a ny ot he r l i m i t a t i ons s e t f or t h i n t hi s Ar t i c l e 4, i n t he e ve nt t ha t on a ny da y t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Ne w Ve hi c l e Fl oor pl a n Loa ns , pl us Ne w Ve hi c l e Swi ng Li ne Loa ns , pl us
r e que s t s f or Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns e xc e e ds ni ne t y- f i ve pe r c e nt ( 95% ) of t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Loa n Com m i t m e nt a s of s uc h da t e , t he n unt i l t he ne xt Bus i ne s s Da y on whi c h s uc h c ondi t i on no l onge r e xi s t s ( i ) a por t i on of t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt ( t he " Re s e r ve Am ount ” ) i n a n a m ount e qua l t o t he l e s s e r of ( A) Fi f t e e n M i l l i on Dol l a r s ( $15, 000, 000. 0015, 000, 000) or ( B) a n a m ount e qua l t o t he M a xi m um Re vol vi ng Loa n Am ount a s of a ny da t e , m i nus t he s um of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns , Re vol vi ng Swi ng Li ne s Loa ns a nd LC Obl i ga t i ons a s of s uc h da t e , s ha l l be r e s e r ve d a nd, e xc e pt a s s e t f or t h i n Se c t i on 4. 1. 9 ( b) s ha l l no l onge r be a va i l a bl e f or f undi ng Re vol vi ng Loa ns or Re vol vi ng Swi ng Li ne Loa ns or f or i s s ua nc e of Le t t e r s of Cr e di t , a nd ( i i ) t he M a xi m um Re vol vi ng Loa n Am ount s ha l l be r e duc e d by t he a m ount of t he Re s e r ve Am ount . ( b) ( i ) Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on i n Se c t i on 4. 1. 9( a ) , t he Re s e r ve Am ount m a y be us e d t o f und Re vol vi ng
Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns whi c h a r e us e d t o r e pa y Ne w Ve hi c l e Swi ng Li ne Loa ns or Ne w Ve hi c l e Fl oor pl a n Loa ns , s o l ong a s a f t e r gi vi ng e f f e c t t o s uc h Loa ns , t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns , 85 115525625. 4 0063724- 00082
Re vol vi ng Swi ng Li ne Loa ns a nd LC Obl i ga t i ons doe s not e xc e e d t he M a xi m um Re vol vi ng Loa n Am ount ( c a l c ul a t e d wi t hout gi vi ng e f f e c t t o r e duc t i on by t he Re s e r ve Am ount ) ; a nd ( i i ) i f , a f t e r gi vi ng e f f e c t t o a ny pa ym e nt de s c r i be d i n Se c t i on 4. 1. 9( b) ( i ) , t he c i r c um s t a nc e s gi vi ng r i s e t o t he r e qui r e m e nt f or a Re s e r ve Am ount a r e s t i l l i n e f f e c t , t he n t he r e qui r e m e nt s a nd l i m i t a t i ons i n Se c t i on 4. 1. 9( a ) s ha l l c ont i nue i n e f f e c t , i nc l udi ng wi t hout l i m i t a t i on t he r e qui r e m e nt t o m a i nt a i n t he Re s e r ve Am ount a nd t he r e s t r i c t i ons on bor r owi ng s e t f or t h t he r e i n. 4. 2 Re vol vi ng Swi ng Li ne Loa ns . 4. 2. 1 Re vol vi ng Swi ng Li ne Com m i t m e nt . Subj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , t he Swi ng Li ne Le nde r s ha l l m a ke l oa ns ( e a c h, a " Re vol vi ng Swi ng Li ne Loa n” ) t o t he Re vol vi ng Loa n Bor r owe r on a r e vol vi ng c r e di t ba s i s dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o but not i nc l udi ng t he Te r m i na t i on Da t e ; pr ovi de d t ha t ( a ) t he a ggr e ga t e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns s ha l l not a t a ny t i m e e xc e e d t he Re vol vi ng Swi ng
Li ne Com m i t m e nt ; a nd ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Re vol vi ng Loa ns m a de by a l l Le nde r s pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Re vol vi ng Swi ng Li ne Loa ns , pl us t he LC Obl i ga t i ons , s ha l l not a t a ny t i m e e xc e e d t he M a xi m um Re vol vi ng Loa n Am ount . Subj e c t t o t he t e r m s a nd c ondi t i ons he r e of , t he Re vol vi ng Loa n Bor r owe r m a y bor r ow, pr e pa y a nd r e bor r ow Re vol vi ng Swi ng Li ne Loa ns . 4. 2. 2 Pur pos e of Re vol vi ng Swi ng Li ne Loa ns . The Re vol vi ng Loa n Bor r owe r s ha l l us e t he pr oc e e ds of Re vol vi ng Swi ng Li ne Loa ns f or pur pos e s pe r m i t t e d by Se c t i on 4. 1. 2. 4. 2. 3 Re que s t s f or Re vol vi ng Swi ng Li ne Loa ns . W he ne ve r t he Re vol vi ng Loa n Bor r owe r wi s he s t o obt a i n a Re vol vi ng Swi ng Li ne Loa n, t he Re vol vi ng Loa n Bor r owe r s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of no l a t e r t ha n 1: 00 p. m . ( Pa c i f i c Ti m e ) on t he r e que s t e d da t e of s uc h Re vol vi ng Swi ng Li ne Loa n, unl e s s Swi ng Li ne Le nde r a gr e e s i n e a c h i ns t a nc e , i n i t s s ol e di s c r e t i on, t o a s hor t e r t i m e pe r i od. Suc h not i c e s ha l l s pe c i f y t he r e que s t e d bor r owi ng da t e ( whi c h m us t be a Bus i ne s s Da y)
a nd t he a m ount of t he Re vol vi ng Swi ng Li ne Loa n a nd i nc l ude a ny ot he r doc um e nt a t i on a nd i nf or m a t i on r e a s ona bl y r e que s t e d by t he Age nt . 4. 2. 4 Re vol vi ng Swi ng Li ne Loa n Pa ym e nt s . ( a ) I nt e r e s t Pa ym e nt s . I nt e r e s t on t he unpa i d pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns s ha l l be pa i d m ont hl y by t he Re vol vi ng Loa n Bor r owe r i n a n a m ount e qua l t o a l l i nt e r e s t a c c r ue d dur i ng t he pr i or c a l e nda r m ont h. Suc h i nt e r e s t pa ym e nt s s ha l l be m a de on e a c h Us e d Ve hi c l e / Re vol vi ng/ Se r vi c e Loa ne r Ve hi c l e M ont hl y Pa ym e nt Da t e c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur f ol l owi ng t he Cl os i ng Da t e a nd c ont i nui ng t he r e a f t e r . Al l a c c r ue d i nt e r e s t out s t a ndi ng on t he Te r m i na t i on Da t e s ha l l be due a nd pa ya bl e i n f ul l on t he Te r m i na t i on Da t e . ( b) Pr i nc i pa l Pa ym e nt s . The e nt i r e out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns pl us a l l i nt e r e s t a c c r ue d t he r e on s ha l l be due a nd pa ya bl e i n f ul l by t he Re vol vi ng Loa n Bor r owe r on t he Te r m i na t i on Da t e . I n a ddi t i on, t he pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns s ha l l be due a nd pa ya bl e a s
r e qui r e d by Se c t i on 4. 2. 6. 86 115525625. 4 0063724- 00082 4. 2. 5 Pa r t i c i pa t i on i n Re vol vi ng Swi ng Li ne Loa ns . I m m e di a t e l y upon t he m a ki ng of a Re vol vi ng Swi ng Li ne Loa n by t he Swi ng Li ne Le nde r , t he Swi ng Li ne Le nde r s ha l l be de e m e d t o ha ve s ol d a nd t r a ns f e r r e d t o e a c h Le nde r a nd e a c h Le nde r s ha l l be de e m e d t o ha ve pur c ha s e d a nd r e c e i ve d f r om t he Swi ng Li ne Le nde r , wi t hout a ny f ur t he r a c t i on by a ny pa r t y, a n undi vi de d pa r t i c i pa t i ng i nt e r e s t i n e a c h Re vol vi ng Swi ng Li ne Loa n i n a n a m ount e qua l t o s uc h Le nde r ’ s Pr o Ra t a Sha r e ; pr ovi de d, howe ve r , t ha t ( a ) no Le nde r s ha l l be r e qui r e d t o f und i t s pa r t i c i pa t i on i n a ny Re vol vi ng Swi ng Li ne Loa n e xc e pt a s s e t f or t h i n Se c t i on 4. 2. 6( b) , a nd ( b) no Le nde r s ha l l be e nt i t l e d t o s ha r e i n a ny pa ym e nt s of pr i nc i pa l or i nt e r e s t i n r e s pe c t of i t s pa r t i c i pa t i on e xc e pt , wi t h r e s pe c t t o a ny pa r t i c i pa t i on f unde d by s uc h Le nde r , a s s e t f or t h he r e i n. Suc h pa r t i c i pa t i on s ha l l be s ubj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt . 4. 2. 6 Se t t l e m e nt of Re vol vi ng Swi ng Li ne Loa ns . ( a ) Re f undi ng of Loa ns . ( i ) Upon t he
r e que s t of t he Swi ng Li ne Le nde r , t he Age nt f r om t i m e t o t i m e s ha l l , on be ha l f of t he Re vol vi ng Loa n Bor r owe r ( a nd t he Re vol vi ng Loa n Bor r owe r he r e by i r r e voc a bl y a ut hor i z e s t he Age nt t o s o a c t on i t s be ha l f ) r e que s t t ha t e a c h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s a Le nde r ) m a ke a Re vol vi ng Loa n t o t he Re vol vi ng Loa n Bor r owe r , i n a c c or da nc e wi t h t he pr ovi s i ons of t hi s Se c t i on 4. 2. 6( a ) , whi c h s ha l l be a ppl i e d t o r e pa y a l l or a por t i on of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns ( e a c h s uc h Re vol vi ng Loa n, a " Re f undi ng Re vol vi ng Loa n” ) , i n a n a m ount e qua l t o t ha t Le nde r ’ s Pr o Ra t a Sha r e of a l l or a por t i on of t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns . ( i i ) W i t hout l i m i t i ng t he f or e goi ng, e a c h Le nde r a gr e e s t ha t t he Age nt m a y r e que s t t he Le nde r s t o m a ke Re f undi ng Re vol vi ng Loa ns a t a ny t i m e i f ( A) a De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng, or ( B) i n t he j udgm e nt of Swi ng Li ne Le nde r , t a ki ng i nt o a c c ount t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns ,
a nd t he a nt i c i pa t e d us a ge of t he Re vol vi ng Swi ng Li ne Loa ns , s uc h Re f undi ng Re vol vi ng Loa ns a r e r e a s ona bl y ne c e s s a r y t o e ns ur e t ha t t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns wi l l not a t a ny t i m e e xc e e d t he Re vol vi ng Swi ng Li ne Com m i t m e nt or s uc h l e s s e r a m ount a s i s pe r m i t t e d t o be out s t a ndi ng on t he Re vol vi ng Swi ng Li ne Loa ns a t s uc h t i m e ( i t be i ng unde r s t ood t ha t i n or de r t o a t t a i n s uc h obj e c t i ve , Swi ng Li ne Le nde r m a y r e que s t r e f undi ng of t he Re vol vi ng Swi ng Li ne Loa ns e ve n t hough t he pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns a t t he t i m e of s uc h r e que s t i s l e s s t ha n t he Re vol vi ng Swi ng Li ne Com m i t m e nt or t he a m ount pe r m i t t e d t o be out s t a ndi ng on t he Re vol vi ng Swi ng Li ne Loa ns ) . ( i i i ) I f t he Age nt m a ke s a r e que s t f or f undi ng unde r t hi s Se c t i on 4. 2. 6( a ) by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, t he Le nde r s wi l l de l i ve r t he r e qui r e d a m ount t o t he Age nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h r e que s t . The pr oc e e ds of a l l Re f undi ng Re vol vi ng Loa ns s ha l l be pa i d
by t he Age nt t o t he Swi ng Li ne Le nde r i n r e pa ym e nt of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he a ppl i c a bl e Re vol vi ng Swi ng Li ne Loa ns . ( b) Fundi ng of Pa r t i c i pa t i ons . I n a ddi t i on t o t he r i ght of t he Swi ng Li ne Le nde r t o r e que s t r e f undi ng of t he Re vol vi ng Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 87 115525625. 4 0063724- 00082
4. 2. 6( a ) , upon t he r e que s t of t he Swi ng Li ne Le nde r , t he Age nt m a y r e que s t e a c h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s a Le nde r ) t o f und i t s pa r t i c i pa t i on i n t he Re vol vi ng Swi ng Li ne Loa ns by pa yi ng t o t he Age nt , f or t he a c c ount of t he Swi ng Li ne Le nde r , i t s Pr o Ra t a Sha r e of t he pr i nc i pa l a m ount of t he Re vol vi ng Swi ng Li ne Loa ns . I f t he Age nt m a ke s s uc h r e que s t by 1: 00 p. m . ( Pa c i f i c Ti m e ) on a ny Bus i ne s s Da y, t he Le nde r s wi l l de l i ve r s uc h a m ount t o t he Age nt no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r s uc h r e que s t . Al l pa r t i c i pa t i ons f unde d by t he Le nde r s unde r t hi s Se c t i on 4. 2. 6( b) s ha l l be t r e a t e d a s t he f undi ng of t he Re vol vi ng Loa ns f or pur pos e s of t he c a l c ul a t i on of t he Re vol vi ng Loa n Com m i t m e nt Fe e . I f a ny pa ym e nt pa i d t o a ny Le nde r wi t h r e s pe c t t o i t s pa r t i c i pa t i ng i nt e r e s t i n a ny Re vol vi ng Swi ng Li ne Loa n i s t he r e a f t e r r e c ove r e d f r om or m us t be r e t ur ne d or pa i d ove r by Swi ng Li ne Le nde r f or a ny r e a s on, s uc h Le nde r wi l l pa y t o t he Age nt f or t he a c c ount of t he Swi ng Li ne Le nde r , s uc h Le nde r ’ s
Pr o Ra t a Sha r e of s uc h a m ount a nd of a ny i nt e r e s t a nd ot he r a m ount s pa i d or pa ya bl e by t he Swi ng Li ne Le nde r wi t h r e s pe c t t o s uc h a m ount . The Age nt a gr e e s not t o r e que s t a ny f undi ng of t he Le nde r ’ s pa r t i c i pa t i ons i n t he Re vol vi ng Swi ng Li ne Loa ns unde r t hi s Se c t i on 4. 2. 6( b) a t a ny t i m e t ha t s uc h pa r t i c i pa t i ons m a y be l e ga l l y r e pa i d us i ng a dva nc e s of t he Re vol vi ng Loa n unde r Se c t i on 4. 2. 6( a ) . ( c ) Pa ym e nt t o Swi ng Li ne Le nde r . Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on of t hi s Agr e e m e nt ( i ) e xc e pt a s s e t f or t h i n c l a us e ( i i ) of t hi s Se c t i on 4. 2. 6( c ) a l l pa ym e nt s of pr i nc i pa l a nd i nt e r e s t on t he Re vol vi ng Swi ng Li ne Loa ns s ha l l be pa i d by t he Age nt s ol e l y t o t he Swi ng Li ne Le nde r ; a nd ( i i ) wi t h r e s pe c t t o e a c h pa r t i c i pa t i on i n Re vol vi ng Swi ng Li ne Loa ns whi c h i s f unde d by a ny Le nde r , s uc h Le nde r ( i nc l udi ng Swi ng Li ne Le nde r i n i t s c a pa c i t y a s Le nde r ) s ha l l be e nt i t l e d t o r e c e i ve i t s Pr o Ra t a Sha r e of pa ym e nt s of ( A) pr i nc i pa l on s uc h Re vol vi ng Swi ng Li ne Loa ns a nd ( B) i nt e r e s t on s uc h Re vol vi ng Swi ng Li ne Loa ns onl y f or t he pe r i od f ol l owi ng t he da t e
s uc h pa r t i c i pa t i on i s f unde d. ( d) Obl i ga t i ons Unc ondi t i ona l . The obl i ga t i on of e a c h Le nde r t o m a ke Re vol vi ng Loa ns t o r e pa y Re vol vi ng Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 4. 2. 6( a ) or t o f und i t s pa r t i c i pa t i on i nt e r e s t s i n Re vol vi ng Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 4. 2. 6( b) s ha l l be a bs ol ut e a nd unc ondi t i ona l a nd s ha l l not be a f f e c t e d by t he oc c ur r e nc e of a De f a ul t or Eve nt of De f a ul t , t he f a c t t ha t a ny one or m or e of t he c ondi t i ons i n Ar t i c l e 9 i s not s a t i s f i e d, t he t e r m i na t i on of t he a va i l a bi l i t y of Loa ns , t he f a c t t ha t s uc h Re vol vi ng Loa n i s m a de a f t e r t he Te r m i na t i on Da t e t o r e f i na nc e Re vol vi ng Swi ng Li ne Loa ns m a de pr i or t o t he Te r m i na t i on Da t e , a ny de f e ns e , s e t of f , c ount e r c l a i m or c l a i m f or r e c oupm e nt of a ny Le nde r a ga i ns t Age nt or Swi ng Li ne Le nde r or a ny ot he r c i r c um s t a nc e , whe t he r or not s i m i l a r t o t he f or e goi ng. Not wi t hs t a ndi ng t he f or e goi ng, t he Le nde r s s ha l l not be r e qui r e d t o r e pa y Re vol vi ng Swi ng Li ne Loa ns pur s ua nt t o Se c t i on 4. 2. 6( a ) or t o f und t he i r pa r t i c i pa t i on i nt e r e s t s i n Re vol vi ng Swi ng Li ne Loa ns pur s ua nt t o
Se c t i on 4. 2. 6( b) wi t h r e s pe c t t o a ny por t i ons of t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Swi ng Li ne Loa ns t ha t a r e f unde d by Swi ng Li ne Le nde r a f t e r Age nt i s de e m e d t o ha ve knowl e dge or not i c e of t he oc c ur r e nc e of a De f a ul t or a f t e r t he Te r m i na t i on Da t e . ARTI CLE 5 LETTERS OF CREDI T 5. 1 Le t t e r of Cr e di t Com m i t m e nt 88 115525625. 4 0063724- 00082 . Subj e c t t o a nd upon t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt , LC I s s ue r m a y f r om t i m e t o t i m e dur i ng t he pe r i od f r om t he Cl os i ng Da t e t o t he da t e whi c h i s 30 da ys pr i or t o t he Te r m i na t i on Da t e i s s ue a nd r e ne w, e xt e nd a nd a m e nd ( " M odi f y” a nd s uc h a c t i on, a " M odi f i c a t i on” ) one or m or e s t a ndby l e t t e r s of c r e di t f or t he a c c ount of t he Re vol vi ng Loa n Bor r owe r or a Subs i di a r y a c c e pt a bl e t o LC I s s ue r , ( s o l ong a s t he Re vol vi ng Loa n Bor r owe r i s t he a ppl i c a nt on a nd l i a bl e f or r e pa ym e nt of s uc h Le t t e r of Cr e di t unde r t he a ppl i c a bl e LC Agr e e m e nt ) ; pr ovi de d t ha t ( a ) t he LC Obl i ga t i ons s ha l l not e xc e e d a t a ny t i m e t he Le t t e r of Cr e di t Com m i t m e nt ; a nd ( b) t he out s t a ndi ng pr i nc i pa l ba l a nc e
of a l l Re vol vi ng Loa ns m a de by a l l Le nde r s , pl us t he out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Re vol vi ng Swi ng Li ne Loa ns , pl us t he LC Obl i ga t i ons s ha l l not a t a ny t i m e e xc e e d t he M a xi m um Re vol vi ng Loa n Am ount . 5. 2 Exi s t i ng Le t t e r s of Cr e di t . LC I s s ue r ha s pr e vi ous l y i s s ue d c e r t a i n l e t t e r s of c r e di t f or t he a c c ount of t he Re vol vi ng Loa n Bor r owe r or a Subs i di a r y unde r t he Exi s t i ng Loa n Agr e e m e nt ( " Exi s t i ng Le t t e r s of Cr e di t ” ) . Ea c h of t he Exi s t i ng Le t t e r s of Cr e di t s ha l l be a Le t t e r of Cr e di t unde r a nd s ha l l be s ubj e c t t o t he t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt . 5. 3 LC Agr e e m e nt s . Fr om t i m e t o t i m e a s r e qui r e d by LC I s s ue r , t he Re vol vi ng Loa n Bor r owe r s ha l l e xe c ut e a nd de l i ve r t o LC I s s ue r a l e t t e r of c r e di t r e i m bur s e m e nt a gr e e m e nt or a n a m e ndm e nt t o e xi s t i ng a gr e e m e nt s e xe c ut e d by t he Re vol vi ng Loa n Bor r owe r ( e a c h, a n " LC Agr e e m e nt ” ) i n a f or m a c c e pt a bl e t o LC I s s ue r . W he ne ve r t he Re vol vi ng Loa n Bor r owe r wi s he s t o r e que s t t he i s s ua nc e of a Le t t e r of Cr e di t , t he Re vol vi ng Loa n Bor r owe r s ha l l e xe c ut e a nd de l i ve r t o LC I s s ue r a n
a ppl i c a t i on t he r e f or i n LC I s s ue r ’ s s t a nda r d f or m a ppr opr i a t e l y c om pl e t e d wi t h a l l r e qui r e d i nf or m a t i on ( a n " LC Appl i c a t i on” ) a nd s uc h ot he r doc um e nt s a nd i nf or m a t i on a s LC I s s ue r r e a s ona bl y r e qui r e s . Ea c h Le t t e r of Cr e di t s ha l l be s ubj e c t t o a l l t e r m s a nd c ondi t i ons of t hi s Agr e e m e nt a nd of t he a ppl i c a bl e LC Appl i c a t i on a nd LC Agr e e m e nt . I n t he e ve nt of a ny e xpr e s s c onf l i c t be t we e n t he t e r m s of t hi s Agr e e m e nt a nd of t he a ppl i c a bl e LC Agr e e m e nt , t he t e r m s of t hi s Agr e e m e nt s ha l l c ont r ol . 5. 4 Expi r y Da t e . No Le t t e r of Cr e di t s ha l l be i s s ue d l a t e r t ha n 30 da ys pr i or t o t he Te r m i na t i on Da t e . Ea c h Le t t e r of Cr e di t s ha l l ha ve a n e xpi r a t i on da t e no l a t e r t ha n t he e a r l i e r of ( a ) t wo ye a r s a f t e r t he i s s ua nc e da t e ( or da t e of e xt e ns i on or r e ne wa l , i f a ppl i c a bl e ) ; or ( b) t he Te r m i na t i on Da t e . Dr a f t s dr a wn unde r a Le t t e r of Cr e di t m a y be s i ght dr a f t s or t i m e dr a f t s ; pr ovi de d, howe ve r , t ha t no dr a f t s ha l l ha ve a m a t ur i t y da t e l a t e r t ha n t he Te r m i na t i on Da t e . I f t he r e a r e a ny Le t t e r s of Cr e di t out s t a ndi ng on t he Te r m i na t i on Da t e , t he Age nt
m a y r e qui r e t he Re vol vi ng Loa n Bor r owe r t o de l i ve r t o t he Age nt f unds i n a n a m ount e qua l t o t he LC Obl i ga t i ons . The Re vol vi ng Loa n Bor r owe r i m m e di a t e l y s ha l l de l i ve r t o t he Age nt a l l s uc h f unds r e qui r e d by t he Age nt a nd t he Age nt s ha l l hol d s uc h f unds i n t he LC Col l a t e r a l Ac c ount a s c ol l a t e r a l f or t he Obl i ga t i ons a nd Pe r m i t t e d Swa p Obl i ga t i ons . 5. 5 Re que s t s f or Le t t e r s of Cr e di t 89 115525625. 4 0063724- 00082
. Ea c h LC Appl i c a t i on or r e que s t f or a M odi f i c a t i on s ha l l be s ubm i t t e d t o t he LC I s s ue r , wi t h a c opy t o t he Age nt , a t l e a s t f i ve Bus i ne s s Da ys pr i or t o t he pr opos e d da t e of i s s ua nc e or M odi f i c a t i on ( unl e s s t he LC I s s ue r , i n a ny i ns t a nc e , i n i t s s ol e di s c r e t i on, a gr e e s t o a s hor t e r t i m e pe r i od) . The Age nt s ha l l pr om pt l y not i f y t he LC I s s ue r whe t he r s uc h LC Appl i c a t i on, a nd t he i s s ua nc e of a Le t t e r of Cr e di t pur s ua nt t he r e t o, c onf or m t o t he r e qui r e m e nt s of t hi s Agr e e m e nt . Upon i s s ua nc e or M odi f i c a t i on of a Le t t e r of Cr e di t , t he LC I s s ue r s ha l l pr om pt l y not i f y t he Age nt , a nd t he Age nt s ha l l pr om pt l y not i f y t he Le nde r s , of t he a m ount a nd t e r m s t he r e of . The LC I s s ue r s ha l l ha ve no i nde pe nde nt dut y t o a s c e r t a i n whe t he r t he c ondi t i ons s e t f or t h i n Ar t i c l e 9 ha ve be e n s a t i s f i e d; pr ovi de d, howe ve r , t ha t t he LC I s s ue r s ha l l not i s s ue a Le t t e r of Cr e di t i f , on or be f or e t he pr opos e d da t e of i s s ua nc e , t he LC I s s ue r ha s r e c e i ve d not i c e f r om t he Age nt or Re qui r e d Le nde r s t ha t a ny s uc h c ondi t i on ha s not be e n s a t i s f i e d or wa i ve d. I n t he e ve nt of a ny
c onf l i c t be t we e n t he t e r m s of t hi s Agr e e m e nt a nd t he t e r m s of a ny LC Appl i c a t i on or LC Agr e e m e nt , t he t e r m s of t hi s Agr e e m e nt s ha l l c ont r ol . 5. 6 Pa r t i c i pa t i on i n Le t t e r s of Cr e di t . Upon t he i s s ua nc e of a Le t t e r of Cr e di t i n a c c or da nc e wi t h t hi s Agr e e m e nt ( or on t he Cl os i ng Da t e wi t h r e s pe c t t o Exi s t i ng Le t t e r s of Cr e di t ) , e a c h Le nde r s ha l l be de e m e d t o ha ve pur c ha s e d a pr o r a t a pa r t i c i pa t i on i n s uc h Le t t e r of Cr e di t a nd t he r e l a t e d LC Obl i ga t i ons f r om t he LC I s s ue r i n a n a m ount e qua l t o i t s Pr o Ra t a Sha r e of t he r e l a t e d LC Obl i ga t i ons . W i t hout l i m i t i ng t he s c ope a nd na t ur e of e a c h Le nde r ’ s pa r t i c i pa t i on i n a ny Le t t e r of Cr e di t , t o t he e xt e nt t ha t t he LC I s s ue r i s not r e i m bur s e d by t he Re vol vi ng Loa n Bor r owe r ( a nd f unds a r e not a va i l a bl e i n t he LC Col l a t e r a l Ac c ount ) f or a ny pa ym e nt m a de by t he LC I s s ue r unde r a ny Exi s t i ng Le t t e r of Cr e di t or a ny ot he r Le t t e r of Cr e di t i s s ue d i n a c c or da nc e wi t h t he t e r m s he r e of , or i f a ny r e i m bur s e m e nt r e c e i ve d by LC I s s ue r i s r e s c i nde d or m us t be r e t ur ne d, e a c h Le nde r s ha l l r e i m bur s e Age nt , f or
t he be ne f i t of t he LC I s s ue r , a n a m ount e qua l t o i t s Pr o Ra t a Sha r e of s uc h r e i m bur s e m e nt a m ount a s s e t f or t h be l ow. To obt a i n f undi ng by t he Le nde r s of a ny r e i m bur s e m e nt a m ount , t he Age nt s ha l l r e que s t , be f or e 1: 00 p. m . ( Pa c i f i c Ti m e ) on a Bus i ne s s Da y, e a c h Le nde r ( i nc l udi ng t he LC I s s ue r i n i t s c a pa c i t y a s a Le nde r ) t o f und a n a m ount e qua l t o e a c h Le nde r ’ s Pr o Ra t a Sha r e of t he r e i m bur s e m e nt a m ount . The Le nde r s s ha l l f und t o t he Age nt t he a m ount s s o r e que s t e d no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) on t he Bus i ne s s Da y a f t e r t he da t e t ha t s uc h r e que s t i s de l i ve r e d t o t he Le nde r s a nd a l l a m ount s s o f unde d s ha l l be pa i d by t he Age nt t o t he LC I s s ue r i n s a t i s f a c t i on of e a c h Le nde r ’ s pa r t i c i pa t i on obl i ga t i ons . The obl i ga t i on of e a c h Le nde r t o s o r e i m bur s e Age nt , on be ha l f of t he LC I s s ue r , s ha l l be a bs ol ut e a nd unc ondi t i ona l a nd s ha l l not be a f f e c t e d by t he oc c ur r e nc e of a De f a ul t or Eve nt of De f a ul t , t he t e r m i na t i on of t he a va i l a bi l i t y of Le t t e r s of Cr e di t , t he f a c t t ha t a ny one or m or e of t he c ondi t i ons i n Ar t i c l e 9 i s not
s a t i s f i e d, t he f a c t t ha t r e i m bur s e m e nt i s r e que s t e d a f t e r t he Te r m i na t i on Da t e , a ny de f e ns e , s e t of f , c ount e r c l a i m or c l a i m f or r e c oupm e nt a ga i ns t Age nt or LC I s s ue r , or a ny ot he r c i r c um s t a nc e , whe t he r or not s i m i l a r t o t he f or e goi ng. Any s uc h r e i m bur s e m e nt s ha l l not r e l i e ve or ot he r wi s e i m pa i r t he obl i ga t i on of t he Re vol vi ng Loa n Bor r owe r t o r e i m bur s e t he LC I s s ue r f or t he a m ount of a ny pa ym e nt m a de by t he LC I s s ue r unde r a ny Le t t e r of Cr e di t , t oge t he r wi t h i nt e r e s t a s pr ovi de d he r e i n. 5. 7 Pa ym e nt s . The Re vol vi ng Loa n Bor r owe r a gr e e s t o pa y t o t he LC I s s ue r , on t he da t e a ny pa ym e nt i s m a de by t he LC I s s ue r , a n a m ount e qua l t o a ny pa ym e nt m a de by t he LC I s s ue r wi t h r e s pe c t t o 90 115525625. 4 0063724- 00082 e a c h Le t t e r of Cr e di t , t oge t he r wi t h i nt e r e s t on s uc h a m ount f r om t he da t e of a ny pa ym e nt m a de by t he LC I s s ue r a t t he Re vol vi ng Loa n Bor r owi ng Ra t e f or t he f i r s t t hr e e da ys a nd t he r e a f t e r a t t he De f a ul t Ra t e a ppl i c a bl e t o Re vol vi ng Loa ns . The pr i nc i pa l a m ount of a ny s uc h pa ym e nt s ha l l be us e d t o r e i m bur s e t he LC I s s ue r f or
t he pa ym e nt m a de by i t unde r t he Le t t e r of Cr e di t a nd, t o t he e xt e nt t ha t t he Le nde r s ha ve not r e i m bur s e d t he Age nt pur s ua nt t o Se c t i on 5. 6, t he i nt e r e s t a m ount of a ny s uc h pa ym e nt s ha l l be s ol e l y f or t he a c c ount of t he LC I s s ue r . Ea c h Le nde r t ha t ha s r e i m bur s e d t he Age nt pur s ua nt t o Se c t i on 5. 6 f or i t s Pr o Ra t a Sha r e of a ny pa ym e nt m a de by t he LC I s s ue r unde r a Le t t e r of Cr e di t s ha l l t he r e upon a c qui r e a pr o r a t a pa r t i c i pa t i on, t o t he e xt e nt of s uc h r e i m bur s e m e nt , i n t he c l a i m of t he LC I s s ue r a ga i ns t t he Re vol vi ng Loa n Bor r owe r f or r e i m bur s e m e nt of pr i nc i pa l a nd i nt e r e s t unde r t hi s Se c t i on 5. 7 a nd s ha l l s ha r e , i n a c c or da nc e wi t h t ha t pr o r a t a pa r t i c i pa t i on, i n a ny pr i nc i pa l pa ym e nt m a de by t he Re vol vi ng Loa n Bor r owe r wi t h r e s pe c t t o s uc h c l a i m a nd i n a ny i nt e r e s t pa ym e nt m a de by t he Re vol vi ng Loa n Bor r owe r ( but onl y wi t h r e s pe c t t o pe r i ods s ubs e que nt t o t he da t e s uc h Le nde r r e i m bur s e d t he Age nt ) wi t h r e s pe c t t o s uc h c l a i m . The LC I s s ue r s ha l l pr om pt l y m a ke a va i l a bl e t o t he Age nt , i n i m m e di a t e l y a va i l a bl e f unds , a ny a m ount s
due t o t he Le nde r s unde r t hi s Se c t i on 5. 7. The LC I s s ue r s ha l l not i f y t he Re vol vi ng Loa n Bor r owe r a nd t he Age nt whe ne ve r a ny de m a nd f or pa ym e nt i s m a de unde r a ny Le t t e r of Cr e di t by t he be ne f i c i a r y t he r e of . 5. 8 Te r m s Sa t i s f a c t or y t o LC I s s ue r . Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on of t hi s Agr e e m e nt , a ny LC Agr e e m e nt , LC Appl i c a t i on, or a ny ot he r Loa n Doc um e nt , a l l t e r m s a nd c ondi t i ons of e a c h Le t t e r of Cr e di t m us t be a c c e pt a bl e t o LC I s s ue r i n i t s s ol e di s c r e t i on a nd e a c h Le t t e r of Cr e di t m us t c onf or m t o a l l r e qui r e m e nt s of t he LC I s s ue r . 5. 9 Obl i ga t i ons Abs ol ut e . The obl i ga t i on of t he Re vol vi ng Loa n Bor r owe r t o pa y t o t he LC I s s ue r t he a m ount of a ny pa ym e nt m a de by t he LC I s s ue r unde r a ny Le t t e r of Cr e di t s ha l l be a bs ol ut e , unc ondi t i ona l , a nd i r r e voc a bl e . W i t hout l i m i t i ng t he f or e goi ng, t he Re vol vi ng Loa n Bor r owe r ’ s obl i ga t i on s ha l l not be a f f e c t e d by a ny of t he f ol l owi ng c i r c um s t a nc e s , e xc e pt i n t he e ve nt of LC I s s ue r ’ s gr os s ne gl i ge nc e or i nt e nt i ona l m i s c onduc t : ( a ) a ny l a c k of va l i di t y or e nf or c e a bi l i t y of t he Le t t e r of
Cr e di t , t hi s Agr e e m e nt , t he ot he r Loa n Doc um e nt s , or a ny ot he r a gr e e m e nt or i ns t r um e nt r e l a t i ng t he r e t o; ( b) t he e xi s t e nc e of a ny c l a i m , s e t of f , de f e ns e , or ot he r r i ght s whi c h a ny Loa n Pa r t y m a y ha ve a t a ny t i m e a ga i ns t t he LC I s s ue r , a ny be ne f i c i a r y of t he Le t t e r of Cr e di t ( or a ny Pe r s ons f or whom a ny s uc h be ne f i c i a r y m a y be a c t i ng) or a ny ot he r Pe r s on, whe t he r i n c onne c t i on wi t h t he Le t t e r of Cr e di t , t hi s Agr e e m e nt , or a ny ot he r a gr e e m e nt or i ns t r um e nt r e l a t i ng t he r e t o, or a ny unr e l a t e d t r a ns a c t i ons ; ( c ) a ny dr a f t , de m a nd, s t a t e m e nt , or a ny ot he r doc um e nt pr e s e nt e d unde r t he Le t t e r of Cr e di t pr ovi ng t o be f or ge d, f r a udul e nt or i nva l i d i n a ny r e s pe c t or a ny s t a t e m e nt t he r e i n be i ng unt r ue or i na c c ur a t e i n a ny r e s pe c t wha t s oe ve r ; 91 115525625. 4 0063724- 00082
( d) t he s ol ve nc y or f i na nc i a l r e s pons i bi l i t y of a ny pa r t y i s s ui ng a ny doc um e nt s i n c onne c t i on wi t h a Le t t e r of Cr e di t ; ( e ) a ny f a i l ur e or de l a y i n not i c e of s hi pm e nt s or a r r i va l of a ny pr ope r t y; ( f ) a ny e r r or , om i s s i on, i nt e r r upt i on, de l a y, or l os s i n t he t r a ns m i s s i on or de l i ve r y of a ny dr a f t , m e s s a ge , not i c e , a dvi c e , or ot he r c om m uni c a t i on r e l a t i ng t o a Le t t e r of Cr e di t or a ny de l a y or i nt e r r upt i on i n a ny s uc h m e s s a ge ; ( g) a ny e r r or , ne gl e c t or de f a ul t of a ny c or r e s ponde nt of t he LC I s s ue r i n c onne c t i on wi t h a Le t t e r of Cr e di t ; ( h) a ny e r r or i n i nt e r pr e t a t i on of t e c hni c a l t e r m s or a ny c ons e que nc e a r i s i ng f r om c i r c um s t a nc e s be yond t he c ont r ol of t he LC I s s ue r ; ( i ) a ny ot he r c i r c um s t a nc e wha t s oe ve r , whe t he r or not s i m i l a r t o a ny of t he f or e goi ng t ha t m i ght c ons t i t ut e a l e ga l or e qui t a bl e di s c ha r ge of , or pr ovi de a r i ght of s e t of f a ga i ns t , t he Obl i ga t i ons of t he Re vol vi ng Loa n Bor r owe r . 5. 10 Le t t e r of Cr e di t Fe e s . 5. 10. 1 The Re vol vi ng Loa n Bor r owe r a gr e e s t o pa y t o t he Age nt , f or t he a c c ount of t he Le nde r s r a t a bl y i n a c c or da nc e wi t h t he i r
Pr o Ra t a Sha r e s , on t he da t e a ny Le t t e r of Cr e di t i s i s s ue d, r e ne we d or e xt e nde d, wi t h r e s pe c t t o e a c h Le t t e r of Cr e di t , a l e t t e r of c r e di t f e e a t a pe r a nnum r a t e e qua l t o t he LC Fe e Pe r c e nt a ge t i m e s t he da i l y m a xi m um a m ount a va i l a bl e t o be dr a wn unde r s uc h Le t t e r of Cr e di t ( " LC Fe e ” ) . The LC Fe e on Le t t e r s of Cr e di t s ha l l be ( i ) c om put e d on a qua r t e r l y ba s i s i n a r r e a r s a nd ( i i ) due a nd pa ya bl e on t he f i r s t ( 1s t ) da y of e a c h Apr i l , J ul y, Oc t obe r a nd J a nua r y, c om m e nc i ng wi t h t he f i r s t s uc h da t e t o oc c ur a f t e r t he i s s ua nc e of s uc h Le t t e r of Cr e di t , on t he Le t t e r of Cr e di t e xpi r a t i on da t e a nd t he r e a f t e r on de m a nd; pr ovi de d, f ur t he r , t ha t i f a ny pa ym e nt t o be m a de by t he Bor r owe r unde r t hi s Se c t i on 5. 10. 1 s ha l l c om e due on a da y ot he r t ha n a Bus i ne s s Da y, s uc h pa ym e nt s ha l l be due on t he ne xt s uc c e e di ng Bus i ne s s Da y. Al l f e e s pa i d unde r t hi s Se c t i on 5. 10. 1 a r e non- r e f unda bl e , e ve n i f t he Le t t e r of Cr e di t f or whi c h t he y a r e pa i d i s t e r m i na t e d or a m e nde d be f or e i t s a nt i c i pa t e d e xpi r a t i on or e xt e nde d e xpi r a t i on da t e . 5. 10. 2 The Re vol vi ng
Loa n Bor r owe r a gr e e s t o pa y t o LC I s s ue r , f or i t s s ol e a c c ount on de m a nd, ( a ) t he f e e s a gr e e d t o be t we e n t he m a s s e t f or t h i n a ny f e e l e t t e r or a s ot he r wi s e a gr e e d f r om t i m e t o t i m e , a nd ( b) wi t h r e s pe c t t o e a c h Le t t e r of Cr e di t a nd e a c h dr a f t dr a wn t he r e unde r , LC I s s ue r ’ s c us t om a r y f e e s a nd c ha r ge s , i nc l udi ng pr oc e s s i ng, dr a wi ng, t r a ns f e r , a m e ndm e nt , ne got i a t i on, a c c e pt a nc e , a nd ot he r f e e s a nd a l l out - of - poc ke t e xpe ns e s i nc ur r e d by t he LC I s s ue r i n a c c or da nc e wi t h t he i s s ua nc e , M odi f i c a t i on, a dm i ni s t r a t i on or pa ym e nt of a ny Le t t e r of Cr e di t . 5. 11 LC Col l a t e r a l Ac c ount . The Re vol vi ng Loa n Bor r owe r wi l l , upon t he r e que s t of t he Age nt or Re qui r e d Le nde r s a nd unt i l t he f i na l e xpi r a t i on da t e of a ny Le t t e r of Cr e di t a nd t he r e a f t e r a s l ong a s a ny a m ount i s 92 115525625. 4 0063724- 00082 pa ya bl e t o t he LC I s s ue r or t he Le nde r s i n r e s pe c t of a ny Le t t e r of Cr e di t , m a i nt a i n a s pe c i a l c ol l a t e r a l a c c ount pur s ua nt t o a r r a nge m e nt s s a t i s f a c t or y t o t he Age nt ( t he " LC Col l a t e r a l Ac c ount ” ) , i n t he na m e of t he Re vol vi ng Loa n Bor r owe r but unde r t he s ol e
dom i ni on a nd c ont r ol of t he Age nt , f or t he be ne f i t of t he Le nde r s a nd i n whi c h t he Re vol vi ng Loa n Bor r owe r s ha l l ha ve no i nt e r e s t . The Re vol vi ng Loa n Bor r owe r he r e by pl e dge s , a s s i gns a nd gr a nt s t o t he Age nt , on be ha l f of a nd f or t he r a t a bl e be ne f i t of t he Le nde r s a nd t he LC I s s ue r , a s e c ur i t y i nt e r e s t i n a l l of t he Re vol vi ng Loa n Bor r owe r ’ s r i ght , t i t l e a nd i nt e r e s t i n a nd t o a l l f unds whi c h m a y f r om t i m e t o t i m e be on de pos i t i n t he LC Col l a t e r a l Ac c ount t o s e c ur e t he pr om pt a nd c om pl e t e pa ym e nt a nd pe r f or m a nc e of t he Obl i ga t i ons a nd Pe r m i t t e d Swa p Obl i ga t i ons . The Age nt wi l l i nve s t a ny f unds on de pos i t f r om t i m e t o t i m e i n t he LC Col l a t e r a l Ac c ount i n c e r t i f i c a t e s of de pos i t of t he Age nt ha vi ng a m a t ur i t y not e xc e e di ng 30 da ys . Not hi ng i n t hi s Se c t i on s ha l l e i t he r obl i ga t e t he Age nt t o r e qui r e t he Re vol vi ng Loa n Bor r owe r t o de pos i t a ny f unds i n t he LC Col l a t e r a l Ac c ount or l i m i t t he r i ght of t he Age nt t o r e l e a s e a ny f unds he l d i n t he LC Col l a t e r a l Ac c ount . 5. 12 Bor r owe r I nde m ni f i c a t i on . The Re vol vi ng Loa n Bor r owe r he r e by a gr e e s t o
i nde m ni f y a nd hol d ha r m l e s s e a c h Le nde r , t he LC I s s ue r a nd t he Age nt , a nd t he i r r e s pe c t i ve pa r e nt c or por a t i ons , a f f i l i a t e s , s ubs i di a r i e s , s uc c e s s or s , a s s i gns , of f i c e r s , di r e c t or s , e m pl oye e s , a ge nt s , a t t or ne ys a nd a dvi s or s ( t he " I nde m ni f i e d Pe r s ons ” ) f r om a nd a ga i ns t a ny a nd a l l c l a i m s , l os s e s , l i a bi l i t i e s , de m a nds , da m a ge s , a c t i ons , c a us e s of a c t i on, pe na l t i e s , c os t s a nd e xpe ns e s ( i nc l udi ng At t or ne y Cos t s ) , de f e ns e s , c ount e r c l a i m s , s e t of f s a nd c l a i m s f or r e c oupm e nt ( c ol l e c t i ve l y, " Cl a i m s ” ) whi c h s uc h Le nde r , t he LC I s s ue r or t he Age nt m a y i nc ur ( or whi c h m a y be c l a i m e d a ga i ns t s uc h Le nde r , t he LC I s s ue r or t he Age nt by a ny Pe r s on wha t s oe ve r ) by r e a s on of or i n c onne c t i on wi t h t he i s s ua nc e , e xe c ut i on a nd de l i ve r y or t r a ns f e r of or pa ym e nt or f a i l ur e t o pa y unde r a ny Le t t e r of Cr e di t or a ny a c t ua l or pr opos e d us e of a ny Le t t e r of Cr e di t , i nc l udi ng, wi t hout l i m i t a t i on, a ny c l a i m s , da m a ge s , l os s e s , l i a bi l i t i e s , c os t s or e xpe ns e s whi c h t he LC I s s ue r m a y i nc ur by r e a s on of or i n c onne c t i on wi t h ( a ) t he f a i l ur e of a ny ot he r Le nde r t o
f ul f i l l or c om pl y wi t h i t s obl i ga t i ons t o t he LC I s s ue r he r e unde r ( but not hi ng he r e i n c ont a i ne d s ha l l a f f e c t a ny r i ght s t he Re vol vi ng Loa n Bor r owe r m a y ha ve a ga i ns t a ny De f a ul t i ng Le nde r ) or ( b) by r e a s on of or on a c c ount of t he LC I s s ue r i s s ui ng a ny Le t t e r of Cr e di t whi c h s pe c i f i e s t ha t t he t e r m " Be ne f i c i a r y” i nc l ude d t he r e i n i nc l ude s a ny s uc c e s s or by ope r a t i on of l a w of t he na m e d Be ne f i c i a r y, but whi c h Le t t e r of Cr e di t doe s not r e qui r e t ha t a ny dr a wi ng by a ny s uc h s uc c e s s or Be ne f i c i a r y be a c c om pa ni e d by a c opy of a l e ga l doc um e nt , s a t i s f a c t or y t o t he LC I s s ue r , e vi de nc i ng t he a ppoi nt m e nt of s uc h s uc c e s s or Be ne f i c i a r y; pr ovi de d t ha t t he Re vol vi ng Loa n Bor r owe r s ha l l not be r e qui r e d t o i nde m ni f y a ny Le nde r , t he LC I s s ue r or t he Age nt f or a ny Cl a i m t o t he e xt e nt , but onl y t o t he e xt e nt , c a us e d by ( y) t he wi l l f ul m i s c onduc t or gr os s ne gl i ge nc e of t he LC I s s ue r i n de t e r m i ni ng whe t he r a r e que s t pr e s e nt e d unde r a ny Le t t e r of Cr e di t c om pl i e d wi t h t he t e r m s of s uc h Le t t e r of Cr e di t or ( z ) t he LC I s s ue r ’ s f a i l ur e t o pa y unde r a ny Le t t e r of Cr e di t
a f t e r t he pr e s e nt a t i on t o i t of a r e que s t s t r i c t l y c om pl yi ng wi t h t he t e r m s a nd c ondi t i ons of s uc h Le t t e r of Cr e di t . Not hi ng i n t hi s Se c t i on 5. 12 i s i nt e nde d t o l i m i t t he obl i ga t i ons of t he Re vol vi ng Loa n Bor r owe r unde r a ny ot he r pr ovi s i on of t hi s Agr e e m e nt . W i t hout l i m i t i ng t he pr ovi s i ons of Se c t i on 7. 4, t hi s Se c t i on 5. 12 s ha l l not a ppl y wi t h r e s pe c t t o Ta xe s ot he r t ha n a ny Ta xe s t ha t r e pr e s e nt l os s e s , c l a i m s , da m a ge s , e t c . a r i s i ng f r om a ny non- Ta x c l a i m . 93 115525625. 4 0063724- 00082
5. 13 Le nde r s ’ I nde m ni f i c a t i on . Ea c h Le nde r s ha l l , r a t a bl y i n a c c or da nc e wi t h i t s Pr o Ra t a Sha r e , i nde m ni f y t he LC I s s ue r , i t s a f f i l i a t e s a nd t he i r r e s pe c t i ve di r e c t or s , of f i c e r s , a ge nt s a nd e m pl oye e s ( t o t he e xt e nt not r e i m bur s e d by t he Re vol vi ng Loa n Bor r owe r ) a ga i ns t a ny Cl a i m s ( e xc e pt s uc h a s r e s ul t f r om t he LC I s s ue r ’ s gr os s ne gl i ge nc e or wi l l f ul m i s c onduc t or t he LC I s s ue r ’ s f a i l ur e t o pa y unde r a ny Le t t e r of Cr e di t a f t e r t he pr e s e nt a t i on t o i t of a r e que s t s t r i c t l y c om pl yi ng wi t h t he t e r m s a nd c ondi t i ons of t he Le t t e r of Cr e di t ) t ha t s uc h i nde m ni t e e s m a y s uf f e r or i nc ur i n c onne c t i on wi t h t hi s Ar t i c l e 5 or a ny a c t i on t a ke n or om i t t e d by s uc h i nde m ni t e e s he r e unde r . ARTI CLE 6 CERTAI N ADDI TI ONAL PROVI SI ONS 6. 1 I nt e r e s t . 6. 1. 1 I nt e r e s t Ra t e . Unl e s s t he De f a ul t Ra t e or t he r a t e s e t f or t h i n Se c t i on 7. 3 i s a ppl i c a bl e , ( a ) Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns s ha l l be a r i nt e r e s t a t a va r i a bl e r a t e pe r a nnum e qua l t o t he Ne w Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e , ( b) Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng
Li ne Loa ns s ha l l be a r i nt e r e s t a t a va r i a bl e r a t e pe r a nnum e qua l t o t he Us e d Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e ; ( c ) Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns s ha l l be a r i nt e r e s t a t a va r i a bl e r a t e pe r a nnum e qua l t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e a nd ( d) Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns s ha l l be a r i nt e r e s t a t a va r i a bl e r a t e pe r a nnum e qua l t o t he Re vol vi ng Loa n Bor r owi ng Ra t e , i n e a c h c a s e a dj us t e d wi t hout not i c e on t he da t e of e a c h c ha nge i n Adj us t e d Da i l y Si m pl e SOFR, Adj us t e d Te r m SOFR or t he Te r m SOFR Al t e r na t i ve Ra t e , a s a ppl i c a bl e . 6. 1. 2 Ra t e s Appl i c a bl e Af t e r Eve nt of De f a ul t . Dur i ng t he c ont i nua nc e of a n Eve nt of De f a ul t t he Re qui r e d Le nde r s m a y, a t t he i r opt i on, by not i c e t o t he Com pa ny, de c l a r e t ha t ( a ) t he Loa ns s ha l l be a r i nt e r e s t a t a r a t e pe r a nnum e qua l t o t he i nt e r e s t r a t e whi c h woul d ot he r wi s e be i n e f f e c t f r om t i m e t o t i m e pur s ua nt t o Se c t i on 6. 1. 1, pl us 2% pe r a nnum ( e a c h, a " De f a ul t Ra t e ” ) , a nd ( b) t he LC Fe e s ha l l be i nc r e a s e d by 2% pe r
a nnum , pr ovi de d t ha t , dur i ng t he c ont i nua nc e of a n Eve nt of De f a ul t unde r Se c t i on 14. 1. 8, t he i nt e r e s t r a t e s e t f or t h i n c l a us e ( a ) a bove a nd t he i nc r e a s e i n t he LC Fe e s e t f or t h i n c l a us e ( b) a bove s ha l l a ut om a t i c a l l y be a ppl i c a bl e t o a l l Loa ns , Le t t e r s of Cr e di t , a nd Cr e di t Ext e ns i ons wi t hout a ny e l e c t i on or a c t i on on t he pa r t of t he Age nt or a ny Le nde r . Af t e r a n Eve nt of De f a ul t ha s be e n c ur e d or wa i ve d, t he i nt e r e s t r a t e a ppl i c a bl e t o t he Loa ns a nd t he LC Fe e s ha l l r e ve r t t o t he r a t e s a ppl i c a bl e pr i or t o t he oc c ur r e nc e of a n Eve nt of De f a ul t . 6. 1. 3 De t e r m i na t i on of Ra t e . Not wi t hs t a ndi ng a ny pr ovi s i on of t hi s Agr e e m e nt t o t he c ont r a r y, e a c h Le nde r s ha l l be e nt i t l e d t o f und a nd m a i nt a i n i t s f undi ng of a l l or a ny pa r t of t he Loa ns i n a ny m a nne r i t e l e c t s . 6. 2 Evi de nc e of De bt . The Loa ns m a de by e a c h Le nde r s ha l l be e vi de nc e d by one or m or e a c c ount s or r e c or ds m a i nt a i ne d by s uc h Le nde r a nd by t he Age nt i n t he or di na r y c our s e of bus i ne s s . The a c c ount s or 94 115525625. 4 0063724- 00082 r e c or ds m a i nt a i ne d by t he Age nt a nd e a c h Le nde r s ha l l be
c onc l us i ve a bs e nt m a ni f e s t e r r or of t he a m ount of t he Loa ns m a de by t he Le nde r s t o t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , Us e d Ve hi c l e Fl oor pl a n Bor r owe r , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r a nd Re vol vi ng Loa n Bor r owe r a nd t he i nt e r e s t a nd pa ym e nt s t he r e on. Any f a i l ur e t o s o r e c or d or a ny e r r or i n doi ng s o s ha l l not , howe ve r , l i m i t or ot he r wi s e a f f e c t t he obl i ga t i on of t he Bor r owe r s he r e unde r t o pa y a ny a m ount owi ng wi t h r e s pe c t t o t he Obl i ga t i ons . I n t he e ve nt of a ny c onf l i c t be t we e n t he a c c ount s a nd r e c or ds m a i nt a i ne d by a ny Le nde r a nd t he a c c ount s a nd r e c or ds of t he Age nt i n r e s pe c t of s uc h m a t t e r s , t he a c c ount s a nd r e c or ds of t he Age nt s ha l l c ont r ol i n t he a bs e nc e of m a ni f e s t e r r or . 6. 3 Bor r owi ng Pr oc e dur e . 6. 3. 1 Re que s t s f or Loa ns . W he ne ve r t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r or t he Re vol vi ng Loa n Bor r owe r , a s a ppl i c a bl e , wi s he s t o r e que s t a Loa n, t he Com pa ny s ha l l gi ve Age nt i r r e voc a bl e not i c e t he r e of wi t hi n t he t i m e r e qui r e d by t hi s Agr e e m e nt . The
Com pa ny ( on be ha l f of t he a ppl i c a bl e Bor r owe r or Bor r owe r s ) m a y r e que s t a Loa n i n wr i t i ng or by t e l e phone ( or wi t h r e s pe c t t o Us e d Ve hi c l e Swe e p Adva nc e s , a s s e t f or t h i n Se c t i on 3. 2. 7 a nd Se r vi c e Loa ne r Ve hi c l e Swe e p Adva nc e s , a s s e t f or t h i n Se c t i on 3. 4. 7) f or de pos i t i nt o t he Com pa ny’ s de pos i t a c c ount ( s ) wi t h t he Age nt . Re que s t s f or Loa ns t o be de pos i t e d or f or wa r de d e l s e whe r e s ha l l be i n wr i t i ng i n s uc h f or m a nd c ont a i ni ng s uc h a ddi t i ona l i nf or m a t i on a s t he Age nt m a y r e a s ona bl y r e qui r e i n or de r t o c onf i r m t he r e que s t a nd t r a ns m i t f unds . Ea c h Bor r owe r he r e by a ut hor i z e s Le nde r s a nd t he Age nt t o m a ke Adva nc e s a nd t o t r a ns f e r f unds ba s e d on t e l e phoni c not i c e s m a de by a ny Pe r s on whi c h t he Age nt or a ny Le nde r i n good f a i t h be l i e ve s t o be a c t i ng on be ha l f of t he Com pa ny, i t be i ng unde r s t ood t ha t t he f or e goi ng a ut hor i z a t i on i s s pe c i f i c a l l y i nt e nde d t o a l l ow r e que s t s f or Adva nc e s t o be gi ve n t e l e phoni c a l l y. The Com pa ny a gr e e s t o de l i ve r pr om pt l y t o t he Age nt a wr i t t e n c onf i r m a t i on ( whi c h m a y i nc l ude e - m a i l ) of e a c h t e l e phoni c not i c e . I f t he
wr i t t e n c onf i r m a t i on di f f e r s i n a ny m a t e r i a l r e s pe c t f r om t he a c t i on t a ke n by t he Age nt a nd t he Le nde r s , t he r e c or ds of t he Age nt a nd t he Le nde r s s ha l l gove r n a bs e nt m a ni f e s t e r r or . 6. 3. 2 Le ndi ng I ns t a l l a t i ons . Ea c h Le nde r m a y book i t s Adva nc e s a nd i t s pa r t i c i pa t i on i n a ny LC Obl i ga t i ons a nd Swi ng Li ne Loa ns a nd t he LC I s s ue r m a y book t he Le t t e r s of Cr e di t a t a ny Le ndi ng I ns t a l l a t i on s e l e c t e d by s uc h Le nde r or t he LC I s s ue r , a s t he c a s e m a y be , a nd m a y c ha nge i t s Le ndi ng I ns t a l l a t i on f r om t i m e t o t i m e . Al l t e r m s of t hi s Agr e e m e nt s ha l l a ppl y t o a ny s uc h Le ndi ng I ns t a l l a t i on a nd t he Loa ns , Le t t e r s of Cr e di t , a nd pa r t i c i pa t i ons i n LC Obl i ga t i ons a nd Swi ng Li ne Loa ns s ha l l be de e m e d he l d by e a c h Le nde r or t he LC I s s ue r , a s t he c a s e m a y be , f or t he be ne f i t of a ny s uc h Le ndi ng I ns t a l l a t i on. Ea c h Le nde r a nd t he LC I s s ue r m a y, by wr i t t e n not i c e t o t he Age nt a nd t he Com pa ny, de s i gna t e r e pl a c e m e nt or a ddi t i ona l Le ndi ng I ns t a l l a t i ons t hr ough whi c h Loa ns wi l l be m a de by i t or Le t t e r s of Cr e di t wi l l be i s s ue d by i t a nd f or whos e a c c ount Loa n
pa ym e nt s or pa ym e nt s wi t h r e s pe c t t o Le t t e r s of Cr e di t a r e t o be m a de . 6. 4 Obl i ga t i ons Se ve r a l 95 115525625. 4 0063724- 00082
. The f a i l ur e of a ny Le nde r t o m a ke a ny Loa n s ha l l not r e l i e ve a ny ot he r Le nde r of i t s obl i ga t i on t o m a ke i t s Loa n on a ny da t e , but no Le nde r s ha l l be r e s pons i bl e f or t he f a i l ur e of a ny ot he r Le nde r t o m a ke a ny Loa n t o be m a de by s uc h ot he r Le nde r . 6. 5 Non- Re c e i pt of Funds by t he Age nt . Unl e s s t he Com pa ny ( on be ha l f of a ny Bor r owe r or Bor r owe r s ) or a Le nde r , a s t he c a s e m a y be , not i f i e s Age nt pr i or t o t he da t e on whi c h Le nde r or a Bor r owe r or Bor r owe r s i s s c he dul e d t o m a ke pa ym e nt t o t he Age nt of ( a ) i n t he c a s e of a Le nde r , t he pr oc e e ds of a Loa n or pa r t i c i pa t i on or ( b) i n t he c a s e of a Bor r owe r or Bor r owe r s , a pa ym e nt of pr i nc i pa l , i nt e r e s t or f e e s t o t he Age nt f or t he a c c ount of t he Le nde r s , t ha t i t doe s not i nt e nd t o m a ke s uc h pa ym e nt , t he Age nt m a y a s s um e t ha t s uc h pa ym e nt ha s be e n m a de . The Age nt m a y, but s ha l l not be obl i ga t e d t o, m a ke t he a m ount of s uc h pa ym e nt a va i l a bl e t o t he i nt e nde d r e c i pi e nt i n r e l i a nc e upon s uc h a s s um pt i on. I f s uc h Le nde r or Bor r owe r or Bor r owe r s , a s t he c a s e m a y be , ha s not i n f a c t m a de s uc h
pa ym e nt t o t he Age nt , t he r e c i pi e nt of s uc h pa ym e nt s ha l l , on de m a nd by t he Age nt , r e pa y t o t he Age nt t he a m ount s o m a de a va i l a bl e t oge t he r wi t h i nt e r e s t t he r e on i n r e s pe c t of e a c h da y dur i ng t he pe r i od c om m e nc i ng on t he da t e s uc h a m ount wa s s o m a de a va i l a bl e by t he Age nt unt i l t he da t e Age nt r e c ove r s s uc h a m ount a t a r a t e pe r a nnum e qua l t o ( y) i n t he c a s e of pa ym e nt by a Le nde r , t he Fe de r a l Funds Ef f e c t i ve Ra t e f or s uc h da y f or t he f i r s t t hr e e da ys a nd, t he r e a f t e r , t he i nt e r e s t r a t e a ppl i c a bl e t o t he r e l e va nt Loa n or ( z ) i n t he c a s e of pa ym e nt by a Bor r owe r or Bor r owe r s , t he i nt e r e s t r a t e a ppl i c a bl e t o t he r e l e va nt Loa n or Re i m bur s e m e nt Obl i ga t i ons . 6. 6 Aut hor i z a t i on . Any Loa n m a de t o a ny one or m or e of t he Bor r owe r s s ha l l be c onc l us i ve l y pr e s um e d t o ha ve be e n m a de t o or f or t he be ne f i t of s uc h Bor r owe r or Bor r owe r s whe n t he pr oc e e ds of s uc h Loa n ( a ) a r e de pos i t e d t o t he c r e di t of a Bor r owe r i n a n a c c ount of a Bor r owe r wi t h t he Age nt , or ( b) a r e t r a ns m i t t e d t o a ny ot he r ba nk wi t h di r e c t i ons t o c r e di t t he s a m e t o t he a c c ount of
a ny Bor r owe r a t s uc h ba nk, r e ga r dl e s s of whe t he r Pe r s ons ot he r t ha n t hos e a ut hor i z e d t o m a ke r e que s t s f or Loa ns ha ve a ut hor i t y t o dr a w a ga i ns t a ny s uc h a c c ount . Ea c h Bor r owe r a c knowl e dge s t ha t t he Age nt c a nnot e f f e c t i ve l y de t e r m i ne whe t he r a pa r t i c ul a r r e que s t f or a Loa n i s va l i d, a ut hor i z e d, or a ut he nt i c . The r e f or e , e a c h Bor r owe r a s s um e s a l l r i s k of t he va l i di t y, a ut he nt i c i t y, a nd a ut hor i z a t i on of s uc h r e que s t s , whe t he r or not t he i ndi vi dua l m a ki ng s uc h r e que s t s ha s a ut hor i t y t o r e que s t Loa ns . The Age nt s ha l l be e nt i t l e d t o a c t on t he i ns t r uc t i ons of a nyone i de nt i f yi ng hi m s e l f or he r s e l f a s a ut hor i z e d t o r e que s t Loa ns a nd e a c h Bor r owe r s ha l l be bound t he r e by i n t he s a m e m a nne r a s i f t he Pe r s on we r e a c t ua l l y s o a ut hor i z e d. The Age nt i s a ut hor i z e d t o c r e di t a ny a c c ount of ( w) a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r wi t h t he Age nt ( or a ny a c c ount a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r de s i gna t e s i n wr i t i ng) f or Loa ns m a de t o t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , ( x) t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r wi t h t he Age nt ( or a ny a c c ount t he Us e d Ve hi c l e
Fl oor pl a n Bor r owe r de s i gna t e s i n wr i t i ng) f or l oa ns m a de t o t he Us e d Ve hi c l e Fl oor pl a n Bor r owe r , ( y) t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r wi t h t he Age nt ( or a ny a c c ount t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r de s i gna t e s i n wr i t i ng) f or l oa ns m a de t o t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r , a nd ( z ) t he Re vol vi ng Loa n Bor r owe r wi t h t he Age nt ( or a ny a c c ount t he Re vol vi ng Loa n Bor r owe r de s i gna t e s i n wr i t i ng) f or l oa ns m a de t o t he Re vol vi ng Loa n Bor r owe r . A Bor r owe r ’ s f a i l ur e t o c onf i r m a ny t e l e phoni c r e que s t or ot he r wi s e c om pl y wi t h t he 96 115525625. 4 0063724- 00082 pr ovi s i ons of t hi s Se c t i on 6. 6 s ha l l not i n a ny m a nne r a f f e c t t he obl i ga t i on of t he a ppl i c a bl e Bor r owe r or Bor r owe r s t o r e pa y s uc h Loa ns i n a c c or da nc e wi t h t he t e r m s of t hi s Agr e e m e nt . Ea c h Bor r owe r a gr e e s not t o hol d Age nt or t he Le nde r s l i a bl e f or a ny e r r or s or m i s unde r s t a ndi ng i n c om pl yi ng wi t h a ny wr i t t e n or or a l di r e c t i ons f or Loa ns ; a nd e a c h Bor r owe r a gr e e s t o i nde m ni f y a nd hol d Age nt a nd t he Le nde r s a nd t he ot he r I nde m ni f i e d Pe r s ons ha r m l e s s f r om a ny
a nd a l l Cl a i m s whi c h m a y a r i s e or be c r e a t e d by t he a c c e pt a nc e of i ns t r uc t i ons ( t e l e phoni c or ot he r wi s e ) f or m a ki ng Loa ns by wi r e t r a ns f e r or ot he r wi s e , or f or a ppl i c a t i on of pa ym e nt s , ot he r t ha n a s a r e s ul t of t he Age nt ’ s gr os s ne gl i ge nc e or wi l l f ul m i s c onduc t . 6. 7 I nt e r e s t a nd Fe e Ba s i s . Al l i nt e r e s t r a t e s a nd f e e s r e f e r r e d t o he r e i n s ha l l be c a l c ul a t e d f or a c t ua l da ys e l a ps e d on t he ba s i s of a 360- da y ye a r . I nt e r e s t s ha l l be pa ya bl e f or t he da y a n Adva nc e i s m a de but not f or t he da y of a ny pa ym e nt on t he a m ount pa i d i f pa ym e nt i s r e c e i ve d pr i or t o noon ( Pa c i f i c Ti m e ) a t t he pl a c e of pa ym e nt . I f a ny pa ym e nt of pr i nc i pa l of or i nt e r e s t s ha l l be c om e due on a da y whi c h i s not a Bus i ne s s Da y, s uc h pa ym e nt s ha l l be m a de on t he ne xt s uc c e e di ng Bus i ne s s Da y, a nd s uc h e xt e ns i on of t i m e s ha l l i n s uc h c a s e be i nc l ude d i n c om put i ng i nt e r e s t on s uc h pa ym e nt . 6. 8 M e t hod of Pa ym e nt . Al l pa ym e nt s of t he Obl i ga t i ons he r e unde r s ha l l be m a de , wi t hout s e t of f , de duc t i on, or c ount e r c l a i m , i n i m m e di a t e l y a va i l a bl e f unds t o t he Age nt a t t he
Age nt ’ s a ddr e s s s pe c i f i e d f or not i c e he r e i n, or a t a ny ot he r Le ndi ng I ns t a l l a t i on of t he Age nt s pe c i f i e d i n wr i t i ng by t he Age nt t o t he Com pa ny, by noon ( Pa c i f i c Ti m e ) on t he da t e whe n due a nd s ha l l ( e xc e pt ( a ) wi t h r e s pe c t t o r e pa ym e nt s of Swi ng Li ne Loa ns , ( b) i n t he c a s e of Re i m bur s e m e nt Obl i ga t i ons f or whi c h t he LC I s s ue r ha s not be e n f ul l y i nde m ni f i e d by t he Le nde r s , or ( c ) a s ot he r wi s e s pe c i f i c a l l y r e qui r e d he r e unde r ) be a ppl i e d r a t a bl y by t he Age nt a m ong t he Le nde r s , i n a c c or da nc e wi t h t he i r Pr o Ra t a Sha r e s . Ea c h pa ym e nt de l i ve r e d t o t he Age nt f or t he a c c ount of a ny Le nde r s ha l l be de l i ve r e d pr om pt l y by t he Age nt t o s uc h Le nde r i n t he s a m e t ype of f unds t ha t t he Age nt r e c e i ve d a t i t s a ddr e s s s pe c i f i e d f or not i c e he r e i n, or a t a ny Le ndi ng I ns t a l l a t i on s pe c i f i e d i n a not i c e r e c e i ve d by t he Age nt f r om s uc h Le nde r . Ea c h r e f e r e nc e t o t he Age nt i n t hi s Se c t i on s ha l l a l s o be de e m e d t o r e f e r , a nd s ha l l a ppl y e qua l l y, t o t he LC I s s ue r , i n t he c a s e of pa ym e nt s r e qui r e d t o be m a de by t he Re vol vi ng Loa n Bor r owe r t o t he LC I s s ue r . 6. 9 Pa ym e nt
by Aut om a t i c De bi t . Ea c h Bor r owe r he r e by a ut hor i z e s Age nt t o a ut om a t i c a l l y de duc t t he a m ount of a l l pr i nc i pa l a nd i nt e r e s t pa ym e nt s , Re i m bur s e m e nt Obl i ga t i ons a nd f e e s f r om one or m or e de pos i t a c c ount s of t he Com pa ny wi t h t he Age nt s pe c i f i e d i n a wr i t i ng pr ovi de d by t he Com pa ny t o t he Age nt . Ea c h Bor r owe r wi l l pa y a l l t he f e e s on t he a c c ount whi c h r e s ul t f r om t he a ut om a t i c de duc t i ons , i nc l udi ng a ny ove r dr a f t a nd non- s uf f i c i e nt f unds c ha r ge s . I f f or a ny r e a s on Age nt doe s not c ha r ge t he a c c ount f or a pa ym e nt , or i f a n a ut om a t i c pa ym e nt i s r e ve r s e d, t he pa ym e nt i s s t i l l due . The Com pa ny m a y c ha nge a ny a c c ount num be r by not i f yi ng Age nt of t he ne w a c c ount num be r . 97 115525625. 4 0063724- 00082
6. 10 La t e Cha r ge s . Subj e c t t o a ny l i m i t a t i ons i m pos e d by Appl i c a bl e La w, i f a ny pa ym e nt of pr i nc i pa l or i nt e r e s t on t he Loa ns , t he LC Obl i ga t i ons , or ot he r Obl i ga t i ons i s f i f t e e n ( 15) da ys or m or e pa s t due , t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s , Us e d Ve hi c l e Fl oor pl a n Bor r owe r , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r , or t he Re vol vi ng Loa n Bor r owe r , a s a ppl i c a bl e , s ha l l pa y t o t he Age nt on de m a nd, f or t he a c c ount of t he Le nde r s , a l a t e c ha r ge of f i ve pe r c e nt of t he de l i nque nt pa ym e nt . Ea c h pa r t y he r e t o a gr e e s t ha t i t woul d be di f f i c ul t or c os t l y t o de t e r m i ne t he a c t ua l c os t s i nc ur r e d by a ny Le nde r by r e a s on of l a t e pa ym e nt . The r e f or e , t he pa r t i e s a gr e e t ha t t hi s l a t e c ha r ge r e pr e s e nt s a f a i r a nd r e a s ona bl e e s t i m a t e of t he c os t s i nc ur r e d by e a c h Le nde r a nd i s r e a s ona bl e unde r t he c i r c um s t a nc e s e xi s t i ng a s of t he da t e he r e of . Col l e c t i on of t he l a t e pa ym e nt f e e s ha l l not be de e m e d t o be a wa i ve r of a ny De f a ul t he r e unde r . 6. 11 Li m i t a t i on of I nt e r e s t . Bor r owe r s , t he Age nt a nd Le nde r s i nt e nd t o s t r i c t l y c om pl y wi t h a l l Appl i c a bl e La ws ,
i nc l udi ng a ppl i c a bl e us ur y l a ws . Ac c or di ngl y, t he pr ovi s i ons of t hi s Se c t i on s ha l l gove r n a nd c ont r ol ove r e ve r y ot he r pr ovi s i on of t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt whi c h c onf l i c t s or i s i nc ons i s t e nt wi t h t hi s Se c t i on, e ve n i f s uc h pr ovi s i on de c l a r e s t ha t i t c ont r ol s . As us e d i n t hi s Se c t i on, t he t e r m " i nt e r e s t ” i nc l ude s t he a ggr e ga t e of a l l c ha r ge s , f e e s , be ne f i t s or ot he r c om pe ns a t i on whi c h c ons t i t ut e i nt e r e s t unde r Appl i c a bl e La w, pr ovi de d t ha t , t o t he m a xi m um e xt e nt pe r m i t t e d by Appl i c a bl e La w, ( a ) a ny non- pr i nc i pa l pa ym e nt s ha l l be c ha r a c t e r i z e d a s a n e xpe ns e or a s c om pe ns a t i on f or s om e t hi ng ot he r t ha n t he us e , f or be a r a nc e or de t e nt i on of m one y a nd not a s i nt e r e s t , a nd ( b) a l l i nt e r e s t a t a ny t i m e c ont r a c t e d f or , r e s e r ve d, c ha r ge d or r e c e i ve d s ha l l be a m or t i z e d, pr or a t e d, a l l oc a t e d a nd s pr e a d, i n e qua l pa r t s dur i ng t he f ul l t e r m of t he Obl i ga t i ons . I n no e ve nt s ha l l a ny Bor r owe r or a ny ot he r Pe r s on be obl i ga t e d t o pa y, or a ny Le nde r ha ve a ny r i ght or pr i vi l e ge t o r e s e r ve , r e c e i ve or r e t a i n, ( y) a ny i nt e r e s t i n e xc e s s of
t he m a xi m um a m ount of nonus ur i ous i nt e r e s t pe r m i t t e d unde r t he Appl i c a bl e La ws ( i f a ny) of t he Uni t e d St a t e s or of a ny a ppl i c a bl e s t a t e , or ( z ) t ot a l i nt e r e s t i n e xc e s s of t he a m ount whi c h s uc h Le nde r c oul d l a wf ul l y ha ve c ont r a c t e d f or , r e s e r ve d, r e c e i ve d, r e t a i ne d or c ha r ge d ha d t he i nt e r e s t be e n c a l c ul a t e d f or t he f ul l t e r m of t he Obl i ga t i ons a t t he Hi ghe s t La wf ul Ra t e . On e a c h da y, i f a ny, t ha t t he i nt e r e s t r a t e ( t he " St a t e d Ra t e ” ) c a l l e d f or unde r t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt e xc e e ds t he Hi ghe s t La wf ul Ra t e , t he r a t e a t whi c h i nt e r e s t s ha l l a c c r ue s ha l l a ut om a t i c a l l y be f i xe d by ope r a t i on of t hi s s e nt e nc e a t t he Hi ghe s t La wf ul Ra t e f or t ha t da y, a nd s ha l l r e m a i n f i xe d a t t he Hi ghe s t La wf ul Ra t e f or e a c h da y t he r e a f t e r unt i l t he t ot a l a m ount of i nt e r e s t a c c r ue d e qua l s t he t ot a l a m ount of i nt e r e s t whi c h woul d ha ve a c c r ue d i f t he r e we r e no s uc h c e i l i ng r a t e a s i s i m pos e d by t hi s s e nt e nc e . The r e a f t e r , i nt e r e s t s ha l l a c c r ue a t t he St a t e d Ra t e unl e s s a nd unt i l t he St a t e d Ra t e a ga i n e xc e e ds t he Hi ghe s t La wf ul Ra t e whe n t he
pr ovi s i ons of t he i m m e di a t e l y pr e c e di ng s e nt e nc e s ha l l a ga i n a ut om a t i c a l l y ope r a t e t o l i m i t t he i nt e r e s t a c c r ua l r a t e . The da i l y i nt e r e s t r a t e s t o be us e d i n c a l c ul a t i ng i nt e r e s t a t t he Hi ghe s t La wf ul Ra t e s ha l l be de t e r m i ne d by di vi di ng t he a ppl i c a bl e Hi ghe s t La wf ul Ra t e pe r a nnum by t he num be r of da ys i n t he c a l e nda r ye a r f or whi c h s uc h c a l c ul a t i on i s be i ng m a de . None of t he t e r m s a nd pr ovi s i ons c ont a i ne d i n t hi s Agr e e m e nt or i n a ny ot he r Loa n Doc um e nt whi c h di r e c t l y or i ndi r e c t l y r e l a t e t o i nt e r e s t s ha l l e ve r be c ons t r ue d wi t hout r e f e r e nc e t o t hi s Se c t i on, or be c ons t r ue d t o c r e a t e a c ont r a c t t o pa y f or t he us e , f or be a r a nc e or de t e nt i on of m one y a t a n i nt e r e s t r a t e i n e xc e s s of t he Hi ghe s t La wf ul Ra t e . I f t he t e r m of a ny Obl i ga t i on i s s hor t e ne d by r e a s on of a c c e l e r a t i on of m a t ur i t y a s 98 115525625. 4 0063724- 00082 a r e s ul t of a ny Eve nt of De f a ul t or by a ny ot he r c a us e , or by r e a s on of a ny r e qui r e d or pe r m i t t e d pr e pa ym e nt , a nd i f f or t ha t ( or a ny ot he r ) r e a s on a ny Le nde r a t a ny t i m e , i nc l udi ng but not l i m i t e d t o, t he s t a t e d
m a t ur i t y, i s owe d or r e c e i ve s ( a nd/ or ha s r e c e i ve d) i nt e r e s t i n e xc e s s of i nt e r e s t c a l c ul a t e d a t t he Hi ghe s t La wf ul Ra t e , t he n a nd i n a ny s uc h e ve nt a l l of a ny s uc h e xc e s s i nt e r e s t s ha l l be c a nc e l e d a ut om a t i c a l l y a s of t he da t e of s uc h a c c e l e r a t i on, pr e pa ym e nt or ot he r e ve nt whi c h pr oduc e s t he e xc e s s , a nd, i f s uc h e xc e s s i nt e r e s t ha s be e n pa i d t o s uc h Le nde r , i t s ha l l be c r e di t e d a ga i ns t t he t he n- out s t a ndi ng pr i nc i pa l ba l a nc e of t he obl i ga t i ons of t he a ppl i c a bl e Bor r owe r or Bor r owe r s t o s uc h Le nde r , e f f e c t i ve a s of t he da t e or da t e s whe n t he e ve nt oc c ur s whi c h c a us e s i t t o be e xc e s s i nt e r e s t , unt i l s uc h e xc e s s i s e xha us t e d or a l l of s uc h pr i nc i pa l ha s be e n f ul l y pa i d a nd s a t i s f i e d, whi c he ve r oc c ur s f i r s t , a nd a ny r e m a i ni ng ba l a nc e of s uc h e xc e s s s ha l l be pr om pt l y r e f unde d t o i t s pa yor . 6. 12 I nc r e a s e Opt i on. 6. 12. 1 The Com pa ny m a y f r om t i m e t o t i m e r e que s t a n i nc r e a s e i n t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , i n m i ni m um i nc r e m e nt s of $50, 000, 000. 0050, 000, 000 or s uc h l owe r a m ount a s i s a gr e e d t o be t we e n t he Com pa ny a nd t he
Age nt , s o l ong a s , a f t e r gi vi ng e f f e c t t he r e t o, ( a ) t he a ggr e ga t e a m ount of a l l s uc h i nc r e a s e s r e que s t e d a f t e r t he Cl os i ng Da t e doe s not e xc e e d $750, 000, 000. 00750, 000, 000, a nd ( b) t he Aggr e ga t e Com m i t m e nt doe s not e xc e e d $4, 500, 000, 000. 004, 500, 000, 000. 6. 12. 2 The Com pa ny m a y a r r a nge f or a ny s uc h i nc r e a s e t o be pr ovi de d by one or m or e Le nde r s ( e a c h Le nde r s o a gr e e i ng t o a n i nc r e a s e i n i t s Com m i t m e nt , a n " I nc r e a s i ng Le nde r ” ) , or by one or m or e ne w ba nks , f i na nc i a l i ns t i t ut i ons ( e a c h s uc h ne w ba nk, f i na nc i a l i ns t i t ut i on or ot he r e nt i t y, a n " Addi t i ona l Le nde r ” ) , whi c h Le nde r or Le nde r s s ha l l i nc r e a s e t he i r e xi s t i ng Com m i t m e nt s , or e xt e nd Com m i t m e nt s , a s t he c a s e m a y be ; pr ovi de d t ha t ( a ) e a c h Addi t i ona l Le nde r a nd e a c h I nc r e a s i ng Le nde r a nd t he a m ount of t he i nc r e a s e of e a c h Addi t i ona l Le nde r a nd I nc r e a s i ng Le nde r s ha l l be s ubj e c t t o t he r e a s ona bl e a ppr ova l of t he Com pa ny, t he Age nt a nd t he LC I s s ue r , ( b) ( i ) i n t he c a s e of a n I nc r e a s i ng Le nde r , t he Age nt , Bor r owe r s a nd s uc h I nc r e a s i ng Le nde r s ha l l e xe c ut e a n I nc r e a s i ng Le nde r
Agr e e m e nt s ubs t a nt i a l l y i n t he f or m of Exhi bi t N he r e t o, a nd ( i i ) i n t he c a s e of a n Addi t i ona l Le nde r , t he Age nt , Bor r owe r s a nd s uc h Addi t i ona l Le nde r s ha l l e xe c ut e a n Addi t i ona l Le nde r Agr e e m e nt s ubs t a nt i a l l y i n t he f or m of Exhi bi t M he r e t o, a nd ( c ) t he a ppl i c a bl e Bor r owe r or Bor r owe r s , I nc r e a s i ng Le nde r , Addi t i ona l Le nde r a nd a ny ot he r Loa n Pa r t y s ha l l e a c h de l i ve r t o t he Age nt s uc h ot he r doc um e nt s or a m e ndm e nt s t o e xi s t i ng Loa n Doc um e nt s a s t he Age nt r e a s ona bl y de e m s ne c e s s a r y. 6. 12. 3 No c ons e nt of a ny Le nde r ( ot he r t ha n t he Le nde r s pa r t i c i pa t i ng i n t he i nc r e a s e ) s ha l l be r e qui r e d f or a ny i nc r e a s e pur s ua nt t o t hi s Se c t i on 6. 12. I nc r e a s e s a nd ne w Com m i t m e nt s c r e a t e d pur s ua nt t o t hi s Se c t i on 6. 12 s ha l l be c om e e f f e c t i ve on t he da t e a gr e e d by t he Com pa ny, t he Age nt a nd t he r e l e va nt I nc r e a s i ng Le nde r s or Addi t i ona l Le nde r s , a nd t he Age nt s ha l l not i f y e a c h Le nde r t he r e of . Not wi t hs t a ndi ng t he f or e goi ng, no i nc r e a s e i n t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt ( or i n t he Com m i t m e nt of a ny Le nde r ) s ha l l be c om e e f f e c t i ve unl e s s ( a )
on t he pr opos e d e f f e c t i ve da t e of s uc h i nc r e a s e , ( i ) no De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng or wi l l e xi s t a f t e r gi vi ng e f f e c t t o t he i nc r e a s e a nd a ny Cr e di t Ext e ns i ons t o be m a de on t he e f f e c t i ve da t e , ( i i ) a l l r e pr e s e nt a t i ons a nd wa r r a nt i e s i n t hi s Agr e e m e nt a r e t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s a s of t he e f f e c t i ve da t e , ( i i i ) t he Com pa ny a nd i t s Subs i di a r i e s wi l l be i n c om pl i a nc e ( on a Pr o For m a Ba s i s r e a s ona bl y a c c e pt a bl e t o t he 99 115525625. 4 0063724- 00082
Age nt ) wi t h t he f i na nc i a l c ove na nt s i n Se c t i on 11. 1 a f t e r gi vi ng e f f e c t t o t he i nc r e a s e , a nd ( i v) Age nt ha s r e c e i ve d a c e r t i f i c a t e wi t h r e s pe c t t o t he m a t t e r s s e t f or t h i n t he f or e goi ng c l a us e s ( a ) ( i ) ( i i ) a nd ( i i i ) da t e d t he e f f e c t i ve da t e a nd e xe c ut e d by t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt , t oge t he r wi t h s uc h s uppor t i ng doc um e nt a t i on a s t he Age nt r e qui r e s ; a nd ( b) t he Age nt ha s r e c e i ve d s uc h doc um e nt s a s i t r e qui r e s t o e vi de nc e t he powe r a nd a ut hor i t y of t he Bor r owe r s t o bor r ow a nd t he Gua r a nt or s t o gua r a nt y he r e unde r a f t e r gi vi ng e f f e c t t o s uc h i nc r e a s e . 6. 12. 4 On t he e f f e c t i ve da t e of a ny i nc r e a s e i n t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , ( a ) e a c h r e l e va nt I nc r e a s i ng Le nde r a nd Addi t i ona l Le nde r s ha l l m a ke a va i l a bl e t o t he Age nt s uc h a m ount s i n i m m e di a t e l y a va i l a bl e f unds a s t he Age nt s ha l l de t e r m i ne , f or t he be ne f i t of t he ot he r Le nde r s , a s be i ng r e qui r e d i n or de r t o c a us e , a f t e r gi vi ng e f f e c t t o s uc h i nc r e a s e a nd t he us e of s uc h a m ount s t o m a ke pa ym e nt s t o s uc h ot he r Le nde r s ,
e a c h Le nde r ’ s por t i on of t he out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Loa ns of a l l t he Le nde r s t o e qua l i t s a ppl i c a bl e Pr o Ra t a Sha r e of s uc h out s t a ndi ng Loa ns , a nd ( b) t he Bor r owe r s s ha l l m a ke s uc h ot he r pa ym e nt s a nd a dj us t m e nt s a s t he Age nt r e a s ona bl y de e m s ne c e s s a r y i n c onne c t i on wi t h t he c ha nge s i n t he Com m i t m e nt s a nd Pr o Ra t a Sha r e s of t he Le nde r s . 6. 13 Aut hor i z a t i on . Ea c h Bor r owe r a ut hor i z e s Age nt a nd t he Le nde r s ( a ) t o f ur ni s h i nf or m a t i on a bout t he Loa ns t o e a c h m a nuf a c t ur e r or di s t r i but or of Ve hi c l e s , a nd ( b) t o a dvi s e e a c h s uc h m a nuf a c t ur e r or di s t r i but or of a ny c ha nge or t e r m i na t i on whi c h m a y oc c ur wi t h r e s pe c t t o t he Obl i ga t i ons . 6. 14 De f a ul t i ng Le nde r s . 6. 14. 1 De f a ul t i ng Le nde r Adj us t m e nt s . Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y c ont a i ne d i n t hi s Agr e e m e nt , i f a ny Le nde r be c om e s a De f a ul t i ng Le nde r , t he n, unt i l s uc h t i m e a s s uc h Le nde r i s no l onge r a De f a ul t i ng Le nde r , t o t he e xt e nt pe r m i t t e d by Appl i c a bl e La w: ( a ) W a i ve r s a nd Am e ndm e nt s . Suc h De f a ul t i ng Le nde r ’ s r i ght t o a ppr ove or di s a ppr ove a ny a m e ndm e nt , wa i ve r or
c ons e nt wi t h r e s pe c t t o t hi s Agr e e m e nt s ha l l be r e s t r i c t e d a s s e t f or t h i n t he de f i ni t i on of Re qui r e d Le nde r s . ( b) De f a ul t i ng Le nde r W a t e r f a l l . Any pa ym e nt of pr i nc i pa l , i nt e r e s t , f e e s or ot he r a m ount s r e c e i ve d by t he Age nt f or t he a c c ount of s uc h De f a ul t i ng Le nde r ( whe t he r vol unt a r y or m a nda t or y, a t m a t ur i t y, pur s ua nt t o Ar t i c l e 14 or ot he r wi s e ) or r e c e i ve d by t he Age nt f r om a De f a ul t i ng Le nde r pur s ua nt t o Se c t i on 17. 8 s ha l l be a ppl i e d a t s uc h t i m e or t i m e s a s m a y be de t e r m i ne d by t he Age nt a s f ol l ows : f i r s t , t o t he pa ym e nt of a ny a m ount s owi ng by s uc h De f a ul t i ng Le nde r t o t he Age nt he r e unde r ; s e c ond, t o t he pa ym e nt on a pr o r a t a ba s i s of a ny a m ount s owi ng by s uc h De f a ul t i ng Le nde r t o t he LC I s s ue r a nd Swi ng Li ne Le nde r he r e unde r ; t hi r d, t o Ca s h Col l a t e r a l i z e t he LC I s s ue r ’ s Fr ont i ng Expos ur e wi t h r e s pe c t t o s uc h De f a ul t i ng Le nde r i n a c c or da nc e wi t h Se c t i on 6. 14. 4; f our t h, a s t he Com pa ny m a y r e que s t ( s o l ong a s no De f a ul t or Eve nt of De f a ul t e xi s t s ) , t o t he f undi ng of a ny Loa n i n r e s pe c t of whi c h s uc h De f a ul t i ng Le nde r ha s f a i l e d t o
f und i t s por t i on t he r e of a s r e qui r e d by t hi s Agr e e m e nt , a s de t e r m i ne d by t he Age nt ; f i f t h, i f s o de t e r m i ne d by t he Age nt a nd t he Com pa ny, t o be he l d i n a 100 115525625. 4 0063724- 00082 de pos i t a c c ount ( i nc l udi ng t he LC Col l a t e r a l Ac c ount ) a nd r e l e a s e d pr o r a t a i n or de r t o ( i ) s a t i s f y s uc h De f a ul t i ng Le nde r ’ s pot e nt i a l f ut ur e f undi ng obl i ga t i ons wi t h r e s pe c t t o Loa ns unde r t hi s Agr e e m e nt a nd ( i i ) Ca s h Col l a t e r a l i z e t he LC I s s ue r ’ s f ut ur e Fr ont i ng Expos ur e wi t h r e s pe c t t o s uc h De f a ul t i ng Le nde r wi t h r e s pe c t t o f ut ur e Le t t e r s of Cr e di t i s s ue d unde r t hi s Agr e e m e nt , i n a c c or da nc e wi t h Se c t i on 6. 14. 4; s i xt h, t o t he pa ym e nt of a ny a m ount s owi ng t o t he Le nde r s , t he LC I s s ue r or Swi ng Li ne Le nde r a s a r e s ul t of a ny j udgm e nt of a c our t of c om pe t e nt j ur i s di c t i on obt a i ne d by a ny Le nde r , t he LC I s s ue r or Swi ng Li ne Le nde r a ga i ns t s uc h De f a ul t i ng Le nde r a s a r e s ul t of s uc h De f a ul t i ng Le nde r ’ s br e a c h of i t s obl i ga t i ons unde r t hi s Agr e e m e nt ; s e ve nt h, s o l ong a s no De f a ul t or Eve nt of De f a ul t e xi s t s , t o t he pa ym e nt of a ny a m ount s owi ng t o a ny Bor r owe r a s a
r e s ul t of a ny j udgm e nt of a c our t of c om pe t e nt j ur i s di c t i on obt a i ne d by s uc h Bor r owe r a ga i ns t s uc h De f a ul t i ng Le nde r a s a r e s ul t of s uc h De f a ul t i ng Le nde r ’ s br e a c h of i t s obl i ga t i ons unde r t hi s Agr e e m e nt ; e i ght h, i f s o de t e r m i ne d by t he Age nt , di s t r i but e d t o t he Le nde r s ot he r t ha n t he De f a ul t i ng Le nde r unt i l t he r a t i o of t he Out s t a ndi ng Cr e di t Expos ur e of s uc h Le nde r s t o t he Aggr e ga t e Out s t a ndi ng Cr e di t Expos ur e e qua l s s uc h r a t i o i m m e di a t e l y pr i or t o t he De f a ul t i ng Le nde r ’ s f a i l ur e t o f und a ny por t i on of a ny Loa ns or pa r t i c i pa t i ons i n Le t t e r s of Cr e di t or Swi ng Li ne Loa ns ; a nd ni nt h, t o s uc h De f a ul t i ng Le nde r or a s ot he r wi s e di r e c t e d by a c our t of c om pe t e nt j ur i s di c t i on; pr ovi de d t ha t i f ( i ) s uc h pa ym e nt i s a pa ym e nt of t he pr i nc i pa l a m ount of a ny Loa ns or Le t t e r s of Cr e di t i s s ua nc e s i n r e s pe c t of whi c h s uc h De f a ul t i ng Le nde r ha s not f ul l y f unde d i t s a ppr opr i a t e s ha r e , a nd ( i i ) s uc h Loa ns we r e m a de or t he r e l a t e d Le t t e r s of Cr e di t we r e i s s ue d a t a t i m e whe n t he c ondi t i ons s e t f or t h i n Se c t i ons 9. 2 a nd 9. 3 we r e s a t i s f i e d or wa i ve d, s uc h
pa ym e nt s ha l l be a ppl i e d s ol e l y t o pa y t he Cr e di t Ext e ns i ons a nd f unde d pa r t i c i pa t i ons of a l l Non- De f a ul t i ng Le nde r s on a pr o r a t a ba s i s pr i or t o be i ng a ppl i e d t o t he pa ym e nt of a ny Cr e di t Ext e ns i ons or f unde d pa r t i c i pa t i ons of s uc h De f a ul t i ng Le nde r unt i l s uc h t i m e a s a l l Loa ns a nd f unde d a nd unf unde d pa r t i c i pa t i ons i n LC Obl i ga t i ons a nd Swi ng Li ne Loa ns a r e he l d by t he Le nde r s pr o r a t a i n a c c or da nc e wi t h t he Com m i t m e nt s wi t hout gi vi ng e f f e c t t o Se c t i on 6. 14. 1( d) . Any pa ym e nt s , pr e pa ym e nt s or ot he r a m ount s pa i d or pa ya bl e t o a De f a ul t i ng Le nde r t ha t a r e a ppl i e d ( or he l d) t o pa y a m ount s owe d by a De f a ul t i ng Le nde r or t o pos t Ca s h Col l a t e r a l pur s ua nt t o t hi s Se c t i on 6. 14. 1( b) s ha l l be de e m e d pa i d t o a nd r e di r e c t e d by s uc h De f a ul t i ng Le nde r , a nd e a c h Le nde r i r r e voc a bl y c ons e nt s he r e t o. ( c ) Ce r t a i n Fe e s . ( i ) No De f a ul t i ng Le nde r s ha l l be e nt i t l e d t o r e c e i ve a ny Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e , Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e , Re vol vi ng Loa n Com m i t m e nt Fe e or Pe r Annum Fe e
f or a ny pe r i od dur i ng whi c h t ha t Le nde r i s a De f a ul t i ng Le nde r ( a nd no Bor r owe r s ha l l be r e qui r e d t o pa y a ny s uc h f e e t ha t ot he r wi s e woul d ha ve be e n r e qui r e d t o ha ve be e n pa i d t o t ha t De f a ul t i ng Le nde r ) . ( i i ) Ea c h De f a ul t i ng Le nde r s ha l l be e nt i t l e d t o r e c e i ve LC Fe e s f or a ny pe r i od dur i ng whi c h t ha t Le nde r i s a De f a ul t i ng Le nde r onl y t o t he e xt e nt a l l oc a bl e t o i t s r a t a bl e s ha r e of t he s t a t e d a m ount of Le t t e r s of Cr e di t f or whi c h i t ha s pr ovi de d Ca s h Col l a t e r a l pur s ua nt t o Se c t i on 6. 14. 4. ( i i i ) W i t h r e s pe c t t o a ny Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e , Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e , Re vol vi ng Loa n Com m i t m e nt Fe e or LC Fe e not r e qui r e d t o be pa i d t o a ny De f a ul t i ng 101 115525625. 4 0063724- 00082
Le nde r pur s ua nt t o c l a us e ( c ) ( i ) or ( i i ) a bove , t he a ppl i c a bl e Bor r owe r or Bor r owe r s s ha l l ( X) pa y t o e a c h Non- De f a ul t i ng Le nde r t ha t por t i on of a ny s uc h f e e ot he r wi s e pa ya bl e t o s uc h De f a ul t i ng Le nde r wi t h r e s pe c t t o s uc h De f a ul t i ng Le nde r ’ s pa r t i c i pa t i on i n LC Obl i ga t i ons or Swi ng Li ne Loa ns t ha t ha s be e n r e a l l oc a t e d t o s uc h Non- De f a ul t i ng Le nde r pur s ua nt t o c l a us e ( d) be l ow, ( Y) pa y t o t he LC I s s ue r a nd Swi ng Li ne Le nde r , a s a ppl i c a bl e , t he a m ount of a ny s uc h f e e ot he r wi s e pa ya bl e t o s uc h De f a ul t i ng Le nde r t o t he e xt e nt a l l oc a bl e t o t he LC I s s ue r ’ s or Swi ng Li ne Le nde r ’ s Fr ont i ng Expos ur e t o s uc h De f a ul t i ng Le nde r , a nd ( Z) not be r e qui r e d t o pa y t he r e m a i ni ng a m ount of a ny s uc h f e e . ( d) Re a l l oc a t i on of Pa r t i c i pa t i ons t o Re duc e Fr ont i ng Expos ur e . Al l or a ny pa r t of s uc h De f a ul t i ng Le nde r ’ s pa r t i c i pa t i on i n LC Obl i ga t i ons a nd Swi ng Li ne Loa ns s ha l l be r e a l l oc a t e d a m ong t he Non- De f a ul t i ng Le nde r s i n a c c or da nc e wi t h t he i r r e s pe c t i ve Pr o Ra t a Sha r e s ( c a l c ul a t e d wi t hout r e ga r d t o s uc h De f a ul t i ng Le nde r ’ s i nt e r e s t a s pr ovi de d i n t he de f i ni t i on of Pr o
Ra t a Sha r e ) but onl y t o t he e xt e nt t ha t ( i ) t he c ondi t i ons s e t f or t h i n Se c t i ons 9. 2 a nd 9. 3 a r e s a t i s f i e d a t t he t i m e of s uc h r e a l l oc a t i on ( a nd, unl e s s t he Com pa ny s ha l l ha ve ot he r wi s e not i f i e d t he Age nt a t s uc h t i m e , e a c h Bor r owe r s ha l l be de e m e d t o ha ve r e pr e s e nt e d a nd wa r r a nt e d t ha t s uc h c ondi t i ons a r e s a t i s f i e d a t s uc h t i m e ) , a nd ( i i ) s uc h r e a l l oc a t i on doe s not c a us e t he a ggr e ga t e Out s t a ndi ng Cr e di t Expos ur e , Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e , Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e , Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e or Out s t a ndi ng Re vol vi ng Loa n Expos ur e of a ny Non- De f a ul t i ng Le nde r t o e xc e e d s uc h Non- De f a ul t i ng Le nde r ’ s a ppl i c a bl e Com m i t m e nt . No r e a l l oc a t i on he r e unde r s ha l l c ons t i t ut e a wa i ve r or r e l e a s e of a ny c l a i m of a ny pa r t y he r e unde r a ga i ns t a De f a ul t i ng Le nde r a r i s i ng f r om t ha t Le nde r ha vi ng be c om e a De f a ul t i ng Le nde r , i nc l udi ng a ny c l a i m of a Non- De f a ul t i ng Le nde r a s a r e s ul t of s uc h Non- De f a ul t i ng Le nde r ’ s i nc r e a s e d e xpos ur e f ol l owi ng s uc h r e a l l oc a t i on. ( e ) Ca s h Col l a t e r a l , Re pa ym e nt of
Swi ng Li ne Loa ns . I f t he r e a l l oc a t i on de s c r i be d i n c l a us e ( d) a bove c a nnot , or c a n onl y pa r t i a l l y, be e f f e c t e d, t he a ppl i c a bl e Bor r owe r s s ha l l , wi t hout pr e j udi c e t o a ny r i ght or r e m e dy a va i l a bl e t o i t he r e unde r or unde r l a w, ( i ) f i r s t , pr e pa y Swi ng Li ne Loa ns i n a n a m ount e qua l t o t he Swi ng Li ne Le nde r ’ s Fr ont i ng Expos ur e a nd ( i i ) s e c ond, Ca s h Col l a t e r a l i z e t he LC I s s ue r ’ s Fr ont i ng Expos ur e i n a c c or da nc e wi t h t he pr oc e dur e s s e t f or t h i n Se c t i on 6. 14. 4. 6. 14. 2 De f a ul t i ng Le nde r Cur e . I f t he Bor r owe r , t he Age nt , t he Swi ng Li ne Le nde r a nd t he LC I s s ue r a gr e e i n wr i t i ng t ha t a Le nde r i s no l onge r a De f a ul t i ng Le nde r , t he Age nt wi l l s o not i f y t he pa r t i e s he r e t o, whe r e upon a s of t he e f f e c t i ve da t e s pe c i f i e d i n s uc h not i c e a nd s ubj e c t t o a ny c ondi t i ons s e t f or t h t he r e i n ( whi c h m a y i nc l ude a r r a nge m e nt s wi t h r e s pe c t t o a ny Ca s h Col l a t e r a l ) , t ha t Le nde r wi l l , t o t he e xt e nt a ppl i c a bl e , pur c ha s e a t pa r t ha t por t i on of out s t a ndi ng Loa ns of t he ot he r Le nde r s or t a ke s uc h ot he r a c t i ons a s t he Age nt m a y de t e r m i ne t o be ne c e s s a r y t o c a us e t he Loa ns a nd f unde d
a nd unf unde d pa r t i c i pa t i ons i n Le t t e r s of Cr e di t a nd Swi ng Li ne Loa ns t o be he l d pr o r a t a by t he Le nde r s i n a c c or da nc e wi t h t he Com m i t m e nt s ( wi t hout gi vi ng e f f e c t t o Se c t i on 6. 14. 1( d) ) , whe r e upon s uc h Le nde r wi l l c e a s e t o be a De f a ul t i ng Le nde r ; pr ovi de d t ha t no a dj us t m e nt s wi l l be m a de r e t r oa c t i ve l y wi t h r e s pe c t t o f e e s a c c r ue d or pa ym e nt s m a de by or on be ha l f of a ny Bor r owe r whi l e t ha t Le nde r wa s a De f a ul t i ng Le nde r ; a nd pr ovi de d, f ur t he r , t ha t e xc e pt t o t he e xt e nt ot he r wi s e e xpr e s s l y a gr e e d by t he a f f e c t e d pa r t i e s , no c ha nge he r e unde r f r om De f a ul t i ng Le nde r t o Le nde r wi l l c ons t i t ut e a 102 115525625. 4 0063724- 00082 wa i ve r or r e l e a s e of a ny c l a i m of a ny pa r t y he r e unde r a r i s i ng f r om t ha t Le nde r ’ s ha vi ng be e n a De f a ul t i ng Le nde r . 6. 14. 3 Ne w Swi ng Li ne Loa ns / Le t t e r s of Cr e di t . So l ong a s a ny Le nde r i s a De f a ul t i ng Le nde r , ( a ) t he Swi ng Li ne Le nde r s ha l l not be r e qui r e d t o f und a ny Swi ng Li ne Loa ns unl e s s i t i s s a t i s f i e d t ha t i t wi l l ha ve no Fr ont i ng Expos ur e a f t e r gi vi ng e f f e c t t o s uc h Swi ng Li ne Loa n a nd ( b) t he LC I s s ue r s ha l l not be
r e qui r e d t o i s s ue , e xt e nd, r e ne w or i nc r e a s e a ny Le t t e r of Cr e di t unl e s s i t i s s a t i s f i e d t ha t i t wi l l ha ve no Fr ont i ng Expos ur e a f t e r gi vi ng e f f e c t t he r e t o. 6. 14. 4 Ca s h Col l a t e r a l . At a ny t i m e t ha t t he r e s ha l l e xi s t a De f a ul t i ng Le nde r , wi t hi n one ( 1) Bus i ne s s Da y f ol l owi ng t he wr i t t e n r e que s t of t he Age nt or t he LC I s s ue r ( wi t h a c opy t o t he Age nt ) t he Re vol vi ng Loa n Bor r owe r s ha l l Ca s h Col l a t e r a l i z e t he LC I s s ue r ’ s Fr ont i ng Expos ur e wi t h r e s pe c t t o s uc h De f a ul t i ng Le nde r ( de t e r m i ne d a f t e r gi vi ng e f f e c t t o Se c t i on 6. 14. 1( d) a nd a ny Ca s h Col l a t e r a l pr ovi de d by s uc h De f a ul t i ng Le nde r ) i n a n a m ount not l e s s t ha n t he M i ni m um Col l a t e r a l Am ount . ( a ) Gr a nt of Se c ur i t y I nt e r e s t . The Re vol vi ng Loa n Bor r owe r , a nd t o t he e xt e nt pr ovi de d by a ny De f a ul t i ng Le nde r , s uc h De f a ul t i ng Le nde r , he r e by gr a nt s t o t he Age nt , f or t he be ne f i t of t he LC I s s ue r , a nd a gr e e s t o m a i nt a i n, a f i r s t pr i or i t y s e c ur i t y i nt e r e s t i n a l l s uc h Ca s h Col l a t e r a l a s s e c ur i t y f or t he De f a ul t i ng Le nde r ’ s obl i ga t i on t o f und pa r t i c i pa t i ons i n r e s pe c t of LC Obl i ga t i ons , t o be a ppl i e d
pur s ua nt t o c l a us e ( b) be l ow. I f a t a ny t i m e t he Age nt de t e r m i ne s t ha t Ca s h Col l a t e r a l i s s ubj e c t t o a ny r i ght or c l a i m of a ny Pe r s on ot he r t ha n t he Age nt a nd t he LC I s s ue r a s he r e i n pr ovi de d, or t ha t t he t ot a l a m ount of s uc h Ca s h Col l a t e r a l i s l e s s t ha n t he M i ni m um Col l a t e r a l Am ount , t he Re vol vi ng Loa n Bor r owe r wi l l , pr om pt l y upon de m a nd by t he Age nt , pa y or pr ovi de t o t he Age nt a ddi t i ona l Ca s h Col l a t e r a l i n a n a m ount s uf f i c i e nt t o e l i m i na t e s uc h de f i c i e nc y ( a f t e r gi vi ng e f f e c t t o a ny Ca s h Col l a t e r a l pr ovi de d by t he De f a ul t i ng Le nde r ) . ( b) Appl i c a t i on. Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y c ont a i ne d i n t hi s Agr e e m e nt , Ca s h Col l a t e r a l pr ovi de d unde r t hi s Se c t i on 6. 14 i n r e s pe c t of Le t t e r s of Cr e di t s ha l l be a ppl i e d t o t he s a t i s f a c t i on of t he De f a ul t i ng Le nde r ’ s obl i ga t i on t o f und pa r t i c i pa t i ons i n r e s pe c t of LC Obl i ga t i ons ( i nc l udi ng, a s t o Ca s h Col l a t e r a l pr ovi de d by a De f a ul t i ng Le nde r , a ny i nt e r e s t a c c r ue d on s uc h obl i ga t i on) f or whi c h t he Ca s h Col l a t e r a l wa s s o pr ovi de d, pr i or t o a ny ot he r a ppl i c a t i on of s uc h pr ope r t y a s m a y
ot he r wi s e be pr ovi de d f or he r e i n. ( c ) Te r m i na t i on of Re qui r e m e nt . Ca s h Col l a t e r a l ( or t he a ppr opr i a t e por t i on t he r e of ) pr ovi de d t o r e duc e t he LC I s s ue r ’ s Fr ont i ng Expos ur e s ha l l no l onge r be r e qui r e d t o be he l d a s Ca s h Col l a t e r a l pur s ua nt t o t hi s Se c t i on 6. 14. 4 f ol l owi ng ( i ) t he e l i m i na t i on of t he a ppl i c a bl e Fr ont i ng Expos ur e ( i nc l udi ng by t he t e r m i na t i on of De f a ul t i ng Le nde r s t a t us of t he a ppl i c a bl e Le nde r ) , or ( i i ) t he de t e r m i na t i on by t he Age nt a nd t he LC I s s ue r t ha t t he r e e xi s t s e xc e s s Ca s h Col l a t e r a l ; pr ovi de d t ha t , s ubj e c t t o t hi s Se c t i on 6. 14 t he Pe r s on pr ovi di ng Ca s h Col l a t e r a l a nd t he LC I s s ue r m a y a gr e e t ha t Ca s h Col l a t e r a l s ha l l be he l d t o s uppor t f ut ur e a nt i c i pa t e d Fr ont i ng Expos ur e or ot he r obl i ga t i ons a nd pr ovi de d f ur t he r , s uc h 103 115525625. 4 0063724- 00082
Ca s h Col l a t e r a l s ha l l r e m a i n s ubj e c t t o t he s e c ur i t y i nt e r e s t gr a nt e d pur s ua nt t o t he Loa n Doc um e nt s . 6. 15 Re pl a c e m e nt of Le nde r . I f Bor r owe r s a r e r e qui r e d pur s ua nt t o Se c t i on 7. 1, 7. 2 or 7. 4 t o m a ke a ny a ddi t i ona l pa ym e nt t o a ny Le nde r or i f a ny Le nde r ’ s obl i ga t i on t o m a ke Adva nc e s ba s e d on Adj us t e d Da i l y Si m pl e SOFR, Adj us t e d Te r m SOFR or t he Te r m SOFR Al t e r na t i ve Ra t e i s s us pe nde d pur s ua nt t o Se c t i on 7. 3 or i f a ny Le nde r de f a ul t s i n i t s obl i ga t i on t o m a ke a Loa n, r e i m bur s e t he LC I s s ue r pur s ua nt t o Se c t i on 5. 6 or t he Swi ng Li ne Le nde r pur s ua nt t o Se c t i on 2. 2. 6, 3. 2. 6, or 4. 2. 6 or ot he r wi s e be c om e s a De f a ul t i ng Le nde r ( a ny Le nde r s o a f f e c t e d a n " Af f e c t e d Le nde r ” ) , t he Com pa ny m a y e l e c t , i f s uc h a m ount s c ont i nue t o be c ha r ge d or s uc h s us pe ns i on i s s t i l l e f f e c t i ve , t o r e pl a c e s uc h Af f e c t e d Le nde r a s a Le nde r pa r t y t o t hi s Agr e e m e nt , pr ovi de d t ha t no De f a ul t or Eve nt of De f a ul t s ha l l ha ve oc c ur r e d a nd be c ont i nui ng a t t he t i m e of s uc h r e pl a c e m e nt , a nd pr ovi de d f ur t he r t ha t , c onc ur r e nt l y wi t h s uc h r e pl a c e m e nt , ( a ) a not he r ba nk or
ot he r e nt i t y whi c h i s r e a s ona bl y s a t i s f a c t or y t o t he Com pa ny a nd t he Age nt s ha l l a gr e e , a s of s uc h da t e , t o pur c ha s e f or c a s h a nd t o pa y t he Af f e c t e d Le nde r on s uc h da t e 100% of t he out s t a ndi ng pr i nc i pa l a m ount of t he Loa ns a nd ot he r Obl i ga t i ons due t o t he Af f e c t e d Le nde r pur s ua nt t o a n As s i gnm e nt Agr e e m e nt a nd t o be c om e a Le nde r f or a l l pur pos e s unde r t hi s Agr e e m e nt a nd t o a s s um e a l l obl i ga t i ons of t he Af f e c t e d Le nde r t o be t e r m i na t e d a s of s uc h da t e a nd t o c om pl y wi t h t he r e qui r e m e nt s of Se c t i on 17. 4 a ppl i c a bl e t o a s s i gnm e nt s , a nd ( b) t he Bor r owe r s s ha l l pa y t o s uc h Af f e c t e d Le nde r i n s a m e da y f unds on t he da y of s uc h r e pl a c e m e nt a l l i nt e r e s t , f e e s a nd ot he r a m ount s t he n a c c r ue d but unpa i d t o s uc h Af f e c t e d Le nde r by t he Bor r owe r s he r e unde r t o a nd i nc l udi ng t he da t e of t e r m i na t i on, i nc l udi ng wi t hout l i m i t a t i on pa ym e nt s due t o s uc h Af f e c t e d Le nde r unde r Se c t i ons 7. 1, 7. 2 a nd 7. 4. 6. 16 Pe r Annum Fe e . The Bor r owe r s a gr e e t o pa y t o t he Age nt , f or t he a c c ount of e a c h Le nde r , a f e e ( " Pe r Annum Fe e ” ) , c a l c ul a t e d f or e a c h Le nde r a t a pe r
a nnum r a t e e qua l t o t he r a t e s e t f or t h i n t he f e e l e t t e r be t we e n s uc h Le nde r a nd Bor r owe r s , on t he Aggr e ga t e Le nde r Com m i t m e nt of s uc h Le nde r a s of t he l a s t da y of e a c h f i s c a l qua r t e r . The Pe r Annum Fe e s ha l l be due a nd pa ya bl e i n a r r e a r s on e a c h Qua r t e r l y Pa ym e nt Da t e he r e a f t e r a nd on t he Te r m i na t i on Da t e f or t he t hr e e m ont h pe r i od or ot he r t i m e pe r i od e ndi ng on t he l a s t da y of t he pr e c e di ng f i s c a l qua r t e r or on t he Te r m i na t i on Da t e . 6. 17 Re a l l oc a t i on of Com m i t m e nt s . 6. 17. 1 Subj e c t t o t he pr ovi s i ons of t hi s Se c t i on 6. 17 a nd s o l ong a s no Eve nt of De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng or wi l l e xi s t a f t e r gi vi ng e f f e c t t he r e t o, Bor r owe r s m a y f r om t i m e t o t i m e r e que s t a r e a l l oc a t i on of a l l or pa r t of a ny unus e d por t i on of ( a ) t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt t o t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt , t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt a nd/ or t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , ( b) t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt t o t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n
Com m i t m e nt , t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt a nd/ or t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , ( c ) t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt t o t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , t he Aggr e ga t e Us e d 104 115525625. 4 0063724- 00082 Ve hi c l e Fl oor pl a n Com m i t m e nt a nd/ or t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , ( d) t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt t o t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt , t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt a nd/ or t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt , ( e ) t he Re vol vi ng Swi ng Li ne Com m i t m e nt t o t he Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt a nd/ or t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Swi ng Li ne Com m i t m e nt , ( f ) t he Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt t o t he Re vol vi ng Swi ng Li ne Com m i t m e nt a nd/ or t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Swi ng Li ne Com m i t m e nt or ( g) t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Swi ng Li ne Com m i t m e nt t o t he Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt a nd/ or t he Re vol vi ng Swi ng Li ne
Com m i t m e nt ( e a c h a " Re a l l oc a t i on” ) . 6. 17. 2 Bor r owe r s m a y r e que s t a Re a l l oc a t i on no m or e f r e que nt l y t ha n t wi c e i n a ny c a l e nda r m ont h. I f Bor r owe r s wi s h t o r e que s t a Re a l l oc a t i on, t he Com pa ny s ha l l gi ve t he Age nt i r r e voc a bl e wr i t t e n not i c e t he r e of s ubs t a nt i a l l y i n t he f or m a t t a c he d he r e t o a s Exhi bi t O, or i n s uc h ot he r f or m a s i s a c c e pt a bl e t o t he Age nt ( a " Re a l l oc a t i on Re que s t ” ) , no l a t e r t ha n 11: 00 a . m . ( Pa c i f i c Ti m e ) a t l e a s t t wo Bus i ne s s Da ys pr i or t o t he r e que s t e d e f f e c t i ve da t e of t he Re a l l oc a t i on. The Age nt wi l l pr om pt l y not i f y t he Com pa ny a nd t he Le nde r s of t he e f f e c t i ve da t e of a ny Re a l l oc a t i on, a nd t he a m ount of t he ne w Com m i t m e nt s f or e a c h Le nde r . 6. 17. 3 Fol l owi ng a ny Re a l l oc a t i on, ( a ) t he Aggr e ga t e Com m i t m e nt s ha l l not c ha nge ; ( b) t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt s ha l l not be l e s s t ha n t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns a nd t he Ne w Ve hi c l e Swi ng Li ne Loa ns ( whi c h, f or pur pos e s of t hi s de t e r m i na t i on, s ha l l not be de e m e d t o be r e duc e d by a m ount s i n t he PR Ac c ount s ) ;
( c ) t he Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt s ha l l not be l e s s t ha n t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Us e d Ve hi c l e Fl oor pl a n Loa ns a nd t he Us e d Ve hi c l e Swi ng Li ne Loa ns ; ( d) t he Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt ( i ) s ha l l not be m or e t ha n 40. 0040% of t he a m ount of t he Aggr e ga t e Com m i t m e nt a t t he t i m e of s uc h Re a l l oc a t i on a nd ( i i ) s ha l l not be l e s s t ha n t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns pl us t he LC Obl i ga t i ons a nd a ny Re s e r ve Am ount ; a nd ( e ) t he Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt ( i ) s ha l l not be m or e t ha n 3. 00% of t he a m ount of t he Aggr e ga t e Com m i t m e nt a t t he t i m e of s uc h Re a l l oc a t i on a nd ( i i ) s ha l l not be l e s s t ha n t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd t he Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns . 6. 17. 4 Al l Re a l l oc a t i ons s ha l l be m a de pr o r a t a a m ong t he Le nde r s a c c or di ng t o t he i r r e s pe c t i ve Pr o Ra t a Sha r e s of t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , Aggr e ga t e Us e d
Ve hi c l e Fl oor pl a n Com m i t m e nt , Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt , Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , Re vol vi ng Swi ng Li ne Com m i t m e nt , Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt a nd/ or Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Swi ng Li ne Com m i t m e nt s o t ha t a f t e r gi vi ng e f f e c t t o a ny Re a l l oc a t i on, t he r e i s no c ha nge i n t he Pr o Ra t a Sha r e s of t he Le nde r s . 6. 17. 5 [ r e s e r ve d] . 6. 17. 6 Fol l owi ng a ny Re a l l oc a t i on, t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , Aggr e ga t e Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt , Aggr e ga t e Re vol vi ng Loa n Com m i t m e nt a nd Aggr e ga t e Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt a nd t he Pr o Ra t a 105 115525625. 4 0063724- 00082
Sha r e s a nd Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt , Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt , Re vol vi ng Loa n Com m i t m e nt , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt , Re vol vi ng Swi ng Li ne Com m i t m e nt , Us e d Ve hi c l e Swi ng Li ne Com m i t m e nt a nd Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Swi ng Li ne Com m i t m e nt of e a c h Le nde r s ha l l be not e d i n t he Age nt ’ s r e c or ds , whi c h r e c or ds wi l l be c onc l us i ve e vi de nc e t he r e of , a bs e nt m a ni f e s t e r r or ; pr ovi de d, howe ve r , t ha t a ny f a i l ur e by t he Age nt t o r e c or d s uc h i nf or m a t i on s ha l l not a f f e c t or l i m i t t he obl i ga t i ons of t he Bor r owe r s he r e unde r . 6. 18 Ext e ns i on of Com m i t m e nt s . 6. 18. 1 Re que s t s f or Ext e ns i on. The Com pa ny m a y, no m or e t ha n one t i m e pe r Loa n Ye a r , by not i c e t o t he Age nt ( who s ha l l pr om pt l y not i f y t he Le nde r s ) not e a r l i e r t ha n s i xt y ( 60) da ys a nd not l a t e r t ha n t hi r t y- f i ve ( 35) da ys pr i or t o t he Anni ve r s a r y Da t e i n s uc h Loa n Ye a r , r e que s t t ha t e a c h Le nde r e xt e nd s uc h Le nde r ’ s Te r m i na t i on Da t e f or a n a ddi t i ona l Loa n Ye a r f r om t he e xi s t i ng Te r m i na t i on Da t e . 6. 18. 2 Le nde r El e c t i ons t o Ext e nd. Ea c h Le nde r ,
a c t i ng i n i t s s ol e a nd i ndi vi dua l di s c r e t i on, s ha l l , by not i c e t o t he Age nt gi ve n not l a t e r t ha n t he da t e ( t he " Not i c e Da t e ” ) t ha t i s t hi r t y ( 30) da ys pr i or t o t he Anni ve r s a r y Da t e i n s uc h Loa n Ye a r , a dvi s e Age nt whe t he r or not s uc h Le nde r a gr e e s t o s uc h e xt e ns i on a nd e a c h Le nde r t ha t de t e r m i ne s not t o s o e xt e nd i t s Te r m i na t i on Da t e ( a " Non- Ext e ndi ng Le nde r ” ) s ha l l not i f y t he Age nt of s uc h f a c t pr om pt l y a f t e r s uc h de t e r m i na t i on ( but i n a ny e ve nt no l a t e r t ha n t he Not i c e Da t e ) a nd a ny Le nde r t ha t doe s not s o a dvi s e Age nt on or be f or e t he Not i c e Da t e s ha l l be de e m e d t o be a Non- Ext e ndi ng Le nde r . The e l e c t i on of a ny Le nde r t o a gr e e t o s uc h e xt e ns i on s ha l l not obl i ga t e a ny ot he r Le nde r t o s o a gr e e . Fur t he r m or e , t he e l e c t i on of a ny Non- Ext e ndi ng Le nde r not t o e xt e nd i ni t i a l l y s ha l l not pr ohi bi t s uc h Le nde r f r om e xt e ndi ng f or a n a ddi t i ona l Loa n Ye a r a t s ubs e que nt r e que s t of t he Com pa ny, s o l ong a s ( i ) t he Com pa ny ha s not pr e pa i d a l l Loa ns out s t a ndi ng of s uc h Non- Ext e ndi ng Le nde r by s uc h da t e a nd ( i i ) s uc h Le nde r ’ s Te r m i na t i on Da t e s ha l l be
m odi f i e d t o t he Te r m i na t i on Da t e of a l l ot he r Ext e ndi ng Le nde r s a t s uc h t i m e . Onc e a Le nde r e xt e nds i t s Te r m i na t i on Da t e i n a c c or da nc e wi t h t hi s Se c t i on i t s ha l l no l onge r be de e m e d a Non- Ext e ndi ng Le nde r f or a l l pur pos e s of t hi s Agr e e m e nt . 6. 18. 3 Not i f i c a t i on by t he Age nt . The Age nt s ha l l not i f y t he Com pa ny of e a c h Le nde r ’ s de t e r m i na t i on unde r t hi s Se c t i on no l a t e r t ha n t he da t e f i f t e e n ( 15) da ys pr i or t o t he Anni ve r s a r y Da t e i n s uc h Loa n Ye a r ( or , i f s uc h da t e i s not a Bus i ne s s Da y, on t he ne xt pr e c e di ng Bus i ne s s Da y) . 6. 18. 4 Addi t i ona l Com m i t m e nt Le nde r s . The Com pa ny s ha l l ha ve t he r i ght t o r e pl a c e e a c h Non- Ext e ndi ng Le nde r wi t h, a nd a dd a s " Le nde r s ” unde r t hi s Agr e e m e nt i n pl a c e t he r e of , one or m or e El i gi bl e As s i gne e s ( e a c h, a n " Addi t i ona l Com m i t m e nt Le nde r ” ) a s pr ovi de d i n Se c t i on 6. 15; pr ovi de d t ha t e a c h of s uc h Addi t i ona l Com m i t m e nt Le nde r s s ha l l e nt e r i nt o a n As s i gnm e nt Agr e e m e nt pur s ua nt t o whi c h s uc h Addi t i ona l Com m i t m e nt Le nde r s ha l l , e f f e c t i ve a s of t he Anni ve r s a r y Da t e i n s uc h Loa n Ye a r , unde r t a ke a Com m i t m e nt
( a nd, i f a ny s uc h Addi t i ona l Com m i t m e nt Le nde r i s a l r e a dy 106 115525625. 4 0063724- 00082 a Le nde r , i t s Com m i t m e nt s ha l l be i n a ddi t i on t o s uc h Le nde r ’ s Com m i t m e nt he r e unde r on s uc h da t e ) . 6. 18. 5 M i ni m um Ext e ns i on Re qui r e m e nt . I f ( a nd onl y i f ) t he t ot a l of t he Com m i t m e nt s of t he Le nde r s t ha t ha ve a gr e e d s o t o e xt e nd t he i r Te r m i na t i on Da t e ( e a c h, a n " Ext e ndi ng Le nde r ” ) a nd t he a ddi t i ona l Com m i t m e nt s of t he Addi t i ona l Com m i t m e nt Le nde r s s ha l l be m or e t ha n 80% of t he Aggr e ga t e Com m i t m e nt i n e f f e c t i m m e di a t e l y pr i or t o t he Anni ve r s a r y Da t e i n s uc h Loa n Ye a r , t he n, e f f e c t i ve a s of t he Anni ve r s a r y Da t e i n s uc h Loa n Ye a r , t he Te r m i na t i on Da t e of e a c h Ext e ndi ng Le nde r a nd of e a c h Addi t i ona l Com m i t m e nt Le nde r s ha l l be e xt e nde d t o t he da t e f a l l i ng one ye a r a f t e r t he e xi s t i ng Te r m i na t i on Da t e ( e xc e pt t ha t , i f s uc h da t e i s not a Bus i ne s s Da y, s uc h Te r m i na t i on Da t e a s s o e xt e nde d s ha l l be t he ne xt pr e c e di ng Bus i ne s s Da y) a nd e a c h Addi t i ona l Com m i t m e nt Le nde r s ha l l t he r e upon be c om e a " Le nde r ” f or a l l pur pos e s of t hi s
Agr e e m e nt . 6. 18. 6 Condi t i ons t o Ef f e c t i ve ne s s of Ext e ns i ons . As a c ondi t i on pr e c e de nt t o s uc h e xt e ns i on, t he Com pa ny s ha l l de l i ve r t o t he Age nt a c e r t i f i c a t e of e a c h Loa n Pa r t y da t e d a s of t he Anni ve r s a r y Da t e i n s uc h Loa n Ye a r ( i n s uf f i c i e nt c opi e s f or e a c h Ext e ndi ng Le nde r a nd e a c h Addi t i ona l Com m i t m e nt Le nde r ) s i gne d by a Re s pons i bl e Of f i c e r of s uc h Loa n Pa r t y ( i ) c e r t i f yi ng a nd a t t a c hi ng t he r e s ol ut i ons a dopt e d by s uc h Loa n Pa r t y a ppr ovi ng or c ons e nt i ng t o s uc h e xt e ns i on a nd ( i i ) i n t he c a s e of t he Com pa ny, c e r t i f yi ng t ha t , be f or e a nd a f t e r gi vi ng e f f e c t t o s uc h e xt e ns i on, ( A) t he r e pr e s e nt a t i ons a nd wa r r a nt i e s c ont a i ne d i n Ar t i c l e X a nd t he ot he r Loa n Doc um e nt s a r e t r ue a nd c or r e c t on a nd a s of t he Anni ve r s a r y Da t e i n s uc h Loa n Ye a r , e xc e pt t o t he e xt e nt t ha t s uc h r e pr e s e nt a t i ons a nd wa r r a nt i e s s pe c i f i c a l l y r e f e r t o a n e a r l i e r da t e , i n whi c h c a s e t he y a r e t r ue a nd c or r e c t a s of s uc h e a r l i e r da t e , a nd e xc e pt t ha t f or pur pos e s of t hi s Se c t i on 6. 18, t he r e pr e s e nt a t i ons a nd wa r r a nt i e s c ont a i ne d i n Se c t i on 10. 4 s ha l l be de e m e d t o r e f e r t o t he
m os t r e c e nt s t a t e m e nt s f ur ni s he d pur s ua nt t o Se c t i on 11. 1, a nd ( B) no De f a ul t e xi s t s or woul d r e s ul t t he r e f r om . I n a ddi t i on, on t he Te r m i na t i on Da t e of e a c h Non- Ext e ndi ng Le nde r , t he Com pa ny s ha l l pr e pa y a ny Loa ns out s t a ndi ng on s uc h da t e ( a nd pa y a ny a ddi t i ona l a m ount s r e qui r e d pur s ua nt t o Se c t i on 7. 5) t o t he e xt e nt ne c e s s a r y t o ke e p out s t a ndi ng Loa ns r a t a bl e of t he r e s pe c t i ve Le nde r s e f f e c t i ve a s of s uc h da t e . 6. 18. 7 Am e ndm e nt ; Sha r i ng of Pa ym e nt s . I n c onne c t i on wi t h a ny e xt e ns i on of t he Te r m i na t i on Da t e , t he Com pa ny, a nd e a c h Ext e ndi ng Le nde r m a y m a ke s uc h a m e ndm e nt s t o t hi s Agr e e m e nt a s t he Age nt de t e r m i ne s t o be r e a s ona bl y ne c e s s a r y t o e vi de nc e t he e xt e ns i on. Thi s Se c t i on 6. 18 s ha l l s upe r s e de a ny pr ovi s i ons i n Se c t i on 17. 9 t o t he c ont r a r y. 6. 19 De s i gna t i on of Dua l Subs i di a r i e s . The Com pa ny m a y de s i gna t e a ny Subs i di a r y a s a Dua l Subs i di a r y i n or de r t o f i na nc e ( x) ne w Ve hi c l e s onl y or ( y) ne w Ve hi c l e s a nd us e d a nd/ or s e r vi c e l oa ne r Ve hi c l e s t hr ough Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s s o l ong a s : ( a ) wi t h r e s pe c t t o a ny s uc h
Subs i di a r y t ha t i s ( i ) a Ne w Ve hi c l e Fl oor pl a n Bor r owe r , t he Com pa ny s ha l l t e r m i na t e t he de s i gna t i on of s uc h Subs i di a r y a s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r wi t h r e s pe c t t o e a c h f r a nc hi s e ( a ny s uc h f r a nc hi s e , a " Re m ove d 107 115525625. 4 0063724- 00082
Fr a nc hi s e ” ) t ha t wi l l obt a i n f i na nc i ng f or ne w Ve hi c l e s t hr ough Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s or ( i i ) a Si l o Subs i di a r y, t he Com pa ny s ha l l t e r m i na t e t he de s i gna t i on of s uc h Subs i di a r y a s a Si l o Subs i di a r y; ( b) t he Com pa ny s ha l l ha ve ( w) de s i gna t e d s uc h Subs i di a r y a s a Dua l Subs i di a r y t o t he Age nt i n wr i t i ng, ( x) c a us e d s uc h Subs i di a r y t o e xe c ut e a nd de l i ve r a c knowl e dge m e nt s ( i n f or m a nd s ubs t a nc e r e a s ona bl y a c c e pt a bl e t o t he Age nt ) of s uc h Subs i di a r y’ s c ont i nui ng Obl i ga t i ons ( or , wi t h r e s pe c t t o a ny s uc h Subs i di a r y t ha t i s a Si l o Subs i di a r y i m m e di a t e l y pr i or t o s uc h de s i gna t i on, s uc h Si l o Subs i di a r y’ s ne w Obl i ga t i ons ) unde r t he Loa n Doc um e nt s ( i nc l udi ng pur s ua nt t o t he Gua r a nt y a nd a ny ot he r Col l a t e r a l Doc um e nt s ) a s r e que s t e d by t he Age nt , ( y) pr e pa i d a l l out s t a ndi ng Loa ns wi t h r e s pe c t t o s uc h de s i gna t i on a s r e qui r e d by Se c t i on 2. 1. 5( d) , Se c t i on 3. 1. 5( d) , Se c t i on 3. 3. 5( d) a nd ( z ) ot he r wi s e c om pl i e d wi t h Se c t i on 13. 16; ( c ) s uc h Subs i di a r y ot he r wi s e qua l i f i e s a s a " Dua l Subs i di a r y” e nt i t l e d t o i nc ur Pe r m i t t e d Dua l Subs i di a r y
I nde bt e dne s s pur s ua nt t o t he t e r m s of t he Agr e e m e nt a t t he t i m e of s uc h de s i gna t i on; ( d) no De f a ul t or Eve nt of De f a ul t t he n e xi s t s or wi l l r e s ul t t he r e f r om . Fol l owi ng a ny s uc h de s i gna t i on, s uc h Subs i di a r y s ha l l no l onge r be e nt i t l e d t o ut i l i z e t he c r e di t f a c i l i t i e s pr ovi de d f or i n Se c t i on 2 wi t h r e s pe c t t o a ny Re m ove d Fr a nc hi s e ; ( e ) I f t he a ppl i c a bl e Dua l Subs i di a r y wi l l f i na nc e a ny Us e d Ve hi c l e s wi t h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s or wi l l gr a nt a Li e n i n a ny Us e d Ve hi c l e t o a Dua l Subs i di a r y Le nde r , t he Com pa ny s ha l l ha ve pr ovi de d t o t he Age nt a Us e d Ve hi c l e Loa n Bor r owi ng Ba s e Ce r t i f i c a t e a s of t he da t e of a nd a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y a nd de duc t i on of a l l Us e d Ve hi c l e s of s uc h Dua l Subs i di a r y f r om t he Us e d Ve hi c l e Bor r owi ng Ba s e ; ( f ) I f t he a ppl i c a bl e Dua l Subs i di a r y wi l l f i na nc e a ny Se r vi c e Loa ne r Ve hi c l e s wi t h Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s or wi l l gr a nt a Li e n i n a ny Se r vi c e Loa ne r Ve hi c l e t o a Dua l Subs i di a r y Le nde r , t he Com pa ny s ha l l ha ve pr ovi de d t o t he Age nt a
Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e a s of t he da t e of a nd a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y a nd de duc t i on of a l l Se r vi c e Loa ne r Ve hi c l e s of s uc h Dua l Subs i di a r y f r om t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e ; ( g) t he Com pa ny s ha l l ha ve pr ovi de d t o t he Age nt a Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e a s of t he da t e of a nd a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y a nd c e r t i f yi ng t ha t a f t e r gi vi ng e f f e c t t o s uc h de s i gna t i on t he Re vol vi ng Loa n Ava i l a bi l i t y i s not l e s s t ha n $1. 00; ( h) t he Com pa ny s ha l l ha ve pr ovi de d t o t he Age nt a Com pl i a nc e Ce r t i f i c a t e ( pr e pa r e d on a Pr o For m a Ba s i s a s of t he m os t r e c e nt da t e f or whi c h a Com pl i a nc e Ce r t i f i c a t e wa s f ur ni s he d t o t he Age nt ) s i gne d by t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt ; ( i ) ( A) t he e xi s t i ng UCC- 1 f i na nc i ng s t a t e m e nt f or t he Dua l Subs i di a r y t ha t na m e s t he Age nt a s s e c ur e d pa r t y s ha l l ha ve be e n a m e nde d t o r e m ove c e r t a i n 108 115525625. 4 0063724- 00082 a s s e t s
a nd ( B) a ne w UCC- 1 f i na nc i ng s t a t e m e nt s ha l l ha ve be e n f i l e d na m i ng t he Dua l Subs i di a r y a s de bt or a nd t he a ppl i c a bl e Dua l Subs i di a r y Le nde r a s s e c ur e d pa r t y, i n e a c h c a s e , i n a c c or da nc e wi t h t he t e r m s of t he a ppl i c a bl e I nt e r c r e di t or Agr e e m e nt ; a nd ( j ) pr i or t o or c onc ur r e nt l y wi t h t he i ni t i a l i nc ur r e nc e of Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s by a ny Dua l Subs i di a r y f r om a Dua l Subs i di a r y Le nde r , c a us e t o be de l i ve r e d t o t he Age nt a n I nt e r c r e di t or Agr e e m e nt , or a j oi nde r t o a n e xi s t i ng I nt e r c r e di t or Agr e e m e nt , e xe c ut e d by e a c h Re qui r e d I nt e r c r e di t or Count e r pa r t y, a l ong wi t h a ny a ppl i c a bl e r e vi s e d e xhi bi t s t he r e t o. Not wi t hs t a ndi ng t he f or e goi ng, t hi s Se c t i on 6. 19 s ha l l not t a ke e f f e c t unt i l t he Age nt ha s r e c e i ve d ( x) a dul y e xe c ut e d I nt e r c r e di t or Agr e e m e nt ( or a j oi nde r or s uppl e m e nt t he r e of ) , i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt a nd ( y) a ny a ddi t i ona l doc um e nt a t i on r e que s t e d by t he Age nt i n i t s s ol e di s c r e t i on. 6. 20 Er r one ous Pa ym e nt s ( a ) . ( a ) I f t he Age nt not i f i e s a Le nde r , LC I s s ue r or ot he r hol de r of a ny Obl i ga t i ons
( e a c h, a " Le nde r Pa r t y” ) , or a ny Pe r s on who ha s r e c e i ve d f unds on be ha l f of a Le nde r Pa r t y ( a ny s uc h Le nde r Pa r t y or ot he r r e c i pi e nt , a " Pa ym e nt Re c i pi e nt ” ) , t ha t t he Age nt ha s de t e r m i ne d i n i t s s ol e di s c r e t i on ( whe t he r or not a f t e r r e c e i pt of a ny not i c e unde r i m m e di a t e l y s uc c e e di ng c l a us e ( b) ) t ha t a ny f unds r e c e i ve d by s uc h Pa ym e nt Re c i pi e nt f r om t he Age nt or a ny of i t s Af f i l i a t e s we r e e r r one ous l y t r a ns m i t t e d t o, or ot he r wi s e e r r one ous l y r e c e i ve d by, s uc h Pa ym e nt Re c i pi e nt ( whe t he r or not s uc h e r r or i s known t o a ny Pa ym e nt Re c i pi e nt ) ( a ny s uc h f unds , whe t he r r e c e i ve d a s a pa ym e nt , pr e pa ym e nt or r e pa ym e nt of pr i nc i pa l , i nt e r e s t , f e e s , di s t r i but i on or ot he r wi s e , i ndi vi dua l l y a nd c ol l e c t i ve l y, a n " Er r one ous Pa ym e nt ” ) a nd de m a nds t he r e t ur n of s uc h Er r one ous Pa ym e nt ( or a por t i on t he r e of ) , s uc h Er r one ous Pa ym e nt s ha l l a t a l l t i m e s r e m a i n t he pr ope r t y of t he Age nt a nd s ha l l be s e gr e ga t e d by t he Pa ym e nt Re c i pi e nt a nd he l d i n t r us t f or t he be ne f i t of t he Age nt , a nd s uc h Pa ym e nt Re c i pi e nt s ha l l pr om pt l y, but i n no e ve nt l a t e r t ha n one
Bus i ne s s Da y t he r e a f t e r , r e t ur n t o t he Age nt t he a m ount of a ny s uc h Er r one ous Pa ym e nt ( or por t i on t he r e of ) a s t o whi c h s uc h a de m a nd wa s m a de , i n s a m e da y f unds ( i n t he c ur r e nc y s o r e c e i ve d) , t oge t he r wi t h i nt e r e s t t he r e on i n r e s pe c t of e a c h da y f r om a nd i nc l udi ng t he da t e s uc h Er r one ous Pa ym e nt ( or por t i on t he r e of ) wa s r e c e i ve d by s uc h Pa ym e nt Re c i pi e nt t o t he da t e s uc h a m ount i s r e pa i d t o t he Age nt i n s a m e da y f unds a t t he gr e a t e r of t he Fe de r a l Funds Ef f e c t i ve Ra t e a nd a r a t e de t e r m i ne d by t he Age nt i n a c c or da nc e wi t h ba nki ng i ndus t r y r ul e s on i nt e r ba nk c om pe ns a t i on f r om t i m e t o t i m e i n e f f e c t . A not i c e of t he Age nt t o a ny Pa ym e nt Re c i pi e nt unde r t hi s c l a us e ( a ) s ha l l be c onc l us i ve , a bs e nt m a ni f e s t e r r or . ( b) W i t hout l i m i t i ng i m m e di a t e l y pr e c e di ng c l a us e ( a ) , i f a ny Pa ym e nt Re c i pi e nt r e c e i ve s a pa ym e nt , pr e pa ym e nt or r e pa ym e nt ( whe t he r r e c e i ve d a s a pa ym e nt , pr e pa ym e nt or r e pa ym e nt of pr i nc i pa l , i nt e r e s t , f e e s , di s t r i but i on or ot he r wi s e ) f r om t he Age nt ( or a ny of i t s Af f i l i a t e s ) t ha t ( x) i s i n a di f f e r e nt a m ount t ha n,
or on a di f f e r e nt da t e f r om , t ha t s pe c i f i e d i n a not i c e of pa ym e nt , pr e pa ym e nt or r e pa ym e nt s e nt by t he Age nt 109 115525625. 4 0063724- 00082
( or a ny of i t s Af f i l i a t e s ) wi t h r e s pe c t t o s uc h pa ym e nt , pr e pa ym e nt or r e pa ym e nt , ( y) wa s not pr e c e de d or a c c om pa ni e d by a not i c e of pa ym e nt , pr e pa ym e nt or r e pa ym e nt s e nt by t he Age nt ( or a ny of i t s Af f i l i a t e s ) , or ( z ) s uc h Pa ym e nt Re c i pi e nt ot he r wi s e be c om e s a wa r e wa s t r a ns m i t t e d, or r e c e i ve d, i n e r r or ( i n whol e or i n pa r t ) : ( i ) ( A) i n t he c a s e of i m m e di a t e l y pr e c e di ng c l a us e ( x) or ( y) , a n e r r or s ha l l be pr e s um e d t o ha ve be e n m a de ( a bs e nt wr i t t e n c onf i r m a t i on f r om t he Age nt t o t he c ont r a r y) or ( B) i n t he c a s e of i m m e di a t e l y pr e c e di ng c l a us e ( z ) , a n e r r or ha s be e n m a de , i n e a c h c a s e , wi t h r e s pe c t t o s uc h pa ym e nt , pr e pa ym e nt or r e pa ym e nt ; a nd ( i i ) s uc h Pa ym e nt Re c i pi e nt s ha l l pr om pt l y ( a nd, i n a l l e ve nt s , wi t hi n one Bus i ne s s Da y of i t s knowl e dge of s uc h e r r or ) not i f y t he Age nt of i t s r e c e i pt of s uc h pa ym e nt , pr e pa ym e nt or r e pa ym e nt , t he de t a i l s t he r e of ( i n r e a s ona bl e de t a i l ) a nd t ha t i t i s s o not i f yi ng t he Age nt pur s ua nt t o t hi s Se c t i on 6. 20( b) . ( c ) Ea c h Le nde r Pa r t y he r e by a ut hor i z e s t he Age nt t o s e t of f , ne t a nd a ppl y a ny
a nd a l l a m ount s a t a ny t i m e owi ng t o s uc h Le nde r Pa r t y unde r a ny Loa n Doc um e nt , or ot he r wi s e pa ya bl e or di s t r i but a bl e by t he Age nt t o s uc h Le nde r Pa r t y f r om a ny s our c e , a ga i ns t a ny a m ount due t o t he Age nt unde r i m m e di a t e l y pr e c e di ng c l a us e ( a ) or unde r t he i nde m ni f i c a t i on pr ovi s i ons of t hi s Agr e e m e nt . ( d) An Er r one ous Pa ym e nt s ha l l not pa y, pr e pa y, r e pa y, di s c ha r ge or ot he r wi s e s a t i s f y a ny Obl i ga t i ons , e xc e pt t o t he e xt e nt s uc h Er r one ous Pa ym e nt c om pr i s e s f unds r e c e i ve d by t he Age nt f r om a Loa n Pa r t y f or t he pur pos e of m a ki ng s uc h Er r one ous Pa ym e nt . ( e ) To t he e xt e nt pe r m i t t e d by Appl i c a bl e La w, e a c h Pa ym e nt Re c i pi e nt he r e by a gr e e s not t o a s s e r t a ny r i ght or c l a i m t o a n Er r one ous Pa ym e nt , a nd he r e by wa i ve s , a nd i s de e m e d t o wa i ve , a ny c l a i m , c ount e r c l a i m , de f e ns e or r i ght of s e t - of f or r e c oupm e nt , i nc l udi ng wi t hout l i m i t a t i on a ny de f e ns e ba s e d on " di s c ha r ge f or va l ue ” or a ny s i m i l a r doc t r i ne , wi t h r e s pe c t t o a ny de m a nd, c l a i m or c ount e r c l a i m by t he Age nt f or t he r e t ur n of a ny Er r one ous Pa ym e nt . ( f ) Ea c h pa r t y’ s a gr e e m e nt s
unde r t hi s Se c t i on 6. 20 s ha l l s ur vi ve t he r e s i gna t i on or r e pl a c e m e nt of t he Age nt , a ny t r a ns f e r of r i ght s or obl i ga t i ons by, or t he r e pl a c e m e nt of , a Le nde r or LC I s s ue r , t he t e r m i na t i on of t he Com m i t m e nt s , or t he r e pa ym e nt , s a t i s f a c t i on or di s c ha r ge of a ny or a l l Obl i ga t i ons . ARTI CLE 7 YI ELD PROTECTI ON; TAXES 7. 1 Yi e l d Pr ot e c t i on 110 115525625. 4 0063724- 00082 . I f , a f t e r t he da t e of t hi s Agr e e m e nt , t he r e oc c ur s a ny a dopt i on of or c ha nge i n a ny l a w, gove r nm e nt a l or qua s i - gove r nm e nt a l r ul e , r e gul a t i on, pol i c y, gui de l i ne , i nt e r pr e t a t i on, or di r e c t i ve ( whe t he r or not ha vi ng t he f or c e of l a w) or i n t he i nt e r pr e t a t i on, pr om ul ga t i on, i m pl e m e nt a t i on or a dm i ni s t r a t i on t he r e of by a ny gove r nm e nt a l or qua s i - Gove r nm e nt a l Aut hor i t y, c e nt r a l ba nk or c om pa r a bl e a ge nc y c ha r ge d wi t h t he i nt e r pr e t a t i on or a dm i ni s t r a t i on t he r e of , i nc l udi ng, not wi t hs t a ndi ng t he f or e goi ng, a l l r e que s t s , r ul e s , gui de l i ne s or di r e c t i ve s ( x) i n c onne c t i on wi t h t he Dodd- Fr a nk W a l l St r e e t Re f or m a nd Cons um e r Pr ot e c t i on Ac t or ( y) pr om ul ga t e d by t he Ba nk f or I nt e r na t i ona l
Se t t l e m e nt s , t he Ba s e l Com m i t t e e on Ba nki ng Re gul a t i ons a nd Supe r vi s or y Pr a c t i c e s ( or a ny s uc c e s s or or s i m i l a r a ut hor i t y) or t he Uni t e d St a t e s f i na nc i a l r e gul a t or y a ut hor i t i e s , i n e a c h c a s e of c l a us e s ( x) a nd ( y) , r e ga r dl e s s of t he da t e e na c t e d, a dopt e d, i s s ue d, pr om ul ga t e d or i m pl e m e nt e d, or c om pl i a nc e by a ny Le nde r or a ppl i c a bl e Le ndi ng I ns t a l l a t i on or t he LC I s s ue r wi t h a ny r e que s t or di r e c t i ve ( whe t he r or not ha vi ng t he f or c e of l a w) of a ny s uc h a ut hor i t y, c e nt r a l ba nk or c om pa r a bl e a ge nc y ( a ny of t he f or e goi ng, a " Cha nge i n La w” ) whi c h: ( a ) s ubj e c t s a ny Le nde r or a ny a ppl i c a bl e Le ndi ng I ns t a l l a t i on, t he LC I s s ue r , or t he Age nt t o a ny Ta xe s ( ot he r t ha n wi t h r e s pe c t t o I nde m ni f i e d Ta xe s , Exc l ude d Ta xe s , a nd Ot he r Ta xe s ) on i t s l oa ns , l oa n pr i nc i pa l , l e t t e r s of c r e di t , c om m i t m e nt s , or ot he r obl i ga t i ons , or i t s de pos i t s , r e s e r ve s , ot he r l i a bi l i t i e s or c a pi t a l a t t r i but a bl e t he r e t o, or ( b) i m pos e s or i nc r e a s e s or de e m s a ppl i c a bl e a ny r e s e r ve , a s s e s s m e nt , i ns ur a nc e c ha r ge , s pe c i a l de pos i t or s i m i l a r r e qui r e m e nt a ga i ns t a s s e t s of ,
de pos i t s wi t h or f or t he a c c ount of , or c r e di t e xt e nde d by, a ny Le nde r or a ny a ppl i c a bl e Le ndi ng I ns t a l l a t i on or t he LC I s s ue r ( ot he r t ha n r e s e r ve s a nd a s s e s s m e nt s t a ke n i nt o a c c ount i n de t e r m i ni ng t he i nt e r e s t r a t e a ppl i c a bl e t o SOFR Loa ns ) , or ( c ) i m pos e s a ny ot he r c ondi t i on ( ot he r t ha n Ta xe s ) t he r e s ul t of whi c h i s t o i nc r e a s e t he c os t t o a ny Le nde r or a ny a ppl i c a bl e Le ndi ng I ns t a l l a t i on or t he LC I s s ue r of m a ki ng, f undi ng or m a i nt a i ni ng i t s SOFR Loa ns , or of i s s ui ng or pa r t i c i pa t i ng i n Le t t e r s of Cr e di t , or r e duc e s a ny a m ount r e c e i va bl e by a ny Le nde r or a ny a ppl i c a bl e Le ndi ng I ns t a l l a t i on or t he LC I s s ue r i n c onne c t i on wi t h i t s SOFR Loa ns , Le t t e r s of Cr e di t , or pa r t i c i pa t i ons t he r e i n, or r e qui r e s a ny Le nde r or a ny a ppl i c a bl e Le ndi ng I ns t a l l a t i on or t he LC I s s ue r t o m a ke a ny pa ym e nt c a l c ul a t e d by r e f e r e nc e t o t he a m ount of SOFR Loa ns , Le t t e r s of Cr e di t , or pa r t i c i pa t i ons t he r e i n he l d or i nt e r e s t or f e e s r e c e i ve d by i t , by a n a m ount de e m e d m a t e r i a l by s uc h Le nde r or t he LC I s s ue r a s t he c a s e m a y be , a nd t he r e s ul t of a ny of t he
f or e goi ng i s t o i nc r e a s e t he c os t t o s uc h Le nde r or t he LC I s s ue r of m a ki ng or m a i nt a i ni ng i t s Loa ns or Com m i t m e nt s or of i s s ui ng or pa r t i c i pa t i ng i n Le t t e r s of Cr e di t or t o r e duc e t he r e t ur n r e c e i ve d by s uc h Le nde r or t he LC I s s ue r i n c onne c t i on wi t h s uc h Loa ns or Com m i t m e nt , Le t t e r s of Cr e di t or pa r t i c i pa t i ons t he r e i n, t he n, wi t hi n f i f t e e n ( 15) da ys a f t e r de m a nd by s uc h Le nde r or t he LC I s s ue r , t he Bor r owe r s s ha l l pa y s uc h Le nde r or t he LC I s s ue r s uc h a ddi t i ona l a m ount or a m ount s a s wi l l c om pe ns a t e s uc h Le nde r or t he LC I s s ue r f or s uc h i nc r e a s e d c os t or r e duc t i on i n a m ount r e c e i ve d. Fa i l ur e or de l a y on t he pa r t of a ny Le nde r or LC I s s ue r t o de m a nd c om pe ns a t i on pur s ua nt t o t hi s Se c t i on s ha l l not c ons t i t ut e a wa i ve r of s uc h Le nde r ’ s or LC I s s ue r ’ s r i ght t o de m a nd s uc h c om pe ns a t i on; pr ovi de d t ha t t he Bor r owe r s s ha l l not be r e qui r e d t o pa y a ny a m ount t o c om pe ns a t e a ny Le nde r or LC I s s ue r pur s ua nt t o t he f or e goi ng pr ovi s i ons of t hi s Se c t i on 7. 1 f or a ny s uc h i nc r e a s e d c os t s i nc ur r e d or r e duc t i ons s uf f e r e d m or e t ha n ni ne m ont hs pr i or
t o t he da t e t ha t s uc h Le nde r or s uc h LC I s s ue r , a s t he c a s e m a y be , not i f i e s t he 111 115525625. 4 0063724- 00082
Com pa ny of t he Cha nge i n La w gi vi ng r i s e t o s uc h i nc r e a s e d c os t s or r e duc t i ons a nd of s uc h Le nde r ’ s or s uc h LC I s s ue r ’ s i nt e nt i on t o c l a i m c om pe ns a t i on t he r e f or ( e xc e pt t ha t , i f t he Cha nge i n La w gi vi ng r i s e t o s uc h i nc r e a s e d c os t s or r e duc t i ons i s r e t r oa c t i ve , t he n t he ni ne - m ont h pe r i od r e f e r r e d t o a bove s ha l l be e xt e nde d t o i nc l ude t he pe r i od of r e t r oa c t i ve e f f e c t ) . 7. 2 Cha nge s i n Ca pi t a l Ade qua c y Re gul a t i ons . I f a Le nde r or t he LC I s s ue r de t e r m i ne s t he a m ount of c a pi t a l or l i qui di t y r e qui r e d or e xpe c t e d t o be m a i nt a i ne d by s uc h Le nde r or t he LC I s s ue r , a ny Le ndi ng I ns t a l l a t i on of s uc h Le nde r or t he LC I s s ue r , or a ny c or por a t i on or hol di ng c om pa ny c ont r ol l i ng s uc h Le nde r or t he LC I s s ue r i s i nc r e a s e d a s a r e s ul t of ( a ) a Cha nge i n La w or ( b) a ny c ha nge a f t e r t he da t e of t hi s Agr e e m e nt i n t he Ri s k- Ba s e d Ca pi t a l Gui de l i ne s , t he n, wi t hi n f i f t e e n ( 15) da ys of de m a nd by s uc h Le nde r or t he LC I s s ue r , t he Bor r owe r s s ha l l pa y s uc h Le nde r or t he LC I s s ue r t he a m ount ne c e s s a r y t o c om pe ns a t e f or a ny s hor t f a l l i n t he r a t e of r e t ur n on t he por t i on
of s uc h i nc r e a s e d c a pi t a l whi c h s uc h Le nde r or t he LC I s s ue r de t e r m i ne s i s a t t r i but a bl e t o t hi s Agr e e m e nt , i t s Out s t a ndi ng Cr e di t Expos ur e or i t s Com m i t m e nt t o m a ke Loa ns a nd i s s ue or pa r t i c i pa t e i n Le t t e r s of Cr e di t , a s t he c a s e m a y be , he r e unde r ( a f t e r t a ki ng i nt o a c c ount s uc h Le nde r ’ s or t he LC I s s ue r ’ s pol i c i e s a s t o c a pi t a l a de qua c y or l i qui di t y) , i n e a c h c a s e t ha t i s a t t r i but a bl e t o s uc h Cha nge i n La w or c ha nge i n t he Ri s k- Ba s e d Ca pi t a l Gui de l i ne s , a s a ppl i c a bl e . Fa i l ur e or de l a y on t he pa r t of a ny Le nde r or LC I s s ue r t o de m a nd c om pe ns a t i on pur s ua nt t o t hi s Se c t i on s ha l l not c ons t i t ut e a wa i ve r of s uc h Le nde r or LC I s s ue r ’ s r i ght t o de m a nd s uc h c om pe ns a t i on; pr ovi de d t ha t t he Bor r owe r s s ha l l not be r e qui r e d t o pa y a ny a m ount t o c om pe ns a t e a ny Le nde r or LC I s s ue r pur s ua nt t o t he f or e goi ng pr ovi s i ons of t hi s Se c t i on 7. 2 f or a ny s hor t f a l l i n t he r a t e of r e t ur n s uf f e r e d m or e t ha n ni ne m ont hs pr i or t o t he da t e t ha t s uc h Le nde r or s uc h LC I s s ue r , a s t he c a s e m a y be , not i f i e s t he Com pa ny of t he Cha nge i n La w gi vi ng r i s e t o s uc h
s hor t f a l l a nd of s uc h Le nde r ’ s or s uc h LC I s s ue r ’ s i nt e nt i on t o c l a i m c om pe ns a t i on ( e xc e pt t ha t , i f t he Cha nge i n La w gi vi ng r i s e t o s uc h s hor t f a l l i s r e t r oa c t i ve , t he n t he ni ne - m ont h pe r i od r e f e r r e d t o a bove s ha l l be e xt e nde d t o i nc l ude t he pe r i od of r e t r oa c t i ve e f f e c t ) . 7. 3 Ava i l a bi l i t y of Type s of Adva nc e s ; Ade qua c y of I nt e r e s t Ra t e . ( a ) Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y i n t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt ( e xc e pt a s pr ovi de d i n c l a us e ( b) be l ow) , i f t he Age nt de t e r m i ne s ( whi c h de t e r m i na t i on s ha l l be c onc l us i ve a bs e nt m a ni f e s t e r r or ) , or t he Re qui r e d Le nde r s not i f y t he Age nt t ha t t he Re qui r e d Le nde r s ha ve de t e r m i ne d, t ha t : ( i ) de pos i t s of a t ype a nd m a t ur i t y a ppr opr i a t e t o m a t c h f und SOFR Loa ns a r e not a va i l a bl e t o s uc h Le nde r s i n t he r e l e va nt m a r ke t , or ( i i ) t he i nt e r e s t r a t e a ppl i c a bl e t o t he Te r m SOFR Al t e r na t i ve Ra t e Loa ns or Te r m SOFR Loa ns f or a ny r e que s t e d I nt e r e s t Pe r i od i s not a s c e r t a i na bl e or a va i l a bl e ( i nc l udi ng, wi t hout l i m i t a t i on, be c a us e t he a ppl i c a bl e Re ut e r s Sc r e e n ( or on a ny s uc c e s s or or s ubs t i t ut e
pa ge on s uc h s c r e e n) i s una va i l a bl e ) or doe s not a de qua t e l y a nd f a i r l y r e f l e c t t he c os t of m a ki ng or m a i nt a i ni ng t he Te r m SOFR Al t e r na t i ve Ra t e Loa ns or Te r m SOFR Loa ns , 112 115525625. 4 0063724- 00082 t he n t he Age nt s ha l l s us pe nd t he a va i l a bi l i t y of t he Ne w Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e , Us e d Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owi ng Ra t e , a nd Re vol vi ng Loa n Bor r owi ng Ra t e , t he l oa ns s ha l l t he r e a f t e r be a r i nt e r e s t a t t he Al t e r na t e Ba s e Ra t e pl us t he Al t e r na t e Ba s e Ra t e M a r gi n ( Ne w Ve hi c l e ) f or Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns , t he Al t e r na t e Ba s e Ra t e pl us t he Al t e r na t e Ba s e Ra t e M a r gi n ( Us e d Ve hi c l e ) f or Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns , t he Al t e r na t e Ba s e Ra t e pl us t he Al t e r na t e Ba s e Ra t e M a r gi n ( Se r vi c e Loa ne r Ve hi c l e ) f or Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , a nd t he Al t e r na t e Ba s e Ra t e pl us t he Al t e r na t e Ba s e Ra t e M a r gi n ( Re vol vi ng) f or Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns . ( b) Be nc hm a r k
Re pl a c e m e nt Se t t i ng. ( i ) Be nc hm a r k Tr a ns i t i on Eve nt ; Ea r l y Opt - i n El e c t i on. Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y he r e i n or i n a ny ot he r Loa n Doc um e nt ( a nd a ny Swa p s ha l l be de e m e d not t o be a " Loa n Doc um e nt ” f or pur pos e s of t hi s Se c t i on 7. 3( b) ) , i f a Be nc hm a r k Tr a ns i t i on Eve nt or a n Ea r l y Opt - i n El e c t i on, a s a ppl i c a bl e , a nd i t s r e l a t e d Be nc hm a r k Re pl a c e m e nt Da t e ha ve oc c ur r e d pr i or t o t he Re f e r e nc e Ti m e i n r e s pe c t of a ny s e t t i ng of t he t he n- c ur r e nt Be nc hm a r k, t he n t he Adm i ni s t r a t i ve Age nt a nd t he Bor r owe r m a y a m e nd t hi s Agr e e m e nt t o r e pl a c e t he t he n- c ur r e nt Be nc hm a r k wi t h a Be nc hm a r k Re pl a c e m e nt . Any s uc h a m e ndm e nt wi t h r e s pe c t t o a Be nc hm a r k Tr a ns i t i on Eve nt wi l l be c om e e f f e c t i ve a t or a f t e r 5: 00 p. m . ( Ne w Yor k Ci t y t i m e ) on t he f i f t h Bus i ne s s Da y a f t e r t he Adm i ni s t r a t i ve Age nt ha s pos t e d s uc h pr opos e d a m e ndm e nt t o a l l Le nde r s a nd t he Bor r owe r wi t hout a ny a m e ndm e nt t o, or f ur t he r a c t i on or c ons e nt of a ny ot he r pa r t y t o, t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt s o l ong a s t he Adm i ni s t r a t i ve Age nt ha s not r e c e i ve d,
by s uc h t i m e , wr i t t e n not i c e of obj e c t i on t o s uc h a m e ndm e nt f r om Le nde r s c om pr i s i ng t he Re qui r e d Le nde r s . ( i i ) Be nc hm a r k Re pl a c e m e nt Conf or m i ng Cha nge s . I n c onne c t i on wi t h t he i m pl e m e nt a t i on of a Be nc hm a r k Re pl a c e m e nt , t he Age nt wi l l ha ve t he r i ght t o m a ke Be nc hm a r k Re pl a c e m e nt Conf or m i ng Cha nge s f r om t i m e t o t i m e a nd, not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y he r e i n or i n a ny ot he r Loa n Doc um e nt , a ny a m e ndm e nt s i m pl e m e nt i ng s uc h Be nc hm a r k Re pl a c e m e nt Conf or m i ng Cha nge s wi l l be c om e e f f e c t i ve wi t hout a ny f ur t he r a c t i on or c ons e nt of a ny ot he r pa r t y t o t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt . ( i i i ) Not i c e s ; St a nda r ds f or De c i s i ons a nd De t e r m i na t i ons . The Age nt wi l l pr om pt l y not i f y t he Com pa ny a nd t he Le nde r s of ( A) t he i m pl e m e nt a t i on of a ny Be nc hm a r k Re pl a c e m e nt , a nd ( B) t he e f f e c t i ve ne s s of a ny Be nc hm a r k Re pl a c e m e nt Conf or m i ng Cha nge s . Any de t e r m i na t i on, de c i s i on or e l e c t i on t ha t m a y be m a de by t he Age nt or , i f a ppl i c a bl e , a ny Le nde r ( or gr oup of Le nde r s ) pur s ua nt t o t hi s Se c t i on 7. 3( b) , i nc l udi ng a ny
de t e r m i na t i on wi t h r e s pe c t t o a t e nor , r a t e or a dj us t m e nt or of t he oc c ur r e nc e or non- oc c ur r e nc e of a n e ve nt , c i r c um s t a nc e or da t e a nd a ny de c i s i on t o t a ke or r e f r a i n f r om t a ki ng a ny a c t i on or a ny s e l e c t i on, wi l l be c onc l us i ve a nd bi ndi ng a bs e nt m a ni f e s t e r r or a nd m a y be m a de i n i t s or t he i r s ol e di s c r e t i on a nd wi t hout c ons e nt f r om a ny ot he r pa r t y t o t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt , e xc e pt , i n e a c h c a s e , a s e xpr e s s l y r e qui r e d pur s ua nt t o t hi s Se c t i on 7. 3( b) . ( i v) Una va i l a bi l i t y of Te nor of Be nc hm a r k. Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y he r e i n or i n a ny ot he r Loa n Doc um e nt , a t a ny t i m e ( i nc l udi ng i n 113 115525625. 4 0063724- 00082
c onne c t i on wi t h t he i m pl e m e nt a t i on of a Be nc hm a r k Re pl a c e m e nt ) , ( i ) i f t he t he n- c ur r e nt Be nc hm a r k i s a t e r m r a t e ( i nc l udi ng t he Te r m SOFR Ba s e Ra t e or Te r m SOFR) a nd e i t he r ( A) a ny t e nor f or s uc h Be nc hm a r k i s not di s pl a ye d on a s c r e e n or ot he r i nf or m a t i on s e r vi c e t ha t publ i s he s s uc h r a t e f r om t i m e t o t i m e a s s e l e c t e d by t he Age nt i n i t s r e a s ona bl e di s c r e t i on or ( B) t he r e gul a t or y s upe r vi s or f or t he a dm i ni s t r a t or of s uc h Be nc hm a r k ha s pr ovi de d a publ i c s t a t e m e nt or publ i c a t i on of i nf or m a t i on a nnounc i ng t ha t a ny t e nor f or s uc h Be nc hm a r k i s or wi l l be no l onge r r e pr e s e nt a t i ve , t he n t he Age nt m a y m odi f y t he de f i ni t i on of " I nt e r e s t Pe r i od” ( or a ny s i m i l a r or a na l ogous de f i ni t i on) f or a ny Be nc hm a r k s e t t i ngs a t or a f t e r s uc h t i m e t o r e m ove a ny t e nor of s uc h Be nc hm a r k t ha t i s una va i l a bl e or non- r e pr e s e nt a t i ve f or a ny Be nc hm a r k s e t t i ngs a nd ( i i ) i f a t e nor t ha t wa s r e m ove d pur s ua nt t o c l a us e ( i ) a bove e i t he r ( A) i s s ubs e que nt l y di s pl a ye d on a s c r e e n or i nf or m a t i on s e r vi c e f or a Be nc hm a r k ( i nc l udi ng a Be nc hm a r k Re pl a c e m e nt ) or ( B)
i s not , or i s no l onge r , s ubj e c t t o a n a nnounc e m e nt t ha t i t i s or wi l l no l onge r be r e pr e s e nt a t i ve f or a Be nc hm a r k ( i nc l udi ng a Be nc hm a r k Re pl a c e m e nt ) , t he n t he Age nt m a y m odi f y t he de f i ni t i on of " I nt e r e s t Pe r i od” ( or a ny s i m i l a r or a na l ogous de f i ni t i on) f or a l l Be nc hm a r k s e t t i ngs a t or a f t e r s uc h t i m e t o r e i ns t a t e s uc h pr e vi ous l y r e m ove d t e nor . ( v) Be nc hm a r k Una va i l a bi l i t y Pe r i od. Upon not i c e t o t he Com pa ny by t he Age nt i n a c c or da nc e wi t h Se c t i on 17. 11 of t he c om m e nc e m e nt of a Be nc hm a r k Una va i l a bi l i t y Pe r i od a nd unt i l a Be nc hm a r k Re pl a c e m e nt i s de t e r m i ne d i n a c c or da nc e wi t h t hi s Se c t i on 7. 3( b) , t he Com pa ny m a y r e voke a ny r e que s t f or a SOFR Loa n, or a ny r e que s t f or t he c onve r s i on or c ont i nua t i on of a SOFR Loa n t o be m a de , c onve r t e d or c ont i nue d dur i ng a ny Be nc hm a r k Una va i l a bi l i t y Pe r i od a t t he e nd of t he a ppl i c a bl e I nt e r e s t Pe r i od, a nd, f a i l i ng t ha t , t he Com pa ny wi l l be de e m e d t o ha ve c onve r t e d a ny s uc h r e que s t a t t he e nd of t he a ppl i c a bl e I nt e r e s t Pe r i od i nt o l oa ns t ha t be a r i nt e r e s t a t t he Al t e r na t e Ba s e Ra t e pl us t he
Al t e r na t e Ba s e Ra t e M a r gi n ( Ne w Ve hi c l e ) f or Ne w Ve hi c l e Fl oor pl a n Loa ns a nd Ne w Ve hi c l e Swi ng Li ne Loa ns , t he Al t e r na t e Ba s e Ra t e pl us t he Al t e r na t e Ba s e Ra t e M a r gi n ( Us e d Ve hi c l e ) f or Us e d Ve hi c l e Fl oor pl a n Loa ns a nd Us e d Ve hi c l e Swi ng Li ne Loa ns , t he Al t e r na t e Ba s e Ra t e pl us t he Al t e r na t e Ba s e Ra t e M a r gi n ( Se r vi c e Loa ne r Ve hi c l e ) f or Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns a nd Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , a nd t he Al t e r na t e Ba s e Ra t e pl us t he Al t e r na t e Ba s e Ra t e M a r gi n ( Re vol vi ng) f or Re vol vi ng Loa ns a nd Re vol vi ng Swi ng Li ne Loa ns . Dur i ng a ny Be nc hm a r k Una va i l a bi l i t y Pe r i od or a t a ny t i m e t ha t a t e nor f or t he t he n- c ur r e nt Be nc hm a r k i s not a n Ava i l a bl e Te nor , t he c om pone nt of t he Al t e r na t e Ba s e Ra t e ba s e d upon t he t he n- c ur r e nt Be nc hm a r k or s uc h t e nor f or s uc h Be nc hm a r k, a s a ppl i c a bl e , wi l l not be us e d i n a ny de t e r m i na t i on of t he Al t e r na t e Ba s e Ra t e . 7. 4 Ta xe s . 7. 4. 1 Any a nd a l l pa ym e nt s by or on a c c ount of a ny obl i ga t i on of a ny Loa n Pa r t y unde r a ny Loa n Doc um e nt s ha l l be m a de wi t hout de duc t i on or wi t hhol di ng f or a ny Ta xe s ,
e xc e pt a s r e qui r e d by Appl i c a bl e La w. I f a ny Appl i c a bl e La w ( a s de t e r m i ne d i n t he good f a i t h di s c r e t i on of t he a ppl i c a bl e wi t hhol di ng a ge nt ) r e qui r e s t he de duc t i on or wi t hhol di ng of a ny Ta x f r om a ny s uc h pa ym e nt , t he n t he a ppl i c a bl e wi t hhol di ng a ge nt s ha l l be e nt i t l e d t o m a ke s uc h de duc t i on or wi t hhol di ng a nd s ha l l t i m e l y pa y t he f ul l a m ount de duc t e d or wi t hhe l d t o t he r e l e va nt Gove r nm e nt a l Aut hor i t y i n a c c or da nc e wi t h Appl i c a bl e La w a nd, i f s uc h Ta x i s a n I nde m ni f i e d Ta x or Ot he r Ta x, t he n t he s um pa ya bl e by t he a ppl i c a bl e Loa n Pa r t y s ha l l be i nc r e a s e d a s ne c e s s a r y s o t ha t a f t e r s uc h de duc t i on or wi t hhol di ng ha s be e n m a de ( i nc l udi ng s uc h de duc t i ons a nd wi t hhol di ngs a ppl i c a bl e t o a ddi t i ona l s um s pa ya bl e unde r t hi s Se c t i on 7. 4) 114 115525625. 4 0063724- 00082 t he a ppl i c a bl e Le nde r , t he LC I s s ue r or t he Age nt r e c e i ve s a n a m ount e qua l t o t he s um i t woul d ha ve r e c e i ve d ha d no s uc h de duc t i on or wi t hhol di ng be e n m a de a s pr ovi de d i n t hi s Se c t i on 7. 4. 7. 4. 2 The Loa n Pa r t i e s s ha l l t i m e l y pa y t o t he r e l e va nt Gove r nm e nt a l Aut hor i t y i n a c c or da nc e
wi t h Appl i c a bl e La w or a t t he opt i on of t he Age nt t i m e l y r e i m bur s e i t f or t he pa ym e nt of , a ny Ot he r Ta xe s . 7. 4. 3 The Loa n Pa r t i e s s ha l l i nde m ni f y t he Le nde r , t he LC I s s ue r or t he Age nt , wi t hi n f i f t e e n ( 15) da ys a f t e r de m a nd t he r e f or , f or t he f ul l a m ount of a ny I nde m ni f i e d Ta xe s a nd Ot he r Ta xe s ( i nc l udi ng I nde m ni f i e d Ta xe s a nd Ot he r Ta xe s i m pos e d or a s s e r t e d on or a t t r i but a bl e t o a m ount s pa ya bl e unde r t hi s Se c t i on 7. 4) pa ya bl e or pa i d by s uc h Le nde r , t he LC I s s ue r or t he Age nt or r e qui r e d t o be wi t hhe l d or de duc t e d f r om a pa ym e nt t o s uc h Le nde r , t he LC I s s ue r or t he Age nt a nd a ny r e a s ona bl e e xpe ns e s a r i s i ng t he r e f r om or wi t h r e s pe c t t he r e t o, whe t he r or not s uc h I nde m ni f i e d Ta xe s a nd Ot he r Ta xe s we r e c or r e c t l y or l e ga l l y i m pos e d or a s s e r t e d by t he r e l e va nt Gove r nm e nt a l Aut hor i t y. A c e r t i f i c a t e a s t o t he a m ount of s uc h pa ym e nt or l i a bi l i t y de l i ve r e d t o a Bor r owe r by a Le nde r or LC I s s ue r ( wi t h a c opy t o t he Age nt ) , or by t he Age nt on i t s own be ha l f or on be ha l f of a Le nde r or LC I s s ue r , s ha l l be c onc l us i ve a bs e nt m a ni f e s t e r r or . 7. 4. 4
Ea c h Le nde r s ha l l s e ve r a l l y i nde m ni f y t he Age nt , wi t hi n f i f t e e n ( 15) da ys a f t e r de m a nd t he r e f or , f or ( a ) a ny I nde m ni f i e d Ta xe s a nd Ot he r Ta xe s a t t r i but a bl e t o s uc h Le nde r ( but onl y t o t he e xt e nt t ha t a ny Loa n Pa r t y ha s not a l r e a dy i nde m ni f i e d t he Age nt f or s uc h I nde m ni f i e d Ta xe s a nd Ot he r Ta xe s a nd wi t hout l i m i t i ng t he obl i ga t i on of t he Loa n Pa r t i e s t o do s o) , ( b) a ny Ta xe s a t t r i but a bl e t o s uc h Le nde r ’ s f a i l ur e t o c om pl y wi t h t he pr ovi s i ons of Se c t i on 17. 3. 3 r e l a t i ng t o t he m a i nt e na nc e of a Pa r t i c i pa nt Re gi s t e r , a nd ( c ) a ny Exc l ude d Ta xe s a t t r i but a bl e t o s uc h Le nde r , i n e a c h c a s e , t ha t a r e pa ya bl e or pa i d by t he Age nt i n c onne c t i on wi t h a ny Loa n Doc um e nt , a nd a ny r e a s ona bl e e xpe ns e s a r i s i ng t he r e f r om or wi t h r e s pe c t t he r e t o, whe t he r or not s uc h Ta xe s we r e c or r e c t l y or l e ga l l y i m pos e d or a s s e r t e d by t he r e l e va nt Gove r nm e nt a l Aut hor i t y. A c e r t i f i c a t e a s t o t he a m ount of s uc h pa ym e nt or l i a bi l i t y de l i ve r e d t o a ny Le nde r by t he Age nt s ha l l be c onc l us i ve a bs e nt m a ni f e s t e r r or . Ea c h Le nde r he r e by a ut hor i z e s t he Age nt t o s e t of f a nd a ppl y a ny
a nd a l l a m ount s a t a ny t i m e owi ng t o s uc h Le nde r unde r a ny Loa n Doc um e nt or ot he r wi s e pa ya bl e by t he Age nt t o t he Le nde r f r om a ny ot he r s our c e a ga i ns t a ny a m ount due t o t he Age nt unde r t hi s Se c t i on 7. 4. 4. 7. 4. 5 As s oon a s pr a c t i c a bl e a f t e r a ny pa ym e nt of Ta xe s by a ny Loa n Pa r t y t o a Gove r nm e nt a l Aut hor i t y pur s ua nt t o t hi s Se c t i on 7. 4, s uc h Loa n Pa r t y s ha l l de l i ve r t o t he Age nt t he or i gi na l or a c e r t i f i e d c opy of a r e c e i pt i s s ue d by s uc h Gove r nm e nt a l Aut hor i t y e vi de nc i ng s uc h pa ym e nt , a c opy of t he r e t ur n r e por t i ng s uc h pa ym e nt or ot he r e vi de nc e of s uc h pa ym e nt r e a s ona bl y s a t i s f a c t or y t o t he Age nt . 7. 4. 6 ( a ) Any Le nde r t ha t i s e nt i t l e d t o a n e xe m pt i on f r om or r e duc t i on of wi t hhol di ng Ta x wi t h r e s pe c t t o pa ym e nt s m a de unde r a ny Loa n Doc um e nt s ha l l de l i ve r t o t he Com pa ny a nd t he Age nt , a t t he t i m e or t i m e s r e a s ona bl y r e que s t e d by t he Com pa ny or t he Age nt , s uc h pr ope r l y c om pl e t e d a nd e xe c ut e d doc um e nt a t i on r e a s ona bl y r e que s t e d by t he Com pa ny or t he Age nt a s wi l l pe r m i t s uc h pa ym e nt s t o be m a de wi t hout wi t hhol di ng or a t a r e duc e d
r a t e of wi t hhol di ng. I n a ddi t i on, a ny Le nde r , i f r e a s ona bl y r e que s t e d by t he Com pa ny or t he Age nt , s ha l l de l i ve r s uc h ot he r doc um e nt a t i on pr e s c r i be d by Appl i c a bl e La w or r e a s ona bl y 115 115525625. 4 0063724- 00082
r e que s t e d by t he Com pa ny or t he Age nt a s wi l l e na bl e t he Com pa ny or t he Age nt t o de t e r m i ne whe t he r or not s uc h Le nde r i s s ubj e c t t o ba c kup wi t hhol di ng or i nf or m a t i on r e por t i ng r e qui r e m e nt s . Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y i n t he pr e c e di ng t wo s e nt e nc e s , t he c om pl e t i on, e xe c ut i on a nd s ubm i s s i on of s uc h doc um e nt a t i on ( ot he r t ha n s uc h doc um e nt a t i on s e t f or t h i n Se c t i on 7. 4. 6( b) ( i ) , ( b) ( i i ) , a nd ( b) ( i v) ) s ha l l not be r e qui r e d i f i n t he Le nde r ’ s r e a s ona bl e j udgm e nt s uc h c om pl e t i on, e xe c ut i on or s ubm i s s i on woul d s ubj e c t s uc h Le nde r t o a ny m a t e r i a l unr e i m bur s e d c os t or e xpe ns e or woul d m a t e r i a l l y pr e j udi c e t he l e ga l or c om m e r c i a l pos i t i on of s uc h Le nde r . ( b) W i t hout l i m i t i ng t he ge ne r a l i t y of t he f or e goi ng, ( i ) a ny Le nde r t ha t i s a Uni t e d St a t e s pe r s on f or U. S. f e de r a l i nc om e Ta x pur pos e s s ha l l de l i ve r t o t he Com pa ny a nd t he Age nt on or pr i or t o t he da t e on whi c h s uc h Le nde r be c om e s a Le nde r unde r t hi s Agr e e m e nt ( a nd f r om t i m e t o t i m e t he r e a f t e r upon t he r e a s ona bl e r e que s t of t he Com pa ny or t he Age nt ) , e xe c ut e d c opi e s of
I RS For m W - 9 c e r t i f yi ng t ha t s uc h Le nde r i s e xe m pt f r om U. S. f e de r a l ba c kup wi t hhol di ng Ta x; ( i i ) a ny Non- U. S. Le nde r s ha l l , t o t he e xt e nt i t i s l e ga l l y e nt i t l e d t o do s o, de l i ve r t o t he Com pa ny a nd t he Age nt ( i n s uc h num be r of c opi e s a s s ha l l be r e que s t e d by t he r e c i pi e nt ) on or pr i or t o t he da t e on whi c h s uc h Non- U. S. Le nde r be c om e s a Le nde r unde r t hi s Agr e e m e nt ( a nd f r om t i m e t o t i m e t he r e a f t e r upon t he r e a s ona bl e r e que s t of t he Com pa ny or t he Age nt ) , whi c he ve r of t he f ol l owi ng i s a ppl i c a bl e : ( A) i n t he c a s e of a Non- U. S. Le nde r c l a i m i ng t he be ne f i t s of a n i nc om e Ta x t r e a t y t o whi c h t he Uni t e d St a t e s i s a pa r t y ( 1) wi t h r e s pe c t t o pa ym e nt s of i nt e r e s t unde r a ny Loa n Doc um e nt , e xe c ut e d c opi e s of I RS For m W - 8BEN or I RS For m W - 8BEN- E e s t a bl i s hi ng a n e xe m pt i on f r om , or r e duc t i on of , U. S. f e de r a l wi t hhol di ng Ta x pur s ua nt t o t he " i nt e r e s t ” a r t i c l e of s uc h Ta x t r e a t y a nd ( 2) wi t h r e s pe c t t o a ny ot he r a ppl i c a bl e pa ym e nt s unde r a ny Loa n Doc um e nt , I RS For m W - 8BEN or I RS For m W - 8BEN- E e s t a bl i s hi ng a n e xe m pt i on f r om , or r e duc t i on
of , U. S. f e de r a l wi t hhol di ng Ta x pur s ua nt t o t he " bus i ne s s pr of i t s ” or " ot he r i nc om e ” a r t i c l e of s uc h Ta x t r e a t y; ( B) e xe c ut e d c opi e s of I RS For m W - 8ECI ; ( C) i n t he c a s e of a Non- U. S. Le nde r c l a i m i ng t he be ne f i t s of t he e xe m pt i on f or por t f ol i o i nt e r e s t unde r Se c t i on 881( c ) of t he Code , ( 1) a c e r t i f i c a t e t o t he e f f e c t t ha t s uc h Non- U. S. Le nde r i s not a " ba nk” wi t hi n t he m e a ni ng of Se c t i on 881( c ) ( 3) ( A) of t he Code , a " 10 pe r c e nt s ha r e hol de r ” of t he Bor r owe r wi t hi n t he m e a ni ng of Se c t i on 881( c ) ( 3) ( B) of t he Code , or a " c ont r ol l e d f or e i gn c or por a t i on” r e l a t e d t o t he Bor r owe r a s de s c r i be d i n Se c t i on 881( c ) ( 3) ( C) of t he Code a nd ( 2) e xe c ut e d c opi e s of I RS For m W - 8BEN or I RS For m W - 8BEN- E; or ( D) t o t he e xt e nt a Non- U. S. Le nde r i s not t he be ne f i c i a l owne r , e xe c ut e d c opi e s of I RS For m W - 8I M Y, a c c om pa ni e d by I RS For m W - 8ECI , I RS For m W - 8BEN, I RS For m W - 8BEN- E, I RS For m W - 8I M Y or I RS For m W - 9, a nd/ or ot he r c e r t i f i c a t i on doc um e nt s f r om e a c h be ne f i c i a l owne r , a s a ppl i c a bl e . 116 115525625. 4 0063724- 00082 ( i i i ) a ny Non- U. S. Le nde r s ha l l ,
t o t he e xt e nt i t i s l e ga l l y e nt i t l e d t o do s o, de l i ve r t o t he Com pa ny a nd t he Age nt ( i n s uc h num be r of c opi e s a s s ha l l be r e que s t e d by t he r e c i pi e nt ) on or pr i or t o t he da t e on whi c h s uc h Non- U. S. Le nde r be c om e s a Le nde r unde r t hi s Agr e e m e nt ( a nd f r om t i m e t o t i m e t he r e a f t e r upon t he r e a s ona bl e r e que s t of t he Com pa ny or t he Age nt ) , e xe c ut e d or i gi na l s of a ny ot he r f or m pr e s c r i be d by Appl i c a bl e La w a s a ba s i s f or c l a i m i ng e xe m pt i on f r om or a r e duc t i on i n U. S. f e de r a l wi t hhol di ng Ta x, dul y c om pl e t e d, t oge t he r wi t h s uc h s uppl e m e nt a r y doc um e nt a t i on a s m a y be pr e s c r i be d by Appl i c a bl e La w t o pe r m i t t he Com pa ny or t he Age nt t o de t e r m i ne t he wi t hhol di ng or de duc t i on r e qui r e d t o be m a de ; a nd ( i v) i f a pa ym e nt m a de t o a Le nde r unde r a ny Loa n Doc um e nt woul d be s ubj e c t t o U. S. f e de r a l wi t hhol di ng Ta x i m pos e d by FATCA i f s uc h Le nde r we r e t o f a i l t o c om pl y wi t h t he a ppl i c a bl e r e por t i ng r e qui r e m e nt s of FATCA ( i nc l udi ng t hos e c ont a i ne d i n Se c t i on 1471( b) or 1472( b) of t he Code , a s a ppl i c a bl e ) , s uc h Le nde r s ha l l de l i ve r t o t he Com pa ny a nd t he
Age nt a t t he t i m e or t i m e s pr e s c r i be d by l a w a nd a t s uc h t i m e or t i m e s r e a s ona bl y r e que s t e d by t he Com pa ny or t he Age nt s uc h doc um e nt a t i on pr e s c r i be d by Appl i c a bl e La w ( i nc l udi ng a s pr e s c r i be d by Se c t i on 1471( b) ( 3) ( C) ( i ) of t he Code ) a nd s uc h a ddi t i ona l doc um e nt a t i on r e a s ona bl y r e que s t e d by t he Com pa ny or t he Age nt a s m a y be ne c e s s a r y f or t he Com pa ny a nd t he Age nt t o c om pl y wi t h t he i r obl i ga t i ons unde r FATCA a nd t o de t e r m i ne t ha t s uc h Le nde r ha s c om pl i e d wi t h s uc h Le nde r ’ s obl i ga t i ons unde r FATCA or t o de t e r m i ne t he a m ount , i f a ny, t o de duc t a nd wi t hhol d f r om s uc h pa ym e nt . Sol e l y f or pur pos e s of t hi s c l a us e ( i v) , " FATCA” s ha l l i nc l ude a ny a m e ndm e nt s m a de t o FATCA a f t e r t he da t e of t hi s Agr e e m e nt . ( c ) Ea c h Le nde r a gr e e s t ha t i f a ny f or m or c e r t i f i c a t i on i t pr e vi ous l y de l i ve r e d e xpi r e s or be c om e s obs ol e t e or i na c c ur a t e i n a ny r e s pe c t , i t s ha l l upda t e s uc h f or m or c e r t i f i c a t i on or pr om pt l y not i f y t he Com pa ny a nd t he Age nt i n wr i t i ng of i t s l e ga l i na bi l i t y t o do s o. 7. 4. 7 I f a ny pa r t y de t e r m i ne s , i n i t s s ol e di s c r e t i on e xe r c i s e d
i n good f a i t h, t ha t i t ha s r e c e i ve d a r e f und of a ny Ta xe s a s t o whi c h i t ha s be e n i nde m ni f i e d pur s ua nt t o t hi s Se c t i on 7. 4 ( i nc l udi ng by t he pa ym e nt of a ddi t i ona l a m ount s pur s ua nt t o t hi s Se c t i on 7. 4) , i t s ha l l pa y t o t he i nde m ni f yi ng pa r t y a n a m ount e qua l t o s uc h r e f und ( but onl y t o t he e xt e nt of i nde m ni t y pa ym e nt s m a de unde r t hi s Se c t i on wi t h r e s pe c t t o t he Ta xe s gi vi ng r i s e t o s uc h r e f und) , ne t of a l l out - of - poc ke t e xpe ns e s ( i nc l udi ng Ta xe s ) of s uc h i nde m ni f i e d pa r t y a nd wi t hout i nt e r e s t ( ot he r t ha n a ny i nt e r e s t pa i d by t he r e l e va nt Gove r nm e nt a l Aut hor i t y wi t h r e s pe c t t o s uc h r e f und) . Suc h i nde m ni f yi ng pa r t y, upon t he r e que s t of s uc h i nde m ni f i e d pa r t y, s ha l l r e pa y t o s uc h i nde m ni f i e d pa r t y t he a m ount pa i d ove r pur s ua nt t o t hi s pa r a gr a ph ( pl us a ny pe na l t i e s , i nt e r e s t or ot he r c ha r ge s i m pos e d by t he r e l e va nt Gove r nm e nt a l Aut hor i t y) i n t he e ve nt t ha t s uc h i nde m ni f i e d pa r t y i s r e qui r e d t o r e pa y s uc h r e f und t o s uc h Gove r nm e nt a l Aut hor i t y. Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y i n t hi s pa r a gr a ph, i n no e ve nt wi l l t he i nde m ni f i e d
pa r t y be r e qui r e d t o pa y a ny a m ount t o a n i nde m ni f yi ng pa r t y pur s ua nt t o t hi s pa r a gr a ph t he pa ym e nt of whi c h woul d pl a c e t he i nde m ni f i e d pa r t y i n a l e s s f a vor a bl e ne t a f t e r - Ta x pos i t i on t ha n t he i nde m ni f i e d pa r t y woul d ha ve be e n i n i f t he i nde m ni f i c a t i on pa ym e nt s or a ddi t i ona l a m ount s gi vi ng r i s e t o s uc h r e f und ha d ne ve r be e n pa i d. Thi s pa r a gr a ph s ha l l not be c ons t r ue d 117 115525625. 4 0063724- 00082
t o r e qui r e a ny i nde m ni f i e d pa r t y t o m a ke a va i l a bl e i t s Ta x r e t ur ns ( or a ny ot he r i nf or m a t i on r e l a t i ng t o i t s Ta xe s t ha t i t de e m s c onf i de nt i a l ) t o t he i nde m ni f yi ng pa r t y or a ny ot he r Pe r s on. 7. 4. 8 Ea c h pa r t y’ s obl i ga t i ons unde r t hi s Se c t i on 7. 4 s ha l l s ur vi ve t he r e s i gna t i on or r e pl a c e m e nt of t he Age nt or a ny a s s i gnm e nt of r i ght s by, or t he r e pl a c e m e nt of , a Le nde r , t he t e r m i na t i on of t he Com m i t m e nt s a nd t he r e pa ym e nt , s a t i s f a c t i on or di s c ha r ge of a l l obl i ga t i ons unde r a ny Loa n Doc um e nt . 7. 4. 9 For pur pos e s of Se c t i ons 7. 4. 4 a nd 7. 4. 6, t he t e r m " Le nde r ” i nc l ude s t he LC I s s ue r . 7. 4. 10 For pur pos e s of de t e r m i ni ng wi t hhol di ng Ta xe s i m pos e d unde r FATCA, f r om a nd a f t e r t he Cl os i ng Da t e , t he Com pa ny, t he ot he r Bor r owe r s a nd t he Age nt s ha l l t r e a t ( a nd t he Le nde r s he r e by a ut hor i z e Age nt t o t r e a t ) t he Loa ns a nd t he LC Obl i ga t i ons a s not qua l i f yi ng a s a " gr a ndf a t he r e d obl i ga t i on” wi t hi n t he m e a ni ng of Tr e a s ur y Re gul a t i on Se c t i on 1. 1471- 2( b) ( 2) ( i ) . 7. 5 Se l e c t i on of Le ndi ng I ns t a l l a t i on; M i t i ga t i on Obl i ga t i ons ; Le nde r St a t e m e nt s ; Sur vi va l of
I nde m ni t y . To t he e xt e nt r e a s ona bl y pos s i bl e , e a c h Le nde r s ha l l de s i gna t e a n a l t e r na t e Le ndi ng I ns t a l l a t i on wi t h r e s pe c t t o i t s SOFR Loa ns t o r e duc e a ny l i a bi l i t y of t he Bor r owe r s t o s uc h Le nde r unde r Se c t i ons 7. 1, 7. 2, a nd 7. 4 or t o a voi d t he una va i l a bi l i t y of SOFR Loa ns unde r Se c t i on 7. 3, s o l ong a s s uc h de s i gna t i on i s not , i n t he j udgm e nt of s uc h Le nde r , di s a dva nt a ge ous t o s uc h Le nde r . Ea c h Le nde r s ha l l de l i ve r a wr i t t e n s t a t e m e nt of s uc h Le nde r t o t he Com pa ny ( wi t h a c opy t o t he Age nt ) a s t o t he a m ount due , i f a ny, unde r Se c t i ons 7. 1, 7. 2 or 7. 4. Suc h wr i t t e n s t a t e m e nt s ha l l s e t f or t h i n r e a s ona bl e de t a i l t he c a l c ul a t i ons upon whi c h s uc h Le nde r de t e r m i ne d s uc h a m ount a nd s ha l l be f i na l , c onc l us i ve a nd bi ndi ng on t he Bor r owe r s i n t he a bs e nc e of m a ni f e s t e r r or . De t e r m i na t i on of a m ount s pa ya bl e unde r s uc h Se c t i ons i n c onne c t i on wi t h a SOFR Loa n s ha l l be c a l c ul a t e d a s t hough e a c h Le nde r f unde d i t s SOFR Loa n t hr ough t he pur c ha s e of a de pos i t of t he t ype a nd m a t ur i t y c or r e s pondi ng t o t he de pos i t us e d a s a r e f e r e nc e i n de t e r m i ni ng SOFR,
Te r m SOFR or t he Te r m SOFR Ba s e Ra t e a ppl i c a bl e t o s uc h Loa n, whe t he r i n f a c t t ha t i s t he c a s e or not . Unl e s s ot he r wi s e pr ovi de d he r e i n, t he a m ount s pe c i f i e d i n t he wr i t t e n s t a t e m e nt of a ny Le nde r s ha l l be pa ya bl e on de m a nd a f t e r r e c e i pt by t he Com pa ny of s uc h wr i t t e n s t a t e m e nt . The obl i ga t i ons of t he Bor r owe r s unde r Se c t i ons 7. 1, 7. 2 a nd 7. 4 s ha l l s ur vi ve pa ym e nt of t he Obl i ga t i ons a nd t e r m i na t i on of t hi s Agr e e m e nt . ARTI CLE 8 SECURI TY AND GUARANTI ES 8. 1 Se c ur i t y. 8. 1. 1 Col l a t e r a l . Al l pr e s e nt a nd f ut ur e Loa ns , Le t t e r s of Cr e di t , Obl i ga t i ons , Gua r a nt or Obl i ga t i ons , a nd Pe r m i t t e d Swa p Obl i ga t i ons of t he Loa n Pa r t i e s t o t he Age nt a nd t he Le nde r s unde r t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s s ha l l be , s ubj e c t t o e a c h I nt e r c r e di t or Agr e e m e nt ( onc e e f f e c t i ve ) , s e c ur e d by a pe r f e c t e d s e c ur i t y i nt e r e s t , s ubj e c t onl y t o Pe r m i t t e d Li e ns , i n t he pr ope r t y de s c r i be d i n t he Col l a t e r a l Doc um e nt s ( c ol l e c t i ve l y, " Col l a t e r a l ” ) ; i nc l udi ng, wi t hout l i m i t a t i on, t he f ol l owi ng pr ope r t y of t he Com pa ny a nd a l l of i t s 118 115525625. 4 0063724- 00082
pr e s e nt a nd f ut ur e Subs i di a r i e s ( e xc e pt Pe r s ons t ha t ( x) a r e not Fi na nc e d Ent i t i e s or ( y) a r e Exc l ude d Subs i di a r i e s , Si l o Subs i di a r i e s or Ca na di a nFor e i gn Subs i di a r i e s ) , whe t he r now owne d or e xi s t i ng or he r e a f t e r a c qui r e d a nd whe r e ve r l oc a t e d, a nd a l l pr oduc t s a nd pr oc e e ds t he r e of : ( a ) Al l i nve nt or y ( i nc l udi ng, wi t hout l i m i t a t i on, a l l pa r t s i nve nt or y, a l l Ve hi c l e s of wha t e ve r m a ke , m ode l a nd de s c r i pt i on, t r a de i ns , r e pos s e s s i ons a nd i nve nt or y he l d f or di s pl a y or de m ons t r a t i on pur pos e s ) ; e qui pm e nt ( ot he r t ha n f i xt ur e s ) ; i nve s t m e nt pr ope r t y; s t oc k; pa r t ne r s hi p i nt e r e s t s ; m e m be r s hi p i nt e r e s t s ; s e c ur i t i e s ( c e r t i f i c a t e d or unc e r t i f i c a t e d) ; s e c ur i t y e nt i t l e m e nt s ; s e c ur i t i e s a c c ount s ; a c c ount s ; i ns t r um e nt s ; doc um e nt s ; pr om i s s or y not e s ; c ha t t e l pa pe r ( i nc l udi ng e l e c t r oni c a nd t a ngi bl e c ha t t e l pa pe r ) ; pa ym e nt i nt a ngi bl e s ; ge ne r a l i nt a ngi bl e s ; de pos i t a c c ount s ; c ont r a c t r i ght s a nd ot he r r i ght s t o pa ym e nt ; pe r s ona l pr ope r t y l e a s e s ; r e ba t e s , c r e di t s , f a c t or y hol dba c ks , i nc e nt i ve pa ym e nt s a nd ot he r pa ym e nt s f r om a ny m a nuf a c t ur e r , f a c t or y or
di s t r i but or . ( b) Al l a t t a c hm e nt s , a c c e s s i ons , a c c e s s or i e s , t ool s , pa r t s , s uppl i e s , i nc r e a s e s a nd a ddi t i ons t o, a nd a l l r e pl a c e m e nt s of , a nd s ubs t i t ut i ons f or a ny pr ope r t y de s c r i be d i n t hi s Se c t i on 8. 1. 1; a l l pr oduc t s , pr oduc e , a nd s uppor t i ng obl i ga t i ons of a ny of t he pr ope r t y de s c r i be d i n t hi s Se c t i on 8. 1. 1; a l l pr oc e e ds ( i nc l udi ng i ns ur a nc e pr oc e e ds ) of a ny of t he pr ope r t y de s c r i be d i n t hi s Se c t i on 8. 1. 1; a nd a l l r e c or ds a nd da t a r e l a t i ng t o a ny of t he pr ope r t y de s c r i be d i n t hi s Se c t i on 8. 1. 1, whe t he r i n t he f or m of a wr i t i ng, phot ogr a ph, m i c r of i l m , m i c r of i c he , or e l e c t r oni c m e di a , t oge t he r wi t h a l l r i ght , t i t l e a nd i nt e r e s t of t he Com pa ny a nd e a c h Subs i di a r y i n a nd t o a l l c om put e r s of t wa r e r e qui r e d t o ut i l i z e , c r e a t e , m a i nt a i n, a nd pr oc e s s a ny s uc h r e c or ds or da t a on e l e c t r oni c m e di a . Not wi t hs t a ndi ng t he f or e goi ng, t he Ne w Ve hi c l e Fl oor pl a n Loa n Obl i ga t i ons s ha l l be s e c ur e d onl y by t he Col l a t e r a l owne d by t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s . For t he a voi da nc e of doubt a nd not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y s e t f or t h i n t hi s
Agr e e m e nt or a ny Se c ur i t y Doc um e nt , t he t e r m " Col l a t e r a l ” a s us e d i n t hi s Agr e e m e nt a nd i n t he Se c ur i t y Doc um e nt s s ha l l not i nc l ude a ny Exc l ude d Pr ope r t y. 8. 1. 2 Col l a t e r a l Doc um e nt s . The s e c ur i t y i nt e r e s t s i n t he Col l a t e r a l s ha l l be e vi de nc e d by s uc h s e c ur i t y a gr e e m e nt s , a s s i gnm e nt s , Uni f or m Com m e r c i a l Code f i na nc i ng s t a t e m e nt s , Ti t l e Doc um e nt s , t r us t de e ds , m or t ga ge s , a nd ot he r Col l a t e r a l Doc um e nt s c ove r i ng t he Col l a t e r a l a s t he Age nt or Re qui r e d Le nde r s m a y a t a ny t i m e r e a s ona bl y r e qui r e . 8. 1. 3 Addi t i ona l Ac t s . As a c ondi t i on pr e c e de nt t o t he e f f e c t i ve ne s s of t hi s Agr e e m e nt , a nd f r om t i m e t o t i m e a t t he Age nt ’ s or a ny Le nde r ’ s r e que s t , e a c h Pe r s on gr a nt i ng Col l a t e r a l s ha l l e xe c ut e a nd/ or de l i ve r t o t he Age nt s uc h s e c ur i t y a gr e e m e nt s , a s s i gnm e nt s , pl e dge a gr e e m e nt s , c ont r ol a gr e e m e nt s , Ti t l e Doc um e nt s , l a ndl or d a nd owne r c ons e nt s , a m e ndm e nt s t o a ny of t he f or e goi ng doc um e nt s a nd a ny ot he r doc um e nt s a nd i ns t r um e nt s ( e ndor s e d or a s s i gne d t o t he Age nt a s t he Age nt m a y r e que s t ) , a nd s ha l l t a ke s uc h ot he r a c t i ons , a s m a y
be r e qui r e d unde r Appl i c a bl e La w or whi c h t he Age nt or a ny Le nde r m a y r e a s ona bl y r e que s t t o e f f e c t ua t e t he t r a ns a c t i ons c ont e m pl a t e d he r e unde r a nd t o gr a nt , pr e s e r ve , pr ot e c t , pe r f e c t a nd c ont i nue t he va l i di t y a nd pr i or i t y of t he i r s e c ur i t y i nt e r e s t s ( s ubj e c t t o Pe r m i t t e d Li e ns ) . 119 115525625. 4 0063724- 00082
8. 1. 4 Li m i t a t i ons . Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on of t hi s Agr e e m e nt or a ny Col l a t e r a l Doc um e nt , unl e s s Age nt ot he r wi s e r e qui r e s ( whi c h t he Age nt m a y do a t a ny t i m e ) ( a ) t he s e c ur i t y i nt e r e s t of t he Age nt a nd t he Le nde r s i n a ny Loa n Pa r t y’ s pa t e nt s , t r a de m a r ks , c opyr i ght s , t r a de na m e s a nd ot he r i nt e l l e c t ua l pr ope r t y wi l l not be pe r f e c t e d by f i l i ng wi t h t he Uni t e d St a t e s Pa t e nt a nd Tr a de m a r k Of f i c e or a ny ot he r a ge nc y of t he Uni t e d St a t e s gove r nm e nt ; ( b) t he s e c ur i t y i nt e r e s t of t he Age nt a nd t he Le nde r s wi l l not be not e d on t he Ti t l e Doc um e nt f or a ny Ve hi c l e ; ( c ) t he s e c ur i t y i nt e r e s t of t he Age nt a nd t he Le nde r s i n de pos i t a c c ount s m a i nt a i ne d by a ny Loa n Pa r t y wi t h a f i na nc i a l i ns t i t ut i on ot he r t ha n U. S. Ba nk m a y not be pe r f e c t e d i f t he Age nt r e a s ona bl y de t e r m i ne s t ha t t he a m ount s ge ne r a l l y m a i nt a i ne d i n s uc h de pos i t a c c ount s a r e not m a t e r i a l , ( d) t he s e c ur i t y i nt e r e s t of t he Age nt a nd t he Le nde r s i n i nve s t m e nt pr ope r t y wi l l not be pe r f e c t e d by c ont r ol , a nd ( e ) t he s e c ur i t y i nt e r e s t of t he Age nt a nd t he Le nde r s i n a i r c r a f t
wi l l not be pe r f e c t e d. 8. 2 Gua r a nt i e s . Al l pr e s e nt a nd f ut ur e Re vol vi ng Loa ns , Re vol vi ng Swi ng Li ne Loa ns , LC Obl i ga t i ons , Us e d Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a nd ot he r Re vol vi ng Loa n Obl i ga t i ons , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons a nd Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons of Re vol vi ng Loa n Bor r owe r , Se r vi c e Loa ne r Ve hi c l e Bor r owe r a nd Us e d Ve hi c l e Fl oor pl a n Bor r owe r t o t he Age nt a nd t he Le nde r s s ha l l be gua r a nt e e d by e a c h of t he Gua r a nt or s . ARTI CLE 9 CONDI TI ONS PRECEDENT 9. 1 I ni t i a l Condi t i ons Pr e c e de nt . The e f f e c t i ve ne s s of t hi s Agr e e m e nt a nd t he obl i ga t i on of t he Le nde r s t o m a ke t he i ni t i a l Cr e di t Ext e ns i ons a r e s ubj e c t t o s a t i s f a c t i on of t he f ol l owi ng c ondi t i ons ( e a c h, a n " I ni t i a l Condi t i on” ) : 9. 1. 1 The Age nt ha s r e c e i ve d t he f ol l owi ng: ( a ) Suc h f ul l y e xe c ut e d or i gi na l Loa n Doc um e nt s a s t he Age nt or a ny Le nde r r e qui r e s , i nc l udi ng, wi t hout l i m i t a t i on, t hi s Agr e e m e nt ; t he Se c ur i t y Agr e e m e nt , t he Pl e dge Agr e e m e nt , a nd a ny ot he r
Col l a t e r a l Doc um e nt s ; t he Gua r a nt y s i gne d by e a c h Gua r a nt or ; a ny r e qui r e d LC Agr e e m e nt ; a nd e a c h ot he r Loa n Doc um e nt r e qui r e d by t he Age nt or a ny Le nde r . ( b) Doc um e nt a t i on s a t i s f a c t or y t o t he Age nt t o e s t a bl i s h t he due or ga ni z a t i on, va l i d e xi s t e nc e a nd ( i f a ppl i c a bl e ) good s t a ndi ng of e a c h Loa n Pa r t y; i t s qua l i f i c a t i on t o e nga ge i n bus i ne s s i n e a c h j ur i s di c t i on i n whi c h i t i s e nga ge d i n bus i ne s s or r e qui r e d t o be s o qua l i f i e d; i t s a ut hor i t y t o e xe c ut e , de l i ve r a nd pe r f or m a ny Loa n Doc um e nt s t o whi c h i t i s a pa r t y a nd t he i de nt i t y, a ut hor i t y a nd c a pa c i t y of e a c h Pe r s on a ut hor i z e d t o a c t on i t s be ha l f , whi c h s ha l l , wi t hout l i m i t a t i on, i nc l ude c e r t i f i e d c opi e s of a r t i c l e s or c e r t i f i c a t e s of i nc or por a t i on a nd a m e ndm e nt s t he r e t o, byl a ws a nd a m e ndm e nt s t he r e t o, c e r t i f i c a t e s of good 120 115525625. 4 0063724- 00082 s t a ndi ng, e xi s t e nc e a nd/ or qua l i f i c a t i on t o e nga ge i n bus i ne s s , c or por a t e r e s ol ut i ons , i nc um be nc y c e r t i f i c a t e s , a nd t he l i ke . ( c ) A f a vor a bl e opi ni on of a c c e pt a bl e i nde pe nde nt c ouns e l f or e a c h Loa n Pa r t y c ove r i ng s uc h m a t t e r s a s t he
Age nt or a ny Le nde r m a y r e a s ona bl y r e que s t . ( d) A c e r t i f i c a t e , s i gne d by t he c hi e f f i na nc i a l of f i c e r of t he Com pa ny, s t a t i ng t ha t on t he da t e of t he i ni t i a l Cr e di t Ext e ns i on no De f a ul t or Eve nt of De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng. ( e ) ( i ) One or m or e i nt e r c r e di t or a gr e e m e nt s be t we e n t he Age nt a nd e a c h Pe r s on e xt e ndi ng f l oor pl a n f i na nc i ng t o t he De a l e r s hi ps or a n a m e ndm e nt t o t he e xi s t i ng i nt e r c r e di t or a gr e e m e nt , i n f or m a nd c ont e nt s a t i s f a c t or y t o t he Age nt a nd t he Re qui r e d Le nde r s , a nd ( i i ) a ny ot he r s ubor di na t i on or i nt e r c r e di t or a gr e e m e nt s or a m e ndm e nt s t o e xi s t i ng i nt e r c r e di t or a gr e e m e nt s r e qui r e d by t he Age nt or t he Re qui r e d Le nde r s , a l l i n f or m a nd c ont e nt s a t i s f a c t or y t o t he Age nt a nd t he Le nde r s . 9. 1. 2 The Age nt s ha l l ha ve r e c e i ve d c opi e s of a ny Se l l e r Agr e e m e nt s whi c h i t ha s r e que s t e d, ot he r t ha n t hos e di s c l os ur e of whi c h i s pr ohi bi t e d by t he r e l e va nt m a nuf a c t ur e r or di s t r i but or , whi c h m us t be r e a s ona bl y s a t i s f a c t or y t o t he Age nt , a nd ha s r e c e i ve d s uc h e vi de nc e a s i t r e a s ona bl y r e qui r e s t ha t a l l Se l l e r Agr e e m e nt s whi c h
a r e ne c e s s a r y f or t he c onduc t of t he Com pa ny’ s a nd e a c h De a l e r s hi p’ s bus i ne s s , a r e i n f ul l f or c e a nd e f f e c t . 9. 1. 3 The Age nt s ha l l ha ve a va l i d a nd pe r f e c t e d s e c ur i t y i nt e r e s t i n t he Col l a t e r a l ( s ubj e c t t o t he l i m i t a t i ons f ound i n Se c t i on 8. 1. 4) wi t h a pr i or i t y a c c e pt a bl e t o t he Age nt a nd t he Re qui r e d Le nde r s a nd s ubj e c t onl y t o Pe r m i t t e d Li e ns a nd t he Age nt s ha l l ha ve r e c e i ve d s a t i s f a c t or y e vi de nc e of pe r f e c t i on a nd t he pr i or i t y of s uc h s e c ur i t y i nt e r e s t s , i nc l udi ng wi t hout l i m i t a t i on s uc h Uni f or m Com m e r c i a l Code a nd ot he r s e a r c he s , t e r m i na t i on s t a t e m e nt s , a nd ot he r f i l i ngs a s i t de e m s a ppr opr i a t e . 9. 1. 4 Al l r e qui r e d i ns ur a nc e s ha l l be i n f ul l f or c e a nd e f f e c t a nd t he Age nt s ha l l ha ve r e c e i ve d s uc h e vi de nc e t he r e of a s i t r e qui r e s . 9. 1. 5 The r e pr e s e nt a t i ons a nd wa r r a nt i e s c ont a i ne d i n t hi s Agr e e m e nt a nd i n e a c h Loa n Doc um e nt s ha l l be c or r e c t , a c c ur a t e a nd c om pl e t e i n a l l m a t e r i a l r e s pe c t s a s of t he Cl os i ng Da t e . 9. 1. 6 No De f a ul t s ha l l ha ve oc c ur r e d a nd i s c ont i nui ng on t he Cl os i ng Da t e or wi l l e xi s t a f t e r gi vi ng e f f e c t t o t he m a ki ng of
t he Loa ns t o be m a de on t he Cl os i ng Da t e , t he Exi s t i ng Le t t e r s of Cr e di t , a nd a ny Le t t e r s of Cr e di t t o be i s s ue d on t he Cl os i ng Da t e . 9. 1. 7 Al l f e e s a c c r ue d unde r t he Exi s t i ng Loa n Agr e e m e nt f or pe r i ods pr i or t o t he Cl os i ng Da t e a nd a l l i nt e r e s t a c c r ue d on t he out s t a ndi ng pr i nc i pa l ba l a nc e of t he l oa ns m a de unde r t he Exi s t i ng Loa n Agr e e m e nt a s of t he Cl os i ng Da t e s ha l l be pa i d; pr ovi de d t ha t ( a ) i nt e r e s t a nd f e e s a c c r ue d unde r t he Exi s t i ng Loa n Agr e e m e nt a s of t he Cl os i ng Da t e i n r e s pe c t of t he Aggr e ga t e Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt a nd Ne w Ve hi c l e Fl oor pl a n Loa ns s ha l l be due a nd pa ya bl e on t he Ne w Ve hi c l e M ont hl y Pa ym e nt Da t e i m m e di a t e l y f ol l owi ng t he Cl os i ng 121 115525625. 4 0063724- 00082
Da t e , a nd ( b) t he Pe r Annum Fe e s ha l l be due a nd pa ya bl e on t he Qua r t e r l y Pa ym e nt Da t e i m m e di a t e l y f ol l owi ng t he Cl os i ng Da t e . 9. 1. 8 Al l f e e s a nd At t or ne y Cos t s pa ya bl e on or pr i or t o t he Cl os i ng Da t e s ha l l ha ve be e n pa i d. 9. 1. 9 The Age nt s ha l l ha ve r e c e i ve d s uc h a ddi t i ona l doc um e nt s , opi ni ons , a ppr ova l s , c ons e nt s a nd i nf or m a t i on a nd e a c h Loa n Pa r t y s ha l l ha ve s a t i s f i e d s uc h a ddi t i ona l r e qui r e m e nt s a s t he Age nt or a ny Le nde r m a y r e a s ona bl y r e qui r e . 9. 1. 10 Upon t he r e a s ona bl e r e que s t of a ny Le nde r m a de a t l e a s t t e n da ys pr i or t o t he Cl os i ng Da t e , t he Loa n Pa r t i e s m us t ha ve pr ovi de d t o s uc h Le nde r t he doc um e nt a t i on a nd ot he r i nf or m a t i on s o r e que s t e d i n c onne c t i on wi t h a ppl i c a bl e " know your c us t om e r ” a nd a nt i - m one y- l a unde r i ng r ul e s a nd r e gul a t i ons , i nc l udi ng t he PATRI OT Ac t , i n e a c h c a s e a t l e a s t f i ve da ys pr i or t o t he Cl os i ng Da t e . 9. 1. 11 At l e a s t f i ve da ys pr i or t o t he Cl os i ng Da t e , i f a ny Bor r owe r qua l i f i e s a s a " l e ga l e nt i t y c us t om e r ” unde r t he Be ne f i c i a l Owne r s hi p Re gul a t i on, s uc h Bor r owe r m us t de l i ve r a Be ne f i c i a l Owne r s hi p
Ce r t i f i c a t i on i n r e l a t i on t o s uc h Bor r owe r . 9. 1. 12 The Age nt s ha l l ha ve r e c e i ve d a Com pl i a nc e Ce r t i f i c a t e ( c a l c ul a t e d on a Pr o For m a Ba s i s a f t e r gi vi ng e f f e c t t o t hi s Agr e e m e nt ) , da t e d a s of t he l a s t da y of t he f i s c a l qua r t e r e ndi ng De c e m be r 31, 2020 a nd s i gne d by t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt . 9. 1. 13 The Age nt s ha l l ha ve r e c e i ve d ( a ) a Us e d Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e da t e d a s of t he Cl os i ng Da t e c e r t i f yi ng a s t o t he Us e d Ve hi c l e Bor r owi ng Ba s e a s of t he l a s t da y of t he c a l e nda r m ont h pr e c e di ng t he c a l e nda r m ont h e ndi ng pr i or t o t he Cl os i ng Da t e , ( b) a Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e da t e d a s of t he Cl os i ng Da t e c e r t i f yi ng a s t o t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e a s of t he l a s t da y of t he c a l e nda r m ont h pr e c e di ng t he c a l e nda r m ont h e ndi ng pr i or t o t he Cl os i ng Da t e a nd ( c ) a Re vol vi ng Bor r owi ng Ba s e Ce r t i f i c a t e , da t e d a s of t he Cl os i ng Da t e c e r t i f yi ng a s t o t he Re vol vi ng Bor r owi ng Ba s e a s of t he l a s t da y of t he c a l e nda r m ont h pr e c e di ng t he c a l e nda r m ont h e ndi ng
pr i or t o t he Cl os i ng Da t e , i n e a c h c a s e , s i gne d by t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt . 9. 2 Condi t i ons Pr e c e de nt t o Ea c h Cr e di t Ext e ns i on . Exc e pt a s ot he r wi s e s e t f or t h he r e i n ( i nc l udi ng wi t hout l i m i t a t i on Se c t i ons 2. 2. 6( d) , 3. 2. 6( d) , a nd 4. 2. 6( d) ) , a l l of t he f ol l owi ng c ondi t i ons m us t be s a t i s f i e d on t he da t e of a ny Cr e di t Ext e ns i on: 9. 2. 1 The Age nt s ha l l ha ve r e c e i ve d a r e que s t f or t he Loa n or Le t t e r of Cr e di t a s r e qui r e d by t he pr ovi s i ons of t hi s Agr e e m e nt . 9. 2. 2 No De f a ul t s ha l l ha ve oc c ur r e d a nd be c ont i nui ng or wi l l e xi s t a f t e r gi vi ng e f f e c t t o t he m a ki ng of s uc h Cr e di t Ext e ns i on. 122 115525625. 4 0063724- 00082 9. 2. 3 Al l r e pr e s e nt a t i ons a nd wa r r a nt i e s i n t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s s ha l l be t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s a s of s uc h da t e , e xc e pt t o t he e xt e nt t he y r e l a t e t o a not he r da t e , a nd e xc e pt a s pr e vi ous l y di s c l os e d t o a nd a c c e pt e d by t he Age nt i n wr i t i ng. 9. 2. 4 Al l I ni t i a l Condi t i ons ha ve be e n s a t i s f i e d a t t he t i m e of t he i ni t i a l Cr e di t Ext e ns i on. 9. 2. 5 The
Age nt , a nd/ or a ny Le nde r , a s a ppl i c a bl e , s ha l l ha ve r e c e i ve d s uc h doc um e nt s a nd i nf or m a t i on a s t he y r e a s ona bl y r e qui r e . 9. 2. 6 Al l c ondi t i ons i n a ny ot he r pr ovi s i on of t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt ha ve be e n s a t i s f i e d a s of t he t i m e r e qui r e d. 9. 2. 7 W i t h r e s pe c t t o e a c h Ne w Ve hi c l e Loa n Adva nc e , t he Age nt s ha l l ha ve r e c e i ve d t he f ol l owi ng: ( a ) For Ne w Ve hi c l e Loa n Adva nc e s m a de unde r a Pa ym e nt Com m i t m e nt . M a nuf a c t ur e r or di s t r i but or i nvoi c e , c a s h dr a f t , e l e c t r oni c r e c or d, de pos i t or y t r a ns f e r c he c k, s i ght dr a f t , or s uc h ot he r doc um e nt s a s s pe c i f i e d i n t he a ppl i c a bl e Pa ym e nt Com m i t m e nt , i de nt i f yi ng t he Ve hi c l e s de l i ve r e d or t o be de l i ve r e d t o a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p. ( b) For Ne w Ve hi c l e Loa n Adva nc e s m a de t o f i na nc e Fl e e t Ve hi c l e s . I f r e qui r e d by t he Age nt , a c opy of t he a ppl i c a bl e Fl e e t Sa l e Cont r a c t a nd/ or a n a gr e e m e nt f r om t he pur c ha s e r of t he Fl e e t Ve hi c l e s a gr e e i ng t o pa y t he pur c ha s e pr i c e due t o a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p di r e c t l y t o t he Age nt . ( c ) For Ne w Ve hi c l e Loa n Adva nc e s m a de t o f i na nc e Ne w
Ve hi c l e s whi c h a r e obt a i ne d f r om a not he r de a l e r . Copy of m a nuf a c t ur e r or di s t r i but or i nvoi c e ( or s ubs t i t ut e a c c e pt a bl e t o t he Age nt ) a nd bi l l of s a l e dul y e xe c ut e d by t he pa r t i e s t o t he t r a ns a c t i on or ot he r doc um e nt a t i on a c c e pt a bl e t o t he Age nt e vi de nc i ng t he a c qui s i t i on c os t t o a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p of s uc h Ve hi c l e s . ( d) For Ne w Ve hi c l e Loa n Adva nc e s m a de t o f i na nc e a ny ot he r Ne w Ve hi c l e s . M a nuf a c t ur e r or di s t r i but or i nvoi c e or ot he r doc um e nt s a c c e pt a bl e t o t he Age nt i de nt i f yi ng t he Ve hi c l e s pur c ha s e d by a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p. 9. 3 Condi t i ons Pr e c e de nt t o I ni t i a l Adva nc e t o a ny Ne w Ve hi c l e Fl oor pl a n Bor r owe r . I n a ddi t i on t o t he r e qui r e m e nt s i n Se c t i on 9. 1 a nd 9. 2, no Ne w Ve hi c l e Loa ns s ha l l be m a de t o f i na nc e Ne w Ve hi c l e s owne d by a ny De a l e r s hi p ( i nc l udi ng t he i ni t i a l Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ) a nd no De a l e r s hi p s ha l l be c om e a Ne w Ve hi c l e Fl oor pl a n Bor r owe r unl e s s a l l of t he f ol l owi ng c ondi t i ons ha ve be e n s a t i s f i e d wi t h r e s pe c t t o s uc h De a l e r s hi p: 9. 3. 1 Al l i nde bt e dne s s a nd obl i ga t i ons of t he De a l e r s hi p ( or i f
Re qui r e d Le nde r s , i n t he i r s ol e di s c r e t i on, c ons e nt i n wr i t i ng, a f r a nc hi s e or l oc a t i on of a De a l e r s hi p) t o 123 115525625. 4 0063724- 00082
a ny l e nde r ( " For m e r Le nde r ” ) f or f l oor i ng l i ne s of c r e di t ( ot he r t ha n pe r m i t t e d Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng) ha ve be e n r e pa i d or wi l l be r e pa i d wi t h t he pr oc e e ds of t he f i r s t Ne w Ve hi c l e Loa n Adva nc e t o be m a de t o f i na nc e Ne w Ve hi c l e s owne d by s uc h De a l e r s hi p a nd a l l c om m i t m e nt s of a ny For m e r Le nde r t o e xt e nd f l oor pl a n f i na nc i ng t o s uc h De a l e r s hi p ( or i f Re qui r e d Le nde r s , i n t he i r s ol e di s c r e t i on, c ons e nt i n wr i t i ng, t he a ppl i c a bl e f r a nc hi s e or l oc a t i on of s uc h De a l e r s hi p) ha ve be e n t e r m i na t e d. 9. 3. 2 Al l Li e ns of a ny For m e r Le nde r i n t he Col l a t e r a l ( ot he r t ha n Pe r m i t t e d Li e ns ) ha ve be e n t e r m i na t e d, or a t t he Age nt ’ s s ol e di s c r e t i on, s a t i s f a c t or y a r r a nge m e nt s ha ve be e n m a de f or t e r m i na t i on of s uc h Li e ns , or i f s uc h Li e ns a r e pe r m i t t e d he r e unde r , a ny s ubor di na t i on or i nt e r c r e di t or a gr e e m e nt or a m e ndm e nt t o a ny s uc h a gr e e m e nt r e qui r e d by t he Age nt ha s be e n e xe c ut e d a nd de l i ve r e d t o t he Age nt . 9. 3. 3 The Age nt s ha l l ha ve c onduc t e d s uc h a udi t s of t he Col l a t e r a l of t he Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p a s i t r e qui r e s , t he
r e s ul t s of whi c h a r e s a t i s f a c t or y t o t he Age nt . 9. 3. 4 The Age nt s ha l l ha ve r e c e i ve d s uc h Re pur c ha s e Agr e e m e nt s r e l a t i ng t o t he Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p a s i t r e qui r e s . 9. 3. 5 Al l c ondi t i ons i n Se c t i on 9. 1. 2, 9. 1. 3, a nd 9. 1. 4 s ha l l be s a t i s f i e d f or s uc h De a l e r s hi p a s of t he da t e i t be c om e s a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p, a nd wi t h r e s pe c t t o t he De a l e r s hi p, ( i ) i f i t i s a Subs i di a r y a s of t he da t e of t hi s Agr e e m e nt or ha s pr e vi ous l y e xe c ut e d a Gua r a nt or J oi nde r Agr e e m e nt , i t s ha l l ha ve e xe c ut e d a n Exi s t i ng Subs i di a r y J oi nde r Agr e e m e nt ( i i ) i f i t i s a ne w Ac qui s i t i on Subs i di a r y, a l l c ondi t i ons i n Se c t i on 13. 13 s ha l l ha ve be e n s a t i s f i e d, or ( i i i ) i f i t i s a ne w Subs i di a r y whi c h i s not a n Ac qui s i t i on Subs i di a r y, a l l c ondi t i ons i n Se c t i on 12. 17 s ha l l ha ve be e n s a t i s f i e d. 9. 3. 6 Ea c h Loa n Pa r t y ha s s a t i s f i e d s uc h ot he r c ondi t i ons a s a r e r e a s ona bl y r e qui r e d by t he Age nt . 9. 4 Re a l Pr ope r t y Condi t i ons . I n a ddi t i on t o t he ot he r r e qui r e m e nt s s e t f or t h he r e i n, no Re a l Pr ope r t y s ha l l be i nc l ude d or r e m a i n i n t he Re vol vi ng Loa n Bor r owi ng Ba s e a s
El i gi bl e Re a l Pr ope r t y unl e s s a l l of t he f ol l owi ng c ondi t i ons ha ve be e n s a t i s f i e d a nd c ont i nue t o be s a t i s f i e d wi t h r e s pe c t t o s uc h Re a l Pr ope r t y: 9. 4. 1 A Re a l Es t a t e Subs i di a r y or De a l e r s hi p s ha l l hol d f e e s i m pl e t i t l e t o t he Re a l Pr ope r t y f r e e a nd c l e a r of a l l Li e ns a nd e nc um br a nc e s of a ny na t ur e or ki nd wha t s oe ve r e xc e pt a ny e a s e m e nt s , r i ght s of wa y, z oni ng r e s t r i c t i ons a nd ot he r m i nor e nc um br a nc e s a nd e xc e pt i ons whi c h s ha l l be t he onl y e nc um br a nc e s on t he Re a l Pr ope r t y, a nd s uc h Re a l Es t a t e Subs i di a r y or De a l e r s hi p s ha l l not ha ve e nt e r e d i nt o a ny a gr e e m e nt pr ohi bi t i ng or l i m i t i ng i t s a bi l i t y t o gr a nt a Li e n on s uc h Re a l Pr ope r t y t o t he Age nt a nd t he Le nde r s ; pr ovi de d, t ha t , e xc e pt f or ( x) t a x l i e ns s e c ur i ng obl i ga t i ons t ha t a r e not ye t due a nd pa ya bl e or t ha t a r e be i ng c ont e s t e d i n good f a i t h by a ppr opr i a t e pr oc e e di ngs , or ( y) m e c ha ni c s ’ , c a r r i e r s ’ , wor km e n’ s , r e pa i r m e n’ s or ot he r l i ke l i e ns a r i s i ng or i nc ur r e d i n t he or di na r y c our s e of bus i ne s s or a m ount s t ha t a r e not de l i nque nt a nd whi c h a r e not , i ndi vi dua l l y or i n t he a ggr e ga t e ,
m a t e r i a l t o t he bus i ne s s of t he 124 115525625. 4 0063724- 00082 Bor r owe r , a ny Li e n s e c ur i ng a m one t a r y obl i ga t i on s ha l l not be c ons i de r e d a m i nor e nc um br a nc e . 9. 4. 2 The Re a l Pr ope r t y s ha l l be i de nt i f i e d on a m ont hl y ba s i s i n a s c he dul e a t t a c he d t o t he Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e s e t t i ng f or t h t he owne r na m e , a ddr e s s , va l ua t i on, va l ua t i on t ype ( a ppr a i s a l or t a x a s s e s s e d va l ue ) a nd da t e of va l ua t i on, a nd t he Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e s ha l l s e t f or t h a c e r t i f i c a t i on by t he Com pa ny t ha t t he i nf or m a t i on on s uc h s c he dul e i s a c c ur a t e a nd c om pl e t e i n a l l m a t e r i a l r e s pe c t s a nd t ha t t he Re a l Pr ope r t y i de nt i f i e d on t he Sc he dul e i s El i gi bl e Re a l Pr ope r t y. 9. 4. 3 Re a l Pr ope r t y c a n r e m a i n i n t he Re vol vi ng Loa n Bor r owi ng Ba s e i nde f i ni t e l y. Af t e r t he oc c ur r e nc e of a n Eve nt of De f a ul t , t he Com pa ny s ha l l de l i ve r t o t he Age nt , pr om pt l y a f t e r t he Age nt ’ s r e que s t , t he f ol l owi ng wi t h r e s pe c t t o Re a l Pr ope r t y t ha t i s i nc l ude d i n t he Re vol vi ng Loa n Bor r owi ng Ba s e , e a c h i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt : ( a ) a n i ni t i a l
Pha s e I e nvi r onm e nt a l s i t e a s s e s s m e nt r e por t a nd s uc h ot he r e nvi r onm e nt a l a udi t s , a s s e s s m e nt s , s t udi e s a nd r e por t s a s t he Age nt r e qui r e s , pr e pa r e d by a ge ot e c hni c a l e ngi ne e r or ot he r qua l i f i e d Pe r s on a c c e pt a bl e t o t he Age nt ( " Envi r onm e nt a l Re por t s ” ) a nd t he r e a f t e r s uc h ne w or upda t e d Envi r onm e nt a l Re por t s a s t he Age nt r e qui r e s , ( b) s uc h ne w or upda t e d a ppr a i s a l s , e va l ua t i ons or r e por t s a s t he Age nt r e qui r e s t o de t e r m i ne t he Va l ue of s uc h Re a l Pr ope r t y, ( c ) s uc h t i t l e r e por t s wi t h r e s pe c t t o s uc h Re a l Pr ope r t y a s t he Age nt r e qui r e s a nd ( d) f l ood ha z a r d c e r t i f i c a t i ons a nd, i f a ppl i c a bl e , e vi de nc e of f l ood i ns ur a nc e c ove r a ge . 9. 4. 4 I n a ddi t i on t o a ny ot he r i ns ur a nc e r e qui r e d he r e unde r , a l l i ns ur a nc e c ove r i ng t he Re a l Pr ope r t y whi c h i s r e a s ona bl y r e qui r e d by t he Age nt s ha l l be i n f ul l f or c e a nd e f f e c t a nd t he Age nt s ha l l r e c e i ve f r om t i m e t o t i m e s uc h e vi de nc e t he r e of a s i t r e qui r e s . 9. 4. 5 The Re a l Pr ope r t y a nd i m pr ove m e nt s t he r e on s ha l l be i n good c ondi t i on, a nd no pa r t of t he Re a l Pr ope r t y a nd i m pr ove m e nt s s ha l l ha ve be e n da m a ge d by f i r e
or ot he r c a s ua l t y or ha ve be e n t he s ubj e c t of a ny e m i ne nt dom a i n or c onde m na t i on pr oc e e di ngs . 9. 4. 6 The r e a r e no c i r c um s t a nc e s a f f e c t i ng t he Re a l Pr ope r t y, i nc l udi ng wi t hout l i m i t a t i on a ny r e qui r e m e nt of Appl i c a bl e La w of t he j ur i s di c t i on i n whi c h i t i s l oc a t e d whi c h, i n t he opi ni on of t he Age nt or i t s c ouns e l , m a y m a t e r i a l l y a f f e c t t he va l ue of t he Re a l Pr ope r t y. 9. 4. 7 The Age nt s ha l l ha ve r e c e i ve d s uc h a ddi t i ona l doc um e nt s a nd i nf or m a t i on a nd e a c h Loa n Pa r t y s ha l l ha ve s a t i s f i e d s uc h a ddi t i ona l r e qui r e m e nt s a s t he Age nt r e a s ona bl y r e qui r e s , wi t h r e s pe c t t o t he Re a l Pr ope r t y. 9. 4. 8 The Re vol vi ng Loa n Bor r owe r s ha l l pa y a l l c os t s a nd e xpe ns e s i nc ur r e d by t he Age nt i n c onne c t i on wi t h t he Re a l Pr ope r t y, i nc l udi ng wi t hout l i m i t a t i on a l l a ppr a i s a l a nd a ppr a i s a l r e vi e w f e e s , c os t s of e nvi r onm e nt a l a udi t s a nd i ns pe c t i ons , a nd f e e s of t he Age nt ’ s c ouns e l . ARTI CLE 10 REPRESENTATI ONS AND W ARRANTI ES 125 115525625. 4 0063724- 00082
Exc e pt a s s e t f or t h i n t he Di s c l os ur e Sc he dul e , e a c h Loa n Pa r t y he r e by r e pr e s e nt s a nd wa r r a nt s t o a nd a gr e e s wi t h t he Age nt a nd t he Le nde r s : 10. 1 Exi s t e nc e a nd St a ndi ng . Ea c h Loa n Pa r t y ( a ) i s a c or por a t i on, pa r t ne r s hi p or l i m i t e d l i a bi l i t y c om pa ny ( i ) dul y a nd pr ope r l y i nc or por a t e d, or ga ni z e d or f or m e d, a s t he c a s e m a y be , va l i dl y e xi s t i ng a nd i n good s t a ndi ng ( t o t he e xt e nt s uc h c onc e pt a ppl i e s t o s uc h e nt i t y) or c ur r e nt s t a t us , i n i t s j ur i s di c t i on of i nc or por a t i on or or ga ni z a t i on a nd ( i i ) dul y qua l i f i e d a nd i n good s t a ndi ng ( t o t he e xt e nt s uc h c onc e pt a ppl i e s t o s uc h e nt i t y) or c ur r e nt s t a t us , i n e a c h ot he r j ur i s di c t i on whe r e t he c onduc t of i t s bus i ne s s or t he owne r s hi p of i t s pr ope r t i e s r e qui r e s s uc h qua l i f i c a t i on, a nd ( b) ha s f ul l powe r , a ut hor i t y a nd l e ga l r i ght t o c a r r y on i t s bus i ne s s a s pr e s e nt l y c onduc t e d, a nd t o own a nd ope r a t e i t s pr ope r t i e s a nd a s s e t s ; e xc e pt i n e a c h c a s e r e f e r r e d t o i n c l a us e ( a ) ( i i ) or ( b) , t o t he e xt e nt t he f a i l ur e t o do s o c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 10. 2 Aut hor i z a t i on a nd
Va l i di t y . Ea c h Loa n Pa r t y ha s t he powe r a nd a ut hor i t y a nd l e ga l r i ght t o e xe c ut e a nd de l i ve r t he Loa n Doc um e nt s t o whi c h i t i s a pa r t y a nd t o pe r f or m i t s obl i ga t i ons t he r e unde r . The e xe c ut i on, de l i ve r y, a nd pe r f or m a nc e of t he Loa n Doc um e nt s by e a c h Loa n Pa r t y ha ve be e n dul y a ut hor i z e d by pr ope r c or por a t e , l i m i t e d l i a bi l i t y c om pa ny pa r t ne r s hi p or ot he r e nt i t y pr oc e e di ngs . Thi s Agr e e m e nt c ons t i t ut e s , a nd e a c h ot he r Loa n Doc um e nt t o whi c h a ny Loa n Pa r t y i s a pa r t y whe n e xe c ut e d a nd de l i ve r e d t o t he Age nt wi l l c ons t i t ut e a l e ga l , va l i d a nd bi ndi ng obl i ga t i on of s uc h Loa n Pa r t y, e nf or c e a bl e i n a c c or da nc e wi t h i t s t e r m s , e xc e pt a s e nf or c e a bi l i t y m a y be l i m i t e d by a ppl i c a bl e ba nkr upt c y, i ns ol ve nc y, m or a t or i um , f r a udul e nt t r a ns f e r a nd ot he r s i m i l a r l a ws a f f e c t i ng c r e di t or s ’ r i ght s ge ne r a l l y. 10. 3 Conf l i c t ; Gove r nm e nt Cons e nt . Ne i t he r t he e xe c ut i on a nd de l i ve r y by a ny Loa n Pa r t y of t he Loa n Doc um e nt s t o whi c h i t i s a pa r t y, nor t he c ons um m a t i on of t he t r a ns a c t i ons t he r e i n c ont e m pl a t e d, nor c om pl i a nc e wi t h t he pr ovi s i ons t he r e of wi l l
vi ol a t e ( a ) a ny l a w, r ul e , r e gul a t i on, or de r , wr i t , j udgm e nt , i nj unc t i on, de c r e e or a wa r d bi ndi ng on a ny Loa n Pa r t y or ( b) a ny Loa n Pa r t y’ s a r t i c l e s or c e r t i f i c a t e of i nc or por a t i on, pa r t ne r s hi p a gr e e m e nt , c e r t i f i c a t e of l i m i t e d pa r t ne r s hi p, a r t i c l e s or c e r t i f i c a t e of f or m a t i on or or ga ni z a t i on, by- l a ws , or ope r a t i ng or ot he r m a na ge m e nt a gr e e m e nt , a s t he c a s e m a y be , or ( c ) t he pr ovi s i ons of a ny l oa n, l oa n a gr e e m e nt , i nde nt ur e , i ns t r um e nt or a gr e e m e nt t o whi c h a ny Loa n Pa r t y i s a pa r t y or i s s ubj e c t , or by whi c h i t , or i t s pr ope r t y, i s bound, or c onf l i c t wi t h or c ons t i t ut e a de f a ul t t he r e unde r , or r e s ul t i n, or r e qui r e , t he c r e a t i on or i m pos i t i on of a ny Li e n i n, of or on t he pr ope r t y of a ny Loa n Pa r t y pur s ua nt t o t he t e r m s of a ny s uc h i nde nt ur e , i ns t r um e nt or a gr e e m e nt , e xc e pt , wi t h r e s pe c t t o t hi s c l a us e ( c ) , a s c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . No Gove r nm e nt a l Appr ova l of a ny Gove r nm e nt a l Body i s r e qui r e d f or t he due e xe c ut i on, de l i ve r y a nd pe r f or m a nc e of t he Loa n Doc um e nt s e xc e pt s uc h a s ha ve be e n
obt a i ne d a nd a r e i n f ul l f or c e a nd e f f e c t . 10. 4 Fi na nc i a l St a t e m e nt s . The f i na nc i a l s t a t e m e nt s t ha t ha ve he r e t of or e be e n de l i ve r e d t o t he Age nt or a ny Le nde r , a nd a l l s c he dul e s a nd not e s i nc l ude d i n s uc h f i na nc i a l s t a t e m e nt s , pr e s e nt f a i r l y ( a ) t he 126 115525625. 4 0063724- 00082 f i na nc i a l pos i t i on of t he Com pa ny a nd i t s Subs i di a r i e s a s of t he da t e of s uc h s t a t e m e nt s a nd ( b) t he r e s ul t s of i t s ope r a t i ons f or t he pe r i ods c ove r e d t he r e by; a nd wi t h r e s pe c t t o t he c ons ol i da t e d f i na nc i a l s t a t e m e nt s of t he Com pa ny a nd i t s Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r Subs i di a r i e s ) , t he r e a r e not a ny m a t e r i a l l i a bi l i t i e s t ha t s houl d ha ve be e n r e f l e c t e d i n t he f i na nc i a l s t a t e m e nt s or t he not e s t he r e t o unde r GAAP, c ont i nge nt or ot he r wi s e , i nc l udi ng l i a bi l i t i e s f or t a xe s or a ny unus ua l f or wa r d or l ong- t e r m c om m i t m e nt s , t ha t a r e not di s c l os e d or r e s e r ve d a ga i ns t i n t he s t a t e m e nt s r e f e r r e d t o a bove or i n t he not e s t he r e t o or t ha t a r e not di s c l os e d he r e i n. The c ons ol i da t e d f i na nc i a l s t a t e m e nt s of t he Com pa ny a nd i t s
Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r Subs i di a r i e s ) ha ve be e n pr e pa r e d i n a c c or da nc e wi t h GAAP, e xc e pt , a s t o i nt e r i m f i na nc i a l s t a t e m e nt s , f or t he a bs e nc e of f oot not e s a nd s ubj e c t t o ye a r - e nd a dj us t m e nt s . 10. 5 M a t e r i a l Adve r s e Ef f e c t . Si nc e t he da t e of t he m os t r e c e nt a udi t e d f i na nc i a l s t a t e m e nt s de l i ve r e d t o t he Age nt , no e ve nt or c i r c um s t a nc e ha s oc c ur r e d whi c h ha s ha d or whi c h c oul d r e a s ona bl y be e xpe c t e d t o ha ve , a M a t e r i a l Adve r s e Ef f e c t . 10. 6 Ta xe s . Ea c h Loa n Pa r t y ha s f i l e d a l l f e de r a l , s t a t e , l oc a l , a nd ot he r t a x r e t ur ns whi c h a r e r e qui r e d t o be f i l e d a nd ha s pa i d a l l t a xe s due pur s ua nt t o s a i d r e t ur ns or pur s ua nt t o a ny a s s e s s m e nt r e c e i ve d by a ny Loa n Pa r t y, e xc e pt s uc h t a xe s , i f a ny, a s a r e be i ng c ont e s t e d i n good f a i t h a nd by pr ope r pr oc e e di ngs a nd a s t o whi c h a de qua t e r e s e r ve s ha ve be e n pr ovi de d i n a c c or da nc e wi t h GAAP a nd a s t o whi c h no Li e n e xi s t s . 10. 7 Li t i ga t i on . The r e i s no l i t i ga t i on, a r bi t r a t i on, gove r nm e nt a l i nve s t i ga t i on, pr oc e e di ng or i nqui r y pe ndi ng a ga i ns t a ny Loa n Pa r t y or , t o
t he knowl e dge of a ny of t he i r of f i c e r s , t hr e a t e ne d a ga i ns t or a f f e c t i ng a ny Loa n Pa r t y whi c h ( a ) pur por t t o a f f e c t or pe r t a i n t o t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt , or a ny of t he t r a ns a c t i ons c ont e m pl a t e d t he r e by, whi c h s e e ks t o pr e ve nt , e nj oi n or de l a y t he m a ki ng of a ny Cr e di t Ext e ns i on, or ( b) i f de t e r m i ne d a dve r s e l y, c oul d r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 10. 8 Subs i di a r i e s a nd Af f i l i a t e s . Se t f or t h i n t he Di s c l os ur e Sc he dul e i s a c om pl e t e a nd a c c ur a t e l i s t a s of t he Cl os i ng Da t e of t he Com pa ny a nd i t s Subs i di a r i e s a nd Af f i l i a t e s ( i nc l udi ng a c om pl e t e a nd a c c ur a t e l i s t of e a c h Subs i di a r y t ha t ha s be e n de s i gna t e d a s a Si l o Subs i di a r y a s of t he Cl os i ng Da t e ) e xc l udi ng, a s t o Af f i l i a t e s , ( a ) pe r s ons i nc l ude d i n c l a us e ( c ) of t he de f i ni t i on of Af f i l i a t e , a nd ( b) Pe r s ons hol di ng 5% or m or e of t he Com pa ny’ s Cl a s s A Com m on St oc k who ha ve f i l e d r e qui r e d r e por t s unde r Se c t i ons 13( d) , 13( g) or 16 of t he Se c ur i t i e s Exc ha nge Ac t of 1934, a s a m e nde d, or a r e not r e qui r e d t o f i l e s uc h r e por t s , s howi ng t he
j ur i s di c t i on of i nc or por a t i on of e a c h a nd s howi ng t he pe r c e nt a ge of t he Com pa ny’ s owne r s hi p of t he out s t a ndi ng s t oc k of e a c h Subs i di a r y a nd Af f i l i a t e . Al l of t he out s t a ndi ng c a pi t a l s t oc k or ot he r Equi t y I nt e r e s t s of e a c h s uc h Subs i di a r y t ha t i s owne d, di r e c t l y or i ndi r e c t l y, by t he Com pa ny ha s be e n va l i dl y i s s ue d, i s f ul l y 127 115525625. 4 0063724- 00082
pa i d a nd nona s s e s s a bl e a nd i s f r e e a nd c l e a r of a l l Li e ns ot he r t ha n Li e ns s e c ur i ng t he Obl i ga t i ons . 10. 9 ERI SA . W i t h r e s pe c t t o e a c h Pl a n, e a c h Loa n Pa r t y a nd a l l ERI SA Af f i l i a t e s ha ve pa i d a l l r e qui r e d m i ni m um c ont r i but i ons a nd i ns t a l l m e nt s on or be f or e t he due da t e s pr ovi de d unde r Se c t i on 430( j ) of t he Code a nd c oul d not r e a s ona bl y be s ubj e c t t o a l i e n unde r Se c t i on 430( k) of t he Code or Ti t l e I V of ERI SA. Ne i t he r a ny Loa n Pa r t y nor a ny ERI SA Af f i l i a t e ha s f i l e d, pur s ua nt t o Se c t i on 412( c ) of t he Code or Se c t i on 302( c ) of ERI SA, a n a ppl i c a t i on f or a wa i ve r of t he m i ni m um f undi ng s t a nda r d. No ERI SA Eve nt ha s oc c ur r e d or i s r e a s ona bl y e xpe c t e d t o oc c ur t ha t , whe n t a ke n t oge t he r wi t h a l l ot he r s uc h ERI SA Eve nt s f or whi c h l i a bi l i t y i s r e a s ona bl y e xpe c t e d t o oc c ur , c oul d r e a s ona bl y be e xpe c t e d t o r e s ul t i n a M a t e r i a l Adve r s e Ef f e c t . 10. 10 Ac c ur a c y of I nf or m a t i on . 10. 10. 1 No r e por t , f i na nc i a l s t a t e m e nt , c e r t i f i c a t e or ot he r wr i t t e n i nf or m a t i on f ur ni s he d by or on be ha l f of a ny Loa n Pa r t y ( ot he r t ha n pr oj e c t e d f i na nc i a l i nf or m a t i on, pr o
f or m a f i na nc i a l i nf or m a t i on a nd i nf or m a t i on of a ge ne r a l e c onom i c or i ndus t r y na t ur e ) t o t he Age nt or a ny Le nde r i n c onne c t i on wi t h t he t r a ns a c t i ons c ont e m pl a t e d he r e by a nd t he ne got i a t i on of t hi s Agr e e m e nt or de l i ve r e d he r e unde r or unde r a ny ot he r Loa n Doc um e nt ( i n e a c h c a s e , a s m odi f i e d or s uppl e m e nt e d by ot he r wr i t t e n i nf or m a t i on s o f ur ni s he d) , whe n t a ke n a s a whol e , c ont a i ns a ny m a t e r i a l m i s s t a t e m e nt of f a c t or om i t s t o s t a t e a ny m a t e r i a l f a c t ne c e s s a r y t o m a ke t he s t a t e m e nt s t he r e i n ( whe n t a ke n a s a whol e ) , i n t he l i ght of t he c i r c um s t a nc e s unde r whi c h t he y we r e m a de , not m a t e r i a l l y m i s l e a di ng; pr ovi de d t ha t , wi t h r e s pe c t t o pr oj e c t e d a nd pr o f or m a f i na nc i a l i nf or m a t i on, e a c h Bor r owe r r e pr e s e nt s onl y t ha t s uc h i nf or m a t i on wa s pr e pa r e d i n good f a i t h ba s e d upon a s s um pt i ons be l i e ve d t o be r e a s ona bl e a t t he t i m e of pr e pa r a t i on a nd de l i ve r y; i t be i ng unde r s t ood t ha t s uc h pr oj e c t i ons m a y va r y f r om a c t ua l r e s ul t s a nd t ha t s uc h va r i a nc e s m a y be m a t e r i a l . 10. 10. 2 As of t he Cl os i ng Da t e , t he i nf or m a t i on i nc l ude d i n a ny
Be ne f i c i a l Owne r s hi p Ce r t i f i c a t i on i s t r ue a nd c or r e c t i n a l l r e s pe c t s . 10. 11 Re gul a t i on U . M a r gi n s t oc k ( a s de f i ne d i n Re gul a t i on U) c ons t i t ut e s l e s s t ha n 25% of t he va l ue of t hos e a s s e t s whi c h a r e s ubj e c t t o a ny l i m i t a t i on on s a l e , pl e dge , or ot he r r e s t r i c t i on he r e unde r . 10. 12 M a t e r i a l Agr e e m e nt s . The Com pa ny a nd e a c h ot he r Loa n Pa r t y whi c h i s a De a l e r s hi p i s i n c om pl i a nc e wi t h a l l Se l l e r Agr e e m e nt s e xc e pt a s c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . No Loa n Pa r t y i s a pa r t y t o a ny a gr e e m e nt or i ns t r um e nt or s ubj e c t t o a ny c ha r t e r or ot he r c or por a t e , pa r t ne r s hi p, or l i m i t e d l i a bi l i t y c om pa ny or ot he r r e s t r i c t i on whi c h c oul d 128 115525625. 4 0063724- 00082 r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . No Loa n Pa r t y i s i n br e a c h of or de f a ul t i n t he pe r f or m a nc e , obs e r va nc e or f ul f i l l m e nt of a ny of t he obl i ga t i ons , c ove na nt s or c ondi t i ons c ont a i ne d i n ( a ) a ny a gr e e m e nt t o whi c h i t i s a pa r t y, or whi c h i s bi ndi ng on i t or a ny of i t s a s s e t s , whi c h de f a ul t or de f a ul t c oul d r e a s ona bl y be e xpe c t e d t o
ha ve a M a t e r i a l Adve r s e Ef f e c t or ( b) a ny a gr e e m e nt or i ns t r um e nt e vi de nc i ng or gove r ni ng I nde bt e dne s s i n e xc e s s of I nde bt e dne s s of t he Loa n Pa r t i e s de s c r i be d i n Se c t i on 14. 1. 3. 10. 13 Com pl i a nc e wi t h La ws . Ea c h Loa n Pa r t y i s i n c om pl i a nc e wi t h a l l Appl i c a bl e La ws , i nc l udi ng wi t hout l i m i t a t i on a l l e nvi r onm e nt a l pe r m i t s , Envi r onm e nt a l La ws , Ac c e s s La ws , a nd t he FLSA, e xc e pt a s c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 10. 14 Owne r s hi p of Pr ope r t i e s . Ea c h Loa n Pa r t y i s t he t r ue a nd l a wf ul owne r of a nd ha s good t i t l e t o, or va l i d l e a s e hol d i nt e r e s t s i n, a l l pr ope r t i e s a nd a s s e t s m a t e r i a l t o i t s bus i ne s s , r e a l a nd pe r s ona l , i nt a ngi bl e a nd t a ngi bl e whi c h i t owns or l e a s e s , f r e e of a ny l i e ns a nd e nc um br a nc e s , e xc e pt Pe r m i t t e d Li e ns . 10. 15 Pl a n As s e t s ; Pr ohi bi t e d Tr a ns a c t i ons . No Loa n Pa r t y i s a n e nt i t y de e m e d t o hol d " pl a n a s s e t s ” wi t hi n t he m e a ni ng of 29 C. F. R. § 2510. 3- 101, a s m odi f i e d by Se c t i on 3( 42) of ERI SA, of a n e m pl oye e be ne f i t pl a n ( a s de f i ne d i n Se c t i on 3( 3) of ERI SA) whi c h i s s ubj e c t t o Ti t l e I of
ERI SA or a ny pl a n ( wi t hi n t he m e a ni ng of Se c t i on 4975 of t he Code ) , a nd ne i t he r t he e xe c ut i on of t hi s Agr e e m e nt nor t he m a ki ng of Cr e di t Ext e ns i ons he r e unde r gi ve s r i s e t o a Pr ohi bi t e d Tr a ns a c t i on. 10. 16 Tr a de m a r ks ; Pa t e nt s , Et c . Ea c h Loa n Pa r t y pos s e s s e s or ha s t he r i ght t o us e a l l l i c e ns e s , pe r m i t s , f r a nc hi s e s , pa t e nt s , c opyr i ght s , t r a de m a r ks , t r a de na m e s , s e r vi c e m a r ks , or r i ght s t he r e t o, m a t e r i a l t o t he c onduc t of i t s bus i ne s s s ubs t a nt i a l l y a s now c onduc t e d a nd a s pr e s e nt l y pr opos e d t o be c onduc t e d a nd none of t he Loa n Pa r t i e s a r e i n m a t e r i a l vi ol a t i on of a ny va l i d r i ght s of ot he r s wi t h r e s pe c t t o a ny of t he f or e goi ng. 10. 17 Bur de ns om e Re s t r i c t i ons . No Loa n Pa r t y i s a pa r t y t o or ot he r wi s e bound by a ny i nde nt ur e , l oa n or c r e di t a gr e e m e nt or a ny l e a s e or ot he r a gr e e m e nt or i ns t r um e nt or s ubj e c t t o a ny c ha r t e r , c or por a t e , l i m i t e d l i a bi l i t y c om pa ny or pa r t ne r s hi p or ot he r r e s t r i c t i on whi c h c oul d r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 10. 18 [ Re s e r ve d] . 10. 19 I nve s t m e nt Com pa ny Ac t , Et c . 129 115525625. 4 0063724-
00082
No Loa n Pa r t y, Pe r s on Cont r ol l i ng a ny Loa n Pa r t y, or Subs i di a r y i s a n " I nve s t m e nt Com pa ny” wi t hi n t he m e a ni ng of t he I nve s t m e nt Com pa ny Ac t of 1940. No Loa n Pa r t y i s s ubj e c t t o r e gul a t i on unde r t he Fe de r a l Powe r Ac t , a ny s t a t e publ i c ut i l i t i e s c ode , or a ny ot he r f e de r a l or s t a t e s t a t ut e or r e gul a t i on l i m i t i ng i t s a bi l i t y t o i nc ur i nde bt e dne s s . 10. 20 Sol ve nc y . Ea c h Loa n Pa r t y i s Sol ve nt a nd, a f t e r t he e xe c ut i on a nd de l i ve r y of t he Loa n Doc um e nt s a nd t he c ons um m a t i on of t he t r a ns a c t i ons c ont e m pl a t e d t he r e by, i nc l udi ng t he m a ki ng of e a c h Cr e di t Ext e ns i on a nd t he us e of t he pr oc e e ds t he r e of , wi l l be Sol ve nt . 10. 21 Fr a nc hi s e Agr e e m e nt s ; M a t e r i a l Bus i ne s s Re l a t i ons hi ps . As of t he Cl os i ng Da t e , ne i t he r t he Com pa ny nor a ny of i t s Subs i di a r i e s i s a pa r t y t o a ny de a l e r f r a nc hi s e a gr e e m e nt , de a l e r a gr e e m e nt , de a l e r s a l e s a nd s e r vi c e a gr e e m e nt or s i m i l a r a gr e e m e nt ( e a c h, a " Fr a nc hi s e Agr e e m e nt ” ) ot he r t ha n t hos e s pe c i f i c a l l y l i s t e d i n t he Di s c l os ur e Sc he dul e , whi c h s c he dul e s hows t he a ppl i c a bl e m a nuf a c t ur e r or di s t r i but or a nd t he Com pa ny
or Subs i di a r y, a s t he c a s e m a y be , t ha t i s a pa r t y t o e a c h s uc h a gr e e m e nt , t he da t e s uc h a gr e e m e nt wa s e nt e r e d i nt o a nd t he e xpi r a t i on da t e of s uc h a gr e e m e nt . Exc e pt a s c oul d not r e a s ona bl y be e xpe c t e d t o r e s ul t i n a M a t e r i a l Adve r s e Ef f e c t : ( a ) e a c h of s uc h Fr a nc hi s e Agr e e m e nt s i s c ur r e nt l y i n f ul l f or c e a nd e f f e c t ; ( b) ne i t he r t he Com pa ny nor a ny Subs i di a r y ha s r e c e i ve d a ny not i c e of t e r m i na t i on wi t h r e s pe c t t o a ny s uc h a gr e e m e nt ; a nd ( c ) e xc e pt a s di s c l os e d on t he Di s c l os ur e Sc he dul e , ne i t he r t he Com pa ny nor a ny Subs i di a r y i s a wa r e of a ny e ve nt t ha t wi t h not i c e , l a ps e of t i m e or bot h woul d a l l ow a ny m a nuf a c t ur e r or di s t r i but or t ha t i s a pa r t y of a ny Fr a nc hi s e Agr e e m e nt t o t e r m i na t e a ny s uc h a gr e e m e nt . The r e e xi s t s no a c t ua l or t hr e a t e ne d t e r m i na t i on, c a nc e l l a t i on or l i m i t a t i on of , or a ny m odi f i c a t i on or c ha nge i n, t he bus i ne s s r e l a t i ons hi p be t we e n t he Com pa ny or a ny of i t s Subs i di a r i e s a nd a ny c us t om e r or a ny gr oup of c us t om e r s or wi t h a ny m a nuf a c t ur e r or di s t r i but or t ha t , i n a ny c a s e , c oul d r e a s ona bl y be e xpe c t e d t o ha ve a
M a t e r i a l Adve r s e Ef f e c t . 10. 22 Se c ur i t y I nt e r e s t s . The Li e ns c r e a t e d or t o be c r e a t e d i n f a vor of t he Age nt a nd t he Le nde r s unde r t he Col l a t e r a l Doc um e nt s do a nd wi l l a t a l l t i m e s on a nd a f t e r t he Cl os i ng Da t e , c ons t i t ut e pe r f e c t e d s e c ur i t y i nt e r e s t s ( s ubj e c t t o Se c t i on 8. 1. 4) , s ubj e c t onl y t o t he Pe r m i t t e d Li e ns , i n t he Col l a t e r a l a s s e c ur i t y f or t he Obl i ga t i ons s pe c i f i e d i n t he Col l a t e r a l Doc um e nt s . 10. 23 Cont i nui ng Re pr e s e nt a t i ons a nd W a r r a nt i e s . Ea c h r e que s t f or a Cr e di t Ext e ns i on s ha l l be de e m e d t o be e a c h Bor r owe r ’ s r e pr e s e nt a t i on a nd wa r r a nt y t ha t ( a ) s uc h Cr e di t Ext e ns i on m a y be m a de wi t hout e xc e e di ng t he a ppl i c a bl e m a xi m um a m ount de t e r m i ne d i n a c c or da nc e wi t h t he pr ovi s i ons of t hi s Agr e e m e nt , ( b) no De f a ul t ha s oc c ur r e d, or wi l l e xi s t a f t e r gi vi ng e f f e c t t o t he m a ki ng of s uc h Cr e di t Ext e ns i on, a nd ( c ) a l l r e pr e s e nt a t i ons a nd wa r r a nt i e s s e t f or t h i n t hi s Agr e e m e nt , t he Col l a t e r a l Doc um e nt s a nd t he ot he r Loa n Doc um e nt s a r e t r ue , a c c ur a t e a nd c om pl e t e i n a l l m a t e r i a l r e s pe c t s a s of t he da t e of s uc h r e que s t wi t h t he s a m e
e f f e c t a s i f m a de on e a c h da t e , e xc e pt a s 130 115525625. 4 0063724- 00082 pr e vi ous l y di s c l os e d t o a nd a c c e pt e d by t he Age nt i n wr i t i ng, a nd e xc e pt f or r e pr e s e nt a t i ons a nd wa r r a nt i e s whi c h s pe c i f i c a l l y r e f e r onl y t o a not he r da t e . 10. 24 Ant i - Cor r upt i on La ws ; Sa nc t i ons . The Bor r owe r s , t he i r Subs i di a r i e s a nd t he i r r e s pe c t i ve of f i c e r s a nd e m pl oye e s , a nd t o t he knowl e dge of t he Bor r owe r s , t he i r di r e c t or s a nd a ge nt s , a r e i n c om pl i a nc e wi t h Ant i - Cor r upt i on La ws a nd a ppl i c a bl e Sa nc t i ons i n a l l m a t e r i a l r e s pe c t s . Ea c h Bor r owe r ha s i m pl e m e nt e d a nd m a i nt a i ns i n e f f e c t f or i t s e l f a nd i t s Subs i di a r i e s pol i c i e s a nd pr oc e dur e s t o e ns ur e c om pl i a nc e by e a c h Bor r owe r , i t s Subs i di a r i e s , a nd t he i r r e s pe c t i ve of f i c e r s , e m pl oye e s , di r e c t or s , a nd a ge nt s wi t h Ant i - Cor r upt i on La ws a nd a ppl i c a bl e Sa nc t i ons . None of t he Bor r owe r s , a ny of t he i r Subs i di a r i e s or a ny di r e c t or , of f i c e r , e m pl oye e , a ge nt , or a f f i l i a t e of s uc h Bor r owe r or a ny of i t s Subs i di a r i e s i s a n i ndi vi dua l or e nt i t y t ha t i s , or i s 50% or m or e owne d ( i ndi vi dua l l y or i n t he a ggr e ga t e , di r e c t l y or
i ndi r e c t l y) or c ont r ol l e d by i ndi vi dua l s or e nt i t i e s ( i nc l udi ng a ny a ge nc y, pol i t i c a l s ubdi vi s i on or i ns t r um e nt a l i t y of a ny gove r nm e nt ) t ha t a r e ( i ) t he t a r ge t of a ny Sa nc t i ons or ( i i ) l oc a t e d, or ga ni z e d or r e s i de nt i n a c ount r y or t e r r i t or y t ha t i s , or whos e gove r nm e nt i s , t he s ubj e c t of Sa nc t i ons ( c ur r e nt l y Cr i m e a , Cuba , I r a n, Nor t h Kor e a , Suda n a nd Syr i a ) . 10. 25 Af f e c t e d Fi na nc i a l I ns t i t ut i on . No Loa n Pa r t y i s a n Af f e c t e d Fi na nc i a l I ns t i t ut i on. ARTI CLE 11 FI NANCI AL COVENANTS AND I NFORM ATI ON Dur i ng t he t e r m of t hi s Agr e e m e nt a nd unt i l t e r m i na t i on of t he a va i l a bi l i t y of Cr e di t Ext e ns i ons a nd pa ym e nt a nd pe r f or m a nc e i n f ul l of a l l Obl i ga t i ons a nd Gua r a nt or Obl i ga t i ons of e a c h Loa n Pa r t y unde r t he Loa n Doc um e nt s , e a c h Bor r owe r a gr e e s t ha t , unl e s s Re qui r e d Le nde r s s ha l l ot he r wi s e c ons e nt i n wr i t i ng: 11. 1 Fi na nc i a l Cove na nt s . 11. 1. 1 [ Re s e r ve d] . 11. 1. 2 Fi xe d Cha r ge Cove r a ge Ra t i o. The Fi xe d Cha r ge Cove r a ge Ra t i o f or t he Com pa ny a nd i t s Subs i di a r i e s , on a c ons ol i da t e d ba s i s , a s of t he l a s t da y of a ny f i s c a l qua r t e r , f or t he pe r i od of f our
c ons e c ut i ve f i s c a l qua r t e r s e ndi ng on s uc h da t e ( e a c h, a " M e a s ur e m e nt Pe r i od” ) , s ha l l not be l e s s t ha n 1. 20 t o 1. 0. As us e d he r e i n, " EBI TDAR” m e a ns , f or a ny Pe r s on, f or a ny t i m e pe r i od, ( a ) s uc h Pe r s on’ s ne t i nc om e ( or l os s ) f or s uc h t i m e pe r i od ( a dj us t e d a s s e t f or t h i n t he i m m e di a t e l y f ol l owi ng s e nt e nc e ) , pl us ( b) wi t hout dupl i c a t i on, t he a m ount s whi c h, i n de t e r m i ni ng ne t i nc om e or l os s , ha ve be e n de duc t e d f or ( i ) i nt e r e s t e xpe ns e , ( i i ) i nc om e t a x e xpe ns e , ( i i i ) de pr e c i a t i on, a m or t i z a t i on, goodwi l l i m pa i r m e nt c ha r ge s , s t oc k- ba s e d c om pe ns a t i on c ha r ge s a nd ot he r non- c a s h c ha r ge s a ppr ove d by Re qui r e d Le nde r s ( l e s s non- c a s h ga i ns ) a nd ( i v) r e nt a l or l e a s e 131 115525625. 4 0063724- 00082
e xpe ns e . For pur pos e s of c l a us e ( a ) of t hi s pa r a gr a ph, ne t i nc om e or l os s ( A) s ha l l e xc l ude ( 1) e xt r a or di na r y ga i ns or l os s e s , a nd ( 2) Exc l ude d I t e m s , a nd ( B) s ha l l i nc l ude ne t i nc om e or l os s f r om di s c ont i nue d ope r a t i ons . " Exc l ude d I t e m s ” m e a ns ga i n or l os s f r om ( a ) t he s a l e , s a l e a nd l e a s e ba c k or f i na nc i ng of r e a l e s t a t e , or ( b) t he s a l e of a l l or s ubs t a nt i a l l y a l l of t he Equi t y I nt e r e s t s or a s s e t s of ( i ) a De a l e r s hi p or ot he r Subs i di a r y, ( i i ) a De a l e r s hi p l oc a t i on, or ( i i i ) a ny bus i ne s s uni t or f r a nc hi s e of a De a l e r s hi p or ot he r Subs i di a r y or a De a l e r s hi p l oc a t i on. " Fi xe d Cha r ge Cove r a ge Ra t i o” m e a ns , a s of t he l a s t da y of a ny f i s c a l qua r t e r , t he r a t i o f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e of ( a ) ( i ) EBI TDAR, m i nus ( i i ) di vi de nds a nd ot he r di s t r i but i ons i n r e s pe c t of Equi t y I nt e r e s t s a ndof t he Com pa ny or a ny Subs i di a r y ( e xc e pt t o t he e xt e nt s uc h di vi de nds or ot he r di s t r i but i ons a r e pa i d t o t he Com pa ny or a not he r Subs i di a r y) , m i nus ( i i i ) a m ount s e xpe nde d t o r e pur c ha s e Equi t y I nt e r e s t s f r om a Pe r s on t ha t i s not a Loa n Pa r t y i n
a c c or da nc e wi t h c l a us e ( z ) ( i i ) of t he l a s t s e nt e nc e of Se c t i on 13. 4 a nd e qua l t o t he a m ount i n e xc e s s of t he Equi t y I nt e r e s t Re pur c ha s e Thr e s hol d f or s uc h M e a s ur e m e nt Pe r i od, m i nus ( i i i i v) i nc om e t a x e xpe ns e t o t he e xt e nt pa i d i n c a s h, m i nus ( i vv) a n a l l owa nc e f or m a i nt e na nc e c a pi t a l e xpe ndi t ur e s i n a n a m ount e qua l t o $85, 000 f or e a c h De a l e r s hi p l oc a t i on, pl us ( vvi ) i f a ny Pe r m i t t e d Ac qui s i t i on ha s oc c ur r e d dur i ng a ny M e a s ur e m e nt Pe r i od, Pr o For m a EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e a t t r i but a bl e t o a ny ne w Ac qui s i t i on Subs i di a r y or bus i ne s s a c qui r e d i n c onne c t i on wi t h s uc h Pe r m i t t e d Ac qui s i t i on, a s a ppl i c a bl e , c a l c ul a t e d a s i f t he Pe r m i t t e d Ac qui s i t i on ha d oc c ur r e d on t he f i r s t da y of s uc h M e a s ur e m e nt Pe r i od ( i t be i ng unde r s t ood a nd a gr e e d t ha t Pr o For m a EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e m a y not be i nc l ude d i n t hi s c a l c ul a t i on t o t he e xt e nt t ha t i t r e s ul t s i n a n a nnua l i z e d i nc r e a s e of m or e t ha n 10% i n t he Com pa ny’ s c ons ol i da t e d EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e pr i or t o s uc h a dj us t m e nt , unl e s s t he Com pa ny pr ovi de s
t o t he Age nt a nd t he Re qui r e d Le nde r s t he s uppor t i ng c a l c ul a t i ons f or s uc h a dj us t m e nt a nd s uc h ot he r i nf or m a t i on a s t he y m a y r e a s ona bl y r e que s t t o de t e r m i ne t he a c c ur a c y of s uc h c a l c ul a t i ons ) ; t o ( b) t he s um f or t he a ppl i c a bl e M e a s ur e m e nt Pe r i od of ( i ) c a s h i nt e r e s t , pl us ( i i ) r e qui r e d pr i nc i pa l pa ym e nt s on I nde bt e dne s s ( e xc l udi ng pr i nc i pa l pa ym e nt s on I nde bt e dne s s de s c r i be d i n s ubs e c t i on ( r ) of Se c t i on 13. 10) pl us ( i i i ) r e nt a l or l e a s e e xpe ns e . 11. 1. 3 Le ve r a ge Ra t i o. The Le ve r a ge Ra t i o f or t he Com pa ny a nd i t s Subs i di a r i e s on a c ons ol i da t e d ba s i s , a s of t he l a s t da y of a ny f i s c a l qua r t e r , s ha l l not be gr e a t e r t ha n 5. 75 t o 1. 0. As us e d he r e i n: " Le ve r a ge Ra t i o” m e a ns , a s of t he l a s t da y of a ny f i s c a l qua r t e r , t he r a t i o f or t he Com pa ny a nd i t s Subs i di a r i e s on a c ons ol i da t e d ba s i s of : ( a ) ( i ) t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Funde d De bt ( m i nus t he s um of ( A) unr e s t r i c t e d c a s h a nd c a s h e qui va l e nt s pl us ( B) a ny a m ount s he l d i n t he PR Ac c ount s pl us ( C) a ny a m ount s he l d i n a c c ount s e s t a bl i s he d by Dua l Subs i di a r i e s or Si l o
Subs i di a r i e s a s a n of f s e t t o f l oor pl a n not e s pa ya bl e ( or i nt e r e s t t he r e on) ; pr ovi de d t ha t t he a ggr e ga t e r e duc t i on f or a l l of t he f or e goi ng c l a us e s ( A) t hr ough ( C) s ha l l not e xc e e d $200, 000, 000) , m i nus ( i i ) t he s um of t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns , Ne w Ve hi c l e Swi ng Li ne Loa ns , Us e d Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng 132 115525625. 4 0063724- 00082 Li ne Loa ns , pr i nc i pa l a m ount of a ny Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng, Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( o) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( p) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( r ) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt not gua r a nt e e d by t he Com pa ny) , a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( s ) of Se c t i on 13. 10 a nd, wi t hout dupl i c a t i on, Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( f ) of
Se c t i on 13. 10 ( but onl y t o t he e xt e nt t he unde r l yi ng i nde bt e dne s s t ha t i s gua r a nt e e d c ons t i t ut e s f l oor pl a n f i na nc i ng) , pl us ( i i i ) s i x t i m e s r e nt a l or l e a s e e xpe ns e f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e ; t o ( b) ( i ) Pr o For m a EBI TDAR f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e ( i t be i ng unde r s t ood a nd a gr e e d t ha t Pr o For m a EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e m a y not be i nc l ude d i n t hi s c a l c ul a t i on t o t he e xt e nt t ha t i t r e s ul t s i n a n a nnua l i z e d i nc r e a s e of m or e t ha n 10% i n t he Com pa ny’ s c ons ol i da t e d EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e pr i or t o s uc h a dj us t m e nt , unl e s s t he Com pa ny pr ovi de s t o t he Age nt a nd t he Re qui r e d Le nde r s t he s uppor t i ng c a l c ul a t i ons f or s uc h a dj us t m e nt a nd s uc h ot he r i nf or m a t i on a s t he y m a y r e a s ona bl y r e que s t t o de t e r m i ne t he a c c ur a c y of s uc h c a l c ul a t i ons ) , m i nus ( i i ) i nt e r e s t e xpe ns e wi t h r e s pe c t t o t he Ne w Ve hi c l e Fl oor pl a n Loa ns , Ne w Ve hi c l e Swi ng Li ne Loa ns , Us e d Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne
Loa ns a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( o) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( p) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( r ) of Se c t i on 13. 10 ( but onl y t o t he e xt e nt not gua r a nt e e d by t he Com pa ny) , a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( s ) of Se c t i on 13. 10, i n e a c h c a s e f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e . 11. 2 Fi na nc i a l I nf or m a t i on . The Com pa ny s ha l l pr ovi de t o t he Age nt a nd e a c h Le nde r : 11. 2. 1 As s oon a s a va i l a bl e a nd i n a ny e ve nt wi t hi n 120 da ys a f t e r t he e nd of e a c h Fi s c a l Ye a r of t he Com pa ny, t he For m 10( k) f or t he Com pa ny a nd i t s Subs i di a r i e s a s f i l e d wi t h t he Se c ur i t i e s a nd Exc ha nge Com m i s s i on, i nc l udi ng f i na nc i a l s t a t e m e nt s c e r t i f i e d by i nde pe nde nt publ i c a c c ount a nt s of r e c ogni z e d na t i ona l s t a ndi ng whi c h a r e r e a s ona bl y a c c e pt a bl e t o t he Age nt ( wi t hout a " goi ng c onc e r n” or l i ke qua l i f i c a t i on or e xc e pt i on a nd wi t hout a ny qua l i f i c a t i on or e xc e pt i on
a s t o t he s c ope of s uc h a udi t a nd wi t hout a ny ot he r m a t e r i a l qua l i f i c a t i on or e xc e pt i on) t o t he e f f e c t t ha t s uc h f i na nc i a l s t a t e m e nt s pr e s e nt f a i r l y i n a l l m a t e r i a l r e s pe c t s t he f i na nc i a l c ondi t i on a nd r e s ul t s of ope r a t i ons of t he Com pa ny a nd i t s Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r Subs i di a r i e s ) on a c ons ol i da t e d ba s i s i n a c c or da nc e wi t h GAAP c ons i s t e nt l y a ppl i e d. 11. 2. 2 As s oon a s a va i l a bl e a nd i n a ny e ve nt wi t hi n 45 da ys a f t e r t he e nd of e a c h of t he f i r s t t hr e e f i s c a l qua r t e r s of e a c h Fi s c a l Ye a r of t he Com pa ny, t he For m 10- Q f or t he Com pa ny a nd i t s Subs i di a r i e s , a s f i l e d wi t h t he Se c ur i t i e s a nd Exc ha nge Com m i s s i on c e r t i f i e d by t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt a s pr e s e nt i ng f a i r l y i n a l l m a t e r i a l r e s pe c t s t he f i na nc i a l c ondi t i on a nd r e s ul t s of ope r a t i ons of t he Com pa ny a nd i t s Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r Subs i di a r i e s ) on a 133 115525625. 4 0063724- 00082
c ons ol i da t e d ba s i s i n a c c or da nc e wi t h GAAP c ons i s t e nt l y a ppl i e d, s ubj e c t t o nor m a l ye a r - e nd a udi t a dj us t m e nt s a nd t he a bs e nc e of f oot not e s . 11. 2. 3 Pr om pt l y f ol l owi ng t he Age nt ’ s or a ny Le nde r ’ s r e que s t , t he i nt e r na l l y pr e pa r e d c ons ol i da t e d ba l a nc e s he e t a nd s t a t e m e nt of ope r a t i ons f or t he Com pa ny a nd i t s Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r Subs i di a r i e s ) f or s uc h m ont h a nd f or t he f i s c a l ye a r t o da t e , i nc l udi ng s uc h de t a i l a s t he Age nt or a ny Le nde r r e a s ona bl y r e qui r e s , c e r t i f i e d by t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt a s pr e s e nt i ng f a i r l y i n a l l m a t e r i a l r e s pe c t s t he f i na nc i a l c ondi t i on a nd r e s ul t s of ope r a t i ons of t he Com pa ny a nd i t s Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r Subs i di a r i e s ) on a c ons ol i da t e d ba s i s i n a c c or da nc e wi t h GAAP c ons i s t e nt l y a ppl i e d, s ubj e c t t o nor m a l ye a r - e nd a udi t a dj us t m e nt s a nd t he a bs e nc e of f oot not e s . 11. 2. 4 W i t hi n 10 da ys f ol l owi ng de l i ve r y t he r e of , c opi e s of a l l f i na nc i a l s t a t e m e nt s , pr oxy
s t a t e m e nt s , a nd a l l m a t e r i a l wr i t t e n r e por t s a nd i nf or m a t i on pr ovi de d t o i t s s ha r e hol de r s ge ne r a l l y, a nd c opi e s of a l l r e gi s t r a t i on s t a t e m e nt s , r e gul a r , pe r i odi c or s pe c i a l r e por t s , a nd ot he r doc um e nt s of Com pa ny or a ny Subs i di a r y f i l e d wi t h t he Se c ur i t i e s a nd Exc ha nge Com m i s s i on ( or a ny s uc c e s s or a ge nc y) , a ny ot he r na t i ona l s e c ur i t i e s e xc ha nge , or a ny ot he r gove r nm e nt a l s e c ur i t i e s r e gul a t or y a ut hor i t y ha vi ng j ur i s di c t i on ove r Com pa ny or i t s Subs i di a r i e s . 11. 2. 5 W i t h t he f i na nc i a l s t a t e m e nt s r e qui r e d by Se c t i ons 11. 2. 1 a nd 11. 2. 2, a nd i n a ny e ve nt wi t hi n t he t i m e r e qui r e d f or de l i ve r y of s uc h f i na nc i a l s t a t e m e nt s by Se c t i ons 11. 2. 1 a nd 11. 2. 2, a Com pl i a nc e Ce r t i f i c a t e s i gne d by t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt . 11. 2. 6 W i t hi n 30 da ys a f t e r t he e nd of e a c h m ont h ( or wi t h r e s pe c t t o e a c h m ont h e ndi ng De c e m be r 31, wi t hi n 45 da ys a f t e r t he e nd of s uc h m ont h) ( or m or e f r e que nt l y i f r e qui r e d by t he Age nt or Re qui r e d Le nde r s dur i ng t he e xi s t e nc e of a De f a ul t ) , a Us e d Ve hi c l e Bor r owi ng Ba s e
Ce r t i f i c a t e , pr e pa r e d a s of t he l a s t da y of s uc h m ont h, s howi ng t he c a l c ul a t i on of t he Us e d Ve hi c l e Bor r owi ng Ba s e . 11. 2. 7 W i t hi n 30 da ys a f t e r t he e nd of e a c h m ont h ( or wi t h r e s pe c t t o e a c h m ont h e ndi ng De c e m be r 31, wi t hi n 45 da ys a f t e r t he e nd of s uc h m ont h) ( or m or e f r e que nt l y i f r e qui r e d by t he Age nt or Re qui r e d Le nde r s dur i ng t he e xi s t e nc e of a De f a ul t ) , a Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e , pr e pa r e d a s of t he l a s t da y of s uc h m ont h, s howi ng t he c a l c ul a t i on of t he Re vol vi ng Loa n Bor r owi ng Ba s e . 11. 2. 8 W i t hi n 30 da ys a f t e r t he e nd of e a c h m ont h ( or wi t h r e s pe c t t o e a c h m ont h e ndi ng De c e m be r 31, wi t hi n 45 da ys a f t e r t he e nd of s uc h m ont h) ( or m or e f r e que nt l y i f r e qui r e d by t he Age nt or Re qui r e d Le nde r s dur i ng t he e xi s t e nc e of a De f a ul t ) , a Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e , pr e pa r e d a s of t he l a s t da y of s uc h m ont h, s howi ng t he c a l c ul a t i on of t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e . 11. 2. 9 Pr om pt l y f ol l owi ng t he Age nt ’ s or a ny Le nde r ’ s r e que s t , a pr oj e c t e d c ons ol i da t e d ba l a nc e s he e t f or t he Com pa ny a nd i t s
Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r s hi p Subs i di a r i e s ) a nd r e l a t e d s t a t e m e nt s of i nc om e a nd c a s h f l ows f or 134 115525625. 4 0063724- 00082 t he t i m e pe r i od r e que s t e d by t he Age nt or a ny Le nde r , s i gne d by t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt , a c knowl e dgi ng hi s or he r r e vi e w of s uc h pr oj e c t i ons . 11. 2. 10 Pr om pt l y f ol l owi ng t he Age nt ’ s or a ny Le nde r ’ s r e que s t , c opi e s of e a c h f i na nc i a l s t a t e m e nt de l i ve r e d t o a m a nuf a c t ur e r or di s t r i but or by a ny De a l e r s hi p, a s r e qui r e d by i t s a gr e e m e nt wi t h t he m a nuf a c t ur e r or di s t r i but or . 11. 2. 11 Pr om pt l y f ol l owi ng a ny r e que s t t he r e f or , s uc h ot he r i nf or m a t i on r e ga r di ng t he ope r a t i ons , bus i ne s s a f f a i r s a nd f i na nc i a l c ondi t i on of a ny Loa n Pa r t y, or c om pl i a nc e wi t h t he t e r m s of t hi s Agr e e m e nt , a s t he Age nt or a ny Le nde r m a y r e a s ona bl y r e que s t , whi c h m a y i nc l ude wi t hout l i m i t a t i on a m ont hl y s t a t e m e nt of c a s h f l ows . I f a ny i nf or m a t i on whi c h i s r e qui r e d t o be f ur ni s he d t o t he Le nde r s unde r t hi s Se c t i on i s r e qui r e d by l a w or r e gul a t i on
t o be f i l e d by a ny Loa n Pa r t y wi t h a gove r nm e nt body on a n e a r l i e r da t e , t he n t he i nf or m a t i on r e qui r e d he r e unde r s ha l l be f ur ni s he d t o t he Le nde r s a t s uc h e a r l i e r da t e . Any f i na nc i a l s t a t e m e nt r e qui r e d t o be f ur ni s he d pur s ua nt t o Se c t i on 11. 2. 1, 11. 2. 2, or 11. 2. 4 s ha l l be de e m e d t o ha ve be e n f ur ni s he d on t he da t e on whi c h t he Le nde r s r e c e i ve not i c e t ha t t he Com pa ny ha s f i l e d s uc h f i na nc i a l s t a t e m e nt wi t h t he Se c ur i t i e s a nd Exc ha nge Com m i s s i on a nd i s a va i l a bl e on t he EDGAR we bs i t e on t he I nt e r ne t a t www. s e c . gov or a ny s uc c e s s or gove r nm e nt we bs i t e t ha t i s f r e e l y a nd r e a di l y a va i l a bl e t o t he Age nt a nd t he Le nde r s wi t hout c ha r ge ; pr ovi de d t ha t t he Com pa ny s ha l l gi ve not i c e of a ny s uc h f i l i ng t o t he Age nt ( who s ha l l t he n gi ve not i c e of a ny s uc h f i l i ng t o t he Le nde r s ) . Not wi t hs t a ndi ng t he f or e goi ng, t he Com pa ny s ha l l de l i ve r pa pe r c opi e s of a ny s uc h f i na nc i a l s t a t e m e nt t o t he Age nt i f t he Age nt s o r e que s t s , unt i l wr i t t e n not i c e t o c e a s e de l i ve r i ng s uc h pa pe r c opi e s i s gi ve n by t he Age nt . ARTI CLE 12 AFFI RM ATI VE COVENANTS Dur i ng t he t e r m of t hi s
Agr e e m e nt a nd unt i l t e r m i na t i on of t he a va i l a bi l i t y of Cr e di t Ext e ns i ons a nd pa ym e nt a nd pe r f or m a nc e i n f ul l of a l l Obl i ga t i ons a nd Gua r a nt or Obl i ga t i ons of e a c h Loa n Pa r t y unde r t he Loa n Doc um e nt s , e a c h Loa n Pa r t y a gr e e s t ha t , unl e s s Re qui r e d Le nde r s s ha l l ot he r wi s e c ons e nt i n wr i t i ng: 12. 1 M a i nt e na nc e of Exi s t e nc e a nd Pe r m i t s . Exc e pt a s pe r m i t t e d by Se c t i on 13. 1, e a c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, pr e s e r ve a nd m a i nt a i n i t s c or por a t e , l i m i t e d l i a bi l i t y c om pa ny, pa r t ne r s hi p, t r us t or ot he r e xi s t e nc e a nd good s t a ndi ng or c ur r e nt s t a t us i n t he j ur i s di c t i on of i t s i nc or por a t i on or or ga ni z a t i on a nd qua l i f y a nd r e m a i n qua l i f i e d, a s a f or e i gn c or por a t i on, l i m i t e d l i a bi l i t y c om pa ny or ot he r e nt i t y i n e a c h j ur i s di c t i on i n whi c h s uc h qua l i f i c a t i on i s r e qui r e d ( e xc e pt t o t he e xt e nt s uc h f a i l ur e t o qua l i f y i n a f or e i gn j ur i s di c t i on c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t ) , a nd t o m a i nt a i n a l l pa t e nt s , t r a de m a r ks , c opyr i ght s , t r a de na m e s , i nt e l l e c t ua l pr ope r t y, f r a nc hi s e s , l i c e ns e s ,
a nd pe r m i t s t o t he e xt e nt m a t e r i a l a nd ne c e s s a r y f or t he c onduc t of i t s bus i ne s s a nd t he t r a ns a c t i ons c ont e m pl a t e d by t he Loa n Doc um e nt s . 135 115525625. 4 0063724- 00082
12. 2 ERI SA . Ea c h Bor r owe r s ha l l m a i nt a i n, a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o m a i nt a i n, e a c h Pl a n i n c om pl i a nc e wi t h a l l m a t e r i a l a ppl i c a bl e r e qui r e m e nt s of ERI SA a nd of t he Code a nd wi t h a l l a ppl i c a bl e r ul i ngs a nd r e gul a t i ons i s s ue d unde r t he pr ovi s i ons of ERI SA a nd of t he Code a nd wi l l not a nd not pe r m i t a ny of t he ERI SA Af f i l i a t e s t o ( a ) e nga ge i n a ny t r a ns a c t i on i n c onne c t i on wi t h whi c h a ny Loa n Pa r t y or a ny of t he ERI SA Af f i l i a t e s woul d be s ubj e c t t o e i t he r a c i vi l pe na l t y a s s e s s e d pur s ua nt t o Se c t i on 502( i ) of ERI SA or a t a x i m pos e d by Se c t i on 4975 of t he Code , ( b) f a i l t o m a ke f ul l pa ym e nt whe n due of a l l a m ount s whi c h, unde r t he pr ovi s i ons of a ny Pl a n, a ny Loa n Pa r t y or a ny ERI SA Af f i l i a t e i s r e qui r e d t o pa y a s c ont r i but i ons t he r e t o, or ( c ) f a i l t o m a ke a ny pa ym e nt s t o a ny M ul t i e m pl oye r Pl a n t ha t a ny Loa n Pa r t y or a ny of t he ERI SA Af f i l i a t e s m a y be r e qui r e d t o m a ke unde r a ny a gr e e m e nt r e l a t i ng t o s uc h M ul t i e m pl oye r Pl a n or a ny l a w pe r t a i ni ng t he r e t o. 12. 3 I ns pe c t i on . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l
c a us e e a c h Subs i di a r y t o, pe r m i t r e pr e s e nt a t i ve s of t he Age nt a nd t he Le nde r s t o vi s i t a nd i ns pe c t a ny of i t s pr ope r t i e s , a udi t a nd i ns pe c t a ny of t he Col l a t e r a l a nd e xa m i ne a ny of i t s books a nd r e c or ds ( a nd m a ke c opi e s a t i t s e xpe ns e ) whe r e ve r l oc a t e d, i nc l udi ng, but not l i m i t e d t o, a l l m a nuf a c t ur e r s ’ s t a t e m e nt s of or i gi n, t i t l e s , de m ons t r a t or a gr e e m e nt s , f a c t or y i nvoi c e s , pur c ha s e or de r s , de a l j a c ke t s a nd pa pe r s i nc l ude d t he r e i n, buy- ba c k a gr e e m e nt s a nd ot he r a gr e e m e nt s wi t h m a nuf a c t ur e r s , di s t r i but or s or ot he r s e l l e r s of Ve hi c l e s ( e xc l udi ng a gr e e m e nt s t o t he e xt e nt t ha t di s c l os ur e i s s pe c i f i c a l l y pr ohi bi t e d by t he t e r m s of s uc h a gr e e m e nt s ) , a nd a l l ot he r i ns t r um e nt s , doc um e nt s a nd r e c or ds a t a ny r e a s ona bl e t i m e a nd a s of t e n a s t he Age nt or a ny Le nde r m a y r e a s ona bl y de s i r e ; a nd e a c h Bor r owe r s ha l l a nd t he Com pa ny s ha l l c a us e e a c h ot he r Loa n Pa r t y t o, a s s i s t t he Age nt a nd t he Le nde r s i n s o doi ng. 12. 4 Col l a t e r a l Audi t s . Ea c h Bor r owe r wi l l , a nd t he Com pa ny wi l l c a us e e a c h Subs i di a r y t o, pe r m i t t he Age nt by or t hr ough a ny of t he
Age nt ’ s r e pr e s e nt a t i ve s , t hi r d pa r t y i ns pe c t or s , i nde pe nde nt c ont r a c t or s , a t t or ne ys or a c c ount a nt s , a t s uc h i nt e r va l s a s m a y be r e qui r e d by t he Age nt i n i t s s ol e di s c r e t i on, t o c onduc t a udi t s of a nd t o ve r i f y, t he Col l a t e r a l . Audi t r e por t s f or a ny m ont h s ha l l be pr ovi de d by t he Age nt t o t he Le nde r s i n t he f ol l owi ng m ont h. The Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y t o t he Age nt , f or t he Age nt ’ s s ol e a c c ount , s uc h f e e s a s a r e a gr e e d t o be t we e n t he m f or c ol l a t e r a l a udi t s r e l a t i ng t o Ne w Ve hi c l e s owne d by t he Ne w Ve hi c l e Fl oor pl a n De a l e r s hi ps ; pr ovi de d, t ha t , ( a ) pr i or t o t he oc c ur r e nc e of a n Eve nt of De f a ul t , ( i ) t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l not be r e qui r e d t o pa y s uc h f e e f or m or e t ha n t hr e e Ne w Ve hi c l e c ol l a t e r a l a udi t s i n a ny pe r i od of t we l ve c ons e c ut i ve m ont hs , i f t he Le ve r a ge Ra t i o i s e qua l t o or l e s s t ha n 2. 50 t o 1. 0 a s of t he e nd of e a c h f i s c a l qua r t e r dur i ng s uc h t i m e pe r i od, a nd ( i i ) t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l not be r e qui r e d t o pa y s uc h f e e f or m or e t ha n f our Ne w Ve hi c l e c ol l a t e r a l a udi t s i n a ny pe r i od of
t we l ve c ons e c ut i ve m ont hs , i f t he Le ve r a ge Ra t i o i s gr e a t e r t ha n 2. 50 t o 1. 0 a s of t he e nd of a ny f i s c a l qua r t e r dur i ng s uc h t i m e pe r i od; a nd ( b) f ol l owi ng t he oc c ur r e nc e of a n Eve nt of De f a ul t , t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l pa y t he c os t s of 136 115525625. 4 0063724- 00082 a l l Ne w Ve hi c l e c ol l a t e r a l a udi t s r e qui r e d by t he Age nt . The Com pa ny s ha l l pa y t he c os t of a l l c ol l a t e r a l a udi t s ot he r t ha n c ol l a t e r a l a udi t s r e l a t i ng t o Ne w Ve hi c l e s . 12. 5 Books a nd Re c or ds . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, ke e p a de qua t e r e c or ds a nd books of a c c ount i n whi c h c om pl e t e e nt r i e s wi l l be m a de r e f l e c t i ng a l l m a t e r i a l f i na nc i a l t r a ns a c t i ons a nd m a t t e r s i nvol vi ng t he a s s e t s a nd bus i ne s s of t he Com pa ny or s uc h Subs i di a r y, a s t he c a s e m a y be , i nc l udi ng, books a nd r e c or ds s pe c i f yi ng t he ye a r , m a ke , m ode l , c os t , pr i c e , l oc a t i on a nd ve hi c l e i de nt i f i c a t i on num be r of e a c h Ne w Ve hi c l e owne d by t he Com pa ny or s uc h Subs i di a r y. The Com pa ny wi l l pr e pa r e a l l f i na nc i a l s t a t e m e nt s , c om put a t i ons a nd i nf or m a t i on r e qui r e d
he r e unde r f or t he Com pa ny a nd i t s Subs i di a r i e s ( i nc l udi ng, f or t he a voi da nc e of doubt , a l l M i nor i t y De a l e r s hi p Subs i di a r i e s ) c ons ol i da t e d i n a c c or da nc e wi t h GAAP. 12. 6 M a i nt e na nc e of Pr ope r t i e s . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, m a i nt a i n, r e pa i r , a nd pr e s e r ve a l l of e a c h Loa n Pa r t y’ s pr ope r t i e s ( whe t he r owne d, l e a s e d or s ubl e a s e d) t ha t a r e us e d or us e f ul i n t he c onduc t of t he bus i ne s s of t he Loa n Pa r t i e s , or whe r e a ny Col l a t e r a l i s l oc a t e d ( " Pr ope r t i e s ” ) i n good wor ki ng or de r a nd c ondi t i on, or di na r y we a r a nd t e a r e xc e pt e d, a nd wi l l f r om t i m e t o t i m e m a ke or c a us e t o be m a de a l l ne c e s s a r y a nd pr ope r r e pl a c e m e nt s , r e pa i r s , r e ne wa l s , a nd i m pr ove m e nt s s o t ha t t he e f f i c i e nc y a nd va l ue of i t s Pr ope r t i e s a nd f a c i l i t i e s s ha l l not be m a t e r i a l l y i m pa i r e d. 12. 7 Ta xe s a nd Ot he r Obl i ga t i ons . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, t i m e l y f i l e c om pl e t e a nd c or r e c t Uni t e d St a t e s f e de r a l a nd a ppl i c a bl e f or e i gn, s t a t e a nd l oc a l t a x r e t ur ns r e qui r e d by l a w a nd t o pa y a nd di s c ha r ge whe n
due a l l i nde bt e dne s s , t a xe s , a nd ot he r obl i ga t i ons f or whi c h i t i s l i a bl e or t o whi c h i t s i nc om e or pr ope r t y i s s ubj e c t a nd a l l c l a i m s f or l a bor a nd m a t e r i a l s or s uppl i e s whi c h, i f unpa i d, m i ght be c om e by l a w a l i e n upon i t s a s s e t s , unl e s s i t i s c ont e s t i ng t he i nde bt e dne s s , t a xe s , or ot he r obl i ga t i ons i n good f a i t h a nd pr ovi s i on ha s be e n m a de f or t he pa ym e nt t he r e of t hr ough s e t t i ng a s i de on i t s books a ppr opr i a t e r e s e r ve s wi t h r e s pe c t t he r e t o i n a c c or da nc e wi t h GAAP. 12. 8 I ns ur a nc e . 12. 8. 1 M a i nt e na nc e of I ns ur a nc e . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, m a i nt a i n pol i c i e s of i ns ur a nc e upon a l l of t he i ns ur a bl e Col l a t e r a l , a nd on i t s pr ope r t i e s a nd ope r a t i ons , c a r r i e d wi t h c om pa ni e s r e a s ona bl y a c c e pt a bl e t o t he Age nt , i n s uc h f or m a nd a m ount s a nd c ove r i ng s uc h r i s ks a s t he Age nt m a y r e a s ona bl y r e qui r e a nd a s a r e r e qui r e d by Appl i c a bl e La w. W i t hout l i m i t i ng t he f or e goi ng, e a c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, m a i nt a i n wi t h f i na nc i a l l y s ound a nd r e put a bl e i nde pe nde nt i ns ur e r s ,
i ns ur a nc e wi t h r e s pe c t t o i t s pr ope r t i e s a nd bus i ne s s a ga i ns t l os s or da m a ge of s uc h t ype s a nd i n s uc h a m ount s a s a r e c us t om a r i l y c a r r i e d unde r s i m i l a r c i r c um s t a nc e s by Pe r s ons e nga ge d i n t he s a m e or s i m i l a r bus i ne s s e s . 137 115525625. 4 0063724- 00082
12. 8. 2 For m of Pol i c i e s . Al l pol i c i e s s ha l l be wr i t t e n i n f or m , a m ount s , c ove r a ge s a nd ba s i s r e a s ona bl y a c c e pt a bl e t o t he Age nt a nd s ha l l be i s s ue d by a c om pa ny or c om pa ni e s r e a s ona bl y a c c e pt a bl e t o t he Age nt . The Age nt s ha l l be de s i gna t e d a s l os s pa ye e wi t h a " Le nde r ’ s Los s Pa ya bl e ” e ndor s e m e nt on c a s ua l t y pol i c i e s c ove r i ng t he Col l a t e r a l a nd a s a n a ddi t i ona l i ns ur e d on l i a bi l i t y pol i c i e s . Al l pol i c i e s s ha l l i nc l ude a pr ovi s i on t ha t s uc h pol i c i e s wi l l not be c a nc e l l e d or m a t e r i a l l y a m e nde d, whi c h t e r m s ha l l i nc l ude a ny r e duc t i on i n t he s c ope or l i m i t s of c ove r a ge , wi t hout a t l e a s t t hi r t y ( 30) da ys pr i or wr i t t e n not i c e t o t he Age nt . Ea c h pol i c y a l s o s ha l l i nc l ude a n e ndor s e m e nt pr ovi di ng t ha t c ove r a ge i n f a vor of t he Age nt wi l l not be i m pa i r e d i n a ny wa y by a ny a c t , om i s s i on or de f a ul t of a ny Loa n Pa r t y. 12. 8. 3 De l i ve r y of Ce r t i f i c a t e s . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, f ur ni s h t o t he Age nt a c e r t i f i c a t e of i ns ur a nc e i n a f or m r e a s ona bl y a c c e pt a bl e t o t he Age nt e vi de nc i ng s uc h i ns ur a nc e c ove r a ge . At
l e a s t t hi r t y ( 30) da ys pr i or t o t he e xpi r a t i on da t e of e a c h pol i c y, t he Age nt s ha l l be pr ovi de d wi t h a r e ne wa l c e r t i f i c a t e , t oge t he r wi t h e vi de nc e t ha t t he r e ne wa l pr e m i um ha s be e n pa i d. 12. 9 Com pl i a nc e wi t h La ws ; Pe r f or m a nc e Unde r Agr e e m e nt s . Ea c h Bor r owe r The Com pa ny s ha l l , a nd s ha l l c a us e e a c h Subs i di a r y t o, ( i ) c om pl y wi t h Appl i c a bl e La ws , i nc l udi ng, wi t hout l i m i t a t i on, a l l a ppl i c a bl e Envi r onm e nt a l La ws , Ant i - Cor r upt i on La ws a nd a ppl i c a bl e Sa nc t i ons , e xc e pt a s c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t a nd ( i i ) pe r f or m i t s obl i ga t i ons unde r a gr e e m e nt s t o whi c h i t i s a pa r t y e xc e pt t o t he e xt e nt t he f a i l ur e t o pe r f or m c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . Ea c h Bor r owe r The Com pa ny s ha l l m a i nt a i n i n e f f e c t a nd e nf or c e pol i c i e s a nd pr oc e dur e s de s i gne d t o e ns ur e c om pl i a nc e by s uc h Bor r owe r i t s e l f , i t s Subs i di a r i e s a nd t he i r r e s pe c t i ve di r e c t or s , of f i c e r s , e m pl oye e s a nd a ge nt s wi t h Ant i - Cor r upt i on La ws a nd a ppl i c a bl e Sa nc t i ons . The Bor r owe r s s ha l l not us e or a l l ow a ny t e na nt s or
s ubt e na nt s t o us e , or pe r m i t a ny Subs i di a r y t o us e or a l l ow a ny t e na nt s or s ubt e na nt s t o us e , i t s Pr ope r t y f or a ny bus i ne s s a c t i vi t y t ha t vi ol a t e s i n a ny m a t e r i a l r e s pe c t a ny f e de r a l or s t a t e l a w or t ha t s uppor t s a bus i ne s s t ha t vi ol a t e s i n a ny m a t e r i a l r e s pe c t a ny f e de r a l or s t a t e l a w. 12. 10 Agr e e m e nt s wi t h Se l l e r s . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, c om pl y wi t h Fr a nc hi s e Agr e e m e nt s , ot he r Se l l e r Agr e e m e nt s , a nd a l l ot he r a gr e e m e nt s be t we e n s uc h Pe r s on a nd a ny m a nuf a c t ur e r or di s t r i but or of Ne w Ve hi c l e s i n a l l r e s pe c t s a nd s ha l l m a i nt a i n a l l s uc h a gr e e m e nt s i n f ul l f or c e a nd e f f e c t , e xc e pt ( a ) i n a c c or da nc e wi t h t he di s pos i t i on of or ot he r t r a ns a c t i on i nvol vi ng a De a l e r s hi p or Subs i di a r y i n a c c or da nc e wi t h Se c t i on 13. 1, ( b) a s a r e s ul t of t o t he e xt e nt s uc h t e r m i na t i on or c e s s a t i on of bus i ne s s not r e s t r i c t e d byi s ne c e s s a r y t o c om pl y wi t h Se c t i on 13. 812. 22, or ( c ) t o t he e xt e nt t he f a i l ur e t o c om pl y wi t h t hi s Se c t i on 12. 10 c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 12. 11
Re pur c ha s e Agr e e m e nt s . Ea c h Ne w Ve hi c l e Fl oor pl a n Bor r owe r s ha l l c om pl y wi t h a l l t e r m s a nd c ondi t i ons of a ny a ppl i c a bl e Re pur c ha s e Agr e e m e nt e xc e pt t o t he e xt e nt t he f a i l ur e t o s o c om pl y c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . Ea c h Ne w Ve hi c l e Fl oor pl a n 138 115525625. 4 0063724- 00082 Bor r owe r s ha l l t a ke a ny a c t i ons r e a s ona bl y r e qui r e d by t he Age nt wi t h r e s pe c t t o a ny Re pur c ha s e Agr e e m e nt . 12. 12 [ Re s e r ve d] . 12. 13 La ndl or d’ s Cons e nt s . Pr om pt l y f ol l owi ng t he Cl os i ng Da t e a nd f r om t i m e t o t i m e t he r e a f t e r , e a c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h pr e s e nt a nd f ut ur e Subs i di a r y t o, us e c om m e r c i a l l y r e a s ona bl e e f f or t s t o obt a i n a nd de l i ve r t o t he Age nt a n a gr e e m e nt , r e l e a s e a nd c ons e nt t o t he s e c ur i t y i nt e r e s t of t he Age nt a nd t he Le nde r s i n t he Col l a t e r a l , i n f or m a nd s ubs t a nc e r e a s ona bl y a c c e pt a bl e t o t he Age nt f r om a ny pr e s e nt or f ut ur e owne r or l a ndl or d of a ny r e a l pr ope r t y l e a s e d by a Loa n Pa r t y ( ot he r t ha n a Si l o Subs i di a r y) a s l e s s e e ( e a c h a " La ndl or d’ s Cons e nt ” ) . 12. 14 Not i f i c a t i on . Pr om pt l y
a f t e r l e a r ni ng t he r e of , t he Com pa ny wi l l not i f y t he Age nt i n wr i t i ng of : 12. 14. 1 The oc c ur r e nc e of a ny De f a ul t , a nd i f s uc h De f a ul t i s t he n c ont i nui ng, wi l l de l i ve r t o t he Age nt a c e r t i f i c a t e of t he Com pa ny’ s c hi e f f i na nc i a l of f i c e r or ot he r a ut hor i z e d of f i c e r s e t t i ng f or t h t he de t a i l s t he r e of a nd t he a c t i on whi c h i t i s t a ki ng or pr opos e s t o t a ke wi t h r e s pe c t t he r e t o. 12. 14. 2 The oc c ur r e nc e of a ny of t he f ol l owi ng t ha t c oul d r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t : ( i ) t he r e l e a s e of a ny Ha z a r dous Subs t a nc e s on, unde r , a bout , f r om , or a f f e c t i ng a ny of t he Pr ope r t i e s , a ny a dj a c e nt pr ope r t y a s a r e s ul t of c ont a m i na t i on, r e l e a s e or a c t i vi t y on t he Pr ope r t i e s , or a ny Col l a t e r a l or ( i i ) a ny ot he r c ondi t i on t hr e a t e ne d or a s s e r t e d wi t h r e s pe c t t o a ny s uc h pr ope r t y a r i s i ng unde r a ny Envi r onm e nt a l La ws . 12. 14. 3 The de t a i l s of a ny l i e n, l i t i ga t i on, a dm i ni s t r a t i ve pr oc e e di ng or j udgm e nt i nvol vi ng $35, 000, 000. 0035, 000, 000 or m or e i ndi vi dua l l y or i n t he a ggr e ga t e t hr e a t e ne d ( i n wr i t i ng) , i ns t i t ut e d or c om pl e t e d a ga i ns t a ny Loa n Pa r t y,
a ny Col l a t e r a l , or a ny a s s e t s of a ny Loa n Pa r t y. 12. 14. 4 Any c i t a t i on, or de r t o s how c a us e , or ot he r l e ga l pr oc e s s or or de r t ha t ha s or c oul d r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t , di r e c t i ng a ny Loa n Pa r t y t o be c om e a pa r t y t o or t o a ppe a r a t a ny pr oc e e di ng or he a r i ng by or be f or e a ny Gove r nm e nt a l Body t ha t ha s gr a nt e d t o i t a ny Gove r nm e nt a l Appr ova l , a nd i nc l ude wi t h s uc h not i c e a c opy of a ny s uc h c i t a t i on, or de r t o s how c a us e , or ot he r l e ga l pr oc e s s or or de r . 12. 14. 5 Any ( a ) r e f us a l , de ni a l , t hr e a t e ne d de ni a l , or f a i l ur e by a ny Gove r nm e nt a l Body t o gr a nt , i s s ue , r e ne w, or e xt e nd a ny m a t e r i a l Gove r nm e nt a l Appr ova l ; ( b) pr opos e d or a c t ua l r e voc a t i on, t e r m i na t i on, or m odi f i c a t i on ( whe t he r f a vor a bl e or a dve r s e ) of a ny m a t e r i a l Gove r nm e nt a l Appr ova l by a ny Gove r nm e nt a l Body; ( c ) di s put e or ot he r a dve r s e a c t i on wi t h r e ga r d t o a ny m a t e r i a l Gove r nm e nt a l Appr ova l by a ny Gove r nm e nt a l Body; ( d) not i c e f r om a ny Gove r nm e nt a l Body of t he i m pos i t i on of a ny m a t e r i a l f i ne s or pe na l t i e s or 139 115525625. 4 0063724- 00082
f or f e i t ur e s ; or ( e ) wr i t t e n t hr e a t s or wr i t t e n not i c e wi t h r e s pe c t t o a ny of t he f or e goi ng or wi t h r e s pe c t t o a ny pr oc e e di ng or he a r i ng t ha t m i ght r e s ul t i n a ny of t he f or e goi ng. 12. 14. 6 Any di s put e c onc e r ni ng or a ny t hr e a t e ne d nonr e ne wa l or m odi f i c a t i on of a ny l e a s e f or r e a l or pe r s ona l pr ope r t y t o whi c h i t i s a pa r t y i f s uc h di s put e or nonr e ne wa l or m odi f i c a t i on c oul d r e a s ona bl y be e xpe c t e d t o r e s ul t i n a M a t e r i a l Adve r s e Ef f e c t . 12. 14. 7 Any m a t e r i a l c ha nge i n t he r e l a t i ons hi p be t we e n a ny De a l e r s hi p a nd a ny Ve hi c l e m a nuf a c t ur e r or di s t r i but or i nc l udi ng, wi t hout l i m i t a t i on, t he l os s or c a nc e l l a t i on, or t hr e a t e ne d l os s or c a nc e l l a t i on, of a f r a nc hi s e , or a ny not i c e of t he e xi s t e nc e of a de f a ul t unde r a ny Fr a nc hi s e Agr e e m e nt or ot he r Se l l e r Agr e e m e nt . 12. 14. 8 Any ot he r e ve nt or c i r c um s t a nc e whi c h ha s or c oul d r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 12. 14. 9 The r e c e i pt of a ny m a t e r i a l not i c e s ( i nc l udi ng not i c e s of de f a ul t or a c c e l e r a t i on) r e c e i ve d f r om a ny hol de r or t r us t e e of , unde r or wi t h r e s pe c t t o i t s Subor di na t e d
De bt ( i f a ny) ( whi c h s ha l l i nc l ude c opi e s of s uc h not i c e s ) . 12. 14. 10 W i t h r e s pe c t t o a Pl a n, ( i ) a ny f a i l ur e t o pa y a l l r e qui r e d m i ni m um c ont r i but i ons a nd i ns t a l l m e nt s on or be f or e t he due da t e s pr ovi de d unde r Se c t i on 430( j ) of t he Code or ( i i ) t he f i l i ng pur s ua nt t o Se c t i on 412( c ) of t he Code or Se c t i on 302( c ) of ERI SA, of a n a ppl i c a t i on f or a wa i ve r of t he m i ni m um f undi ng s t a nda r d. 12. 14. 11 The oc c ur r e nc e of a ny ERI SA Eve nt t ha t , a l one or t oge t he r wi t h a ny ot he r ERI SA Eve nt s t ha t ha ve oc c ur r e d, woul d r e a s ona bl y be e xpe c t e d t o r e s ul t i n m a t e r i a l l i a bi l i t y. 12. 15 Fur t he r As s ur a nc e s . Fr om t i m e t o t i m e , whe n r e que s t e d by t he Age nt or a ny Le nde r , i t s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, dul y e xe c ut e a nd de l i ve r or c a us e t o be dul y e xe c ut e d a nd de l i ve r e d t o t he Age nt s uc h f ur t he r i ns t r um e nt s , a gr e e m e nt s , a nd doc um e nt s a nd do or c a us e t o be done s uc h f ur t he r a c t s a s t he Age nt or a ny Le nde r de e m s r e a s ona bl y ne c e s s a r y t o c a r r y out m or e e f f e c t i ve l y t he pr ovi s i ons a nd pur pos e of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s .
W i t hout l i m i t i ng t he f or e goi ng, e a c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, pr om pt l y c or r e c t a ny de f e c t or e r r or t ha t m a y be di s c ove r e d i n a ny Loa n Doc um e nt or i n t he e xe c ut i on, a c knowl e dgm e nt or r e c or da t i on t he r e of . Pr om pt l y upon r e que s t by t he Age nt , e a c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, do, e xe c ut e , a c knowl e dge , de l i ve r , r e c or d, r e - r e c or d, f i l e , r e - f i l e , r e gi s t e r a nd r e r e gi s t e r , a ny a nd a l l de e ds , c onve ya nc e s , m or t ga ge s , de e ds of t r us t , t r us t de e ds , a s s i gnm e nt s , e s t oppe l c e r t i f i c a t e s , f i na nc i ng s t a t e m e nt s a nd c ont i nua t i ons t he r e of , not i c e s of a s s i gnm e nt , t r a ns f e r s , c e r t i f i c a t e s , a s s ur a nc e s a nd ot he r i ns t r um e nt s a s t he Age nt m a y r e a s ona bl y r e qui r e f r om t i m e t o t i m e i n or de r : ( a ) t o c a r r y out m or e e f f e c t i ve l y t he pur pos e s of t he Loa n Doc um e nt s a nd ( b) t o be t t e r a s s ur e , c onve y, gr a nt , a s s i gn, t r a ns f e r , pr e s e r ve , pr ot e c t a nd c onf i r m unt o t he Age nt t he r i ght s gr a nt e d now or he r e a f t e r i nt e nde d t o be gr a nt e d t o t he Age nt or t he Le nde r s unde r a ny Loa n Doc um e nt or unde r a ny ot he r
i ns t r um e nt e xe c ut e d i n c onne c t i on wi t h a ny Loa n Doc um e nt or t ha t a ny Loa n Pa r t y m a y be or be c om e bound t o c onve y, m or t ga ge or a s s i gn t o t he Age nt i n or de r t o c a r r y out t he 140 115525625. 4 0063724- 00082 i nt e nt i on or f a c i l i t a t e t he pe r f or m a nc e of t he pr ovi s i ons of a ny Loa n Doc um e nt . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, f ur ni s h t o t he Age nt e vi de nc e s a t i s f a c t or y t o t he Age nt of e ve r y s uc h r e c or di ng, f i l i ng or r e gi s t r a t i on. 12. 16 De pos i t Ac c ount s . Exc e pt a s c ons e nt e d t o i n wr i t i ng by t he Age nt a nd Re qui r e d Le nde r s , whi c h c ons e nt s ha l l not be unr e a s ona bl y wi t hhe l d, e a c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y ( ot he r t ha n ( x) a Ca na di a nFor e i gn Subs i di a r y, t ha t i s not a Fi na nc e d Ent i t y, ( y) a n Exc l ude d Subs i di a r y or ( z ) a Si l o Subs i di a r y) t o, m a i nt a i n i t s pr i m a r y ope r a t i ng de pos i t a c c ount s wi t h one or m or e of t he Le nde r s . Exc e pt a s pr ovi de d i n Subs e c t i on ( c ) of Se c t i on 8. 1. 4, a l l s uc h de pos i t a c c ount s ot he r t ha n t r us t a c c ount s s ha l l be s ubj e c t t o a c ont r ol a gr e e m e nt ( i n f or m a nd c ont e nt
r e a s ona bl y s a t i s f a c t or y t o t he Age nt a nd t he Re qui r e d Le nde r s ) be t we e n a ny Le nde r ha vi ng a s e c ur i t y i nt e r e s t i n s uc h a c c ount , de pos i t or y ba nk, t he Age nt , a nd t he a ppl i c a bl e Loa n Pa r t i e s , whi c h c ont r ol a gr e e m e nt s ha l l e s t a bl i s h a pe r f e c t e d pr i or i t y s e c ur i t y i nt e r e s t ( s ubj e c t onl y t o t he Pe r m i t t e d Li e ns ) i n f a vor of t he Age nt , f or t he be ne f i t of t he Le nde r s , i n a l l s uc h de pos i t a c c ount s . 12. 17 J oi nde r of Ne w Subs i di a r i e s a nd De a l e r s hi ps . Ea c h Pe r s on t ha t be c om e s a Subs i di a r y of t he Com pa ny ( ot he r t ha n ( x) a Ca na di a nFor e i gn Subs i di a r y, ( y) a n Exc l ude d Subs i di a r y or ( z ) a Si l o Subs i di a r y) a nd t ha t owns or ope r a t e s a De a l e r s hi p s ha l l , wi t hi n t hi r t y ( 30) da ys t he r e of ( or s uc h l onge r pe r i od a s de t e r m i ne d by t he Age nt i n i t s s ol e di s c r e t i on) , e xe c ut e a Gua r a nt or J oi nde r Agr e e m e nt ( or i f i t i s t o be c om e a Ne w Ve hi c l e Fl oor pl a n Bor r owe r , a Bor r owe r J oi nde r Agr e e m e nt ) a nd s ha l l e xe c ut e s uc h ot he r doc um e nt s a nd s a t i s f y s uc h r e qui r e m e nt s a s t he Age nt r e a s ona bl y r e qui r e s s o t ha t s uc h Pe r s on be c om e s a Gua r a nt or a nd a Loa n Pa r t y a nd, i f a ppl i c a bl e , a Ne w
Ve hi c l e Fl oor pl a n Bor r owe r , a nd gr a nt s a s e c ur i t y i nt e r e s t t o t he Age nt f or t he be ne f i t of t he Le nde r s i n t he Col l a t e r a l owne d by s uc h Pe r s on. Ea c h s uc h Pe r s on t ha t be c om e s a Subs i di a r y of t he Com pa ny ( ot he r t ha n a Si l o Subs i di a r y) s ha l l s a t i s f y a l l r e qui r e m e nt s a ppl i c a bl e t o a n Ac qui s i t i on Subs i di a r y whi c h a r e s e t f or t h i n Se c t i on 13. 13 ( d) , ( g) , ( i ) , ( j ) , ( k) ( i f s uc h Subs i di a r y i s a De a l e r s hi p) , ( l ) a nd ( p) . Ea c h Pe r s on t ha t be c om e s a Si l o Subs i di a r y s ha l l e xe c ut e a Gua r a nt or J oi nde r Agr e e m e nt , but onl y t o be c om e a " Gua r a nt or ” ( a s de f i ne d i n t he Loa n Agr e e m e nt a nd Gua r a nt y) a nd a Loa n Pa r t y, a nd not t o be c om e a " Gr a nt or ” ( a s de f i ne d i n t he Se c ur i t y Agr e e m e nt a nd Pl e dge Agr e e m e nt ) . The Com pa ny m a y c a us e , a t a ny t i m e a nd f r om t i m e t o t i m e , a ny Subs i di a r y t ha t i s a Re a l Es t a t e Subs i di a r y t o e xe c ut e a Gua r a nt or J oi nde r Agr e e m e nt a nd s uc h ot he r doc um e nt s a nd s a t i s f y s uc h r e qui r e m e nt s a s t he Age nt r e a s ona bl y r e qui r e s s o t ha t s uc h Pe r s on be c om e s a Gua r a nt or a nd a Loa n Pa r t y a nd gr a nt s a s e c ur i t y i nt e r e s t t o t he Age nt f or t he be ne f i t of
t he Le nde r s i n t he Col l a t e r a l owne d by s uc h Re a l Es t a t e Subs i di a r y. I n c onne c t i on wi t h e a c h Subs i di a r y be c om i ng a Bor r owe r or a Gua r a nt or he r e unde r , ( a ) t he Age nt s ha l l pr om pt l y not i f y t he Le nde r s of t he pr opos e d de s i gna t i on of a Subs i di a r y a s a Bor r owe r or Gua r a nt or he r e unde r a nd ( b) t he Loa n Pa r t i e s s ha l l pr ovi de t o e a c h Le nde r r e que s t i ng t he s a m e t he doc um e nt a t i on a nd ot he r i nf or m a t i on s o r e que s t e d i n c onne c t i on wi t h a ppl i c a bl e " know your c us t om e r ” a nd a nt i - m one y- l a unde r i ng r ul e s a nd r e gul a t i ons , i nc l udi ng t he 141 115525625. 4 0063724- 00082
PATRI OT Ac t , i n e a c h c a s e a t l e a s t f i ve da ys pr i or t o s uc h Subs i di a r y be c om i ng a Bor r owe r or a Gua r a nt or . 12. 18 Us e of Pr oc e e ds . The Bor r owe r s wi l l not r e que s t a ny Loa n or Le t t e r of Cr e di t , a nd wi l l not us e , a nd t he Bor r owe r s wi l l e ns ur e t ha t t he i r Subs i di a r i e s a nd i t s or t he i r r e s pe c t i ve di r e c t or s , of f i c e r s , e m pl oye e s a nd a ge nt s s ha l l not us e , t he pr oc e e ds of a ny Loa n or Le t t e r of Cr e di t i n f ur t he r a nc e of a n of f e r , pa ym e nt , pr om i s e t o pa y, or a ut hor i z a t i on of t he pa ym e nt or gi vi ng of m one y, or a nyt hi ng e l s e of va l ue , t o a ny Pe r s on i n vi ol a t i on of a ny Ant i - Cor r upt i on La ws . The Bor r owe r s wi l l not , di r e c t l y or i ndi r e c t l y, us e t he pr oc e e ds of t he Loa ns or a ny Le t t e r of Cr e di t , or l e nd, c ont r i but e or ot he r wi s e m a ke a va i l a bl e s uc h pr oc e e ds t o a ny s ubs i di a r y, j oi nt ve nt ur e pa r t ne r or ot he r Pe r s on, ( i ) t o f und a ny a c t i vi t i e s or bus i ne s s of or wi t h a ny Pe r s on, or i n a ny c ount r y or t e r r i t or y, t ha t , a t t he t i m e of s uc h f undi ng, i s , or whos e gove r nm e nt i s , t he s ubj e c t of Sa nc t i ons , or ( i i ) i n a ny ot he r m a nne r t ha t woul d, t o a ny Bor r owe r ’ s knowl e dge ,
r e s ul t i n a vi ol a t i on of Sa nc t i ons by a ny Pe r s on ( i nc l udi ng a ny Pe r s on pa r t i c i pa t i ng i n t he Loa ns , whe t he r a s unde r wr i t e r , a dvi s or , i nve s t or , or ot he r wi s e ) . 12. 19 Ant i - M one y La unde r i ng Com pl i a nc e . Ea c h Bor r owe r s ha l l , a nd s ha l l c a us e e a c h Subs i di a r y t o, pr ovi de s uc h i nf or m a t i on a nd t a ke s uc h a c t i ons a s a r e r e a s ona bl y r e que s t e d by t he Age nt or a ny Le nde r i n or de r t o a s s i s t t he Age nt a nd t he Le nde r s i n m a i nt a i ni ng c om pl i a nc e wi t h a nt i - m one y l a unde r i ng l a ws a nd r e gul a t i ons . 12. 20 J oi nde r of Addi t i ona l Dua l Subs i di a r y Le nde r s . To t he e xt e nt not ot he r wi s e r e qui r e d t o be de l i ve r e d pur s ua nt t o Se c t i on 13. 16, pr i or t o or c onc ur r e nt l y wi t h t he i ni t i a l i nc ur r e nc e of Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s by a ny Dua l Subs i di a r y f r om a Dua l Subs i di a r y Le nde r , c a us e t o be de l i ve r e d t o t he Age nt a n I nt e r c r e di t or Agr e e m e nt , or a j oi nde r a gr e e m e nt t o a n e xi s t i ng I nt e r c r e di t or Agr e e m e nt , e xe c ut e d by e a c h Re qui r e d I nt e r c r e di t or Count e r pa r t y, a l ong wi t h a ny a ppl i c a bl e r e vi s e d e xhi bi t s t he r e t o. 12. 21 Fi na nc e d Ent i t i e s . Not wi t hs t a ndi ng a ny ot he r pr ovi s i on of
t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt , t he Com pa ny a nd e a c h Subs i di a r y t he r e of t ha t i s a Fi na nc e d Ent i t y s ha l l pl e dge Col l a t e r a l pur s ua nt t o Se c t i on 8. 1 a t a l l t i m e s t ha t i t i s a Fi na nc e d Ent i t y, s ubj e c t t o t he e xc e pt i ons wi t h r e s pe c t t o Dua l Subs i di a r i e s c ont a i ne d i n Se c t i on 13. 16, a nd s ha l l be a Gua r a nt or , pr ovi de d i f a ny s uc h Pe r s on c e a s e s t o be a Fi na nc e d Ent i t y a nd i s no l onge r r e qui r e d t o be a Gua r a nt or pur s ua nt t o t he t e r m s of t hi s Agr e e m e nt , i t s a s s e t s s ha l l not be i nc l ude d i n a ny of t he Re vol vi ng Loa n Bor r owi ng Ba s e , t he Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e or t he Us e d Ve hi c l e Bor r owi ng Ba s e . 12. 22 Type of Bus i ne s s . The Com pa ny s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o, c onduc t t he i r bus i ne s s a nd e nga ge , a s a whol e , pr i nc i pa l l y i n a l i ne or l i ne s of bus i ne s s s i m i l a r or 142 115525625. 4 0063724- 00082 c om pl e m e nt a r y t o t hos e he r e t of or e e nga ge d i n, i nc l udi ng, wi t hout l i m i t a t i on, Ve hi c l e Re t a i l i ng Ac t i vi t i e s , a nd a c t i vi t i e s t ha t a r e r e a s ona bl y r e l a t e d t he r e t o or e xt e ns i ons t he r e of . ARTI CLE 13 NEGATI VE COVENANTS Dur i ng
t he t e r m of t hi s Agr e e m e nt a nd unt i l t e r m i na t i on of t he a va i l a bi l i t y of Cr e di t Ext e ns i ons a nd pa ym e nt a nd pe r f or m a nc e i n f ul l of a l l Obl i ga t i ons a nd Gua r a nt or Obl i ga t i ons of e a c h Loa n Pa r t y unde r t he Loa n Doc um e nt s , e a c h Loa n Pa r t y a gr e e s t ha t , unl e s s Re qui r e d Le nde r s s ha l l ot he r wi s e c ons e nt i n wr i t i ng: 13. 1 M e r ge r s , Et c . 13. 1. 1 ( a ) Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o, wi nd up, l i qui da t e , di s s ol ve or r e or ga ni z e , m e r ge i nt o or c ons ol i da t e wi t h a ny ot he r Pe r s on, pe r m i t a ny ot he r Pe r s on t o m e r ge i nt o or c ons ol i da t e wi t h i t , or c onve y, s e l l , t r a ns f e r , l e a s e or ot he r wi s e di s pos e of ( i n one t r a ns a c t i on or i n a s e r i e s of t r a ns a c t i ons ) a l l or a ny s ubs t a nt i a l pa r t of i t s a s s e t s ( e xc e pt , wi t h r e s pe c t t o s a l e s of l e s s t ha n s ubs t a nt i a l l y a l l of i t s a s s e t s , f or s a l e s of i nve nt or y, c ha t t e l pa pe r a nd e qui pm e nt i n t he or di na r y c our s e of bus i ne s s ) or a l l or a ny s ubs t a nt i a l pa r t of t he s t oc k or ot he r Equi t y I nt e r e s t s of Subs i di a r i e s of t he Com pa ny ( i n e a c h c a s e , whe t he r now owne d or he r e a f t e r a c qui r e d) , or t a ke a ny
a c t i on t o a ut hor i z e wi ndi ng up, di s s ol ut i on, or l i qui da t i on, e xc e pt t ha t , i f a t t he t i m e t he r e of a nd a f t e r gi vi ng e f f e c t t he r e t o no De f a ul t s ha l l ha ve oc c ur r e d a nd be c ont i nui ng ( i ) a ny Subs i di a r y m a y m e r ge i nt o t he Com pa ny i n a t r a ns a c t i on i n whi c h t he Com pa ny i s t he s ur vi vi ng c or por a t i on, ( i i ) a ny whol l y- owne d Subs i di a r y m a y m e r ge i nt o a not he r whol l y- owne d Subs i di a r y, ( i i i ) a ny whol l y- owne d Subs i di a r y m a y s e l l , t r a ns f e r , l e a s e or ot he r wi s e di s pos e of i t s a s s e t s t o t he Com pa ny or t o a not he r whol l y- owne d Subs i di a r y, ( i v) t he Com pa ny or a ny whol l y- owne d Subs i di a r y m a y s e l l , t r a ns f e r or ot he r wi s e di s pos e of a por t i on or a l l of t he Equi t y I nt e r e s t s of a ny whol l y- owne d Subs i di a r y t o t he Com pa ny or t o a not he r whol l y- owne d Subs i di a r y a nd ( v) t he Com pa ny or a ny whol l y- owne d Subs i di a r y m a y e nga ge i n a t r a ns a c t i on t o c onve r t i t s l e ga l f or m of or ga ni z a t i on f r om one e nt i t y t ype t o a not he r e nt i t y t ype or c ha nge i t s j ur i s di c t i on of or ga ni z a t i on, s o l ong a s t he Age nt a nd t he Le nde r s s ha l l c ont i nue t o ha ve a pe r f e c t e d s e c ur i t y i nt e r e s t i n a ny
t r a ns f e r r e d Col l a t e r a l , s ubj e c t t o no Li e ns ot he r t ha n Pe r m i t t e d Li e ns e xi s t i ng on t he da t e of t he t r a ns f e r . ( b) I f ( i ) a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p i s i nvol ve d i n a t r a ns a c t i on de s c r i be d i n c l a us e ( i ) , ( i i ) , ( i i i ) , ( i v) or ( v) of Se c t i on 13. 1. 1( a ) or i n Se c t i on 13. 1. 2 a nd, a s a r e s ul t t he r e of , wi l l c e a s e t o be a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p, ( i i ) a ny M i nor i t y De a l e r t ha t i s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r c e a s e s t o be a M i nor i t y De a l e r Subs i di a r y be c a us e a Loa n Pa r t y i s no l onge r t he m a na ge r of s uc h M i nor i t y De a l e r or be c a us e t he m a na ge r of t he M i nor i t y De a l e r ha s no l onge r de l e ga t e d t o a Loa n Pa r t y a l l or a s ubs t a nt i a l por t i on of s uc h m a na ge r ’ s powe r a nd a ut hor i t y unde r t he M i nor i t y De a l e r ’ s a ppl i c a bl e or ga ni z a t i ona l doc um e nt s , ( i i i ) a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p c e a s e s t o own or ope r a t e a ny De a l e r s hi p a nd a ny El i gi bl e Re a l Pr ope r t y or ( i v) a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p wi l l ot he r wi s e c e a s e t o be a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p ( whe t he r a s a r e s ul t of be c om i ng a M i nor i t y De a l e r Af f i l i a t e , ot he r wi s e c e a s i ng
t o be a Subs i di a r y or ot he r wi s e ) , t he Subs i di a r y t ha t i s t he t r a ns f e r or or wi l l not s ur vi ve t he m e r ge r or ot he r wi s e wi l l c e a s e t o be a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p ( " Te r m i na t i ng Bor r owe r ” ) s ha l l e xe c ut e a Bor r owe r Te r m i na t i on Agr e e m e nt ( or i f 143 115525625. 4 0063724- 00082
t he De a l e r s hi p wi l l a l s o c e a s e t o be a Gua r a nt or , a Loa n Pa r t y Te r m i na t i on Agr e e m e nt ) , t he De a l e r s hi p Loa n Li m i t f or s uc h De a l e r s hi p s ha l l be de l e t e d, a nd t he Age nt s ha l l obt a i n a ny r e qui r e d a m e ndm e nt t o a ny i nt e r c r e di t or a gr e e m e nt , t he Re l a t e d Pr i nc i pa l Por t i on of a l l Ne w Ve hi c l e Loa ns m a de t o f i na nc e Ne w Ve hi c l e s f or s uc h Te r m i na t i ng Bor r owe r s ha l l be r e pa i d, a nd a l l c ondi t i ons i n Se c t i on 9. 3 s ha l l be s a t i s f i e d wi t h r e s pe c t t o a ny t r a ns f e r e e or s ur vi vi ng Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p. ( c ) I f ( i ) a ny Subs i di a r y ot he r t ha n a Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p i s i nvol ve d i n a t r a ns a c t i on de s c r i be d i n c l a us e ( i ) , ( i i ) , ( i i i ) , ( i v) or ( v) of Se c t i on 13. 1. 1( a ) or i n Se c t i on 13. 1. 2 a nd, a s a r e s ul t t he r e of , wi l l c e a s e t o be a Gua r a nt or , ( i i ) a ny Subs i di a r y c e a s e s t o own or ope r a t e a ny De a l e r s hi p a nd a ny El i gi bl e Re a l Pr ope r t y or ( i i i ) a ny Subs i di a r y ot he r wi s e c e a s e s t o be a Gua r a nt or ( whe t he r a s a r e s ul t of be c om i ng a M i nor i t y De a l e r Af f i l i a t e , ot he r wi s e c e a s i ng t o be a Subs i di a r y or ot he r wi s e ) , t he Subs i di a r y t ha t i s t he t r a ns f e r or or wi l l not
s ur vi ve t he m e r ge r or ot he r wi s e wi l l c e a s e t o be a Gua r a nt or s ha l l e xe c ut e a Loa n Pa r t y Te r m i na t i on Agr e e m e nt a nd s a t i s f y s uc h ot he r c ondi t i ons a s t he Age nt r e a s ona bl y r e qui r e s t o r e m ove s uc h Subs i di a r y a s a Gua r a nt or . 13. 1. 2 Not wi t hs t a ndi ng t he pr ovi s i ons of Se c t i on 13. 1. 1, t he Com pa ny or a ny Subs i di a r y m a y s e l l ( y) a ny Equi t y I nt e r e s t s i n a ny M i nor i t y De a l e r or a ny De a l e r s hi p t ha t a s a r e s ul t of s uc h s a l e be c om e s a M i nor i t y De a l e r ( pr ovi de d s uc h Equi t y I nt e r e s t s a r e s ol d t o a M i nor i t y De a l e r Pa r t ne r i n s uc h M i nor i t y De a l e r ) a nd ( z ) a l l or a ny s ubs t a nt i a l pa r t of t he a s s e t s of , or a l l or a ny s ubs t a nt i a l pa r t of i t s c a pi t a l s t oc k or Equi t y I nt e r e s t s i n, a ny De a l e r s hi p or ot he r Subs i di a r y ( or of a ny bus i ne s s uni t or f r a nc hi s e of a De a l e r s hi p or ot he r Subs i di a r y) f or not l e s s t ha n f a i r m a r ke t va l ue , i f , i n e a c h c a s e , ( a ) ( i ) a f t e r gi vi ng Pr o For m a Ef f e c t t o s uc h s a l e ( a nd a l l ot he r s a l e s pe r m i t t e d unde r t hi s Se c t i on 13. 1. 2) , t he Com pa ny s ha l l be i n c om pl i a nc e wi t h t he r e qui r e m e nt s of Se c t i on 11. 1, ( i i ) i f t he s a l e s pr i c e ( e xc l udi ng r e a l
pr ope r t y a nd Ve hi c l e i nve nt or y) f or t he a s s e t s or Equi t y I nt e r e s t s s ol d i s gr e a t e r t ha n $20, 000, 000. 0020, 000, 000, t he Com pa ny s ha l l ha ve de l i ve r e d t o t he Age nt a Re vol vi ng Loa n Bor r owi ng Ba s e Ce r t i f i c a t e , Us e d Ve hi c l e Fl oor pl a n Bor r owi ng Ba s e Ce r t i f i c a t e a nd Se r vi c e Loa ne r Ve hi c l e Bor r owi ng Ba s e Ce r t i f i c a t e , e a c h c a l c ul a t e d on a Pr o For m a Ba s i s a f t e r gi vi ng e f f e c t t o s uc h s a l e , ( i i i ) no De f a ul t s ha l l e xi s t i m m e di a t e l y pr i or t o or upon gi vi ng e f f e c t t o a ny s uc h s a l e a nd ( i v) t he c ondi t i ons i n Se c t i on 13. 1. 1 a r e s a t i s f i e d, or ( b) Re qui r e d Le nde r s ha ve c ons e nt e d i n wr i t i ng t o t he s a l e a nd e a c h Loa n Pa r t y ha s c om pl i e d wi t h a l l t e r m s a nd c ondi t i ons of s uc h c ons e nt . 13. 1. 3 Not wi t hs t a ndi ng t he pr ovi s i ons of t hi s Agr e e m e nt ( i nc l udi ng Se c t i ons 12. 1, 12. 22, 13. 1. 1, 13. 1. 2, 13. 8 a nd 13. 9) , a ny Subs i di a r y t ha t no l onge r ha s a s s e t s ( or t ha t ha s a s s e t s ( x) wi t h a n a ggr e ga t e book va l ue l e s s t ha n $25, 000 or ( y) t ha t wi l l be di s t r i but e d s ol e l y t o a Loa n Pa r t y) m a y di s c ont i nue ope r a t i ons a nd di s s ol ve or l i qui da t e unl e s s s uc h a c t i on woul d c ons t i t ut e a M a t e r i a l
Adve r s e Ef f e c t or a ny De f a ul t s ha l l e xi s t i m m e di a t e l y pr i or t o or upon gi vi ng e f f e c t t he r e t o. 13. 2 [ Re s e r ve d] . 13. 3 Li e ns 144 115525625. 4 0063724- 00082 . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o, gr a nt or pe r m i t t o e xi s t a s e c ur i t y i nt e r e s t i n or Li e n on i t s pr e s e nt l y owne d or he r e a f t e r a c qui r e d r e a l or pe r s ona l pr ope r t y e xc e pt : ( a ) Li e ns i n f a vor of t he Age nt f or t he be ne f i t of t he Le nde r s whi c h s e c ur e t he Obl i ga t i ons , Gua r a nt or Obl i ga t i ons , a nd Pe r m i t t e d Swa p Obl i ga t i ons . ( b) Li e ns f or t a xe s , a s s e s s m e nt s or ot he r gove r nm e nt c ha r ge s or l e vi e s not ye t due a nd pa ya bl e or , i f due a nd pa ya bl e , i f t he y a r e be i ng c ont e s t e d i n good f a i t h by a ppr opr i a t e pr oc e e di ngs a nd f or whi c h a ppr opr i a t e r e s e r ve s a r e m a i nt a i ne d. ( c ) Li e ns i m pos e d by l a w, s uc h a s m e c ha ni c s ’ , m a t e r i a l m e n’ s , l a ndl or ds ’ , wa r e hous e m e n’ s , a nd c a r r i e r s ’ Li e ns , a nd ot he r s i m i l a r Li e ns , s e c ur i ng obl i ga t i ons i nc ur r e d i n t he or di na r y c our s e of bus i ne s s whi c h a r e not pa s t due f or m or e t ha n 30 da ys or whi c h a r e be i ng c ont e s t e d i n good f a i t h by
a ppr opr i a t e pr oc e e di ngs a nd f or whi c h a ppr opr i a t e r e s e r ve s ha ve be e n e s t a bl i s he d. ( d) Li e ns unde r wor ke r s ’ c om pe ns a t i on, une m pl oym e nt i ns ur a nc e , Soc i a l Se c ur i t y, or s i m i l a r l e gi s l a t i on ( e xc l udi ng, howe ve r , Li e ns a r i s i ng unde r ERI SA) whi c h a r e not pa s t due f or m or e t ha n s i xt y ( 60) da ys or whi c h a r e be i ng c ont e s t e d i n good f a i t h by a ppr opr i a t e pr oc e e di ngs a nd f or whi c h a ppr opr i a t e r e s e r ve s ha ve be e n e s t a bl i s he d. ( e ) Li e ns , de pos i t s , or pl e dge s t o s e c ur e t he pe r f or m a nc e of bi ds , t e nde r s , c ont r a c t s ( ot he r t ha n c ont r a c t s f or t he pa ym e nt of m one y) , l e a s e s ( pe r m i t t e d unde r t he t e r m s of t hi s Agr e e m e nt ) , publ i c or s t a t ut or y obl i ga t i ons , s ur e t y, s t a y, a ppe a l , i nde m ni t y, pe r f or m a nc e or ot he r s i m i l a r bonds , or ot he r s i m i l a r obl i ga t i ons a r i s i ng i n t he or di na r y c our s e of bus i ne s s whi c h a r e not pa s t due f or m or e t ha n 30 da ys or whi c h a r e be i ng c ont e s t e d i n good f a i t h by a ppr opr i a t e pr oc e e di ngs a nd f or whi c h a ppr opr i a t e r e s e r ve s ha ve be e n e s t a bl i s he d. ( f ) J udgm e nt a nd ot he r s i m i l a r Li e ns a r i s i ng i n c onne c t i on wi t h c our t pr oc e e di ngs , i n a n a ggr e ga t e
a m ount not i n e xc e s s of 3% of Ta ngi bl e Ne t W or t h a s of t he l a s t da y of t he m os t r e c e nt l y e nde d f i s c a l qua r t e r of t he Com pa ny a nd i t s Subs i di a r i e s ; pr ovi de d t he e xe c ut i on or ot he r e nf or c e m e nt of s uc h Li e ns i s e f f e c t i ve l y s t a ye d a nd t he c l a i m s s e c ur e d t he r e by a r e be i ng a c t i ve l y c ont e s t e d i n good f a i t h a nd by a ppr opr i a t e pr oc e e di ngs , a nd t he e xi s t e nc e t he r e of doe s not c ons t i t ut e a De f a ul t he r e unde r . ( g) Ea s e m e nt s , r i ght s - of - wa y, z oni ng r e s t r i c t i ons , a nd ot he r s i m i l a r e nc um br a nc e s i n e xi s t e nc e on t he da t e of t hi s Agr e e m e nt or whi c h, i n t he a ggr e ga t e , do not m a t e r i a l l y i nt e r f e r e wi t h t he oc c upa t i on, us e , a nd e nj oym e nt by a ny Loa n Pa r t y of t he pr ope r t y or a s s e t s e nc um be r e d t he r e by i n t he nor m a l c our s e of i t s bus i ne s s or m a t e r i a l l y i m pa i r t he va l ue of t he pr ope r t y s ubj e c t t he r e t o. ( h) Li e ns on Se r vi c e Loa ne r Ve hi c l e s of a De a l e r s hi p a nd pr oc e e ds t he r e of s e c ur i ng Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng pe r m i t t e d by Se c t i on 13. 10( e ) , a nd whi c h a r e , onl y a s t o l i e ns i n e xi s t e nc e on t he Cl os i ng Da t e , s e c ur i ng I nde bt e dne s s l i s t e d on t he
Di s c l os ur e Sc he dul e ; pr ovi de d t ha t i f r e qui r e d by t he Age nt , t he Ot he r Se r vi c e Loa ne r Fl oor pl a n 145 115525625. 4 0063724- 00082
Le nde r pr ovi di ng s uc h f i na nc i ng ha s e nt e r e d i nt o a n i nt e r c r e di t or a gr e e m e nt wi t h t he Age nt i n f or m a nd c ont e nt r e a s ona bl y s a t i s f a c t or y t o t he Age nt a nd t he Re qui r e d Le nde r s . ( i ) Pur c ha s e m one y Li e ns he r e a f t e r c r e a t e d by a ny Loa n Pa r t y t o s e c ur e t he pur c ha s e pr i c e of e qui pm e nt a c qui r e d a f t e r t he Cl os i ng Da t e , s o l ong a s ( i ) s uc h e qui pm e nt i s a c qui r e d i n t he or di na r y c our s e of s uc h Pe r s on’ s bus i ne s s , ( i i ) s uc h Li e n a t t a c he s t o s uc h e qui pm e nt no l a t e r t ha n 10 da ys a f t e r t he a c qui s i t i on t he r e of ; ( i i i ) s uc h Li e n doe s not e xt e nd t o a ny pr ope r t y ot he r t ha n t he e qui pm e nt a c qui r e d, ( i v) s uc h Li e n s e c ur e s onl y t he obl i ga t i on t o pa y t he pur c ha s e pr i c e of s uc h e qui pm e nt , a nd ( v) t he I nde bt e dne s s s e c ur e d i s pe r m i t t e d by Se c t i on 13. 10( j ) he r e of . ( j ) Li e ns i n e xi s t e nc e on t he Cl os i ng Da t e s e c ur i ng I nde bt e dne s s pe r m i t t e d by Se c t i on 13. 10 he r e of ( i f s uc h I nde bt e dne s s i s pe r m i t t e d t o be s e c ur e d) , whi c h a r e l i s t e d on t he Di s c l os ur e Sc he dul e . ( k) Li e ns s e c ur i ng obl i ga t i ons i n r e s pe c t of Ca pi t a l i z e d Le a s e s pr ovi de d t ha t s uc h Ca pi t a l i z e d Le a s e s a r e ot he r wi s e
pe r m i t t e d unde r t hi s Agr e e m e nt , a nd s uc h Li e ns a t t a c h onl y t o t he pr ope r t y be i ng l e a s e d. ( l ) Li e ns a r i s i ng s ol e l y by vi r t ue of a ny s t a t ut or y or c om m on l a w pr ovi s i on r e l a t i ng t o ba nke r ’ s l i e ns , r i ght s of s e t of f or s i m i l a r r i ght s a nd r e m e di e s a s t o de pos i t a c c ount s or ot he r f unds m a i nt a i ne d wi t h a c r e di t or de pos i t or y i ns t i t ut i on ( pr ovi de d t ha t s uc h de pos i t a c c ount s a r e pe r m i t t e d) a nd, i f s uc h de pos i t a c c ount s a r e wi t h a Le nde r ( or wi t h a not he r f i na nc i a l i ns t i t ut i on, i f r e qui r e d by t he Age nt ) , s uc h l i e ns a r e s ubor di na t e d t o t he Li e ns i n f a vor of t he Age nt a nd t he Le nde r s unde r t he Col l a t e r a l Doc um e nt s . ( m ) Li e ns on pr ope r t y ( e xc l udi ng Col l a t e r a l ) a c qui r e d a f t e r t he Cl os i ng Da t e whi c h a r e i n e xi s t e nc e a t t he t i m e s uc h pr ope r t y i s a c qui r e d, whi c h we r e not i nc ur r e d i n c ont e m pl a t i on of t he a c qui s i t i on, a nd whi c h s e c ur e I nde bt e dne s s pe r m i t t e d by t hi s Agr e e m e nt . ( n) Li e ns on a s s e t s owne d by a ny Exc l ude d Ta x Cr e di t I nve s t m e nt Subs i di a r y or a ny ot he r Subs i di a r y ( ot he r t ha n Col l a t e r a l a nd El i gi bl e Re a l Pr ope r t y) whi c h s e c ur e I nde bt e dne s s pe r m i t t e d
by Se c t i on 13. 10( d) , a nd Li e ns on Equi t y I nt e r e s t s i n Exc l ude d Ta x Cr e di t I nve s t m e nt Subs i di a r i e s ( ot he r t ha n LCDC) gr a nt e d i n c onne c t i on wi t h I nve s t m e nt s de s c r i be d i n Se c t i on 13. 6( p) . ( o) Li e ns c ons e nt e d t o i n wr i t i ng by t he Age nt a nd Re qui r e d Le nde r s . ( p) Li e ns on Ve hi c l e s a nd ot he r a s s e t s of a Si l o Subs i di a r y s e c ur i ng Funde d De bt pe r m i t t e d by Se c t i on 13. 10( o) , pr ovi de d t ha t s uc h Ve hi c l e s a nd ot he r a s s e t s do not c ons t i t ut e Col l a t e r a l . ( q) Li e ns on a s s e t s of , or Equi t y I nt e r e s t s i n, Ca na di a nFor e i gn Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s a nd pr oc e e ds t he r e of s e c ur i ng Ca na di a nFor e i gn Subs i di a r y I nde bt e dne s s . 146 115525625. 4 0063724- 00082 ( r ) ( x) Re s t r i c t i ons on t r a ns f e r a nd ( y) wi t h r e s pe c t t o Equi t y I nt e r e s t s i n M i nor i t y De a l e r Subs i di a r i e s , c a l l opt i ons or ot he r buy- s e l l r i ght s i n f a vor of M i nor i t y Pa r t ne r s , i n e a c h c a s e , s e t f or t h i n t he or ga ni z a t i ona l doc um e nt s of Subs i di a r i e s . ( s ) Li e ns s e c ur i ng Pa r i Pa s s u Funde d De bt . ( t ) Li e ns ( i nc l udi ng, wi t hout l i m i t a t i on, c e r t a i n r i ght s of s e t - of f a nd t i t l e r e t e nt i on a gr e e m e nt s ) i n f a vor of a n
Or i gi na l Equi pm e nt M a nuf a c t ur e r a t t a c hi ng t o I nve nt or y s ol d t o a Loa n Pa r t y by s uc h Or i gi na l Equi pm e nt M a nuf a c t ur e r a nd s e c ur i ng a m ount s owi ng i n c onne c t i on wi t h t he pur c ha s e of s uc h I nve nt or y by s uc h Loa n Pa r t y f r om s uc h Or i gi na l Equi pm e nt M a nuf a c t ur e r , s o l ong a s s uc h Li e ns do not s e c ur e I nde bt e dne s s a nd s uc h Li e ns a r i s e i n t he or di na r y c our s e of bus i ne s s c ons i s t e nt wi t h t he Com pa ny's e xi s t i ng bus i ne s s pr a c t i c e s , a nd Li e ns c ons i s t i ng of pur c ha s e opt i ons a nd r i ght s of f i r s t r e f us a l a r i s i ng unde r a ny Fr a nc hi s e Agr e e m e nt or Re pur c ha s e Agr e e m e nt . ( u) Li e ns not ot he r wi s e pe r m i t t e d unde r t hi s Se c t i on 13. 3 pr ovi de d t ha t ( i ) a t t he t i m e of t he c r e a t i on or i nc ur r e nc e of a ny s uc h Li e n, no De f a ul t or Eve nt of De f a ul t s ha l l e xi s t or woul d r e s ul t f r om s uc h Li e n, ( i i ) no s uc h Li e n a t t a c he s t o a ny Col l a t e r a l , a nd ( i i i ) t he a ggr e ga t e a m ount of I nde bt e dne s s s e c ur e d by a l l s uc h Li e ns s ha l l not e xc e e d $50, 000, 000 a t a ny t i m e . ( v) Li e ns s e c ur i ng Funde d De bt i nc ur r e d by a ny DFC Subs i di a r y t o t he e xt e nt s uc h Funde d De bt i s pe r m i t t e d by Se c t i on 13. 10( r ) .
( w) Li e ns s e c ur i ng Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s s o l ong a s e a c h Re qui r e d I nt e r c r e di t or Count e r pa r t y ha s e xe c ut e d a nd de l i ve r e d a n I nt e r c r e di t or Agr e e m e nt , or a j oi nde r t o a n e xi s t i ng I nt e r c r e di t or Agr e e m e nt , t o t he Age nt a nd s uc h Li e ns a r e s ubj e c t t o a n I nt e r c r e di t or Agr e e m e nt . ( x) Li e ns s e c ur i ng obl i ga t i ons a r i s i ng i n c onne c t i on wi t h c r e di t c a r d pr oc e s s i ng s e r vi c e s , m e r c ha nt c a r d pr oc e s s i ng s e r vi c e s a nd s i m i l a r s e r vi c e s or a r r a nge m e nt s i n t he or di na r y c our s e of bus i ne s s . ( y) Li e ns gr a nt e d by Pe r s ons t ha t a r e not Fi na nc e d Ent i t i e s but a r e pa r t i e s t o a Ca na di a nFor e i gn Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on a r i s i ng i n c onne c t i on wi t h s uc h Ca na di a nFor e i gn Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on. ( z ) Li e ns on ( 1) t he a s s e t s of a ny Subs i di a r y t ha t i s not a Loa n Pa r t y a nd ( 2) t he Equi t y I nt e r e s t s of a ny Subs i di a r y t ha t i s not a Loa n Pa r t y, i n e a c h c a s e s e c ur i ng I nde bt e dne s s of a ny Subs i di a r y t ha t i s not a Loa n Pa r t y a nd t ha t i s pe r m i t t e d by Se c t i on 13. 10 he r e of . Not wi t hs t a ndi ng t he f or e goi ng, e xc e pt f or Li e ns i n f a vor of t he Age nt ,
t he r e s ha l l not be a ny Li e ns on a ny of t he c a pi t a l s t oc k or ot he r Equi t y I nt e r e s t s of a ny Subs i di a r y e xc e pt f or ( 1) c a pi t a l s t oc k or Equi t y I nt e r e s t s owne d, di r e c t l y or i ndi r e c t l y, by a Pe r s on ot he r t ha n t he Com pa ny or a ny Subs i di a r y whe r e s uc h owne r s hi p i s ot he r wi s e pe r m i t t e d by t hi s Agr e e m e nt or ( 2) c a pi t a l s t oc k or Equi t y I nt e r e s t s of Ca na di a n Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s a nd pr oc e e ds 147 115525625. 4 0063724- 00082
t he r e of i f , but onl y i f , t he Li e ns de s c r i be d i n t hi s c l a us e ( 2) do not s e c ur e a ny obl i ga t i ons ot he r t ha n Ca na di a n Subs i di a r y I nde bt e dne s s pe r m i t t e d unde r Se c t i on 13. 10. 13. 4 Re s t r i c t e d Pa ym e nt s . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o ( a ) de c l a r e or pa y, or a gr e e t o de c l a r e or pa y, or s e t a s i de f unds f or t he pa ym e nt , di r e c t l y or i ndi r e c t l y of , a ny Re s t r i c t e d Pa ym e nt , or ( b) pa y or a gr e e t o pa y or s e t a s i de f unds t o pa y a ny m a na ge m e nt f e e s or s i m i l a r f e e s i n t he c a s e of t he Com pa ny, t o a ny di r e c t or i ndi r e c t Af f i l i a t e t he r e of , or i n t he c a s e of a ny ot he r Loa n Pa r t y, t o a ny di r e c t or i ndi r e c t owne r of i t s Equi t y I nt e r e s t s or a ny di r e c t or i ndi r e c t Af f i l i a t e t he r e of , e xc e pt ( c ) ( i ) Subs i di a r i e s of t he Com pa ny m a y m a ke Re s t r i c t e d Pa ym e nt s or pa ym e nt s of s uc h f e e s t o t he Com pa ny or t o a ny ot he r Loa n Pa r t y, ( i i ) t he Com pa ny m a y r e a c qui r e s ha r e s f r om e l i gi bl e pa r t i c i pa nt s i n i t s s t oc k i nc e nt i ve pl a ns , a s r e qui r e d unde r t he t e r m s of t he pl a ns t o pe r m i t c a s hl e s s e xe r c i s e a nd t e nde r of s ha r e s t o m e e t
wi t hhol di ng obl i ga t i ons f or i nc om e t a x pur pos e s a nd ( i i i ) a ny Subs i di a r y m a y m a ke di vi de nds or di s t r i but i ons t o t he hol de r s of i t s Equi t y I nt e r e s t s t ha t a r e not Loa n Pa r t i e s s o l ong a s , i f a ny Loa n Pa r t y i s a hol de r of s uc h Equi t y I nt e r e s t s , s uc h Loa n Pa r t y r e c e i ve s a t l e a s t i t s pr o r a t a s ha r e of s uc h di vi de nds or di s t r i but i ons . Not wi t hs t a ndi ng t he f or e goi ng, a nd s o l ong a s no De f a ul t or Eve nt of De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng or woul d e xi s t a f t e r gi vi ng e f f e c t t he r e t o, ( w) e a c h M i nor i t y De a l e r m a y m a ke di s t r i but i ons t o a ny of i t s M i nor i t y De a l e r Pa r t ne r s , ( x) t he Com pa ny or a ny Subs i di a r y m a y a c qui r e , f r om t i m e t o t i m e , a ny Equi t y I nt e r e s t s i n a ny M i nor i t y De a l e r , di r e c t l y or i ndi r e c t l y, f r om a M i nor i t y De a l e r Pa r t ne r , ( y) t he Com pa ny m a y pa y di vi de nds on i t s c a pi t a l s t oc k, a nd ot he r di s t r i but i ons i n r e s pe c t of i t s Equi t y I nt e r e s t s a nd ( z ) t he Com pa ny m a y pa y a m ount s e xpe nde d t o r e pur c ha s e s ha r e s of i t s c a pi t a l s t oc kEqui t y I nt e r e s t s f r om a Pe r s on t ha t i s not a Loa n Pa r t y ( i ) i n a n unl i m i t e d a m ount s o l ong a s t he Le ve r a ge
Ra t i o i s not gr e a t e r t ha n 3. 75 t o 1 ( de t e r m i ne d on a pr o f or m a ba s i s f or t he m os t r e c e nt l y e nde d M e a s ur e m e nt Pe r i od ba s e d upon t he m os t r e c e nt l y de l i ve r e d f i na nc i a l s t a t e m e nt s pr i or t o s uc h pa ym e nt ) , a nd ( i i ) t o t he e xt e nt t ha t t he Le ve r a ge Ra t i o i s gr e a t e r t ha n 3. 75 t o 1 ( de t e r m i ne d on a pr o f or m a ba s i s f or t he m os t r e c e nt l y e nde d M e a s ur e m e nt Pe r i od ba s e d upon t he m os t r e c e nt l y de l i ve r e d f i na nc i a l s t a t e m e nt s pr i or t o s uc h pa ym e nt ) , t he Com pa ny m a y m a ke a ddi t i ona l pa ym e nt s t o r e pur c ha s e Equi t y I nt e r e s t s f r om a Pe r s on t ha t i s not a Loa n Pa r t y, pr ovi de d, howe ve r , t ha t a ny s uc h a ddi t i ona l pa ym e nt s m a de pur s ua nt t o t hi s c l a us e ( z ) ( i i ) i n e xc e s s of $500, 000, 000 ( t he " Equi t y I nt e r e s t Re pur c ha s e Thr e s hol d” ) s ha l l be de duc t e d f r om t he c a l c ul a t i on of t he Fi xe d Cha r ge Cove r a ge Ra t i o i n a c c or da nc e wi t h t he de f i ni t i on t he r e of . 13. 5 Subor di na t e d De bt . I f a ny Subor di na t e d De bt i s out s t a ndi ng, e a c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o ( a ) m a ke a ny a m e ndm e nt or m odi f i c a t i on t o t he i nde nt ur e , not e or
ot he r a gr e e m e nt e vi de nc i ng or gove r ni ng a ny Subor di na t e d De bt ; ( b) m a ke a ny s c he dul e d pa ym e nt of t he pr i nc i pa l of or i nt e r e s t on a ny Subor di na t e d De bt whi c h woul d be pr ohi bi t e d by t he t e r m s of s uc h Subor di na t e d De bt or a ny r e l a t e d s ubor di na t i on a gr e e m e nt ; ( c ) di r e c t l y or i ndi r e c t l y m a ke a ny pr e pa ym e nt on or pur c ha s e , r e de e m or de f e a s e a ny Subor di na t e d De bt or of f e r t o do s o ( whe t he r s uc h pr e pa ym e nt , pur c ha s e or r e de m pt i on, or of f e r wi t h r e s pe c t t he r e t o, i s vol unt a r y or m a nda t or y) ; ( d) t a ke or om i t t o t a ke a ny a c t i on i f a s a r e s ul t of s uc h a c t i on or om i s s i on t he s ubor di na t i on of s uc h Subor di na t e d De bt , or a ny pa r t t he r e of , t o t he 148 115525625. 4 0063724- 00082 Obl i ga t i ons m i ght be t e r m i na t e d, i m pa i r e d or a dve r s e l y a f f e c t e d; or ( e ) om i t t o gi ve Age nt pr om pt not i c e of a ny not i c e r e c e i ve d f r om a ny hol de r of Subor di na t e d De bt , or a ny t r us t e e t he r e f or , or of a ny de f a ul t unde r a ny a gr e e m e nt or i ns t r um e nt r e l a t i ng t o a ny Subor di na t e d De bt by r e a s on whe r e of s uc h Subor di na t e d De bt m i ght be c om e or be de c l a r e d t o be due or pa ya bl e . 13. 6
Loa ns a nd I nve s t m e nt s . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o ( a ) m a ke or c ont r a c t t o m a ke a ny l oa n or a dva nc e t o a ny Pe r s on ( ot he r t ha n s hor t t e r m t r a de a dva nc e s i n t he or di na r y c our s e of bus i ne s s ) ; or ( b) pur c ha s e or ot he r wi s e a c qui r e , a ny c a pi t a l s t oc k, obl i ga t i ons , or ot he r s e c ur i t i e s of , m a ke a ny c a pi t a l c ont r i but i ons t o, or ot he r wi s e i nve s t i n or a c qui r e a ny i nt e r e s t i n a ny Pe r s on, or pa r t i c i pa t e a s a pa r t ne r or j oi nt ve nt ur e r wi t h a ny ot he r Pe r s on ( t he m a t t e r s de s c r i be d i n c l a us e ( a ) a nd ( b) a r e c ol l e c t i ve l y, " I nve s t m e nt s ” ) , e xc e pt : ( a ) I nve s t m e nt s by t he Com pa ny i n a ny Subs i di a r y or Af f i l i a t e or by a ny Subs i di a r y i n a ny of i t s Subs i di a r i e s or Af f i l i a t e s , i n e a c h c a s e , whi c h e xi s t a s of t he Cl os i ng Da t e ; ( b) I n t he or di na r y c our s e of bus i ne s s , I nve s t m e nt s by t he Com pa ny i n a ny Subs i di a r y or by a ny Subs i di a r y i n t he Com pa ny, or by a ny Subs i di a r y i n a ny ot he r Subs i di a r y, by wa y of c a pi t a l c ont r i but i ons , i nt e r c om pa ny l oa ns , a dva nc e s or gua r a nt i e s , t o t he e xt e nt pe r m i t t e d by t hi s Agr e e m e nt ; ( c )
( i ) I nve s t m e nt s m a de by a ny Ca na di a nFor e i gn Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y i n a ny ot he r Ca na di a nFor e i gn Subs i di a r y a nd ( i i ) I nve s t m e nt s m a de by t he Com pa ny or a ny Subs i di a r y ( ot he r t ha n a Ca na di a nFor e i gn Subs i di a r y) pr ovi de d t ha t t he a ggr e ga t e a m ount of s uc h I nve s t m e nt s out s t a ndi ng unde r t hi s c l a us e ( c ) ( i i ) doe s not e xc e e d t hi r t y pe r c e nt ( 30% ) of St oc khol de r s ’ Equi t y ( m e a s ur e d a s of t he da t e s uc h I nve s t m e nt i s m a de ba s e d upon t he m os t r e c e nt l y de l i ve r e d f i na nc i a l s t a t e m e nt s ) ; ( d) Ca s h Equi va l e nt I nve s t m e nt s ; ( e ) Ba nk de pos i t s i n t he or di na r y c our s e of bus i ne s s ; ( f ) I nve s t m e nt s i n s e c ur i t i e s of a c c ount de bt or s r e c e i ve d pur s ua nt t o a ny pl a n of r e or ga ni z a t i on or s i m i l a r a r r a nge m e nt upon t he ba nkr upt c y or i ns ol ve nc y of s uc h a c c ount de bt or s or ot he r wi s e i n s e t t l e m e nt of c l a i m s a r i s i ng i n t he or di na r y c our s e of bus i ne s s ; ( g) I nve s t m e nt s pur s ua nt t o a Pe r m i t t e d Ac qui s i t i on; ( h) I nve s t m e nt s not ot he r wi s e pe r m i t t e d unde r t hi s Se c t i on 13. 6 pr ovi de d t ha t t he a ggr e ga t e a m ount of s uc h I nve s t m e nt s doe s not e xc e e d $100, 000, 000 a t
a ny t i m e out s t a ndi ng; ( i ) I nve s t m e nt s l i s t e d on t he Di s c l os ur e Sc he dul e ; 149 115525625. 4 0063724- 00082
( j ) Ext e ns i ons of c r e di t t o c us t om e r s m a de i n t he or di na r y c our s e of bus i ne s s a nd i n c onne c t i on wi t h t he s a l e or l e a s e of i nve nt or y i n t he or di na r y c our s e of bus i ne s s ; ( k) ( i ) I nve s t m e nt s ( ot he r t ha n l oa ns or ot he r a dva nc e s ) i n M i nor i t y De a l e r s , i nc l udi ng t he a c qui s i t i on of e qui t y owne r s hi p i nt e r e s t s of M i nor i t y De a l e r s f r om one or m or e M i nor i t y De a l e r Pa r t ne r s , a nd ( i i ) I nve s t m e nt s not e xc e e di ng $60, 000, 000 i n t he a ggr e ga t e a t a ny t i m e out s t a ndi ng c ons i s t i ng of l oa ns or ot he r a dva nc e s t o M i nor i t y De a l e r s or t he M i nor i t y De a l e r Pa r t ne r s i n s uc h M i nor i t y De a l e r s ; ( l ) Suc h ot he r I nve s t m e nt s a s a r e c ons e nt e d t o by t he Re qui r e d Le nde r s i n t he i r s ol e di s c r e t i on; ( m ) Ext e ns i ons of c r e di t t o Pe r s ons a c qui r i ng t he a s s e t s of a De a l e r s hi p or a not he r Subs i di a r y pur s ua nt t o a s a l e pe r m i t t e d by Se c t i on 13. 1. 2 ( " Se l l e r Not e s ” ) ; pr ovi de d, t ha t a t l e a s t 75% of c ons i de r a t i on r e c e i ve d f r om s uc h s a l e ( t oge t he r wi t h a l l ot he r c ons i de r a t i on r e c e i ve d i n a l l ot he r s uc h s a l e s s i nc e t he Cl os i ng Da t e , on a c um ul a t i ve ba s i s ) i s c a s h; ( n) I nve s t m e nt s i n
e qui t y i nt e r e s t s i n Pe r m i t t e d Ne w De a l e r s hi ps ; ( o) I nve s t m e nt s not i n t he or di na r y c our s e of bus i ne s s i n e qui t y i nt e r e s t s i n Ot he r Ne w Subs i di a r i e s , pr ovi de d t ha t t he a ggr e ga t e of a l l i nve s t m e nt s i n Ot he r Ne w Subs i di a r i e s unde r t hi s c l a us e ( o) s ha l l not e xc e e d $4, 000, 000. 004, 000, 000 dur i ng t he t i m e pe r i od f r om t he Cl os i ng Da t e t o t he Te r m i na t i on Da t e ; ( p) I nve s t m e nt s by t he Com pa ny or a ny Subs i di a r y ( i ) i n Com m uni t y De ve l opm e nt Ent i t i e s unde r t he Fe de r a l Ne w M a r ke t s Ta x Cr e di t Pr ogr a m or ( i i ) i n a ny ot he r Pe r s on f or m e d f or ( a nd c ont i nui ng t o ope r a t e f or ) t he pur pos e of m a ki ng i nve s t m e nt s t ha t a r e i nt e nde d t o qua l i f y f or r e ne wa bl e e ne r gy or ot he r t a x c r e di t s , pr ovi de d t ha t t he a ggr e ga t e a m ount of s uc h I nve s t m e nt s do not e xc e e d $50, 000, 000. 00 out s t a ndi ng50, 000, 000 a t a ny one t i m e out s t a ndi ng; ( q) I nve s t m e nt s by t he Com pa ny a nd i t s Subs i di a r i e s i n Shi f t c ons i s t i ng of ( a ) ( i ) pr e f e r r e d e qui t y i nve s t m e nt s , t oge t he r wi t h wa r r a nt s t o a c qui r e a ddi t i ona l e qui t y i nt e r e s t s a nd a ny a ddi t i ona l e qui t y i nt e r e s t s a c qui r e d upon e xe r c i s e of s uc h
wa r r a nt s i n a n a ggr e ga t e a m ount not t o e xc e e d $54, 000, 000, or ( i i ) ot he r e qui t y i nve s t m e nt s , l oa ns or ot he r e xt e ns i ons of c r e di t by t he Com pa ny a nd i t s Subs i di a r i e s t o Shi f t ( a nd/ or one or m or e of i t s s ubs i di a r i e s ) i n a n a ggr e ga t e a m ount not t o e xc e e d $25, 000, 000 a t a ny t i m e out s t a ndi ng a nd ( b) gua r a nt e e s or di r e c t f i na nc i ng by t he Com pa ny of t he Shi f t Fa c i l i t y or t he a c qui s i t i on of t he Shi f t Fa c i l i t y f r om t he l e nde r s pr ovi di ng s uc h f i na nc i ng t o Shi f t ( e a c h, a " Shi f t I nve s t m e nt ” a nd c ol l e c t i ve l y, t he " Shi f t I nve s t m e nt s ” ) ; ( r ) I nve s t m e nt s by t he Com pa ny a nd i t s Subs i di a r i e s wi t h t he pr oc e e ds of a ny i s s ua nc e of Equi t y I nt e r e s t s by s uc h Pe r s on; a nd ( s ) ( i ) I nve s t m e nt s m a de s ol e l y by one or m or e Ca na di a nFor e i gn Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s i n c onne c t i on wi t h a ny Ca na di a nFor e i gn Re c e i va bl e s 150 115525625. 4 0063724- 00082 or Se c ur i t i z a t i on Tr a ns a c t i on a nd ( i i ) I nve s t m e nt s m a de s ol e l y by one or m or e DFC Subs i di a r i e s . ; pr ovi de d t ha t ( x) a ny I nve s t m e nt whi c h whe n m a de c om pl i e s wi t h t he r e qui r e m e nt s of t he de f i ni t i on of t he
t e r m " Ca s h Equi va l e nt I nve s t m e nt ” m a y c ont i nue t o be he l d not wi t hs t a ndi ng t ha t s uc h I nve s t m e nt i f m a de t he r e a f t e r woul d not c om pl y wi t h s uc h r e qui r e m e nt s ; a nd ( y) no I nve s t m e nt ot he r wi s e pe r m i t t e d by c l a us e ( c ) , ( g) , ( h) , or ( k) s ha l l be pe r m i t t e d t o be m a de i f , i m m e di a t e l y be f or e or a f t e r gi vi ng e f f e c t t he r e t o, a ny De f a ul t or Eve nt of De f a ul t e xi s t s ; a nd ( z ) t he Com pa ny s ha l l not , a nd s ha l l not pe r m i t a ny Subs i di a r y t o, c r e a t e or a c qui r e , or m a ke a ny I nve s t m e nt i n a ny Subs i di a r y not or ga ni z e d unde r t he l a ws of a St a t e of t he Uni t e d St a t e s or a pr ovi nc e or t he f e de r a l l a ws of Ca na da . 13. 7 Tr a ns a c t i ons wi t h Af f i l i a t e s . Ot he r t ha n ( i ) s e r vi c e a gr e e m e nt s wi t h Di M a r Hol di ngs , LLC a nd i t s s ubs i di a r i e s a nd, ( i i ) a gr e e m e nt s wi t h M i nor i t y De a l e r Af f i l i a t e s , a nd ( i i i i i ) a ny a gr e e m e nt , c ont r a c t or t r a ns a c t i on e nt e r e d i nt o i n c onne c t i on wi t h t he Shi f t I nve s t m e nt s , e a c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o, e nt e r i nt o a ny t r a ns a c t i on wi t h a ny Af f i l i a t e , e xc e pt a Loa n Pa r t y, i nc l udi ng wi t hout l i m i t a t i on,
t he pur c ha s e , s a l e , or e xc ha nge of pr ope r t y or t he r e nde r i ng of a ny s e r vi c e , e xc e pt upon f a i r a nd r e a s ona bl e t e r m s no l e s s f a vor a bl e t o i t t ha n t hos e t ha t woul d pr e va i l i n a c om pa r a bl e a r m ’ s l e ngt h t r a ns a c t i on wi t h a Pe r s on not a n Af f i l i a t e . 13. 8 Type of Bus i ne s s [ Re s e r ve d] . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o ( i ) e nga ge i n a ny l i ne of bus i ne s s di f f e r e nt f r om t hos e l i ne s of bus i ne s s c onduc t e d by t he Com pa ny a nd i t s Subs i di a r i e s on t he da t e he r e of , whi c h s ha l l be de e m e d t o i nc l ude m ot or c yc l e de a l e r s hi ps , or a ny bus i ne s s s ubs t a nt i a l l y r e l a t e d or i nc i de nt a l t he r e t o or ( i i ) e xc e pt a s a r e s ul t of t r a ns a c t i ons pe r m i t t e d by Se c t i ons 13. 1, i nt e r r upt or c e a s e t o e nga ge i n, f or a t i m e de e m e d m a t e r i a l by t he Age nt , a ny m a t e r i a l por t i on of i t s bus i ne s s a c t i vi t i e s or ope r a t i ons . . 13. 9 St r uc t ur e . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o, m a ke a ny m a t e r i a l c ha nge i n i t s or ga ni z a t i ona l s t r uc t ur e or c a pi t a l s t r uc t ur e , or m a ke a ny m a t e r i a l m odi f i c a t i on i n i t s Ar t i c l e s of
Or ga ni z a t i on or I nc or por a t i on, Pa r t ne r s hi p Agr e e m e nt , Ope r a t i ng Agr e e m e nt , Byl a ws , or ot he r or ga ni z a t i ona l doc um e nt s , i n e a c h c a s e t o t he e xt e nt s uc h c ha nge or m odi f i c a t i on i m pa i r s t he e nf or c e a bi l i t y of a ny Loa n Doc um e nt s , i m pa i r s t he a bi l i t y of a ny Loa n Pa r t y t o pe r f or m i t s obl i ga t i ons unde r a ny Loa n Doc um e nt or woul d ot he r wi s e r e a s ona bl y be e xpe c t e d t o r e s ul t i n a M a t e r i a l Adve r s e Ef f e c t . 13. 10 I nde bt e dne s s . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o, i nc ur or pe r m i t t o e xi s t a ny I nde bt e dne s s t o a ny Pe r s on e xc e pt : 151 115525625. 4 0063724- 00082
( a ) I nde bt e dne s s ( i nc l udi ng Cont i nge nt Obl i ga t i ons ) i nc ur r e d pur s ua nt t o t hi s Agr e e m e nt a nd t he Loa n Doc um e nt s . ( b) Shor t - t e r m uns e c ur e d t r a de obl i ga t i ons i nc ur r e d i n t he or di na r y c our s e of bus i ne s s whi c h a r e out s t a ndi ng not m or e t ha n 90 da ys a f t e r t he or i gi na l da t e on whi c h s uc h t r a de obl i ga t i ons we r e c r e a t e d. ( c ) I nde bt e dne s s i n r e s pe c t of Pe r m i t t e d Swa p Obl i ga t i ons . ( d) Funde d De bt of a ny Subs i di a r y whi c h i s s e c ur e d pr i m a r i l y by r e a l e s t a t e owne d by s uc h Subs i di a r y, a nd Funde d De bt of a ny Exc l ude d Ta x Cr e di t I nve s t m e nt Subs i di a r y ( ot he r t ha n LCDC) . ( e ) Subj e c t t o s a t i s f a c t i on of t he r e qui r e m e nt s of Se c t i on 13. 3( h) by e a c h Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r , Funde d De bt of t he De a l e r s hi ps wi t h r e s pe c t t o Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng pr ovi de d by Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r s . ( f ) Uns e c ur e d gua r a nt e e s by t he Com pa ny of , a nd uns e c ur e d c obor r owe r obl i ga t i ons of t he Com pa ny i n r e s pe c t of , ( i ) Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng obl i ga t i ons of De a l e r s hi ps t o Ot he r Se r vi c e Loa ne r Fl oor pl a n Le nde r s , ( i i ) de bt of a ny
Subs i di a r y whi c h i s pe r m i t t e d unde r Se c t i on 13. 10( d) , ( i i i ) ope r a t i ng l e a s e s of i t s Subs i di a r i e s a nd M i nor i t y De a l e r Af f i l i a t e s , ( i v) e xt e ns i ons of c r e di t t o a M i nor i t y De a l e r Af f i l i a t e , a l l pr oc e e ds of whi c h a r e us e d t o pur c ha s e Ne w Ve hi c l e s or Se r vi c e Loa ne r Ve hi c l e s t o be he l d by t he M i nor i t y De a l e r Af f i l i a t e f or s a l e a nd/ or l e a s e i n t he or di na r y c our s e of bus i ne s s , ( v) obl i ga t i ons of De a l e r s hi ps t o m a nuf a c t ur e r s or di s t r i but or s of Ne w Ve hi c l e s unde r Se l l e r Agr e e m e nt s a nd ( vi ) I nde bt e dne s s whi c h i s pe r m i t t e d unde r Se c t i on 13. 10( o) , ( p) a nd ( s ) ; pr ovi de d, t ha t , f or t he a voi da nc e of doubt , t hi s c l a us e ( f ) s ha l l not be de e m e d t o pr ohi bi t t he pr ovi s i on by t he Com pa ny of ot he r uns e c ur e d gua r a nt e e s t ha t a r e pe r m i t t e d unde r ot he r c l a us e s of t hi s Se c t i on 13. 10. ( g) Uns e c ur e d I nde bt e dne s s of t he Com pa ny t o a ny Subs i di a r y. ( h) Uns e c ur e d I nde bt e dne s s of a ny Subs i di a r y t o t he Com pa ny or a not he r Subs i di a r y. ( i ) I nde bt e dne s s e xi s t i ng on t he Cl os i ng Da t e a nd s e t f or t h on t he Di s c l os ur e Sc he dul e , s ol e l y t o t he e xt e nt t ha t s uc h I nde bt e dne s s i s not
i nc r e a s e d a nd no a ddi t i ona l c ol l a t e r a l i s pr ovi de d f or s uc h I nde bt e dne s s . ( j ) Funde d De bt c ons i s t i ng of pur c ha s e m one y i nde bt e dne s s i nc ur r e d t o a c qui r e e qui pm e nt whi c h i s s e c ur e d onl y by t he e qui pm e nt a c qui r e d a nd pr oc e e ds t he r e f r om a nd s uc h e qui pm e nt s e c ur e s onl y t he obl i ga t i on t o pa y t he pur c ha s e pr i c e . ( k) Uns e c ur e d gua r a nt i e s by a Subs i di a r y of t he obl i ga t i ons of a ny ot he r Subs i di a r y on ( i ) r e a l e s t a t e l e a s e s be t we e n s uc h ot he r Subs i di a r y a nd a n owne r of r e a l e s t a t e whi c h ha s be e n s ubl e a s e d by s uc h ot he r Subs i di a r y t o s uc h Subs i di a r y, a nd ( i i ) 152 115525625. 4 0063724- 00082 I nde bt e dne s s i nc ur r e d by s uc h ot he r Subs i di a r y whi c h i s pe r m i t t e d unde r Subs e c t i on 13. 10( d) a nd whi c h i s obt a i ne d t o f i na nc e r e a l e s t a t e l e a s e d by s uc h ot he r Subs i di a r y t o s uc h Subs i di a r y. ( l ) Addi t i ona l Funde d De bt , i nc l udi ng, wi t hout l i m i t a t i on, ( i ) Pa r i Pa s s u Funde d De bt a nd ( i i ) Cont i nge nt Obl i ga t i ons i n r e s pe c t of Funde d De bt of t he Com pa ny or a ny of i t s Subs i di a r i e s , pr ovi de d t ha t , a f t e r gi vi ng Pr o For m a Ef f e c t t o t he i nc ur r e nc e of s uc h a ddi t i ona l Funde d De bt , t he
Com pa ny woul d ha ve be e n i n c om pl i a nc e wi t h Se c t i on 11. 1. 3 a s of s uc h da y ( a nd f or pur pos e s of de t e r m i ni ng s uc h c om pl i a nc e f or a ny Funde d De bt i nc ur r e d i n c onne c t i on wi t h a Pe r m i t t e d Ac qui s i t i on, " Pr o For m a Ef f e c t ” s ha l l t a ke i nt o a c c ount , f or t he M e a s ur e m e nt Pe r i od m os t r e c e nt l y e nde d pr i or t o t he i nc ur r e nc e , t he Pr o For m a EBI TDAR a t t r i but a bl e t o t he bus i ne s s or bus i ne s s e s a c qui r e d, l e s s i nt e r e s t e xpe ns e a t t r i but a bl e t o t he bus i ne s s or bus i ne s s e s a c qui r e d wi t h r e s pe c t t o ve hi c l e f l oor pl a n f i na nc i ng, c a l c ul a t e d a s i f t he Pe r m i t t e d Ac qui s i t i on ha d oc c ur r e d on t he f i r s t da y of s uc h M e a s ur e m e nt Pe r i od) . ( m ) I nde bt e dne s s a ppe a r i ng a s a c l a i m s r e s e r ve ( or s i m i l a r t e r m ) on t he ba l a nc e s he e t of t he Com pa ny a nd i t s Subs i di a r i e s , whi c h r e pr e s e nt s a m ount s whi c h ha ve be e n r e c e i ve d but whi c h wi l l be e xpe nde d t o pa y wa r r a nt y a nd s e r vi c e c l a i m s by c us t om e r s of t he De a l e r s hi ps . ( n) Gua r a nt i e s by Li t hi a Fi na nc i a l Cor por a t i on of Pe r m i t t e d Swa p Obl i ga t i ons . ( o) Funde d De bt owi ng by a Si l o Subs i di a r y; pr ovi de d t ha t no Loa n Pa r t y ot he r t ha n ( i ) t he
Com pa ny a nd ( i i ) one or m or e Si l o Subs i di a r i e s , ha s a ny obl i ga t i on ( c ont i nge nt or ot he r wi s e ) wi t h r e s pe c t t o s uc h Funde d De bt . ( p) Funde d De bt of Ca na di a nFor e i gn Subs i di a r i e s ( i ) t ha t a r e not Fi na nc e d Ent i t i e s a nd ( i i ) not s e c ur e d by a ny a s s e t s of t he Com pa ny or a ny Subs i di a r y ot he r t ha n ( 1) a s s e t s of Ca na di a nFor e i gn Subs i di a r i e s ot he r t ha n Fi na nc e d Ent i t i e s a nd/ or ( 2) a pl e dge by t he Com pa ny or a ny Subs i di a r y of Equi t y I nt e r e s t s i n a Ca na di a nFor e i gn Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y ( " Ca na di a nFor e i gn Subs i di a r y I nde bt e dne s s ” ) . ( q) Obl i ga t i ons i n r e s pe c t of put r i ght s a nd ot he r buy- s e l l r i ght s gr a nt e d t o a M i nor i t y De a l e r Pa r t ne r t ha t a r e s e t f or t h i n t he or ga ni z a t i ona l doc um e nt s of a M i nor i t y De a l e r . ( r ) Funde d De bt i nc ur r e d by a ny ( i ) DFC Subs i di a r y a nd not s e c ur e d by a ny a s s e t s of t he Com pa ny or a ny Subs i di a r y ot he r t ha n a s s e t s of a DFC Subs i di a r y ( " DFC I nde bt e dne s s ” ) or ( i i ) Funde d De bt i nc ur r e d by a ny Ca na di a nFor e i gn Subs i di a r y t ha t i s not a Fi na nc e d Ent i t y i n c onne c t i on wi t h a ny Ca na di a nFor e i gn Re c e i va bl e s or Se c ur i t i z a t i on
Tr a ns a c t i on a nd not s e c ur e d by a ny a s s e t s of t he Com pa ny or a ny Subs i di a r y ot he r t ha n one or m or e Ca na di a nFor e i gn Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s ; pr ovi de d t ha t no Loa n Pa r t y ot he r t ha n t he Com pa ny a nd one or m or e DFC Subs i di a r i e s or s uc h Ca na di a nFor e i gn Subs i di a r i e s t ha t a r e not Fi na nc e d Ent i t i e s i nvol ve d i n s uc h Ca na di a nFor e i gn Re c e i va bl e s or Se c ur i t i z a t i on Tr a ns a c t i on ha s a ny obl i ga t i on ( c ont i nge nt or ot he r wi s e ) wi t h r e s pe c t t o s uc h Funde d De bt . 153 115525625. 4 0063724- 00082
( s ) Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s s o l ong a s e a c h Re qui r e d I nt e r c r e di t or Count e r pa r t y ha s e xe c ut e d a nd de l i ve r e d a n I nt e r c r e di t or Agr e e m e nt , or a j oi nde r t o a n e xi s t i ng I nt e r c r e di t or Agr e e m e nt , t o t he Age nt . 13. 11 M a r gi n St oc k; Spe c ul a t i on . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o, us e a ny pa r t of t he pr oc e e ds of a ny Loa n, e i t he r di r e c t l y or i ndi r e c t l y, f or t he pur pos e , whe t he r i m m e di a t e , i nc i de nt a l , or ul t i m a t e , of pur c ha s i ng or c a r r yi ng a ny m a r gi n s t oc k ( wi t hi n t he m e a ni ng of Re gul a t i on U) or e xt e ndi ng c r e di t t o ot he r s f or t he pur pos e of pur c ha s i ng or c a r r yi ng a ny m a r gi n s t oc k or f or a ny pur pos e whi c h vi ol a t e s a ny a ppl i c a bl e pr ovi s i on of a ny r e gul a t i on of t he Boa r d of Gove r nor s of t he Fe de r a l Re s e r ve Sys t e m . No Loa n Pa r t y s ha l l be e nga ge d pr i nc i pa l l y or a s one of i t s i m por t a nt a c t i vi t i e s i n t he bus i ne s s of e xt e ndi ng c r e di t f or t he pur pos e of pur c ha s i ng or c onve yi ng a ny m a r gi n s t oc k. No pa r t of t he pr oc e e ds of a ny Loa n wi l l be us e d f or s pe c ul a t i ve i nve s t m e nt pur pos e s , i nc l udi ng wi t hout
l i m i t a t i on s pe c ul a t i ng or he dgi ng i n t he c om m odi t i e s a nd/ or f ut ur e s m a r ke t . 13. 12 Re s t r i c t i ve Agr e e m e nt s . Exc e pt f or Pe r m i t t e d Re s t r i c t i ons , t he pr ovi s i ons of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s or a s c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t , e a c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y ( whi c h, f or t he a voi da nc e of doubt , i nc l ude s a ny Re a l Es t a t e Subs i di a r y or De a l e r s hi p) t o, ( a ) e nt e r i nt o or pe r m i t t o e xi s t a ny a r r a nge m e nt , c ont r a c t , or a gr e e m e nt whi c h di r e c t l y or i ndi r e c t l y pr ohi bi t s a ny Loa n Pa r t y f r om or i m pos e s a ny r e s t r i c t i ons on c r e a t i ng, a s s um i ng or i nc ur r i ng a ny Li e n upon a l l or a ny por t i on of i t s pr ope r t i e s , r e ve nue s or a s s e t s or t hos e of a ny of i t s Subs i di a r i e s ( ot he r t ha n Exc l ude d Subs i di a r i e s ) whe t he r now owne d or he r e a f t e r a c qui r e d, t o s e c ur e t he Obl i ga t i ons or t o s e c ur e a ny r e ne wa l s , r e f undi ngs , r e pl a c e m e nt s , r e f i na nc i ngs or r e s t r uc t ur i ngs of t he Obl i ga t i ons i n a n a ggr e ga t e out s t a ndi ng pr i nc i pa l a m ount or a ggr e ga t e c om m i t t e d a m ount t ha t i s l e s s t ha n or
e qua l t o t he Aggr e ga t e Com m i t m e nt s a s of t he da t e of s uc h a r r a nge m e nt , c ont r a c t , or a gr e e m e nt , ( b) e nt e r i nt o or pe r m i t t o e xi s t a ny a gr e e m e nt , c ont r a c t or a r r a nge m e nt r e s t r i c t i ng t he a bi l i t y of a ny Subs i di a r y ( ot he r t ha n Exc l ude d Subs i di a r i e s ) f r om pa yi ng or m a ki ng di vi de nds or di s t r i but i ons i n c a s h or ki nd t o t he Com pa ny or a ny ot he r Loa n Pa r t y, f r om m a ki ng l oa ns , a dva nc e s or ot he r pa ym e nt s of wha t s oe ve r na t ur e t o t he Com pa ny or a ny ot he r Loa n Pa r t y, f r om m a ki ng t r a ns f e r s or di s t r i but i ons of a l l or a ny pa r t of i t s a s s e t s t o t he Com pa ny or a ny ot he r Loa n Pa r t y, or f r om bor r owi ng m one y f r om t he Com pa ny or a ny ot he r Loa n Pa r t y, ( c ) e nt e r i nt o or pe r m i t t o e xi s t a ny a gr e e m e nt , c ont r a c t or a r r a nge m e nt whi c h di r e c t l y or i ndi r e c t l y pr ohi bi t s a ny Subs i di a r y ( ot he r t ha n a n Exc l ude d Subs i di a r y) f r om gua r a nt yi ng, or i m pos e s r e s t r i c t i ons on t he a bi l i t y of a ny Subs i di a r y t o gua r a nt y, t he Obl i ga t i ons , or ( d) e nt e r i nt o or pe r m i t t o e xi s t a ny a gr e e m e nt or a r r a nge m e nt whi c h woul d be vi ol a t e d by t he e xt e ns i ons of c r e di t c ont e m pl a t e d
he r e unde r or t he pe r f or m a nc e by a ny Loa n Pa r t y of i t s obl i ga t i ons unde r t he Loa n Doc um e nt s . 13. 13 Pe r m i t t e d Ac qui s i t i ons . Exc e pt a s ot he r wi s e pe r m i t t e d by Se c t i on 13. 6 a nd e xc e pt f or a c qui s i t i ons of r e a l e s t a t e , e a c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o a c qui r e Cont r ol of a ny Pe r s on or a c qui r e a l l or s ubs t a nt i a l l y a l l of t he a s s e t s of a ny Pe r s on or of a ny 154 115525625. 4 0063724- 00082 bus i ne s s uni t or l i ne of bus i ne s s of a ny Pe r s on ( a n " Ac qui s i t i on” ) e xc e pt upon s a t i s f a c t i on of t he f ol l owi ng r e qui r e m e nt s : ( a ) The Ac qui s i t i on c ons i s t s of t he a c qui s i t i on by t he Com pa ny, di r e c t l y or i ndi r e c t l y, of ( i ) a Pe r s on e nga ge d i n a l i ne of bus i ne s s t ha t t he Com pa ny i s not pr ohi bi t e d f r om e nga gi ng i n unde r Se c t i on 13. 8 of t hi s Agr e e m e nt , ( i i ) a Re a l Es t a t e Subs i di a r y or ( i i i ) a non- ope r a t i ng hol di ng c om pa ny; pr ovi de d, t ha t i n e a c h c a s e of t he f or e goi ng c l a us e s ( i ) t hr ough ( i i i ) , s uc h e nt i t y i s or ga ni z e d unde r t he l a ws of a St a t e of t he Uni t e d St a t e s or a pr ovi nc e or t he f e de r a l l a ws of Ca na da On a pr o f or m a ba s i s ,
a f t e r gi vi ng e f f e c t t o s uc h Ac qui s i t i on, t he Com pa ny a nd i t s Subs i di a r i e s ( i nc l udi ng e a c h Pe r s on a c qui r e d i n s uc h Ac qui s i t i on) wi l l be i n c om pl i a nc e wi t h Se c t i ons 12. 9 a nd 12. 22. ( b) The Com pa ny s ha l l gi ve Age nt pr i or wr i t t e n not i c e of t he pr opos e d Ac qui s i t i on a t l e a s t 30 da ys pr i or t o t he c l os i ng da t e of s uc h Ac qui s i t i on or , i f l a t e r , wi t hi n 5 da ys a f t e r e xe c ut i on of t he pur c ha s e a gr e e m e nt f or s uc h Ac qui s i t i on. ( c ) The Boa r d of Di r e c t or s ( or ot he r Pe r s ons e xe r c i s i ng s i m i l a r f unc t i ons ) of t he s e l l e r ha ve not di s a ppr ove d t he t r a ns a c t i on or r e c om m e nde d t ha t s uc h t r a ns a c t i on be di s a ppr ove d. ( d) [ Re s e r ve d] . ( e ) Ea c h Ne w Loa n Pa r t y s ha l l ha ve e xe c ut e d a Gua r a nt or J oi nde r Agr e e m e nt or Bor r owe r J oi nde r Agr e e m e nt , a s a ppl i c a bl e , a nd a ny ot he r doc um e nt s r e a s ona bl y r e qui r e d by t he Age nt s o t ha t s uc h Ne w Loa n Pa r t y ( i ) be c om e s a Gua r a nt or of t he Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons , Re vol vi ng Loa n Obl i ga t i ons , ( i i ) i f a ppl i c a bl e , be c om e s a Ne w Ve hi c l e Fl oor pl a n Bor r owe r , a nd ( i i i ) i f a ppl i c a bl e , gr a nt s a
s e c ur i t y i nt e r e s t i n t he Col l a t e r a l of s uc h Ac qui s i t i on Subs i di a r y. ( f ) Subj e c t t o Se c t i on 1. 5, a l l r e pr e s e nt a t i ons a nd wa r r a nt i e s i n t hi s Agr e e m e nt s ha l l be t r ue a nd c or r e c t i n a l l m a t e r i a l r e s pe c t s a s of t he da t e of a ny Ac qui s i t i on unl e s s s uc h r e pr e s e nt a t i on or wa r r a nt y r e f e r s t o a not he r da t e a nd e xc e pt a s pr e vi ous l y di s c l os e d t o a nd a c c e pt e d by t he Age nt i n wr i t i ng, a nd no De f a ul t s ha l l ha ve oc c ur r e d a nd be c ont i nui ng or wi l l e xi s t a f t e r gi vi ng e f f e c t t o t he Ac qui s i t i on. For pur pos e s of t hi s de t e r m i na t i on, a l l r e qui r e m e nt s a ppl i c a bl e t o a ny Gua r a nt or , Ne w Ve hi c l e Fl oor pl a n Bor r owe r ( i f a ppl i c a bl e ) , or Subs i di a r y s ha l l be de e m e d t o a ppl y t o a ny Ac qui s i t i on Subs i di a r y. ( g) The Age nt s ha l l ha ve r e c e i ve d t he or ga ni z a t i ona l doc um e nt s , s t a t us or good s t a ndi ng c e r t i f i c a t e s a nd r e s ol ut i ons , or ot he r a ut hor i z a t i ons de m ons t r a t i ng t he due or ga ni z a t i on, va l i d e xi s t e nc e , qua l i f i c a t i on t o do bus i ne s s , good s t a ndi ng a nd a ut hor i t y of e a c h Ne w Loa n Pa r t y t o be c om e a Loa n Pa r t y, Ne w Ve hi c l e Fl oor pl a n Bor r owe r ( i f a ppl i c a bl e ) , a nd Gua r a nt or . ( h) The Age nt
s ha l l ha ve r e c e i ve d c opi e s of t he pur c ha s e a gr e e m e nt a nd l e a s e , i f a ny, r e l a t i ng t o t ha t Ac qui s i t i on. ( i ) The Age nt s ha l l ha ve pe r f e c t e d s e c ur i t y i nt e r e s t s i n t he Col l a t e r a l owne d by t he Ne w Loa n Pa r t y a s s e c ur i t y f or a l l of t he Us e d Ve hi c l e Fl oor pl a n Obl i ga t i ons , 155 115525625. 4 0063724- 00082
Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Obl i ga t i ons , Re vol vi ng Loa n Obl i ga t i ons , Gua r a nt or Obl i ga t i ons , a nd Pe r m i t t e d Swa p Obl i ga t i ons , a nd i f a ppl i c a bl e , t he Ne w Ve hi c l e Fl oor pl a n Loa n Obl i ga t i ons , s ubj e c t onl y t o Pe r m i t t e d Li e ns , a nd s ha l l ha ve r e c e i ve d s a t i s f a c t or y e vi de nc e of pe r f e c t i on a nd t he pr i or i t y of s uc h s e c ur i t y i nt e r e s t s , i nc l udi ng wi t hout l i m i t a t i on s uc h Uni f or m Com m e r c i a l Code a nd ot he r s e a r c he s , s i gne d t e r m i na t i on s t a t e m e nt s or pa yof f l e t t e r s a nd ot he r f i l i ngs a s t he Age nt de e m s a ppr opr i a t e , whi c h s ha l l i nc l ude e vi de nc e of t he t e r m i na t i on of , or r e a s ona bl y s a t i s f a c t or y a r r a nge m e nt s f or t he t e r m i na t i on of , t he s e c ur i t y i nt e r e s t s of a ny s e c ur e d pa r t y i n a ny of t he a s s e t s a c qui r e d or of t he Ne w Loa n Pa r t y. ( j ) The Age nt s ha l l ha ve c onduc t e d s uc h a udi t s of a ny Col l a t e r a l be i ng a c qui r e d or whi c h i s owne d by a ny Ne w Loa n Pa r t y a s i s de s i r e d by t he Age nt , t he r e s ul t s of whi c h s ha l l be s a t i s f a c t or y t o t he Age nt . ( k) The Com pa ny a nd/ or a ny Ne w Loa n Pa r t y s ha l l ha ve r e c e i ve d a ppr ova l of a l l m a t e r i a l Se l l e r Agr e e m e nt s ( i nc l udi ng wi t hout
l i m i t a t i on Fr a nc hi s e Agr e e m e nt s ) , be t we e n a ny Ne w Loa n Pa r t y a nd a ny m a nuf a c t ur e r or di s t r i but or of Ve hi c l e s f or whi c h t he Ne w Loa n Pa r t y wi l l a c t a s a de a l e r a s m a y be ne c e s s a r y f or t he Ne w Loa n Pa r t y t o c onduc t i t s i nt e nde d bus i ne s s f ol l owi ng t he Ac qui s i t i on. The Com pa ny or t he Ne w Loa n Pa r t y s ha l l de l i ve r t o t he Age nt c opi e s of a l l s uc h Se l l e r Agr e e m e nt s pr om pt l y upon r e c e i pt , ot he r t ha n t hos e di s c l os ur e of whi c h i s pr ohi bi t e d by t he r e l e va nt m a nuf a c t ur e r or di s t r i but or , i f r e que s t e d by t he Age nt . ( l ) Al l i ns ur a nc e r e qui r e d unde r Se c t i on 12. 8 s ha l l ha ve be e n obt a i ne d a nd t he Age nt s ha l l ha ve r e c e i ve d e vi de nc e t he r e of i n t he f or m of a c e r t i f i c a t e of i ns ur a nc e a s r e qui r e d unde r Se c t i on 12. 8. ( m ) The Com pa ny ha s de l i ve r e d t o t he Age nt a c e r t i f i c a t e i n a f or m a c c e pt a bl e t o t he Age nt a nd s i gne d by i t s c hi e f f i na nc i a l of f i c e r or ot he r of f i c e r a c c e pt a bl e t o t he Age nt , c e r t i f yi ng t ha t a l l c ondi t i ons i n Se c t i on 13. 13( a ) , ( c ) , ( f ) a nd ( k) ha ve be e n s a t i s f i e d or wi l l be s a t i s f i e d a s of t he da t e of t he Ac qui s i t i on. ( n) I f r e que s t e d by t he Age nt ,
t he Com pa ny ha s de l i ve r e d t o t he Age nt , ( i ) a Com pl i a nc e Ce r t i f i c a t e , t oge t he r wi t h a l l s uppor t i ng doc um e nt a t i on r e a s ona bl y r e qui r e d by t he Age nt , pr e pa r e d on a Pr o For m a Ba s i s a s of t he m os t r e c e nt da t e f or whi c h a Com pl i a nc e Ce r t i f i c a t e wa s f ur ni s he d t o t he Age nt , de m ons t r a t i ng t ha t t he Com pa ny a nd i t s Subs i di a r i e s woul d ha ve be e n i n c om pl i a nc e wi t h t he r e qui r e m e nt s of Se c t i on 11. 1 i f t he Ac qui s i t i on ha d oc c ur r e d on t he f i r s t da y of t he pe r i od c ove r e d by t he Com pl i a nc e Ce r t i f i c a t e , a nd ( i i ) i f r e que s t e d by t he Age nt , c opi e s of t he s e l l e r ’ s f i na nc i a l s t a t e m e nt s . The Age nt he r e by a gr e e s t o pr om pt l y pr ovi de t o t he Le nde r s c opi e s of a l l doc um e nt s r e c e i ve d unde r t he f or e goi ng c l a us e s ( i ) a nd ( i i ) . ( o) For a ny s i ngl e Ac qui s i t i on or gr oup of r e l a t e d Ac qui s i t i ons , e i t he r ( x) on t he da t e of c ons um m a t i on of s uc h Ac qui s i t i on or gr oup of r e l a t e d Ac qui s i t i ons ( or i n t he c a s e of a Li m i t e d Condi t i on Ac qui s i t i on, on t he LCA Te s t Da t e ) a nd a f t e r gi vi ng Pr o For m a Ef f e c t t he r e t o, t he Le ve r a ge Ra t i o i s be l ow 5. 75 t o 1. 0; or ( y) t he a ggr e ga t e
c ons i de r a t i on pa i d f or t he a s s e t s a c qui r e d ( ot he r t ha n r e a l pr ope r t y a nd Ve hi c l e s ) , or t he Equi t y I nt e r e s t s a c qui r e d, i s l e s s t ha n or e qua l t o 10% of Ta ngi bl e Ne t W or t h a s of t he l a s t da y of t he f i s c a l qua r t e r of t he 156 115525625. 4 0063724- 00082 Com pa ny a nd i t s Subs i di a r i e s m os t r e c e nt l y e nde d pr i or t o t he da t e of c ons um m a t i on of s uc h Ac qui s i t i on or Ac qui s i t i ons . For pur pos e s of t hi s s ubs e c t i on ( o) of Se c t i on 13. 13, " Pr o For m a Ef f e c t ” s ha l l m e a n t ha t t he Le ve r a ge Ra t i o s ha l l be c a l c ul a t e d a s i f ( i ) s uc h Ac qui s i t i on or Ac qui s i t i ons ha d oc c ur r e d on t he f i r s t da y of t he M e a s ur e m e nt Pe r i od m os t r e c e nt l y e nde d pr i or t o c ons um m a t i on of s uc h Ac qui s i t i on or Ac qui s i t i ons , t a ki ng i nt o a c c ount t he Pr o For m a EBI TDAR a t t r i but a bl e t o t he bus i ne s s or bus i ne s s e s a c qui r e d, l e s s i nt e r e s t e xpe ns e a t t r i but a bl e t o t he bus i ne s s or bus i ne s s e s a c qui r e d wi t h r e s pe c t t o ve hi c l e f l oor pl a n f i na nc i ng, a nd ( i i ) a ny I nde bt e dne s s i nc ur r e d or a c qui r e d i n c onne c t i on wi t h s uc h Ac qui s i t i on or Ac qui s i t i ons ( i nc l udi ng wi t hout l i m i t a t i on a ny I nde bt e dne s s i nc ur r e d t o e na bl e
t he Com pa ny or a ny Subs i di a r y t o e f f e c t s uc h Ac qui s i t i on or Ac qui s i t i ons ) ha d be e n i nc ur r e d or a c qui r e d on t he l a s t da y of s uc h M e a s ur e m e nt Pe r i od. ( p) Age nt ha s r e c e i ve d s uc h a ddi t i ona l doc um e nt s , a ppr ova l s , c ons e nt s a nd i nf or m a t i on a nd e a c h Loa n Pa r t y ha s s a t i s f i e d s uc h a ddi t i ona l r e qui r e m e nt s a s t he Age nt r e a s ona bl y r e que s t s . 13. 14 Ac c ount i ng Cha nge s ; Fi s c a l Ye a r . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o, m a ke a ny c ha nge i n a c c ount i ng t r e a t m e nt or r e por t i ng pr a c t i c e s , e xc e pt a s pe r m i t t e d by GAAP, or c ha nge i t s Fi s c a l Ye a r . 13. 15 Exc l ude d Ta x Cr e di t I nve s t m e nt Subs i di a r i e s . No Exc l ude d Ta x Cr e di t I nve s t m e nt Subs i di a r y ( ot he r t ha n LCDC) s ha l l own a ny a s s e t s ot he r t ha n I nve s t m e nt s pe r m i t t e d unde r Se c t i on 13. 6( p) . 13. 16 Dua l Subs i di a r i e s . Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not de s i gna t e a ny Subs i di a r y a s a Dua l Subs i di a r y unl e s s ( i ) e a c h Re qui r e d I nt e r c r e di t or Count e r pa r t y ha s de l i ve r e d t o t he Age nt a n I nt e r c r e di t or Agr e e m e nt or a j oi nde r a gr e e m e nt t o a n e xi s t i ng I nt e r c r e di t or
Agr e e m e nt , ( i i ) no Ne w Ve hi c l e s of a ny Re m ove d Fr a nc hi s e of a ny s uc h Dua l Subs i di a r y s ha l l be f i na nc e d by t he Ne w Ve hi c l e Fl oor pl a n Fa c i l i t y, ( i i i ) pr i or t o t he t i m e of de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y, a l l out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Loa ns wi t h r e s pe c t t o a l l Re m ove d Fr a nc hi s e s of s uc h Subs i di a r y s ha l l ha ve be e n r e pa i d, ( i v) wi t h r e s pe c t t o a ny Dua l Subs i di a r y t ha t wi l l obt a i n Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s c ons i s t i ng of f l oor pl a n f i na nc i ng t o a c qui r e us e d Ve hi c l e s , s uc h Dua l Subs i di a r y s ha l l not f i na nc e t he a c qui s i t i on of a ny Us e d Ve hi c l e s unde r t he Us e d Ve hi c l e Fl oor pl a n Fa c i l i t y, a nd pr i or t o t he t i m e of de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y, a l l out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Loa ns wi t h r e s pe c t t o s uc h Subs i di a r y s ha l l ha ve be e n r e pa i d, ( v) wi t h r e s pe c t t o a ny Dua l Subs i di a r y t ha t wi l l obt a i n Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s c ons i s t i ng of f l oor pl a n f i na nc i ng t o a c qui r e s e r vi c e l oa ne r Ve hi c l e s , s uc h Dua l Subs i di a r y s ha l l not f i na nc e t he a c qui s i t i on of a ny Se r vi c e Loa ne r Ve hi c l e s unde r
t he Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Fa c i l i t y, a nd pr i or t o t he t i m e of 157 115525625. 4 0063724- 00082
de s i gna t i on of s uc h Subs i di a r y a s a Dua l Subs i di a r y, a l l out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns wi t h r e s pe c t t o s uc h Subs i di a r y s ha l l ha ve be e n r e pa i d, a nd ( vi ) t he Com pa ny ha s c om pl i e d wi t h a l l r e qui r e m e nt s s e t f or t h i n Se c t i on 6. 19 a nd t hi s Se c t i on 13. 16. Not wi t hs t a ndi ng t he f or e goi ng, t hi s Se c t i on 13. 16 s ha l l not t a ke e f f e c t unt i l t he Age nt ( w) ha s r e c e i ve d a dul y e xe c ut e d I nt e r c r e di t or Agr e e m e nt , i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt , ( x) t he e xi s t i ng UCC- 1 f i na nc i ng s t a t e m e nt s f or a ny Dua l Subs i di a r i e s s ha l l ha ve be e n a m e nde d i n a c c or da nc e wi t h t he a ppl i c a bl e I nt e r c r e di t or Agr e e m e nt , ( y) ne w UCC- 1 f i na nc i ng s t a t e m e nt s ha ve be e n f i l e d na m i ng e a c h Dua l Subs i di a r y a s de bt or a nd t he a ppl i c a bl e Dua l Subs i di a r y Le nde r a s s e c ur e d pa r t y, i n e a c h c a s e , i n f or m a nd s ubs t a nc e s a t i s f a c t or y t o t he Age nt a nd ( z ) t he Age nt ha s r e c e i ve d a ny a ddi t i ona l doc um e nt a t i on r e que s t e d by t he Age nt i n i t s s ol e di s c r e t i on. The Le nde r s pa r t y he r e t o he r e by c ons e nt t o t he Age nt e nt e r i ng i nt o e a c h I nt e r c r e di t or Agr e e m e nt ( a nd a ny j oi nde r or
s uppl e m e nt t he r e of ) on or a f t e r t he Cl os i ng Da t e on be ha l f of t he Le nde r s . 13. 17 Addi t i ona l Cr e di t Suppor t Doc um e nt a t i on. Ea c h Bor r owe r s ha l l not , a nd t he Com pa ny s ha l l not pe r m i t a ny Subs i di a r y t o Gua r a nt e e or gr a nt a ny Li e n i n f a vor of a ny Dua l Subs i di a r y Le nde r i n r e s pe c t of Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s e xc e pt f or s uc h Gua r a nt e e s by a nd Li e ns gr a nt e d by Dua l Subs i di a r i e s whi c h r e c e i ve Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s f r om s uc h Dua l Subs i di a r y Le nde r . W i t hout l i m i t i ng t he f or e goi ng a nd wi t hout l i m i t i ng t he ge ne r a l i t y of t he Gua r a nt y or Se c t i on 12. 17, i n t he e ve nt a ny Dua l Subs i di a r y Le nde r r e c e i ve s a Gua r a nt e e or Li e n i n vi ol a t i on of t he pr e vi ous s e nt e nc e , t he Com pa ny s ha l l c a us e t he a ppl i c a bl e Subs i di a r i e s t o pr ovi de s ubs t a nt i a l l y s i m i l a r Gua r a nt e e s t o t he Age nt , e a c h L/ C I s s ue r a nd t he Le nde r s or gr a nt s ubs t a nt i a l l y s i m i l a r Li e ns i n f a vor of t he Age nt ( f or t he be ne f i t of t he Se c ur e d Pa r t i e s ) t o t he s a m e e xt e nt . ARTI CLE 14 DEFAULT AND REM EDI ES 14. 1 Eve nt s of De f a ul t . The oc c ur r e nc e of a ny of t he f ol l owi ng s ha l l
c ons t i t ut e a n Eve nt of De f a ul t unde r t hi s Agr e e m e nt a nd e a c h of t he Loa n Doc um e nt s : 14. 1. 1 Any Loa n Pa r t y s ha l l f a i l t o pa y ( a ) whe n due , a ny pr i nc i pa l owi ng unde r t hi s Agr e e m e nt , Le t t e r of Cr e di t , LC Agr e e m e nt , or a ny ot he r Loa n Doc um e nt , e xc e pt a s de s c r i be d i n t he f ol l owi ng c l a us e ( d) , or ( b) wi t hi n f i ve ( 5) da ys a f t e r i t i s due , a ny i nt e r e s t or f e e pa ya bl e unde r t hi s Agr e e m e nt , Le t t e r of Cr e di t , LC Agr e e m e nt , or a ny ot he r Loa n Doc um e nt or ( c ) whe n due a nd unc ur e d wi t hi n f i ve ( 5) da ys a f t e r not i c e f r om t he Age nt t ha t s uc h a m ount r e m a i ns unpa i d, a ny ot he r a m ount pa ya bl e unde r t hi s Agr e e m e nt , Le t t e r of Cr e di t , LC Agr e e m e nt , or a ny ot he r Loa n Doc um e nt or ( d) t he Com pa ny s ha l l f a i l t o c ur e a ny Out of Ba l a nc e Condi t i on, whi c h c ondi t i on s ha l l r e m a i n unr e m e di e d f or a pe r i od of f our ( 4) da ys a f t e r not i c e f r om t he Age nt , Ne w Ve hi c l e Swi ng Li ne Le nde r , Us e d Ve hi c l e Swi ng Li ne Le nde r or Se r vi c e Ve hi c l e Swi ng Li ne Le nde r . 158 115525625. 4 0063724- 00082 14. 1. 2 Any de f a ul t unde r or a ny f a i l ur e of a ny Loa n Pa r t y t o pe r f or m or c om pl y wi t h a ny
t e r m , c ondi t i on, c ove na nt or obl i ga t i on ( a ) s e t f or t h i n Se c t i on 11. 1, 12. 1, 12. 10 or Ar t i c l e 13 of t hi s Agr e e m e nt ( e xc e pt Se c t i on 13. 15) or ( b) s e t f or t h i n a ny pr ovi s i on of t hi s Agr e e m e nt ( e xc e pt a n Eve nt of De f a ul t s pe c i f i e d i n Se c t i on 14. 1. 1, 14. 1. 2( a ) or e l s e whe r e i n Se c t i on 14. 1) , a ny ot he r Loa n Doc um e nt or a ny ot he r Agr e e m e nt be t we e n t he Age nt or a ny Le nde r a nd a ny Loa n Pa r t y, a nd s uc h de f a ul t or f a i l ur e i s not c ur e d wi t hi n 30 da ys a f t e r t he e a r l i e r of t he da t e a ny Loa n Pa r t y knows t he r e of or t he da t e on whi c h t he Age nt gi ve s wr i t t e n not i c e t he r e of t o t he Com pa ny ( pr ovi de d, howe ve r , t ha t s uc h c ur e pe r i od i s a va i l a bl e onl y i f t he a ppl i c a bl e de f a ul t or f a i l ur e i s r e a s ona bl y c a pa bl e of be i ng c ur e d) . 14. 1. 3 Any Loa n Pa r t y de f a ul t s i n t he pa ym e nt or pe r f or m a nc e of a ny m a t e r i a l pr ovi s i ons of a ny a gr e e m e nt or c ondi t i on r e l a t i ng t o a ny I nde bt e dne s s of s uc h Loa n Pa r t y ( e xc e pt a s de s c r i be d i n Se c t i on 14. 1. 16) i n a n a ggr e ga t e a m ount out s t a ndi ng f or s uc h I nde bt e dne s s f or a l l Loa n Pa r t i e s t ha t , t oge t he r wi t h a m ount s de s c r i be d i n Se c t i on 14. 1. 16,
i s i n e xc e s s of $50, 000, 000 ( ot he r t ha n I nde bt e dne s s owi ng unde r t he Loa n Doc um e nt s but i nc l udi ng Pe r m i t t e d Dua l Subs i di a r y I nde bt e dne s s ) , a nd t he pe r i od of gr a c e , i f a ny, t o c ur e s uc h de f a ul t s ha l l ha ve pa s s e d, a nd t he de f a ul t c ons t i t ut e s ( a ) nonpa ym e nt or ( b) a ny e ve nt or c ondi t i on, t he e f f e c t of whi c h i s t o c a us e or pe r m i t t he hol de r of s uc h I nde bt e dne s s t o c a us e s uc h I nde bt e dne s s t o be c om e due pr i or t o i t s m a t ur i t y da t e . 14. 1. 4 ( a ) Any de f a ul t oc c ur s unde r or a ny Loa n Pa r t y f a i l s t o pa y, pe r f or m or c om pl y wi t h a ny m a t e r i a l t e r m s , c ondi t i ons or obl i ga t i ons i n a ny Col l a t e r a l Doc um e nt or ( b) ot he r t ha n i n a c c or da nc e wi t h t he t e r m s of s uc h Col l a t e r a l Doc um e nt , a ny Li e n c r e a t e d or pur por t e d t o be c r e a t e d by a ny Col l a t e r a l Doc um e nt s ha l l c e a s e t o be , or s ha l l be a s s e r t e d by a ny Pe r s on not t o be , a va l i d, pe r f e c t e d Li e n wi t h a pr i or i t y t ha t i s s ubj e c t onl y t o t he Pe r m i t t e d Li e ns , a nd i n e a c h c a s e , s uc h de f a ul t or f a i l ur e i s not c ur e d wi t hi n t e n ( 10) da ys a f t e r t he e a r l i e r of t he da t e a ny Loa n Pa r t y knows t he r e of or t he da t e on whi c h t he
Age nt gi ve s wr i t t e n not i c e t he r e of t o t he Com pa ny. 14. 1. 5 ( a ) Ot he r t ha n i n a c c or da nc e wi t h t he t e r m s of t he Loa n Doc um e nt s , a ny Gua r a nt y or ot he r Loa n Doc um e nt c e a s e s t o be , or s ha l l be a s s e r t e d by a ny Bor r owe r or a ny Gua r a nt or not t o be , i n f ul l f or c e a nd e f f e c t , or ( b) a ny Gua r a nt or s ha l l a t t e m pt t o r e voke , r e pudi a t e , or l i m i t a ny Gua r a nt y. 14. 1. 6 Any wa r r a nt y, r e pr e s e nt a t i on, s t a t e m e nt , or i nf or m a t i on m a de or f ur ni s he d t o t he Age nt or a ny Le nde r by or on be ha l f of a ny Loa n Pa r t y pr ove s t o ha ve be e n f a l s e or m i s l e a di ng i n a ny m a t e r i a l r e s pe c t whe n m a de , f ur ni s he d, or c e r t i f i e d, or whe n de e m e d m a de , f ur ni s he d, or c e r t i f i e d. 14. 1. 7 Cus t ody or c ont r ol of a ny s ubs t a nt i a l pa r t of t he pr ope r t y of a ny Loa n Pa r t y i s a s s um e d by a ny Gove r nm e nt a l Body or a ny Gove r nm e nt a l Body t a ke s a ny f i na l a c t i on, t he e f f e c t of whi c h woul d be a M a t e r i a l Adve r s e Ef f e c t . 14. 1. 8 ( a ) Any Loa n Pa r t y s ha l l c om m e nc e a ny c a s e , pr oc e e di ng, or ot he r a c t i on ( i ) unde r a ny e xi s t i ng or f ut ur e l a w of a ny j ur i s di c t i on, dom e s t i c or f or e i gn, r e l a t i ng t o ba nkr upt c y,
i ns ol ve nc y, r e or ga ni z a t i on, or r e l i e f of de bt or s , s e e ki ng t o ha ve a n or de r f or r e l i e f e nt e r e d wi t h r e s pe c t t o i t , or s e e ki ng t o a dj udi c a t e i t a ba nkr upt or i ns ol ve nt , or s e e ki ng 159 115525625. 4 0063724- 00082
r e or ga ni z a t i on, a r r a nge m e nt , a dj us t m e nt , wi ndi ng- up, l i qui da t i on, di s s ol ut i on, c om pos i t i on, or ot he r r e l i e f wi t h r e s pe c t t o i t or i t s de bt s , or ( i i ) s e e ki ng a ppoi nt m e nt of a r e c e i ve r , t r us t e e , c us t odi a n, or ot he r s i m i l a r of f i c i a l f or i t or f or a l l or a ny s ubs t a nt i a l pa r t of i t s a s s e t s , or a ny Loa n Pa r t y s ha l l m a ke a ge ne r a l a s s i gnm e nt f or t he be ne f i t of i t s c r e di t or s ; or ( b) t he r e s ha l l be c om m e nc e d a ga i ns t a ny Loa n Pa r t y a ny c a s e , pr oc e e di ng, or ot he r a c t i on of a na t ur e r e f e r r e d t o i n c l a us e ( a ) a bove whi c h ( i i i ) r e s ul t s i n t he e nt r y of a n or de r f or r e l i e f or a ny s uc h a dj udi c a t i on or a ppoi nt m e nt or ( i v) r e m a i ns undi s m i s s e d, undi s c ha r ge d, uns t a ye d, or unbonde d f or a pe r i od of 30 da ys ; or ( c ) t he r e s ha l l be c om m e nc e d a ga i ns t a ny Loa n Pa r t y a ny c a s e , pr oc e e di ng, or ot he r a c t i on s e e ki ng i s s ua nc e of a wa r r a nt of a t t a c hm e nt , e xe c ut i on, di s t r a i nt , or s i m i l a r pr oc e s s a ga i ns t a l l or a ny s ubs t a nt i a l pa r t of i t s a s s e t s t ha t r e s ul t s i n t he e nt r y of a n or de r f or a ny s uc h r e l i e f whi c h s ha l l not ha ve be e n va c a t e d, di s c ha r ge d, s t a ye d, or bonde d
pe ndi ng a ppe a l wi t hi n 30 da ys f r om t he e nt r y t he r e of ; or ( d) a ny Loa n Pa r t y s ha l l t a ke a ny a c t i on i n f ur t he r a nc e of , or i ndi c a t i ng i t s c ons e nt t o, a ppr ova l of , or a c qui e s c e nc e i n a ny of t he a c t s s e t f or t h i n c l a us e s ( a ) , ( b) , or ( c ) a bove ; ( e ) a ny Loa n Pa r t y s ha l l a dm i t i n wr i t i ng i t s i na bi l i t y t o pa y i t s de bt s a s t he y be c om e due or s ha l l , wi t hi n t he m e a ni ng of t he Uni t e d St a t e s Ba nkr upt c y Code ( 11 U. S. C. §101 e t s e q. ) , ge ne r a l l y not pa y i t s de bt s a s t he y be c om e due ; or ( f ) a ny Loa n Pa r t y i s not Sol ve nt . 14. 1. 9 Exc e pt a s pe r m i t t e d by Se c t i on 13. 1, ( a ) a ny Loa n Pa r t y whi c h i s a c or por a t i on, pa r t ne r s hi p, l i m i t e d l i a bi l i t y c om pa ny or ot he r t ype of e nt i t y i s di s s ol ve d or l i qui da t e d or t a ke s a ny a c t i on t o a ut hor i z e a di s s ol ut i on or l i qui da t i on; or ( b) a ny Loa n Pa r t y whi c h i s a t r us t ( or t r us t e e a c t i ng wi t h r e s pe c t t o pr ope r t y he l d i n t r us t ) i s r e voke d, a m e nde d or t e r m i na t e d. 14. 1. 10 Any r e f us a l or f a i l ur e by a ny Gove r nm e nt a l Body t o i s s ue , r e ne w, or e xt e nd a ny m a t e r i a l l e a s e or Gove r nm e nt a l Appr ova l wi t h r e s pe c t t o t he ope r a t i on of t he
bus i ne s s of a ny Loa n Pa r t y or i t s Subs i di a r i e s , or a ny de ni a l , f or f e i t ur e or r e voc a t i on by a ny Gove r nm e nt a l Body of a ny Gove r nm e nt a l Appr ova l , t ha t c oul d r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 14. 1. 11 One or m or e j udgm e nt s , wr i t s of a t t a c hm e nt , or s i m i l a r pr oc e s s , i n a n a ggr e ga t e a m ount i n e xc e s s of $50, 000, 000 ( i n e xc e s s of i ns ur a nc e c ove r a ge ) s ha l l be e nt e r e d or f i l e d a ga i ns t a ny Loa n Pa r t y or a ny pr ope r t y of a ny Loa n Pa r t y a nd r e m a i ns unpa i d, unva c a t e d, unbonde d or uns t a ye d f or a pe r i od of s i xt y ( 60) da ys or m or e . 14. 1. 12 ( a ) W i t h r e s pe c t t o a Pl a n, a Loa n Pa r t y or a n ERI SA Af f i l i a t e i s s ubj e c t t o a l i e n i n e xc e s s of $50, 000, 000, pur s ua nt t o Se c t i on 430( k) of t he Code or Se c t i on 302( c ) or ERI SA or Ti t l e I V or ERI SA, or ( b) a n ERI SA Eve nt s ha l l ha ve oc c ur r e d t ha t , i n t he opi ni on of t he Re qui r e d Le nde r s , whe n t a ke n t oge t he r wi t h a l l ot he r ERI SA Eve nt s t ha t ha ve oc c ur r e d, c oul d r e a s ona bl y be e xpe c t e d t o r e s ul t i n a M a t e r i a l Adve r s e Ef f e c t . 14. 1. 13 ( a ) The Com pa ny or a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p f a i l s t o pa y,
pe r f or m or c om pl y wi t h a ny t e r m , c ondi t i on or obl i ga t i on i n a ny Se l l e r Agr e e m e nt , or a ny s uc h a gr e e m e nt c e a s e s t o be , or i s a s s e r t e d by a ny Pe r s on not t o be , i n f ul l f or c e a nd e f f e c t , or t he ot he r pa r t y t o s uc h a gr e e m e nt gi ve s not i c e of de f a ul t t o t he Com pa ny or a ny Ne w Ve hi c l e Fl oor pl a n De a l e r s hi p, or ( b) a ny e ve nt s pe c i f i e d i n c l a us e ( a ) oc c ur s wi t h r e s pe c t t o a ny Loa n Pa r t y ot he r t ha n a Ne w Ve hi c l e Fl oor pl a n Bor r owe r , e xc e pt i n e a c h c a s e de s c r i be d i n c l a us e s ( a ) a nd ( b) a bove t o t he e xt e nt s uc h f a i l ur e , c e s s a t i on, a s s e r t i on or not i c e of de f a ul t ( e i t he r 160 115525625. 4 0063724- 00082 i ndi vi dua l l y or i n t he a ggr e ga t e wi t h a l l ot he r s uc h f a i l ur e s , c e s s a t i ons , a s s e r t i ons a nd not i c e s of de f a ul t ) c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 14. 1. 14 Any Re pur c ha s e Agr e e m e nt c e a s e s t o be , or i s a s s e r t e d by a ny m a nuf a c t ur e r or di s t r i but or of Ve hi c l e s not t o be , i n f ul l f or c e a nd e f f e c t , e xc e pt i n e a c h c a s e t o t he e xt e nt s uc h c e s s a t i on or a s s e r t i on ( e i t he r i ndi vi dua l l y or i n t he a ggr e ga t e wi t h a l l ot he r s uc h c e s s a t i ons a nd
a s s e r t i ons ) c oul d not r e a s ona bl y be e xpe c t e d t o ha ve a M a t e r i a l Adve r s e Ef f e c t . 14. 1. 15 The r e i s a ny Cha nge i n Cont r ol . 14. 1. 16 ( a ) Any de f a ul t oc c ur s unde r or a ny Loa n Pa r t y f a i l s t o pa y, pe r f or m or c om pl y wi t h t he t e r m s of a ny Swa p or ( b) t he r e oc c ur s unde r a ny Swa p a n Ea r l y Te r m i na t i on Da t e ( a s de f i ne d i n s uc h Swa p) r e s ul t i ng f r om ( i ) a ny e ve nt of de f a ul t unde r s uc h Swa p a s t o whi c h t he Com pa ny or a ny Subs i di a r y i s t he De f a ul t i ng Pa r t y ( a s de f i ne d i n s uc h Swa p) or ( i i ) a ny Te r m i na t i on Eve nt ( a s s o de f i ne d) unde r s uc h Swa p a s t o whi c h t he Com pa ny or a ny Subs i di a r y i s a n Af f e c t e d Pa r t y ( a s s o de f i ne d) a nd, i n e i t he r e ve nt , t he Swa p Te r m i na t i on Va l ue owi ng by t he Appl i c a bl e Loa n Pa r t i e s unde r a l l s uc h Swa ps a s a r e s ul t t he r e of , t oge t he r wi t h a l l de f a ul t e d I nde bt e dne s s of t he Loa n Pa r t i e s de s c r i be d i n Se c t i on 14. 1. 3, i s gr e a t e r t ha n 1. 25% of t he a m ount of t he Aggr e ga t e Com m i t m e nt . 14. 2 Cons e que nc e s of De f a ul t ; Ri ght s a nd Re m e di e s . Ti m e i s of t he e s s e nc e of t hi s Agr e e m e nt . 14. 2. 1 Upon t he oc c ur r e nc e or e xi s t e nc e of a ny Eve nt of
De f a ul t ( ot he r t ha n a n Eve nt of De f a ul t r e f e r r e d t o i n Se c t i on 14. 1. 8) a nd a t a ny t i m e t he r e a f t e r dur i ng t he c ont i nua nc e of s uc h Eve nt of De f a ul t , t he Age nt s ha l l ha ve t he r i ght , by wr i t t e n not i c e t o t he Com pa ny, t o: ( a ) t e r m i na t e t he a va i l a bi l i t y of PR Ac c ount Adva nc e s a nd t e r m i na t e t he Com m i t m e nt s t o m a ke Loa ns a nd i s s ue Le t t e r s of Cr e di t ; ( b) de c l a r e a l l out s t a ndi ng Obl i ga t i ons pa ya bl e by t he Re vol vi ng Loa n Bor r owe r , Us e d Ve hi c l e Fl oor pl a n Bor r owe r , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Bor r owe r , a nd t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s t o be i m m e di a t e l y due a nd pa ya bl e wi t hout pr e s e nt m e nt , de m a nd, pr ot e s t or a ny ot he r not i c e of a ny ki nd, a l l of whi c h a r e he r e by e xpr e s s l y wa i ve d, a nyt hi ng c ont a i ne d he r e i n or i n t he Loa n Doc um e nt s t o t he c ont r a r y not wi t hs t a ndi ng; ( c ) di r e c t t he Re vol vi ng Loa n Bor r owe r t o de l i ve r t o t he Age nt f unds i n a n a m ount e qua l t o t he a ggr e ga t e s t a t e d a m ount of t he LC Obl i ga t i ons , s uc h f unds t o be he l d i n t he LC Col l a t e r a l Ac c ount , a nd/ or ( d) di r e c t t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s t o de l i ve r t o t he Age nt f unds i n
a n a m ount whi c h t he Age nt e s t i m a t e s i t or t he Swi ng Li ne Le nde r m a y be r e qui r e d t o pa y pur s ua nt t o Pa ym e nt Com m i t m e nt s whi c h m a y be pr e s e nt e d t he r e a f t e r , s uc h c ol l a t e r a l t o be he l d i n t he Pa ym e nt Com m i t m e nt Col l a t e r a l Ac c ount . The a ppl i c a bl e Bor r owe r s s ha l l i m m e di a t e l y de l i ve r t o t he Age nt a l l s uc h f unds r e qui r e d by t he Age nt . 14. 2. 2 Upon t he oc c ur r e nc e or e xi s t e nc e of a ny Eve nt of De f a ul t de s c r i be d i n Se c t i on 14. 1. 8, i m m e di a t e l y a nd wi t hout not i c e , ( a ) t he Com m i t m e nt s a nd t he a va i l a bi l i t y of Loa ns a nd Le t t e r s of Cr e di t s ha l l a ut om a t i c a l l y t e r m i na t e , ( b) a l l out s t a ndi ng Obl i ga t i ons s ha l l a ut om a t i c a l l y be c om e i m m e di a t e l y due a nd pa ya bl e , wi t hout pr e s e nt m e nt , de m a nd, pr ot e s t or a ny ot he r not i c e of a ny ki nd, a l l of whi c h a r e he r e by e xpr e s s l y wa i ve d, a nyt hi ng c ont a i ne d he r e i n or i n t he Loa n Doc um e nt s t o t he c ont r a r y not wi t hs t a ndi ng, ( c ) t he Re vol vi ng Loa n 161 115525625. 4 0063724- 00082
Bor r owe r s ha l l a ut om a t i c a l l y be c om e obl i ga t e d t o de l i ve r t o t he Age nt Ca s h Col l a t e r a l i n a n a m ount e qua l t o t he a ggr e ga t e s t a t e d a m ount of t he LC Obl i ga t i ons , whi c h f unds s ha l l be he l d by t he Age nt i n t he LC Col l a t e r a l Ac c ount , a nd ( d) t he Ne w Ve hi c l e Fl oor pl a n Bor r owe r s s ha l l a ut om a t i c a l l y be c om e obl i ga t e d t o de l i ve r t o t he Age nt f unds i n a n a m ount whi c h t he Age nt e s t i m a t e s i t or t he Swi ng Li ne Le nde r m a y be r e qui r e d t o pa y pur s ua nt t o Pa ym e nt Com m i t m e nt s whi c h m a y be pr e s e nt e d t he r e a f t e r , whi c h f unds s ha l l be he l d by t he Age nt i n t he Pa ym e nt Com m i t m e nt Col l a t e r a l Ac c ount . 14. 2. 3 I n a ddi t i on t o t he f or e goi ng r e m e di e s , upon t he oc c ur r e nc e or e xi s t e nc e of a ny Eve nt of De f a ul t , t he Age nt a nd t he Le nde r s s ha l l ha ve t he r i ght t o e xe r c i s e a ny r i ght , powe r or r e m e dy a va i l a bl e unde r t hi s Agr e e m e nt , a ny of t he ot he r Loa n Doc um e nt s , or ot he r wi s e a va i l a bl e a t l a w or i n e qui t y. 14. 2. 4 The Age nt s ha l l pr om pt l y i nf or m t he Le nde r s of t he oc c ur r e nc e of a ny Eve nt of De f a ul t of whi c h i t i s de e m e d t o ha ve knowl e dge or not i c e pur s ua nt t o Se c t i on
16. 9 a nd wi l l pr om pt l y pr ovi de t he Le nde r s wi t h c opi e s of a ny a nd a l l not i c e s t ha t t he Age nt ha s r e c e i ve d wi t h r e s pe c t t he r e t o. Af t e r s uc h not i f i c a t i on, t he Le nde r s s ha l l m e e t t o de t e r m i ne t he de s i r e d c our s e of a c t i on a nd t he Age nt s ha l l t a ke s uc h c our s e of a c t i on, a nd pur s ue s uc h r i ght s a nd r e m e di e s unde r t he Loa n Doc um e nt s , a s t he Re qui r e d Le nde r s s ha l l de t e r m i ne . I f t he Re qui r e d Le nde r s ha ve not a gr e e d upon a c our s e of a c t i on wi t hi n 90 da ys a f t e r t he da t e t ha t t he Le nde r s ha ve r e c e i ve d a not i c e f r om t he Age nt of t he oc c ur r e nc e of a n Eve nt of De f a ul t , t he Age nt s ha l l ( a nd s ha l l be obl i ga t e d t o) t e r m i na t e t he Com m i t m e nt s , a c c e l e r a t e a l l of t he Obl i ga t i ons , a ppl y a l l a m ount s c ol l e c t e d f r om t he Bor r owe r s , a ny Gua r a nt or s a nd t he Col l a t e r a l a s s e t f or t h he r e i n a nd pur s ue s uc h ot he r r i ght s a nd r e m e di e s a s a r e pr ude nt unde r t he c i r c um s t a nc e s . Dur i ng t he t i m e be t we e n t he Age nt ’ s gi vi ng not i c e of t he oc c ur r e nc e of a n Eve nt of De f a ul t t o t he Le nde r s a nd t he e a r l i e r of ( a ) t he Re qui r e d Le nde r ’ s a gr e e m e nt on a c our s e of a c t i on or ( b) t he
e xpi r a t i on of t he 90 da y de c i s i on pe r i od, t he Age nt s ha l l t a ke s uc h a c t i ons on be ha l f of t he Le nde r s a s t he Age nt de e m s pr ude nt . To t he e xt e nt i nc ons i s t e nt wi t h Se c t i on 14. 2. 2, t hi s Se c t i on s ha l l not a ppl y t o a ny Eve nt of De f a ul t r e f e r r e d t o i n Se c t i on 14. 1. 8 a nd a ny Eve nt of De f a ul t r e f e r r e d t o i n Se c t i on 14. 1. 8 s ha l l be gove r ne d by Se c t i on 14. 2. 2. Howe ve r , de c i s i ons a s t o how t o ha ndl e , vot e , or c om pr om i s e t he Age nt ’ s c l a i m s on be ha l f of t he Le nde r s i n a ny ba nkr upt c y or i ns ol ve nc y pr oc e e di ng s ha l l be gove r ne d by t hi s Se c t i on. Thi s Se c t i on c onf e r s no r i ght s upon a ny Loa n Pa r t y. 14. 3 Appl i c a t i on of Pa ym e nt s . I f t he Obl i ga t i ons ha ve be c om e due a nd pa ya bl e i n f ul l or i f a t a ny t i m e i ns uf f i c i e nt f unds a r e r e c e i ve d by a nd a va i l a bl e t o t he Age nt t o f ul l y pa y a l l f e e s , c os t s , e xpe ns e s , pr i nc i pa l , i nt e r e s t a nd ot he r a m ount s due t o t he Age nt a nd t he Le nde r s unde r t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s , s uc h f unds r e c e i ve d by t he Age nt s ha l l be a ppl i e d: ( a ) f i r s t , t o t he pa ym e nt of f e e s , c os t s , di s bur s e m e nt s , i nde m ni t i e s a nd ot he r e xpe ns e s
( i nc l udi ng At t or ne y Cos t s of t he Age nt ’ s c ouns e l ) owi ng t o t he Age nt , i nc l udi ng wi t hout l i m i t a t i on, i f a ppl i c a bl e , a m ount s i nc ur r e d i n r e a l i z i ng on Col l a t e r a l or ot he r wi s e e nf or c i ng t he Loa n Doc um e nt s ; ( b) s e c ond, t o t he pa ym e nt of f e e s , c os t s , di s bur s e m e nt s , i nde m ni t i e s , a nd ot he r e xpe ns e s owi ng t o t he Le nde r s ( ot he r t ha n LC Fe e s , Re vol vi ng Loa n Com m i t m e nt Fe e , Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e a nd Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e ) , i nc l udi ng wi t hout l i m i t a t i on, i f a ppl i c a bl e , a m ount s i nc ur r e d i n r e a l i z i ng on 162 115525625. 4 0063724- 00082 Col l a t e r a l or ot he r wi s e e nf or c i ng t he Loa n Doc um e nt s a nd a m ount s owi ng pur s ua nt t o Ar t i c l e 7 a nd Se c t i on 17. 1; ( c ) t hi r d, t o t he pa ym e nt of LC Fe e s , Re vol vi ng Loa n Com m i t m e nt Fe e s , Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e , Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e a nd Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e ; ( d) f our t h t o t he pa ym e nt of a c c r ue d i nt e r e s t on a l l of t he Loa ns a nd ot he r Obl i ga t i ons , ( e ) f i f t h t o t he pa ym e nt t o
Swi ng Li ne Le nde r of a ny pr i nc i pa l a m ount of t he Ne w Ve hi c l e Swi ng Li ne Loa ns i n e xc e s s of t he Ne w Ve hi c l e Swi ng Li ne Com m i t m e nt ; ( f ) s i xt h, t o t he pa ym e nt of t he r e m a i ni ng pr i nc i pa l owi ng t o a l l of t he Le nde r s on a l l of t he Loa ns , LC Obl i ga t i ons , a nd ot he r Obl i ga t i ons , a l l oc a t e d t o t he Le nde r s ba s e d upon t he i r Pr o Ra t a Sha r e s ; ( g) s e ve nt h, t o f ul l y c a s h c ol l a t e r a l i z e t he LC Obl i ga t i ons a nd a ny out s t a ndi ng Pa ym e nt Com m i t m e nt s ; ( h) e i ght h, t o pa ym e nt of t he Pe r m i t t e d Swa p Obl i ga t i ons , r a t a bl y a m ong t he Le nde r s i n pr opor t i on t o t he r e s pe c t i ve a m ount s de s c r i be d i n t hi s c l a us e ( h) he l d by t he m ; a nd ( i ) ni nt h, t he ba l a nc e , i f a ny, t o t he Bor r owe r s or a s ot he r wi s e r e qui r e d by l a w. ARTI CLE 15 HAZARDOUS SUBSTANCES 15. 1 Re pr e s e nt a t i ons a nd W a r r a nt i e s . Ea c h Bor r owe r r e pr e s e nt s a nd wa r r a nt s t ha t t o i t s knowl e dge , a s of t he Cl os i ng Da t e , a ny Pr ope r t i e s i de nt i f i e d a s s uc h i n t he Di s c l os ur e Sc he dul e a r e t he onl y Pr ope r t i e s r e qui r i ng r e m e di a l a c t i on unde r a ppl i c a bl e Envi r onm e nt a l La ws , r e s ul t i ng f r om t he us e , ge ne r a t i on, m a nuf a c t ur e , s t or a ge ,
t r e a t m e nt , di s pos a l , r e l e a s e , or t hr e a t e ne d r e l e a s e of a ny Ha z a r dous Subs t a nc e s on, unde r , a bout or f r om a ny of t he Pr ope r t i e s . The pe r f or m a nc e of s uc h r e m e di a l a c t i ons wi l l not ha ve a M a t e r i a l Adve r s e Ef f e c t on a ny Loa n Pa r t y or i t s bus i ne s s e s . 15. 2 Ac t i vi t i e s . Ea c h Bor r owe r s ha l l , a nd t he Com pa ny s ha l l c a us e e a c h Subs i di a r y t o us e , ge ne r a t e , m a nuf a c t ur e , s t or e , t r e a t , r e l e a s e or di s pos e of Ha z a r dous Subs t a nc e s on, unde r , a bout or f r om t he Pr ope r t i e s onl y a s i s r e a s ona bl e a nd ne c e s s a r y i n t he ope r a t i on of i t s bus i ne s s , a nd i n s ubs t a nt i a l c om pl i a nc e wi t h a l l a ppl i c a bl e Envi r onm e nt a l La ws . 15. 3 I ns pe c t i ons . Ea c h Bor r owe r wi l l pe r m i t a nd t he Com pa ny wi l l c a us e e a c h ot he r Loa n Pa r t y t o pe r m i t r e pr e s e nt a t i ve s of t he Age nt a nd t he Le nde r s t o e nt e r upon t he Pr ope r t i e s t o m a ke s uc h i ns pe c t i ons a nd t e s t s a s t he y m a y r e a s ona bl y de e m a ppr opr i a t e t o de t e r m i ne c om pl i a nc e of t he Pr ope r t i e s wi t h t hi s Ar t i c l e . Any s uc h i ns pe c t i ons or t e s t s s ha l l be a t t he e xpe ns e of Bor r owe r s a nd f or Age nt s ’ a nd t he Le nde r s ’ pur pos e s onl y, a nd s ha l l not be
c ons t r ue d t o c r e a t e a ny r e s pons i bi l i t y or l i a bi l i t y on t he pa r t of t he Age nt or a ny Le nde r t o a ny Bor r owe r or a ny ot he r Pe r s on. 15. 4 Re l e a s e a nd I nde m ni t y . Ea c h Bor r owe r he r e by ( a ) r e l e a s e s a nd wa i ve s a ny f ut ur e c l a i m s a ga i ns t Age nt a nd e a c h Le nde r f or i nde m ni t y or c ont r i but i on i n t he e ve nt t he Com pa ny or a ny of i t s Subs i di a r i e s be c om e s l i a bl e f or c l e a nup or ot he r c os t s unde r a ny Envi r onm e nt a l La ws , a nd ( b) a gr e e s t o 163 115525625. 4 0063724- 00082
i nde m ni f y a nd hol d ha r m l e s s Age nt a nd e a c h Le nde r a nd t he ot he r I nde m ni f i e d Pe r s ons a ga i ns t a ny a nd a l l Cl a i m s whi c h s uc h Pe r s on m a y di r e c t l y or i ndi r e c t l y s us t a i n or s uf f e r r e s ul t i ng f r om a br e a c h of t hi s Ar t i c l e by t he Com pa ny or a ny ot he r Bor r owe r or a s a c ons e que nc e of a ny us e , ge ne r a t i on, m a nuf a c t ur e , s t or a ge , di s pos a l , r e l e a s e or t hr e a t e ne d r e l e a s e of a Ha z a r dous Subs t a nc e on t he Pr ope r t i e s , e xc e pt t o t he e xt e nt a r i s i ng f r om t he gr os s ne gl i ge nc e or wi l l f ul m i s c onduc t of s uc h I nde m ni f i e d Pe r s on. 15. 5 Sur vi va l . The pr ovi s i ons of t hi s Ar t i c l e , i nc l udi ng t he obl i ga t i on t o i nde m ni f y, s ha l l s ur vi ve t he r e pa ym e nt of t he Loa ns a nd Le t t e r s of Cr e di t a nd ot he r l i a bi l i t i e s a nd Obl i ga t i ons of a ny one or m or e of t he Bor r owe r s unde r t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s , a nd t he t e r m i na t i on or e xpi r a t i on of t hi s Agr e e m e nt , a nd, i f a ppl i c a bl e , s ha l l not be a f f e c t e d by Le nde r ’ s a c qui s i t i on of a ny i nt e r e s t i n a ny of t he Pr ope r t i e s , whe t he r by f or e c l os ur e or ot he r wi s e . ARTI CLE 16 THE AGENT 16. 1 Appoi nt m e nt ; Na t ur e of Re l a t i ons hi p . U. S.
Ba nk i s he r e by a ppoi nt e d by e a c h of t he Le nde r s a s i t s c ont r a c t ua l r e pr e s e nt a t i ve ( he r e i n r e f e r r e d t o a s t he " Age nt ” ) he r e unde r a nd unde r e a c h ot he r Loa n Doc um e nt , a nd e a c h of t he Le nde r s i r r e voc a bl y a ut hor i z e s Age nt t o a c t a s t he c ont r a c t ua l r e pr e s e nt a t i ve of s uc h Le nde r wi t h t he r i ght s a nd dut i e s e xpr e s s l y s e t f or t h he r e i n a nd i n t he ot he r Loa n Doc um e nt s . The Age nt a gr e e s t o a c t a s s uc h c ont r a c t ua l r e pr e s e nt a t i ve upon t he e xpr e s s c ondi t i ons c ont a i ne d i n t hi s Ar t i c l e 16. Not wi t hs t a ndi ng t he us e of t he de f i ne d t e r m " Age nt , ” i t i s e xpr e s s l y unde r s t ood a nd a gr e e d t ha t t he Age nt s ha l l not ha ve a ny f i duc i a r y r e s pons i bi l i t i e s t o a ny Le nde r by r e a s on of t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt a nd t ha t t he Age nt i s m e r e l y a c t i ng a s t he c ont r a c t ua l r e pr e s e nt a t i ve of t he Le nde r s wi t h onl y t hos e dut i e s a s a r e e xpr e s s l y s e t f or t h i n t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s . I n i t s c a pa c i t y a s t he Le nde r s ’ c ont r a c t ua l r e pr e s e nt a t i ve , t he Age nt ( a ) doe s not he r e by a s s um e a ny f i duc i a r y dut i e s t o a ny of t he Le nde r s , ( b) i s a " r e pr e s e nt a t i ve ” of t he
Le nde r s wi t hi n t he m e a ni ng of t he t e r m " s e c ur e d pa r t y” a s de f i ne d i n t he Uni f or m Com m e r c i a l Code a nd ( c ) i s a c t i ng a s a n i nde pe nde nt c ont r a c t or , t he r i ght s a nd dut i e s of whi c h a r e l i m i t e d t o t hos e e xpr e s s l y s e t f or t h i n t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s . Ea c h of t he Le nde r s he r e by a gr e e s t o a s s e r t no c l a i m a ga i ns t Age nt on a ny a ge nc y t he or y or a ny ot he r t he or y of l i a bi l i t y f or br e a c h of f i duc i a r y dut y, a l l of whi c h c l a i m s e a c h Le nde r he r e by wa i ve s . 16. 2 Powe r s . The Age nt s ha l l ha ve a nd m a y e xe r c i s e s uc h powe r s unde r t he Loa n Doc um e nt s a s a r e s pe c i f i c a l l y de l e ga t e d t o t he Age nt by t he t e r m s of e a c h t he r e of , t oge t he r wi t h s uc h powe r s a s a r e r e a s ona bl y i nc i de nt a l t he r e t o. The Age nt s ha l l ha ve no i m pl i e d dut i e s t o t he Le nde r s , or a ny obl i ga t i on t o t he Le nde r s t o t a ke a ny a c t i on t he r e unde r e xc e pt a ny a c t i on s pe c i f i c a l l y pr ovi de d by t he Loa n Doc um e nt s t o be t a ke n by t he Age nt . 16. 3 Ge ne r a l I m m uni t y 164 115525625. 4 0063724- 00082 . Ne i t he r Age nt nor a ny of i t s di r e c t or s , of f i c e r s , a ge nt s or e m pl oye e s s ha l l be l i a bl e t o a ny
Bor r owe r or a ny Le nde r f or a ny a c t i on t a ke n or om i t t e d t o be t a ke n by i t or t he m he r e unde r or unde r a ny ot he r Loa n Doc um e nt or i n c onne c t i on he r e wi t h or t he r e wi t h e xc e pt t o t he e xt e nt s uc h a c t i on or i na c t i on i s de t e r m i ne d i n a f i na l non- a ppe a l a bl e j udgm e nt by a c our t of c om pe t e nt j ur i s di c t i on t o ha ve a r i s e n f r om t he gr os s ne gl i ge nc e or wi l l f ul m i s c onduc t of s uc h Pe r s on. 16. 4 No Re s pons i bi l i t y f or Loa ns , Re c i t a l s , Et c . Ne i t he r Age nt nor a ny of i t s di r e c t or s , of f i c e r s , a ge nt s or e m pl oye e s s ha l l be r e s pons i bl e f or or ha ve a ny dut y t o a s c e r t a i n, i nqui r e i nt o, or ve r i f y ( a ) a ny s t a t e m e nt , wa r r a nt y or r e pr e s e nt a t i on m a de i n c onne c t i on wi t h a ny Loa n Doc um e nt or a ny bor r owi ng he r e unde r ; ( b) t he pe r f or m a nc e or obs e r va nc e of a ny of t he c ove na nt s or a gr e e m e nt s of a ny obl i gor unde r a ny Loa n Doc um e nt , i nc l udi ng, wi t hout l i m i t a t i on, a ny a gr e e m e nt by a n obl i gor t o f ur ni s h i nf or m a t i on di r e c t l y t o e a c h Le nde r ; ( c ) t he s a t i s f a c t i on of a ny c ondi t i on s pe c i f i e d i n Ar t i c l e 9, e xc e pt r e c e i pt of i t e m s r e qui r e d t o be de l i ve r e d s ol e l y t o t he Age nt ; ( d) t he
e xi s t e nc e or pos s i bl e e xi s t e nc e of a ny De f a ul t or Eve nt of De f a ul t ; ( e ) t he va l i di t y, e nf or c e a bi l i t y, e f f e c t i ve ne s s , s uf f i c i e nc y or ge nui ne ne s s of a ny Loa n Doc um e nt or a ny ot he r i ns t r um e nt or wr i t i ng f ur ni s he d i n c onne c t i on t he r e wi t h; ( f ) t he va l ue , s uf f i c i e nc y, c r e a t i on, pe r f e c t i on or pr i or i t y of a ny Li e n i n a ny Col l a t e r a l ; or ( g) t he f i na nc i a l c ondi t i on of a ny Loa n Pa r t y or of a ny of a ny Loa n Pa r t y’ s Subs i di a r i e s . The f or e goi ng not wi t hs t a ndi ng, howe ve r , t he Age nt s ha l l , upon a r e a s ona bl e r e que s t f r om a Le nde r , pr ovi de s uc h i nf or m a t i on a s m a y be ne c e s s a r y t o de m ons t r a t e t o s uc h Le nde r t ha t t he Age nt ha s t he a bi l i t y t o c om pl y, or ha s i n f a c t c om pl i e d, wi t h a l l r e gul a t i ons or m a nda t e s f r om a gove r ni ng e nt i t y t ha t a r e a ppl i c a bl e t o t he Loa ns , i nc l udi ng wi t hout l i m i t a t i on, t he Fl ood Di s a s t e r Pr ot e c t i on Ac t of 1973 a nd t he na t i ona l Fl ood I ns ur a nc e Re f or m Ac t ( 1994) . 16. 5 Ac t i on on I ns t r uc t i ons of Le nde r s . The Age nt s ha l l i n a l l c a s e s be f ul l y pr ot e c t e d i n a c t i ng, or i n r e f r a i ni ng f r om a c t i ng, he r e unde r a nd unde r a ny ot he r Loa n Doc um e nt i n
a c c or da nc e wi t h wr i t t e n i ns t r uc t i ons s i gne d by t he Re qui r e d Le nde r s , a nd s uc h i ns t r uc t i ons a nd a ny a c t i on t a ke n or f a i l ur e t o a c t pur s ua nt t he r e t o s ha l l be bi ndi ng on a l l of t he Le nde r s . The Le nde r s he r e by a c knowl e dge t ha t t he Age nt s ha l l be unde r no dut y t o t a ke a ny di s c r e t i ona r y a c t i on pe r m i t t e d t o be t a ke n by i t pur s ua nt t o t he pr ovi s i ons of t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt unl e s s i t s ha l l be r e que s t e d i n wr i t i ng t o do s o by t he Re qui r e d Le nde r s . The Age nt s ha l l be f ul l y j us t i f i e d i n f a i l i ng or r e f us i ng t o t a ke a ny a c t i on he r e unde r a nd unde r a ny ot he r Loa n Doc um e nt unl e s s i t s ha l l f i r s t be i nde m ni f i e d t o i t s s a t i s f a c t i on by t he Le nde r s pr o r a t a a ga i ns t a ny a nd a l l l i a bi l i t y, c os t a nd e xpe ns e t ha t i t m a y i nc ur by r e a s on of t a ki ng or c ont i nui ng t o t a ke a ny s uc h a c t i on. 16. 6 Em pl oym e nt of t he Age nt s a nd Couns e l . The Age nt m a y pe r f or m a ny of i t s dut i e s a s t he Age nt he r e unde r a nd unde r a ny ot he r Loa n Doc um e nt by or t hr ough e m pl oye e s , a ge nt s , a nd a t t or ne ys - i n- f a c t a nd s ha l l not be a ns we r a bl e t o t he Le nde r s , e xc e pt a s t o m one y or
s e c ur i t i e s r e c e i ve d by i t or i t s a ut hor i z e d a ge nt s , f or t he de f a ul t or m i s c onduc t of a ny s uc h a ge nt s or a t t or ne ys - i n- f a c t s e l e c t e d by i t wi t h r e a s ona bl e c a r e . The Age nt s ha l l be e nt i t l e d t o a dvi c e of c ouns e l c onc e r ni ng t he c ont r a c t ua l 165 115525625. 4 0063724- 00082
a r r a nge m e nt be t we e n Age nt a nd t he Le nde r s a nd a l l m a t t e r s pe r t a i ni ng t o t he Age nt ’ s dut i e s he r e unde r a nd unde r a ny ot he r Loa n Doc um e nt . 16. 7 Re l i a nc e on Doc um e nt s ; Couns e l . The Age nt s ha l l be e nt i t l e d t o r e l y upon a ny not i c e , c ons e nt , c e r t i f i c a t e , a f f i da vi t , l e t t e r , t e l e gr a m , f a c s i m i l e , t e l e x, e l e c t r oni c m a i l m e s s a ge , s t a t e m e nt , pa pe r or doc um e nt be l i e ve d by i t t o be ge nui ne a nd c or r e c t a nd t o ha ve be e n s i gne d or s e nt by t he pr ope r pe r s on or pe r s ons , a nd, i n r e s pe c t t o l e ga l m a t t e r s , upon t he opi ni on of c ouns e l s e l e c t e d by t he Age nt , whi c h c ouns e l m a y be e m pl oye e s of t he Age nt . For pur pos e s of de t e r m i ni ng c om pl i a nc e wi t h t he c ondi t i ons s pe c i f i e d i n Ar t i c l e 9, e a c h Le nde r t ha t ha s s i gne d t hi s Agr e e m e nt s ha l l be de e m e d t o ha ve c ons e nt e d t o, a ppr ove d or a c c e pt e d or t o be s a t i s f i e d wi t h, e a c h doc um e nt or ot he r m a t t e r r e qui r e d t he r e unde r t o be c ons e nt e d t o or a ppr ove d by or a c c e pt a bl e or s a t i s f a c t or y t o a Le nde r unl e s s Age nt s ha l l ha ve r e c e i ve d not i c e f r om s uc h Le nde r pr i or t o t he a ppl i c a bl e da t e s pe c i f yi ng i t s obj e c t i on t he r e t o. 16. 8
Re i m bur s e m e nt a nd I nde m ni f i c a t i on . The Le nde r s a gr e e t o r e i m bur s e a nd i nde m ni f y Age nt r a t a bl y i n pr opor t i on t o t he i r r e s pe c t i ve Com m i t m e nt s ( or , i f t he Com m i t m e nt s ha ve be e n t e r m i na t e d, i n pr opor t i on t o t he i r Com m i t m e nt s i m m e di a t e l y pr i or t o s uc h t e r m i na t i on) ( a ) f or a ny a m ount s not r e i m bur s e d by t he Bor r owe r s f or whi c h t he Age nt i s e nt i t l e d t o r e i m bur s e m e nt by a Bor r owe r or Bor r owe r s unde r t he Loa n Doc um e nt s , ( b) f or a ny ot he r e xpe ns e s i nc ur r e d by t he Age nt on be ha l f of t he Le nde r s , i n c onne c t i on wi t h t he pr e pa r a t i on, e xe c ut i on, de l i ve r y, a dm i ni s t r a t i on a nd e nf or c e m e nt of t he Loa n Doc um e nt s ( i nc l udi ng, wi t hout l i m i t a t i on, f or a ny e xpe ns e s i nc ur r e d by t he Age nt i n c onne c t i on wi t h a ny di s put e be t we e n Age nt a nd a ny Le nde r or be t we e n t wo or m or e of t he Le nde r s ) a nd ( c ) f or a ny l i a bi l i t i e s , obl i ga t i ons , l os s e s , da m a ge s , pe na l t i e s , a c t i ons , j udgm e nt s , s ui t s , c os t s , e xpe ns e s or di s bur s e m e nt s of a ny ki nd a nd na t ur e wha t s oe ve r whi c h m a y be i m pos e d on, i nc ur r e d by or a s s e r t e d a ga i ns t Age nt i n a ny wa y r e l a t i ng t o or a r i s i ng out
of t he Loa n Doc um e nt s or a ny ot he r doc um e nt de l i ve r e d i n c onne c t i on t he r e wi t h or t he t r a ns a c t i ons c ont e m pl a t e d t he r e by ( i nc l udi ng, wi t hout l i m i t a t i on, f or a ny s uc h a m ount s i nc ur r e d by or a s s e r t e d a ga i ns t Age nt i n c onne c t i on wi t h a ny di s put e be t we e n Age nt a nd a ny Le nde r or be t we e n t wo or m or e of t he Le nde r s ) , or t he e nf or c e m e nt of a ny of t he t e r m s of t he Loa n Doc um e nt s or of a ny s uc h ot he r doc um e nt s , pr ovi de d t ha t ( y) no Le nde r s ha l l be l i a bl e f or a ny of t he f or e goi ng t o t he e xt e nt a ny of t he f or e goi ng i s f ound i n a f i na l non- a ppe a l a bl e j udgm e nt by a c our t of c om pe t e nt j ur i s di c t i on t o ha ve r e s ul t e d f r om t he gr os s ne gl i ge nc e or wi l l f ul m i s c onduc t of t he Age nt a nd ( z ) a ny i nde m ni f i c a t i on r e qui r e d pur s ua nt t o Se c t i on 7. 4. 4 s ha l l , not wi t hs t a ndi ng t he pr ovi s i ons of t hi s Se c t i on, be pa i d by t he r e l e va nt Le nde r i n a c c or da nc e wi t h t he pr ovi s i ons t he r e of . The obl i ga t i ons of t he Le nde r s unde r t hi s Se c t i on s ha l l s ur vi ve pa ym e nt of t he Obl i ga t i ons a nd Pe r m i t t e d Swa p Obl i ga t i ons a nd t e r m i na t i on of t hi s Agr e e m e nt . 16. 9 Not i c e of Eve nt of De f a ul t .
The Age nt s ha l l not be de e m e d t o ha ve knowl e dge or not i c e of t he oc c ur r e nc e of a ny De f a ul t or Eve nt of De f a ul t he r e unde r , e xc e pt wi t h r e s pe c t t o de f a ul t s i n t he pa ym e nt of pr i nc i pa l , i nt e r e s t a nd f e e s r e qui r e d t o be pa i d t o t he Age nt , unl e s s ( i ) Age nt ha s a c t ua l knowl e dge of s uc h De f a ul t or Eve nt of De f a ul t or ( i i ) Age nt ha s r e c e i ve d wr i t t e n not i c e f r om a 166 115525625. 4 0063724- 00082 Le nde r or Bor r owe r r e f e r r i ng t o t hi s Agr e e m e nt de s c r i bi ng s uc h De f a ul t or Eve nt of De f a ul t a nd s t a t i ng t ha t s uc h not i c e i s a " not i c e of de f a ul t . ” I n t he e ve nt t ha t t he Age nt r e c e i ve s s uc h a not i c e , t he Age nt s ha l l gi ve pr om pt not i c e t he r e of t o t he Le nde r s ; pr ovi de d t ha t , e xc e pt a s e xpr e s s l y s e t f or t h i n t he Loa n Doc um e nt s , t he Age nt s ha l l not ha ve a ny dut y t o di s c l os e , a nd s ha l l not be l i a bl e f or t he f a i l ur e t o di s c l os e , a ny i nf or m a t i on r e l a t i ng t o a Loa n Pa r t y or a ny of i t s Subs i di a r i e s t ha t i s c om m uni c a t e d t o or obt a i ne d by t he ba nk s e r vi ng a s t he Age nt or a ny of i t s Af f i l i a t e s i n a ny c a pa c i t y. 16. 10 Ri ght s a s a Le nde r . The Age nt s ha l l ha ve t he s a m e r i ght s
a nd powe r s he r e unde r a nd unde r a ny ot he r Loa n Doc um e nt wi t h r e s pe c t t o i t s Com m i t m e nt s a nd i t s Loa ns a s a ny Le nde r a nd m a y e xe r c i s e t he s a m e a s t hough i t we r e not Age nt , a nd t he t e r m " Le nde r ” or " Le nde r s ” s ha l l , a t a ny t i m e whe n Age nt i s a Le nde r , unl e s s t he c ont e xt ot he r wi s e i ndi c a t e s , i nc l ude Age nt i n i t s i ndi vi dua l c a pa c i t y. The Age nt a nd i t s Af f i l i a t e s m a y a c c e pt de pos i t s f r om , l e nd m one y t o, a nd ge ne r a l l y e nga ge i n a ny ki nd of t r us t , de bt , e qui t y or ot he r t r a ns a c t i on, i n a ddi t i on t o t hos e c ont e m pl a t e d by t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt , wi t h a ny Loa n Pa r t y, or a ny of t he i r Subs i di a r i e s a nd Af f i l i a t e s i n whi c h a ny Loa n Pa r t y i s not r e s t r i c t e d he r e by f r om e nga gi ng wi t h a ny ot he r Pe r s on. 16. 11 Le nde r Cr e di t De c i s i on, Le ga l Re pr e s e nt a t i on. ( a ) Ea c h Le nde r a c knowl e dge s t ha t i t ha s , i nde pe nde nt l y a nd wi t hout r e l i a nc e upon Age nt , or a ny ot he r Le nde r a nd ba s e d on t he f i na nc i a l s t a t e m e nt s pr e pa r e d by t he Bor r owe r s a nd s uc h ot he r doc um e nt s a nd i nf or m a t i on a s i t ha s de e m e d a ppr opr i a t e , m a de i t s own c r e di t a na l ys i s a nd de c i s i on
t o e nt e r i nt o t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s . Ea c h Le nde r a l s o a c knowl e dge s t ha t i t wi l l , i nde pe nde nt l y a nd wi t hout r e l i a nc e upon Age nt , or a ny ot he r Le nde r a nd ba s e d on s uc h doc um e nt s a nd i nf or m a t i on a s i t s ha l l de e m a ppr opr i a t e a t t he t i m e , c ont i nue t o m a ke i t s own c r e di t de c i s i ons i n t a ki ng or not t a ki ng a c t i on unde r t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s . Exc e pt f or a ny not i c e , r e por t , doc um e nt or ot he r i nf or m a t i on e xpr e s s l y r e qui r e d t o be f ur ni s he d t o t he Le nde r s by t he Age nt he r e unde r or a s m a y be r e a s ona bl y r e que s t e d by a Le nde r f r om t he Age nt , t he Age nt s ha l l ha ve no dut y or r e s pons i bi l i t y ( e i t he r i ni t i a l l y or on a c ont i nui ng ba s i s ) t o pr ovi de a ny Le nde r wi t h a ny not i c e , r e por t , doc um e nt , c r e di t i nf or m a t i on or ot he r i nf or m a t i on c onc e r ni ng t he a f f a i r s , f i na nc i a l c ondi t i on or bus i ne s s of a ny Loa n Pa r t y or a ny of i t s Af f i l i a t e s t ha t m a y c om e i nt o t he pos s e s s i on of t he Age nt ( whe t he r or not i n i t s c a pa c i t y a s t he Age nt ) or a ny of t he i r Af f i l i a t e s . ( b) Ea c h Le nde r f ur t he r a c knowl e dge s t ha t i t ha s ha d t he
oppor t uni t y t o be r e pr e s e nt e d by l e ga l c ouns e l i n c onne c t i on wi t h i t s e xe c ut i on of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s , t ha t i t ha s m a de i t s own e va l ua t i on of a l l Appl i c a bl e La ws r e l a t i ng t o t he t r a ns a c t i ons c ont e m pl a t e d he r e by, a nd t ha t t he c ouns e l t o t he Age nt r e pr e s e nt s onl y Age nt a nd not t he Le nde r s i n c onne c t i on wi t h t hi s Agr e e m e nt a nd t he t r a ns a c t i ons c ont e m pl a t e d he r e by. 16. 12 Suc c e s s or Age nt . The Age nt m a y r e s i gn a t a ny t i m e by gi vi ng wr i t t e n not i c e t he r e of t o t he Le nde r s a nd t he Com pa ny, s uc h r e s i gna t i on t o be e f f e c t i ve upon t he a ppoi nt m e nt of a s uc c e s s or Age nt or , i f 167 115525625. 4 0063724- 00082
no s uc c e s s or Age nt ha s be e n a ppoi nt e d, f or t y- f i ve da ys a f t e r t he r e t i r i ng Age nt gi ve s not i c e of i t s i nt e nt i on t o r e s i gn. Upon a ny s uc h r e s i gna t i on, t he Re qui r e d Le nde r s s ha l l ha ve t he r i ght t o a ppoi nt , on be ha l f of t he Bor r owe r s a nd t he Le nde r s , a s uc c e s s or Age nt . Unl e s s a De f a ul t e xi s t s , s uc h s uc c e s s or Age nt s ha l l be r e a s ona bl y a c c e pt a bl e t o t he Com pa ny. I f no s uc c e s s or Age nt s ha l l ha ve be e n s o a ppoi nt e d by t he Re qui r e d Le nde r s wi t hi n t hi r t y da ys a f t e r t he r e s i gni ng Age nt ’ s gi vi ng not i c e of i t s i nt e nt i on t o r e s i gn, t he n t he r e s i gni ng Age nt m a y a ppoi nt , on be ha l f of Bor r owe r s a nd t he Le nde r s , a s uc c e s s or Age nt . Not wi t hs t a ndi ng t he pr e vi ous s e nt e nc e , t he Age nt m a y a t a ny t i m e wi t hout t he c ons e nt of a ny Bor r owe r or a ny Le nde r , a ppoi nt a ny of i t s Af f i l i a t e s whi c h i s a c om m e r c i a l ba nk a s a s uc c e s s or Age nt he r e unde r . I f t he Age nt ha s r e s i gne d a nd no s uc c e s s or Age nt ha s be e n a ppoi nt e d, t he Le nde r s m a y pe r f or m a l l t he dut i e s of t he Age nt he r e unde r a nd e a c h Bor r owe r s ha l l m a ke a l l pa ym e nt s i n r e s pe c t of t he Obl i ga t i ons t o t he a ppl i c a bl e Le nde r a nd
f or a l l ot he r pur pos e s s ha l l de a l di r e c t l y wi t h t he Le nde r s . No s uc c e s s or Age nt s ha l l be de e m e d t o be a ppoi nt e d he r e unde r unt i l s uc h s uc c e s s or Age nt ha s a c c e pt e d t he a ppoi nt m e nt . Any s uc h s uc c e s s or Age nt s ha l l be a c om m e r c i a l ba nk ha vi ng c a pi t a l a nd r e t a i ne d e a r ni ngs of a t l e a s t $3, 000, 000, 000. 003, 000, 000, 000. Upon t he a c c e pt a nc e of a ny a ppoi nt m e nt a s t he Age nt he r e unde r by a s uc c e s s or Age nt , s uc h s uc c e s s or Age nt s ha l l t he r e upon s uc c e e d t o a nd be c om e ve s t e d wi t h a l l t he r i ght s , powe r s , pr i vi l e ge s a nd dut i e s of t he r e s i gni ng Age nt . Upon t he e f f e c t i ve ne s s of t he r e s i gna t i on of t he Age nt , t he r e s i gni ng Age nt s ha l l be di s c ha r ge d f r om i t s dut i e s a nd obl i ga t i ons he r e unde r a nd unde r t he Loa n Doc um e nt s . Af t e r t he e f f e c t i ve ne s s of t he r e s i gna t i on of a n Age nt , t he pr ovi s i ons of t hi s Ar t i c l e 16 s ha l l c ont i nue i n e f f e c t f or t he be ne f i t of s uc h Age nt i n r e s pe c t of a ny a c t i ons t a ke n or om i t t e d t o be t a ke n by i t whi l e i t wa s a c t i ng a s t he Age nt he r e unde r a nd unde r t he ot he r Loa n Doc um e nt s . I n t he e ve nt t ha t t he r e i s a s uc c e s s or t o t he Age nt by m e r ge r , or
Age nt a s s i gns i t s dut i e s a nd obl i ga t i ons t o a n Af f i l i a t e pur s ua nt t o t hi s Se c t i on, t he n t he t e r m " Pr i m e Ra t e ” a s us e d i n t hi s Agr e e m e nt s ha l l m e a n t he pr i m e r a t e , ba s e r a t e or ot he r a na l ogous r a t e of t he ne w Age nt . 16. 13 Age nt ’ s Fe e s . Ea c h Bor r owe r a gr e e s t o pa y t o t he Age nt , f or i t s a c c ount , t he f e e s a gr e e d t o by s uc h Bor r owe r a nd t he Age nt pur s ua nt t o a ny f e e l e t t e r be t we e n t he m , or a s ot he r wi s e a gr e e d f r om t i m e t o t i m e . 16. 14 De l e ga t i on t o Af f i l i a t e s . Ea c h Bor r owe r a nd t he Le nde r s a gr e e t ha t t he Age nt m a y de l e ga t e a ny of i t s dut i e s unde r t hi s Agr e e m e nt t o a ny of i t s Af f i l i a t e s . Any s uc h Af f i l i a t e ( a nd s uc h Af f i l i a t e ’ s di r e c t or s , of f i c e r s , a ge nt s a nd e m pl oye e s ) whi c h pe r f or m s dut i e s i n c onne c t i on wi t h t hi s Agr e e m e nt s ha l l be ( i ) e nt i t l e d t o t he s a m e be ne f i t s of t he i nde m ni f i c a t i on, wa i ve r a nd ot he r pr ot e c t i ve pr ovi s i ons t o whi c h t he Age nt i s e nt i t l e d unde r t hi s Agr e e m e nt ; a nd ( i i ) s ubj e c t t o t he s a m e obl i ga t i ons of t he Age nt he r e unde r . 16. 15 Exe c ut i on of Col l a t e r a l Doc um e nt s . The Le nde r s he r e by e m powe r a nd a ut hor i z e Age nt t o
e xe c ut e a nd de l i ve r t he Col l a t e r a l Doc um e nt s a nd a l l r e l a t e d a gr e e m e nt s , doc um e nt s or i ns t r um e nt s a s s ha l l be ne c e s s a r y or a ppr opr i a t e t o e f f e c t t he pur pos e s of t he Col l a t e r a l Doc um e nt s . 168 115525625. 4 0063724- 00082 16. 16 Col l a t e r a l Re l e a s e s . The Le nde r s he r e by e m powe r a nd a ut hor i z e Age nt t o e xe c ut e a nd de l i ve r on t he i r be ha l f a ny a gr e e m e nt s , doc um e nt s or i ns t r um e nt s a s s ha l l be ne c e s s a r y or a ppr opr i a t e t o e f f e c t a ny r e l e a s e s of Col l a t e r a l whi c h s ha l l be pe r m i t t e d by t he t e r m s he r e of or a ny ot he r Loa n Doc um e nt or whi c h s ha l l ot he r wi s e ha ve be e n a ppr ove d by t he Re qui r e d Le nde r s ( or , i f r e qui r e d by t he t e r m s of t hi s Agr e e m e nt , a l l of t he Le nde r s ) i n wr i t i ng. I f a ny of t he Col l a t e r a l s ha l l be s ol d or ot he r wi s e di s pos e d of by a ny Loa n Pa r t y i n a t r a ns a c t i on pe r m i t t e d by t he Loa n Doc um e nt s , t he n Age nt , a t t he r e que s t a nd s ol e e xpe ns e of t he a ppl i c a bl e Loa n Pa r t y, s ha l l e xe c ut e a nd de l i ve r t o s uc h Loa n Pa r t y a l l r e l e a s e s a nd ot he r doc um e nt s r e a s ona bl y ne c e s s a r y or a dvi s a bl e f or t he r e l e a s e of t he Li e ns c r e a t e d unde r t he Loa n Doc um e nt s on
s uc h Col l a t e r a l , pr ovi de d t ha t t he a ppl i c a bl e Loa n Pa r t y s ha l l pr ovi de t o t he Age nt e vi de nc e of s uc h t r a ns a c t i on's c om pl i a nc e wi t h t he Loa n Doc um e nt s a s t he Age nt s ha l l r e a s ona bl y r e que s t . 16. 17 No Advi s or y or Fi duc i a r y Re s pons i bi l i t y . I n c onne c t i on wi t h a l l a s pe c t s of e a c h t r a ns a c t i on c ont e m pl a t e d he r e by ( i nc l udi ng i n c onne c t i on wi t h a ny a m e ndm e nt , wa i ve r or ot he r m odi f i c a t i on he r e of or of a ny ot he r Loa n Doc um e nt ) , e a c h Bor r owe r a c knowl e dge s a nd a gr e e s t ha t : ( a ) ( i ) t he a r r a ngi ng a nd ot he r s e r vi c e s r e ga r di ng t hi s Agr e e m e nt pr ovi de d by t he Le nde r s a r e a r m ’ s - l e ngt h c om m e r c i a l t r a ns a c t i ons be t we e n e a c h Bor r owe r a nd i t s Af f i l i a t e s , on t he one ha nd, a nd t he Le nde r s , on t he ot he r ha nd, ( i i ) e a c h Bor r owe r ha s c ons ul t e d i t s own l e ga l , a c c ount i ng, r e gul a t or y a nd t a x a dvi s or s t o t he e xt e nt i t ha s de e m e d a ppr opr i a t e , a nd ( i i i ) e a c h Bor r owe r i s c a pa bl e of e va l ua t i ng, a nd unde r s t a nds a nd a c c e pt s , t he t e r m s , r i s ks a nd c ondi t i ons of t he t r a ns a c t i ons c ont e m pl a t e d he r e by a nd by t he ot he r Loa n Doc um e nt s ; ( b) ( i ) e a c h of t he Le nde r s i s a nd ha s be e n a c t i ng
s ol e l y a s a pr i nc i pa l a nd, e xc e pt a s e xpr e s s l y a gr e e d i n wr i t i ng by t he r e l e va nt pa r t i e s , ha s not be e n, i s not , a nd wi l l not be a c t i ng a s a n a dvi s or , a ge nt or f i duc i a r y f or a ny Bor r owe r or a ny of i t s Af f i l i a t e s , or a ny ot he r Pe r s on a nd ( i i ) no Le nde r ha s a ny obl i ga t i on t o a ny Bor r owe r or a ny of i t s Af f i l i a t e s wi t h r e s pe c t t o t he t r a ns a c t i ons c ont e m pl a t e d he r e by e xc e pt t hos e obl i ga t i ons e xpr e s s l y s e t f or t h he r e i n a nd i n t he ot he r Loa n Doc um e nt s ; a nd ( c ) e a c h of t he Le nde r s a nd t he i r r e s pe c t i ve Af f i l i a t e s m a y be e nga ge d i n a br oa d r a nge of t r a ns a c t i ons t ha t i nvol ve i nt e r e s t s t ha t di f f e r f r om t hos e of t he Bor r owe r s a nd t he i r Af f i l i a t e s , a nd no Le nde r ha s a ny obl i ga t i on t o di s c l os e a ny of s uc h i nt e r e s t s t o a ny Bor r owe r or i t s Af f i l i a t e s . To t he f ul l e s t e xt e nt pe r m i t t e d by l a w, e a c h Bor r owe r he r e by wa i ve s a nd r e l e a s e s a ny c l a i m s t ha t i t m a y ha ve a ga i ns t e a c h of t he Le nde r s wi t h r e s pe c t t o a ny br e a c h or a l l e ge d br e a c h of a ge nc y or f i duc i a r y dut y i n c onne c t i on wi t h a ny a s pe c t of a ny t r a ns a c t i on c ont e m pl a t e d he r e by. 16. 18 Co- Doc um e nt a t i on Age nt s ,
Syndi c a t i on Age nt , e t c . Ne i t he r a ny Doc um e nt a t i on Age nt or t he Syndi c a t i on Age nt s ha l l ha ve a ny r i ght , powe r , obl i ga t i on, l i a bi l i t y, r e s pons i bi l i t y or dut y unde r t hi s Agr e e m e nt ot he r t ha n t hos e a ppl i c a bl e t o a l l Le nde r s a s s uc h. W i t hout l i m i t i ng t he f or e goi ng, none of s uc h Le nde r s s ha l l ha ve or be de e m e d t o ha ve a f i duc i a r y r e l a t i ons hi p wi t h a ny Le nde r . Ea c h Le nde r he r e by m a ke s t he s a m e a c knowl e dgm e nt s wi t h r e s pe c t t o s uc h Pe r s ons a s i t m a ke s wi t h r e s pe c t t o t he Age nt i n Se c t i on 16. 11. 169 115525625. 4 0063724- 00082
16. 19 Ce r t a i n ERI SA M a t t e r s . ( a ) Ea c h Le nde r ( x) r e pr e s e nt s a nd wa r r a nt s , a s of t he da t e s uc h Pe r s on be c a m e a Le nde r pa r t y he r e t o, t o, a nd ( y) c ove na nt s , f r om t he da t e s uc h Pe r s on be c a m e a Le nde r pa r t y he r e t o t o t he da t e s uc h Pe r s on c e a s e s be i ng a Le nde r pa r t y he r e t o, f or t he be ne f i t of , t he Age nt a nd t he Ar r a nge r a nd t he i r r e s pe c t i ve Af f i l i a t e s , a nd not , f or t he a voi da nc e of doubt , t o or f or t he be ne f i t of t he Com pa ny or a ny ot he r Loa n Pa r t y, t ha t a t l e a s t one of t he f ol l owi ng i s a nd wi l l be t r ue : ( i ) s uc h Le nde r i s not us i ng " pl a n a s s e t s ” wi t hi n t he m e a ni ng of 29 C. F. R. § 2510. 3- 101, a s m odi f i e d by Se c t i on 3( 42) of ERI SA, of a ny Be ne f i t Pl a ns wi t h r e s pe c t t o s uc h Le nde r ’ s e nt r a nc e i nt o, pa r t i c i pa t i on i n, a dm i ni s t r a t i on of a nd pe r f or m a nc e of t he Loa ns , t he Le t t e r s of Cr e di t or t he Com m i t m e nt s , ( i i ) t he t r a ns a c t i on e xe m pt i on s e t f or t h i n one or m or e pr ohi bi t e d t r a ns a c t i on e xe m pt i ons i s s ue d by t he De pa r t m e nt of La bor ( e a c h, a " PTE” ) , s uc h a s PTE 84- 14 ( a c l a s s e xe m pt i on f or c e r t a i n t r a ns a c t i ons de t e r m i ne d by i nde pe nde nt qua l i f i e d
pr of e s s i ona l a s s e t m a na ge r s ) , PTE 95- 60 ( a c l a s s e xe m pt i on f or c e r t a i n t r a ns a c t i ons i nvol vi ng i ns ur a nc e c om pa ny ge ne r a l a c c ount s ) , PTE 90- 1 ( a c l a s s e xe m pt i on f or c e r t a i n t r a ns a c t i ons i nvol vi ng i ns ur a nc e c om pa ny pool e d s e pa r a t e a c c ount s ) , PTE 91- 38 ( a c l a s s e xe m pt i on f or c e r t a i n t r a ns a c t i ons i nvol vi ng ba nk c ol l e c t i ve i nve s t m e nt f unds ) or PTE 96- 23 ( a c l a s s e xe m pt i on f or c e r t a i n t r a ns a c t i ons de t e r m i ne d by i n- hous e a s s e t m a na ge r s ) , i s a ppl i c a bl e wi t h r e s pe c t t o s uc h Le nde r ’ s e nt r a nc e i nt o, pa r t i c i pa t i on i n, a dm i ni s t r a t i on of a nd pe r f or m a nc e of t he Loa ns , t he Le t t e r s of Cr e di t , t he Com m i t m e nt s a nd t hi s Agr e e m e nt , ( i i i ) ( A) s uc h Le nde r i s a n i nve s t m e nt f und m a na ge d by a " Qua l i f i e d Pr of e s s i ona l As s e t M a na ge r ” ( wi t hi n t he m e a ni ng of Pa r t VI of PTE 84- 14) , ( B) s uc h Qua l i f i e d Pr of e s s i ona l As s e t M a na ge r m a de t he i nve s t m e nt de c i s i on on be ha l f of s uc h Le nde r t o e nt e r i nt o, pa r t i c i pa t e i n, a dm i ni s t e r a nd pe r f or m t he Loa ns , t he Le t t e r s of Cr e di t , t he Com m i t m e nt s a nd t hi s Agr e e m e nt , ( C) t he e nt r a nc e i nt o, pa r t i c i pa t i on i n,
a dm i ni s t r a t i on of a nd pe r f or m a nc e of t he Loa ns , t he Le t t e r s of Cr e di t , t he Com m i t m e nt s a nd t hi s Agr e e m e nt s a t i s f i e s t he r e qui r e m e nt s of s ub- s e c t i ons ( b) t hr ough ( g) of Pa r t I of PTE 84- 14 a nd ( D) t o t he be s t knowl e dge of s uc h Le nde r , t he r e qui r e m e nt s of s ubs e c t i on ( a ) of Pa r t I of PTE 84- 14 a r e s a t i s f i e d wi t h r e s pe c t t o s uc h Le nde r ’ s e nt r a nc e i nt o, pa r t i c i pa t i on i n, a dm i ni s t r a t i on of a nd pe r f or m a nc e of t he Loa ns , t he Le t t e r s of Cr e di t , t he Com m i t m e nt s a nd t hi s Agr e e m e nt , or ( i v) s uc h ot he r r e pr e s e nt a t i on, wa r r a nt y a nd c ove na nt a s m a y be a gr e e d i n wr i t i ng be t we e n t he Age nt , i n i t s s ol e di s c r e t i on, a nd s uc h Le nde r . ( b) I n a ddi t i on, unl e s s e i t he r ( 1) s ub- c l a us e ( i ) i n t he i m m e di a t e l y pr e c e di ng c l a us e ( a ) i s t r ue wi t h r e s pe c t t o a Le nde r or ( 2) s uc h Le nde r ha s not pr ovi de d a not he r r e pr e s e nt a t i on, wa r r a nt y a nd c ove na nt a s pr ovi de d i n s ub- c l a us e ( i v) i n t he i m m e di a t e l y pr e c e di ng c l a us e ( a ) , s uc h Le nde r f ur t he r ( x) r e pr e s e nt s a nd wa r r a nt s , a s of t he da t e s uc h Pe r s on be c a m e a Le nde r pa r t y he r e t o, t o, a nd ( y) c ove na nt s , f r om t he da t e s uc h
Pe r s on be c a m e a Le nde r pa r t y he r e t o t o t he da t e s uc h Pe r s on c e a s e s be i ng a Le nde r pa r t y he r e t o, f or t he be ne f i t of , t he Age nt a nd t he Ar r a nge r a nd t he i r r e s pe c t i ve Af f i l i a t e s , a nd not , f or t he a voi da nc e of doubt , t o or f or t he be ne f i t of t he Com pa ny or a ny ot he r Loa n Pa r t y, t ha t t he Age nt i s not a f i duc i a r y wi t h r e s pe c t t o t he a s s e t s of s uc h Le nde r i nvol ve d i n s uc h Le nde r ’ s e nt r a nc e i nt o, pa r t i c i pa t i on i n, a dm i ni s t r a t i on of a nd pe r f or m a nc e of t he Loa ns , t he Le t t e r s of Cr e di t , t he Com m i t m e nt s a nd t hi s Agr e e m e nt ( i nc l udi ng i n c onne c t i on wi t h t he 170 115525625. 4 0063724- 00082 r e s e r va t i on or e xe r c i s e of a ny r i ght s by t he Age nt unde r t hi s Agr e e m e nt , a ny Loa n Doc um e nt or a ny doc um e nt s r e l a t e d he r e t o or t he r e t o) . ARTI CLE 17 M I SCELLANEOUS 17. 1 Expe ns e s ; I nde m ni f i c a t i on . Ea c h Bor r owe r he r e by a gr e e s : ( a ) t o pa y or r e i m bur s e Age nt on de m a nd f or a l l r e a s ona bl e c os t s a nd e xpe ns e s ( i nc l udi ng r e a s ona bl e At t or ne y Cos t s of t he Age nt ’ s c ouns e l ) i nc ur r e d i n c onne c t i on wi t h t he s yndi c a t i on, ne got i a t i on, due di l i ge nc e , pr e pa r a t i on, e xe c ut i on, de l i ve r y,
di s t r i but i on ( i nc l udi ng, wi t hout l i m i t a t i on, vi a De bt X a nd a ny ot he r i nt e r ne t s e r vi c e s e l e c t e d by t he Age nt ) , r e vi e w, a dm i ni s t r a t i on a nd e nf or c e m e nt of t he Loa n Doc um e nt s a nd t he t r a ns a c t i ons c ont e m pl a t e d t he r e by, a nd a ny a m e ndm e nt , s uppl e m e nt or m odi f i c a t i on t o, t he Loa n Doc um e nt s a nd a ny ot he r doc um e nt s pr e pa r e d i n c onne c t i on t he r e wi t h, whe t he r or not t he t r a ns a c t i ons c ont e m pl a t e d he r e by a r e c ons um m a t e d, i nc l udi ng wi t hout l i m i t a t i on a l l r e c or di ng c os t s , f i l i ng f e e s , c ons ul t a nt s ’ f e e s , t r a ve l e xpe ns e s , c os t s of a ppr a i s a l s a nd r e vi e ws , e nvi r onm e nt a l a udi t s a nd r e vi e ws ( i nc l udi ng c os t s of i nt e r na l r e vi e w of a t hi r d pa r t y r e por t ) , c ol l a t e r a l a udi t s ( s ubj e c t t o Se c t i on 12. 4) , t i t l e i ns ur a nc e , l i e n s e a r c he s , a nd c os t s of pe r f e c t i ng, c ont i nui ng, m oni t or i ng, pr e s e r vi ng a nd pr ot e c t i ng s e c ur i t y i nt e r e s t s i n t he Col l a t e r a l ; ( b) t o pa y or r e i m bur s e Age nt a nd e a c h Le nde r f or a l l t he i r r e a s ona bl e c os t s a nd e xpe ns e s i nc ur r e d i n c onne c t i on wi t h, a nd t o pa y, i nde m ni f y, a nd hol d t he I nde m ni f i e d Pe r s ons ha r m l e s s f r om a nd a ga i ns t a ny a nd a l l
c l a i m s , l i a bi l i t i e s , obl i ga t i ons , l os s e s , da m a ge s , pe na l t i e s , a c t i ons , j udgm e nt s , s ui t s , c os t s , e xpe ns e s , di s bur s e m e nt s , a nd At t or ne y Cos t s of e ve r y ki nd a nd na t ur e a r i s i ng out of or i n c onne c t i on wi t h, t he c ol l e c t i on, e nf or c e m e nt or pr ot e c t i on of a ny r i ght s a nd r e m e di e s unde r t he Loa n Doc um e nt s a nd a ny ot he r doc um e nt s pr e pa r e d i n c onne c t i on t he r e wi t h ( i nc l udi ng wi t hout l i m i t a t i on i n c onne c t i on wi t h ne got i a t i ons or wor kout or r e s t r uc t ur i ng a f f e c t i ng t he Loa n Doc um e nt s or Obl i ga t i ons a nd a ny ba nkr upt c y, or s i m i l a r pr oc e e di ng or ot he r l e ga l pr oc e e di ng i nvol vi ng a ny Loa n Pa r t y) ; ( c ) t o pa y, i nde m ni f y, a nd t o hol d t he I nde m ni f i e d Pe r s ons ha r m l e s s f r om , a ny a nd a l l r e c or di ng a nd f i l i ng f e e s a nd a ny a nd a l l l i a bi l i t i e s wi t h r e s pe c t t o, or r e s ul t i ng f r om a ny f a i l ur e or de l a y i n pa yi ng, s t a m p, e xc i s e a nd ot he r t a xe s ( ot he r t ha n i nc om e a nd gr os s r e ve nue t a xe s ) , i f a ny, whi c h m a y be pa ya bl e or de t e r m i ne d t o be pa ya bl e i n c onne c t i on wi t h t he e xe c ut i on a nd de l i ve r y of , or c ons um m a t i on of a ny of t he t r a ns a c t i ons c ont e m pl a t e d by, or a ny
a m e ndm e nt , s uppl e m e nt or m odi f i c a t i on of , or a ny wa i ve r or c ons e nt unde r or i n r e s pe c t of , a ny Loa n Doc um e nt a nd a ny s uc h ot he r doc um e nt s i nc l udi ng r e a s ona bl e At t or ne y Cos t s of c ouns e l t o t he Age nt a nd e a c h Le nde r i n c onne c t i on wi t h t he f or e goi ng a nd i n c onne c t i on wi t h a dvi s i ng Age nt wi t h r e s pe c t t o i t s r i ght s a nd r e s pons i bi l i t y unde r a ny Loa n Doc um e nt ; a nd ( d) t o pa y, i nde m ni f y, a nd hol d t he I nde m ni f i e d Pe r s ons ha r m l e s s f r om a nd a ga i ns t a ny a nd a l l ot he r l i a bi l i t i e s , obl i ga t i ons , l os s e s , da m a ge s , pe na l t i e s , 171 115525625. 4 0063724- 00082
a c t i ons , j udgm e nt s , s ui t s , c os t s , e xpe ns e s or di s bur s e m e nt s of a ny ki nd or na t ur e ( i nc l udi ng r e a s ona bl e At t or ne y Cos t s ) whi c h m a y be i nc ur r e d by or a s s e r t e d a ga i ns t a ny I nde m ni f i e d Pe r s on a r i s i ng out of or i n c onne c t i on wi t h t he Loa n Doc um e nt s , t he t r a ns a c t i ons c ont e m pl a t e d by t he Loa n Doc um e nt s , or t he us e of t he pr oc e e ds of t he Loa ns ( i nc l udi ng, wi t hout l i m i t a t i on, i n c onne c t i on wi t h a ny i nve s t i ga t i on, l i t i ga t i on, or pr oc e e di ng or pr e pa r a t i on of de f e ns e i n c onne c t i on t he r e wi t h) , whe t he r or not a ny of t he i nde m ni f i e d Pe r s ons i s a pa r t y t he r e t o, or by r e a s on of or i n c onne c t i on wi t h t he e xe c ut i on a nd de l i ve r y or t r a ns f e r of , or pa ym e nt or f a i l ur e t o m a ke pa ym e nt s unde r , Le t t e r s of Cr e di t ( i t be i ng a gr e e d t ha t not hi ng i n t hi s Se c t i on 17. 1 i s i nt e nde d t o l i m i t t he Re vol vi ng Loa n Bor r owe r ’ s obl i ga t i ons pur s ua nt t o Se c t i on 5. 9) . Not wi t hs t a ndi ng t he f or e goi ng, a Bor r owe r s ha l l ha ve no obl i ga t i on t o i nde m ni f y a ny I nde m ni f i e d Pe r s on wi t h r e s pe c t t o a ny c os t s of t he m a t t e r s de s c r i be d i n s ubs e c t i ons ( a ) , ( b) , ( c ) a nd ( d) of t hi s Se c t i on 17. 1
whi c h a r i s e f r om t he gr os s ne gl i ge nc e or wi l l f ul m i s c onduc t of s uc h I nde m ni f i e d Pe r s on. The a gr e e m e nt s i n t hi s Se c t i on 17. 1 s ha l l s ur vi ve r e pa ym e nt of t he Obl i ga t i ons a nd Pe r m i t t e d Swa p Obl i ga t i ons a nd t e r m i na t i on of t hi s Agr e e m e nt . W i t hout l i m i t i ng t he pr ovi s i ons of Se c t i on 7. 4, t hi s Se c t i on 17. 1( d) s ha l l not a ppl y wi t h r e s pe c t t o Ta xe s ot he r t ha n a ny Ta xe s t ha t r e pr e s e nt l os s e s , c l a i m s , da m a ge s , e t c . a r i s i ng f r om a ny non- Ta x c l a i m . 17. 2 Suc c e s s or s a nd As s i gns . The t e r m s a nd pr ovi s i ons of t he Loa n Doc um e nt s s ha l l be bi ndi ng upon a nd i nur e t o t he be ne f i t of t he Bor r owe r s a nd t he Le nde r s a nd t he i r r e s pe c t i ve s uc c e s s or s a nd a s s i gns pe r m i t t e d he r e by, e xc e pt t ha t ( a ) no Bor r owe r s ha l l ha ve t he r i ght t o a s s i gn i t s r i ght s or obl i ga t i ons unde r t he Loa n Doc um e nt s wi t hout t he pr i or wr i t t e n c ons e nt of e a c h Le nde r , ( b) a ny a s s i gnm e nt by a ny Le nde r m us t be m a de i n c om pl i a nc e wi t h Se c t i on 17. 4, a nd ( c ) a ny t r a ns f e r by pa r t i c i pa t i on m us t be m a de i n c om pl i a nc e wi t h t he t e r m s of t hi s Agr e e m e nt . Any a t t e m pt e d a s s i gnm e nt or t r a ns f e r by a ny
pa r t y not m a de i n c om pl i a nc e wi t h t hi s Se c t i on s ha l l be nul l a nd voi d, unl e s s s uc h a t t e m pt e d a s s i gnm e nt or t r a ns f e r i s t r e a t e d a s a pa r t i c i pa t i on i n a c c or da nc e wi t h t he t e r m s of t hi s Agr e e m e nt . The pa r t i e s t o t hi s Agr e e m e nt a c knowl e dge t ha t c l a us e ( b) of t hi s Se c t i on r e l a t e s onl y t o a bs ol ut e a s s i gnm e nt s a nd t hi s Se c t i on 17. 2 doe s not pr ohi bi t a s s i gnm e nt s c r e a t i ng s e c ur i t y i nt e r e s t s , i nc l udi ng, wi t hout l i m i t a t i on, a ny pl e dge or a s s i gnm e nt by a ny Le nde r of a l l or a ny por t i on of i t s r i ght s unde r t hi s Agr e e m e nt t o a Fe de r a l Re s e r ve Ba nk; pr ovi de d, howe ve r , t ha t no s uc h pl e dge or a s s i gnm e nt c r e a t i ng a s e c ur i t y i nt e r e s t s ha l l r e l e a s e t he t r a ns f e r or Le nde r f r om i t s obl i ga t i ons he r e unde r unl e s s a nd unt i l t he pa r t i e s t he r e t o ha ve c om pl i e d wi t h t he pr ovi s i ons of Se c t i on 17. 4. The Age nt m a y t r e a t t he Pe r s on whi c h m a de a ny Loa n a s t he owne r t he r e of f or a l l pur pos e s he r e of unl e s s a nd unt i l s uc h Pe r s on c om pl i e s wi t h Se c t i on 17. 4; pr ovi de d, howe ve r , t ha t t he Age nt m a y i n i t s di s c r e t i on ( but s ha l l not be r e qui r e d t o) f ol l ow i ns t r uc t i ons f r om t he
Pe r s on whi c h m a de a ny Loa n t o di r e c t pa ym e nt s r e l a t i ng t o s uc h Loa n t o a not he r Pe r s on. Any a s s i gne e of t he r i ght s t o a ny Loa n a gr e e s by a c c e pt a nc e of s uc h a s s i gnm e nt t o be bound by a l l t he t e r m s a nd pr ovi s i ons of t he Loa n Doc um e nt s . Any r e que s t , a ut hor i t y or c ons e nt of a ny Pe r s on, who a t t he t i m e of m a ki ng s uc h r e que s t or gi vi ng s uc h a ut hor i t y or c ons e nt i s t he owne r of t he r i ght s t o a ny Loa n, s ha l l be c onc l us i ve a nd bi ndi ng on a ny s ubs e que nt hol de r or a s s i gne e of t he r i ght s t o s uc h Loa n. 172 115525625. 4 0063724- 00082 17. 3 Pa r t i c i pa t i ons . 17. 3. 1 Pe r m i t t e d Pa r t i c i pa nt s ; Ef f e c t . Any Le nde r m a y, i n a c c or da nc e wi t h Appl i c a bl e La w, a t a ny t i m e s e l l t o one or m or e ba nks or ot he r e nt i t i e s ( e a c h, a " Pa r t i c i pa nt ” ) pa r t i c i pa t i ng i nt e r e s t s i n a ny Out s t a ndi ng Cr e di t Expos ur e owi ng t o s uc h Le nde r , t he Com m i t m e nt s of s uc h Le nde r or a ny ot he r i nt e r e s t of s uc h Le nde r unde r t he Loa n Doc um e nt s . I n t he e ve nt of a ny s uc h s a l e by a Le nde r of pa r t i c i pa t i ng i nt e r e s t s t o a Pa r t i c i pa nt , s uc h Le nde r ’ s obl i ga t i ons unde r t he Loa n Doc um e nt s s ha l l r e m a i n
unc ha nge d, s uc h Le nde r s ha l l r e m a i n s ol e l y r e s pons i bl e t o t he ot he r pa r t i e s he r e t o f or t he pe r f or m a nc e of s uc h obl i ga t i ons , s uc h Le nde r s ha l l r e m a i n t he owne r of i t s Out s t a ndi ng Cr e di t Expos ur e f or a l l pur pos e s unde r t he Loa n Doc um e nt s , a l l a m ount s pa ya bl e by Bor r owe r s unde r t hi s Agr e e m e nt s ha l l be de t e r m i ne d a s i f s uc h Le nde r ha d not s ol d s uc h pa r t i c i pa t i ng i nt e r e s t s , a nd Bor r owe r s a nd Age nt s ha l l c ont i nue t o de a l s ol e l y a nd di r e c t l y wi t h s uc h Le nde r i n c onne c t i on wi t h s uc h Le nde r ’ s r i ght s a nd obl i ga t i ons unde r t he Loa n Doc um e nt s . 17. 3. 2 Vot i ng Ri ght s . Ea c h Le nde r s ha l l r e t a i n t he s ol e r i ght t o a ppr ove , wi t hout t he c ons e nt of a ny Pa r t i c i pa nt , a ny a m e ndm e nt , m odi f i c a t i on or wa i ve r of a ny pr ovi s i on of t he Loa n Doc um e nt s ; pr ovi de d, howe ve r , t ha t a ny a gr e e m e nt pur s ua nt t o whi c h a ny Le nde r s e l l s a pa r t i c i pa t i ng i nt e r e s t m a y r e qui r e t he Le nde r t o obt a i n Pa r t i c i pa nt ’ s c ons e nt t o a ny a m e ndm e nt , m odi f i c a t i on or wa i ve r whi c h woul d r e qui r e t he c ons e nt of a l l Le nde r s pur s ua nt t o Se c t i on 17. 9. 17. 3. 3 Be ne f i t of Ce r t a i n Pr ovi s i ons . Ea c h Bor r owe r
a gr e e s t ha t e a c h Pa r t i c i pa nt s ha l l be de e m e d t o ha ve t he r i ght of s e t of f pr ovi de d i n Se c t i on 17. 8 i n r e s pe c t of i t s pa r t i c i pa t i ng i nt e r e s t i n a m ount s owi ng unde r t he Loa n Doc um e nt s t o t he s a m e e xt e nt a s i f t he a m ount of i t s pa r t i c i pa t i ng i nt e r e s t we r e owi ng di r e c t l y t o i t a s a Le nde r unde r t he Loa n Doc um e nt s , pr ovi de d t ha t e a c h Le nde r s ha l l r e t a i n t he r i ght of s e t of f pr ovi de d i n Se c t i on 17. 8 wi t h r e s pe c t t o t he a m ount of pa r t i c i pa t i ng i nt e r e s t s s ol d t o e a c h Pa r t i c i pa nt . The Le nde r s a gr e e t o s ha r e wi t h e a c h Pa r t i c i pa nt , a nd e a c h Pa r t i c i pa nt , by e xe r c i s i ng t he r i ght of s e t of f pr ovi de d i n Se c t i on 17. 8, a gr e e s t o s ha r e wi t h e a c h Le nde r , a ny a m ount r e c e i ve d pur s ua nt t o t he e xe r c i s e of i t s r i ght of s e t of f , s uc h a m ount s t o be s ha r e d i n a c c or da nc e wi t h Se c t i on 17. 7 a s i f e a c h Pa r t i c i pa nt we r e a Le nde r . Ea c h Bor r owe r f ur t he r a gr e e s t ha t e a c h Pa r t i c i pa nt s ha l l be e nt i t l e d t o t he be ne f i t s of Se c t i ons 7. 1, 7. 2, 7. 4, a nd 17. 1 t o t he s a m e e xt e nt a s i f i t we r e a Le nde r a nd ha d a c qui r e d i t s i nt e r e s t by a s s i gnm e nt pur s ua nt t o Se c t i on 17. 4, pr ovi de d t ha t ( a )
a Pa r t i c i pa nt s ha l l not be e nt i t l e d t o r e c e i ve a ny gr e a t e r pa ym e nt unde r Se c t i ons 7. 1 or 7. 2, or 7. 4 t ha n t he Le nde r who s ol d t he pa r t i c i pa t i ng i nt e r e s t t o s uc h Pa r t i c i pa nt woul d ha ve r e c e i ve d ha d i t r e t a i ne d s uc h i nt e r e s t f or i t s own a c c ount , unl e s s t he s a l e of s uc h i nt e r e s t t o s uc h Pa r t i c i pa nt i s m a de wi t h t he pr i or wr i t t e n c ons e nt of t he Com pa ny, a nd ( b) a Pa r t i c i pa nt s ha l l not be e nt i t l e d t o r e c e i ve a ny gr e a t e r pa ym e nt unde r Se c t i on 7. 4 t ha n t he Le nde r who s ol d t he pa r t i c i pa t i ng i nt e r e s t t o s uc h Pa r t i c i pa nt woul d ha ve r e c e i ve d ha d i t r e t a i ne d s uc h i nt e r e s t f or i t s own a c c ount ( i ) e xc e pt t o t he e xt e nt s uc h e nt i t l e m e nt t o r e c e i ve a gr e a t e r pa ym e nt r e s ul t s f r om a c ha nge i n t r e a t y, l a w or r e gul a t i on ( or a ny c ha nge i n t he i nt e r pr e t a t i on or a dm i ni s t r a t i on t he r e of by a ny Gove r nm e nt a l Aut hor i t y) t ha t oc c ur s a f t e r t he Pa r t i c i pa nt a c qui r e d t he a ppl i c a bl e pa r t i c i pa t i on a nd ( i i ) , i n t he c a s e of a ny Pa r t i c i pa nt t ha t woul d be a Non- U. S. Le nde r i f i t we r e a Le nde r , s uc h Pa r t i c i pa nt a gr e e s t o c om pl y wi t h t he pr ovi s i ons of Se c t i on 7. 4 t o t he s a m e e xt e nt
a s i f i t we r e a Le nde r ( i t be i ng unde r s t ood t ha t t he doc um e nt a t i on r e qui r e d unde r Se c t i on 7. 4. 6 s ha l l be de l i ve r e d t o t he pa r t i c i pa t i ng Le nde r ) . Ea c h Le nde r t ha t s e l l s a pa r t i c i pa t i on s ha l l , a c t i ng s ol e l y f or t hi s pur pos e a s a n a ge nt of t he Bor r owe r s , m a i nt a i n a r e gi s t e r on whi c h i t e nt e r s t he na m e a nd a ddr e s s of e a c h 173 115525625. 4 0063724- 00082
Pa r t i c i pa nt a nd t he pr i nc i pa l a m ount s ( a nd s t a t e d i nt e r e s t ) of e a c h Pa r t i c i pa nt ’ s i nt e r e s t i n a ny Out s t a ndi ng Cr e di t Expos ur e , a ny Com m i t m e nt or a ny ot he r obl i ga t i ons unde r t he Loa n Doc um e nt s ( t he " Pa r t i c i pa nt Re gi s t e r ” ) ; pr ovi de d t ha t no Le nde r s ha l l ha ve a ny obl i ga t i on t o di s c l os e a l l or a ny por t i on of t he Pa r t i c i pa nt Re gi s t e r ( i nc l udi ng t he i de nt i t y of a ny Pa r t i c i pa nt or a ny i nf or m a t i on r e l a t i ng t o a Pa r t i c i pa nt ’ s i nt e r e s t i n a ny Out s t a ndi ng Cr e di t Expos ur e , a ny Com m i t m e nt or a ny ot he r obl i ga t i ons unde r t he Loa n Doc um e nt s ) t o a ny Pe r s on e xc e pt t o t he e xt e nt t ha t s uc h di s c l os ur e i s ne c e s s a r y t o e s t a bl i s h t ha t s uc h Out s t a ndi ng Cr e di t Expos ur e , a ny Com m i t m e nt or a ny ot he r obl i ga t i ons unde r t he Loa n Doc um e nt s i s i n r e gi s t e r e d f or m unde r Se c t i on 5f . 103- 1( c ) of t he Uni t e d St a t e s Tr e a s ur y Re gul a t i ons . The e nt r i e s i n t he Pa r t i c i pa nt Re gi s t e r s ha l l be c onc l us i ve a bs e nt m a ni f e s t e r r or , a nd s uc h Le nde r s ha l l t r e a t e a c h Pe r s on whos e na m e i s r e c or de d i n t he Pa r t i c i pa nt Re gi s t e r a s t he owne r of s uc h pa r t i c i pa t i on f or a l l pur pos e s of t hi s
Agr e e m e nt not wi t hs t a ndi ng a ny not i c e t o t he c ont r a r y. For t he a voi da nc e of doubt , t he Age nt ( i n i t s c a pa c i t y a s t he Age nt ) s ha l l ha ve no r e s pons i bi l i t y f or m a i nt a i ni ng a Pa r t i c i pa nt Re gi s t e r . 17. 4 As s i gnm e nt s . 17. 4. 1 Pe r m i t t e d As s i gnm e nt s . Any Le nde r m a y a t a ny t i m e s e l l t o one or m or e El i gi bl e As s i gne e s or ot he r f i na nc i a l i ns t i t ut i ons r e a s ona bl y a c c e pt a bl e t o t he Age nt ( e a c h a n " As s i gne e ” ) a l l or a r a t a bl e pa r t of i t s Loa ns a nd pa r t i c i pa t i ons i n Swi ng Li ne Loa ns a nd Le t t e r s of Cr e di t a nd ot he r i nt e r e s t s unde r t hi s Agr e e m e nt a nd t he Loa n Doc um e nt s ; pr ovi de d, howe ve r , t ha t ( a ) unl e s s e a c h of t he Com pa ny a nd t he Age nt ot he r wi s e c ons e nt s , e a c h a s s i gnm e nt s ha l l be i n a m i ni m um a m ount of $5, 000, 000 or i f l e s s , t he e nt i r e Aggr e ga t e Le nde r Com m i t m e nt a nd Out s t a ndi ng Cr e di t Expos ur e of s uc h Le nde r ; ( b) a f t e r gi vi ng e f f e c t t o a ny As s i gnm e nt , t he Aggr e ga t e Le nde r Com m i t m e nt of t he a s s i gni ng Le nde r s ha l l be a t l e a s t $5, 000, 000. 005, 000, 000 or s ha l l be $0; a nd ( c ) e a c h a s s i gnm e nt s ha l l be of a c ons t a nt a nd not a va r yi ng, pe r c e nt a ge of a l l
of t he i nt e r e s t s of s uc h Le nde r i n i t s Out s t a ndi ng Cr e di t Expos ur e a nd a l l Com m i t m e nt s , Loa ns a nd Le t t e r s of Cr e di t . Any a s s i gnm e nt s ha l l be pur s ua nt t o a n As s i gnm e nt Agr e e m e nt i n s uc h ot he r f or m r e a s ona bl y a c c e pt a bl e t o t he Age nt a s m a y be a gr e e d t o by t he pa r t i e s t he r e t o. 17. 4. 2 Cons e nt s . The c ons e nt of t he Com pa ny s ha l l be r e qui r e d pr i or t o a n a s s i gnm e nt be c om i ng e f f e c t i ve unl e s s t he As s i gne e i s a Le nde r , a n Af f i l i a t e of a Le nde r or a n Appr ove d Fund, pr ovi de d t ha t t he c ons e nt of t he Com pa ny s ha l l not be r e qui r e d i f a n Eve nt of De f a ul t ha s oc c ur r e d a nd i s c ont i nui ng; pr ovi de d f ur t he r t ha t t he Com pa ny s ha l l be de e m e d t o ha ve c ons e nt e d t o a ny s uc h a s s i gnm e nt unl e s s i t s ha l l obj e c t t he r e t o by wr i t t e n not i c e t o t he Age nt wi t hi n f i ve ( 5) Bus i ne s s Da ys a f t e r ha vi ng r e c e i ve d wr i t t e n not i c e t he r e of . The c ons e nt of t he Age nt s ha l l be r e qui r e d pr i or t o a n a s s i gnm e nt be c om i ng e f f e c t i ve unl e s s t he As s i gne e i s a Le nde r , a n Af f i l i a t e of a Le nde r or a n Appr ove d Fund. The c ons e nt of e a c h of t he LC I s s ue r a nd t he Swi ng Li ne Le nde r s ha l l be r e qui r e d
pr i or t o a n a s s i gnm e nt of a Com m i t m e nt be c om i ng e f f e c t i ve unl e s s t he As s i gne e i s a Le nde r wi t h a Com m i t m e nt . Any c ons e nt r e qui r e d unde r t hi s Se c t i on 17. 4. 2 s ha l l not be unr e a s ona bl y wi t hhe l d or de l a ye d. 17. 4. 3 Ef f e c t ; Ef f e c t i ve Da t e . Upon ( a ) de l i ve r y t o t he Age nt of a n As s i gnm e nt Agr e e m e nt , t oge t he r wi t h a ny r e qui r e d c ons e nt s , a nd ( b) pa ym e nt of a $3, 500 f e e t o t he Age nt f or pr oc e s s i ng s uc h a s s i gnm e nt ( unl e s s s uc h f e e i s wa i ve d by t he Age nt ) , s uc h a s s i gnm e nt s ha l l be c om e e f f e c t i ve on t he e f f e c t i ve da t e s pe c i f i e d i n s uc h a s s i gnm e nt . The a s s i gnm e nt s ha l l c ont a i n a r e pr e s e nt a t i on by t he As s i gne e t o t he e f f e c t t ha t none of t he c ons i de r a t i on us e d t o m a ke 174 115525625. 4 0063724- 00082 t he pur c ha s e of t he Com m i t m e nt s a nd Out s t a ndi ng Cr e di t Expos ur e unde r t he a ppl i c a bl e As s i gnm e nt Agr e e m e nt c ons t i t ut e s " pl a n a s s e t s ” a s de f i ne d unde r ERI SA a nd t ha t t he r i ght s a nd i nt e r e s t s of t he As s i gne e i n a nd unde r t he Loa n Doc um e nt s wi l l not be " pl a n a s s e t s ” unde r ERI SA. On a nd a f t e r t he e f f e c t i ve da t e of s uc h a s s i gnm e nt , t he As s i gne e s ha l l f or a l l
pur pos e s be a Le nde r pa r t y t o t hi s Agr e e m e nt a nd a ny ot he r Loa n Doc um e nt e xe c ut e d by or on be ha l f of t he Le nde r s a nd s ha l l ha ve a l l t he r i ght s a nd obl i ga t i ons of a Le nde r unde r t he Loa n Doc um e nt s , t o t he s a m e e xt e nt a s i f i t we r e a n or i gi na l pa r t y t he r e t o, a nd t he t r a ns f e r or Le nde r s ha l l be r e l e a s e d wi t h r e s pe c t t o t he Com m i t m e nt s a nd Out s t a ndi ng Cr e di t Expos ur e a s s i gne d t o t he As s i gne e wi t hout a ny f ur t he r c ons e nt or a c t i on by a ny Bor r owe r , t he Le nde r s or t he Age nt . I n t he c a s e of a n a s s i gnm e nt c ove r i ng a l l of t he a s s i gni ng Le nde r ’ s r i ght s a nd obl i ga t i ons unde r t hi s Agr e e m e nt , s uc h Le nde r s ha l l c e a s e t o be a Le nde r he r e unde r but s ha l l c ont i nue t o be e nt i t l e d t o t he be ne f i t s of , a nd s ubj e c t t o, t hos e pr ovi s i ons of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s whi c h s ur vi ve pa ym e nt of t he Obl i ga t i ons a nd t e r m i na t i on of t he a ppl i c a bl e a gr e e m e nt . Any a s s i gnm e nt or t r a ns f e r by a Le nde r of r i ght s or obl i ga t i ons unde r t hi s Agr e e m e nt t ha t doe s not c om pl y wi t h t hi s Se c t i on s ha l l be t r e a t e d f or pur pos e s of t hi s Agr e e m e nt a s a s a l e by s uc h Le nde r
of a pa r t i c i pa t i on i n s uc h r i ght s a nd obl i ga t i ons i n a c c or da nc e wi t h Se c t i on 17. 3. 17. 4. 4 Ta x Tr e a t m e nt . I f a ny i nt e r e s t i n a ny Loa n Doc um e nt i s t r a ns f e r r e d t o a ny As s i gne e or Pa r t i c i pa nt whi c h i s not i nc or por a t e d unde r t he l a ws of t he Uni t e d St a t e s or a ny St a t e t he r e of , t he t r a ns f e r or Le nde r s ha l l c a us e s uc h Tr a ns f e r e e , c onc ur r e nt l y wi t h t he e f f e c t i ve ne s s of s uc h t r a ns f e r , t o c om pl y wi t h t he pr ovi s i ons of Se c t i on 7. 4. 17. 5 Re gi s t e r . The Age nt , a c t i ng s ol e l y f or t hi s pur pos e a s a n a ge nt of t he Bor r owe r s , s ha l l m a i nt a i n a t one of i t s of f i c e s i n t he Uni t e d St a t e s of Am e r i c a , a c opy of e a c h As s i gnm e nt de l i ve r e d t o i t a nd a r e gi s t e r f or t he r e c or da t i on of t he na m e s a nd a ddr e s s e s of t he Le nde r s , a nd t he Com m i t m e nt s of , a nd pr i nc i pa l a m ount s ( a nd s t a t e d i nt e r e s t ) of t he Loa ns owi ng t o, e a c h Le nde r , a nd pa r t i c i pa t i ons of e a c h Le nde r i n Le t t e r s of Cr e di t , pur s ua nt t o t he t e r m s he r e of f r om t i m e t o t i m e ( t he " Re gi s t e r ” ) . The e nt r i e s i n t he Re gi s t e r s ha l l be c onc l us i ve i n t he a bs e nc e of m a ni f e s t e r r or , a nd t he Bor r owe r , t he Age nt a nd t he Le nde r s
m a y t r e a t e a c h Pe r s on whos e na m e i s r e c or de d i n t he Re gi s t e r pur s ua nt t o t he t e r m s he r e of a s a Le nde r he r e unde r f or a l l pur pos e s of t hi s Agr e e m e nt , not wi t hs t a ndi ng not i c e t o t he c ont r a r y. The Re gi s t e r s ha l l be a va i l a bl e f or i ns pe c t i on by a ny Bor r owe r or Le nde r a t a ny r e a s ona bl e t i m e a nd f r om t i m e t o t i m e upon r e a s ona bl e pr i or not i c e . 17. 6 Di s s e m i na t i on of I nf or m a t i on . Ea c h Bor r owe r , f or i t s e l f a nd i t s Subs i di a r i e s , a ut hor i z e s e a c h Le nde r t o di s c l os e t o a ny Pa r t i c i pa nt or As s i gne e a nd pr os pe c t i ve Pa r t i c i pa nt or As s i gne e a ny a nd a l l f i na nc i a l or ot he r i nf or m a t i on i n s uc h Le nde r ’ s pos s e s s i on c onc e r ni ng a ny Loa n Pa r t y, s ubj e c t t o t he c onf i de nt i a l i t y r e qui r e m e nt s of Se c t i on 17. 26 of t hi s Agr e e m e nt . 17. 7 Ra t a bl e Pa ym e nt s . I f a ny Le nde r , whe t he r by s e t of f or ot he r wi s e , ha s pa ym e nt m a de t o i t upon i t s Out s t a ndi ng Cr e di t Expos ur e , Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e , Out s t a ndi ng Us e d 175 115525625. 4 0063724- 00082
Ve hi c l e Fl oor pl a n Expos ur e , Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e , a nd/ or Out s t a ndi ng Re vol vi ng Loa n Expos ur e ( ot he r t ha n pa ym e nt s r e c e i ve d pur s ua nt t o Se c t i ons 7. 1, 7. 2 or 7. 4 or pa ym e nt s s pe c i f i c a l l y pa ya bl e onl y t o s uc h Le nde r ) i n a gr e a t e r pr opor t i on t ha n t ha t r e c e i ve d by a ny ot he r Le nde r , s uc h Le nde r a gr e e s , pr om pt l y upon de m a nd, t o pur c ha s e a por t i on of t he Aggr e ga t e Out s t a ndi ng Cr e di t Expos ur e he l d by t he ot he r Le nde r s s o t ha t a f t e r s uc h pur c ha s e e a c h Le nde r wi l l hol d i t s Pr o Ra t a Sha r e of t he Aggr e ga t e Out s t a ndi ng Cr e di t Expos ur e , Out s t a ndi ng Ne w Ve hi c l e Fl oor pl a n Expos ur e , Out s t a ndi ng Us e d Ve hi c l e Fl oor pl a n Expos ur e , Out s t a ndi ng Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Expos ur e a nd/ or Out s t a ndi ng Re vol vi ng Loa n Expos ur e . I f a ny Le nde r , whe t he r i n c onne c t i on wi t h s e t of f or a m ount s whi c h m i ght be s ubj e c t t o s e t of f or ot he r wi s e , r e c e i ve s c ol l a t e r a l or ot he r pr ot e c t i on f or i t s Obl i ga t i ons or s uc h a m ount s whi c h m a y be s ubj e c t t o s e t of f , s uc h Le nde r a gr e e s , pr om pt l y upon de m a nd, t o t a ke s uc h a c t i on ne c e s s a r y s uc h t ha t a l l Le nde r s
s ha r e i n t he be ne f i t s of s uc h c ol l a t e r a l or ot he r pr ot e c t i on r a t a bl y i n pr opor t i on t o t he i r r e s pe c t i ve Pr o Ra t a Sha r e s . I n c a s e a ny s uc h pa ym e nt i s di s t ur be d by l e ga l pr oc e s s , or ot he r wi s e , a ppr opr i a t e f ur t he r a dj us t m e nt s s ha l l be m a de . 17. 8 Se t of f . Ea c h Bor r owe r he r e by gr a nt s e a c h Le nde r a s e c ur i t y i nt e r e s t i n a l l de pos i t s , c r e di t s a nd de pos i t a c c ount s ( i nc l udi ng a l l a c c ount ba l a nc e s , whe t he r pr ovi s i ona l or f i na l a nd whe t he r or not c ol l e c t e d or a va i l a bl e ) of s uc h Bor r owe r wi t h s uc h Le nde r or a ny Af f i l i a t e of s uc h Le nde r ( t he " De pos i t s ” ) . I n a ddi t i on t o, a nd wi t hout l i m i t a t i on of , a ny r i ght s of t he Le nde r s unde r Appl i c a bl e La w, i f a ny Bor r owe r i s not Sol ve nt , or i f a ny Eve nt of De f a ul t oc c ur s , e a c h Bor r owe r a ut hor i z e s e a c h Le nde r t o of f s e t a nd a ppl y a l l s uc h De pos i t s t owa r d t he pa ym e nt of t he Obl i ga t i ons owi ng t o s uc h Le nde r , whe t he r or not t he Obl i ga t i ons , or a ny pa r t t he r e of , s ha l l t he n be due a nd r e ga r dl e s s of t he e xi s t e nc e or a de qua c y of a ny c ol l a t e r a l , gua r a nt y or a ny ot he r s e c ur i t y, r i ght or r e m e dy a va i l a bl e t o s uc h Le nde r or t he Le nde r s ;
pr ovi de d, t ha t i n t he e ve nt t ha t a ny De f a ul t i ng Le nde r s ha l l e xe r c i s e s uc h r i ght of s e t of f , ( a ) a l l a m ount s s o s e t of f s ha l l be pa i d ove r i m m e di a t e l y t o t he Age nt f or f ur t he r a ppl i c a t i on i n a c c or da nc e wi t h t he pr ovi s i ons of Se c t i on 6. 14 a nd, pe ndi ng s uc h pa ym e nt , s ha l l be s e gr e ga t e d by s uc h De f a ul t i ng Le nde r f r om i t s ot he r f unds a nd de e m e d he l d i n t r us t f or t he be ne f i t of t he Age nt , t he LC I s s ue r , a nd t he Le nde r s , a nd ( b) t he Le nde r s ha l l pr ovi de pr om pt l y t o t he Age nt a s t a t e m e nt de s c r i bi ng i n r e a s ona bl e de t a i l t he Obl i ga t i ons owi ng t o s uc h De f a ul t i ng Le nde r a s t o whi c h i t e xe r c i s e d s uc h r i ght of s e t of f . The a f or e s a i d r i ght s m a y be e xe r c i s e d by t he Age nt or s uc h Le nde r a ga i ns t a ny Bor r owe r or a ga i ns t a ny t r us t e e i n ba nkr upt c y, de bt or i n pos s e s s i on, a s s i gne e f or t he be ne f i t of c r e di t or s , r e c e i ve r or e xe c ut i on, j udgm e nt or a t t a c hm e nt c r e di t or of a ny Bor r owe r or a ga i ns t a nyone e l s e c l a i m i ng t hr ough or a ga i ns t a ny Bor r owe r or s uc h t r us t e e i n ba nkr upt c y, de bt or i n pos s e s s i on, a s s i gne e f or t he be ne f i t of c r e di t or s , r e c e i ve r , or e xe c ut i on,
j udgm e nt or a t t a c hm e nt c r e di t or , not wi t hs t a ndi ng t he f a c t t ha t s uc h r i ght of s e t of f s ha l l not ha ve be e n e xe r c i s e d by t he Age nt or s uc h Le nde r pr i or t o t he oc c ur r e nc e of a n Eve nt of De f a ul t . 17. 9 Am e ndm e nt s a nd W a i ve r s . 17. 9. 1 Subj e c t t o t he pr ovi s i ons of t hi s Se c t i on 17. 9, t he Re qui r e d Le nde r s ( or t he Age nt wi t h t he c ons e nt i n wr i t i ng of t he Re qui r e d Le nde r s ) a nd t he Bor r owe r s m a y e nt e r i nt o a gr e e m e nt s s uppl e m e nt a l he r e t o f or t he pur pos e of a ddi ng or m odi f yi ng a ny pr ovi s i ons t o t he Loa n Doc um e nt s or c ha ngi ng i n a ny m a nne r t he r i ght s of t he Le nde r s or Bor r owe r s he r e unde r or 176 115525625. 4 0063724- 00082 wa i vi ng a ny Eve nt of De f a ul t he r e unde r ; pr ovi de d, howe ve r , t ha t no s uc h s uppl e m e nt a l a gr e e m e nt s ha l l : ( a ) wi t hout t he c ons e nt of a l l Le nde r s , e xt e nd t he f i na l m a t ur i t y of a ny Loa n, or e xt e nd t he e xpi r y da t e of a ny Le t t e r of Cr e di t t o a da t e a f t e r t he Te r m i na t i on Da t e or pos t pone or r e duc e t he a m ount of a ny r e gul a r l y s c he dul e d pa ym e nt of pr i nc i pa l of a ny Loa n or f or gi ve a l l or a ny por t i on of t he pr i nc i pa l a m ount t he r e of or a ny
Re i m bur s e m e nt Obl i ga t i on, or r e duc e t he r a t e ( e xc e pt a s pr ovi de d i n Se c t i on 7. 3) or e xt e nd t he t i m e of pa ym e nt of i nt e r e s t or f e e s t he r e on or on Re i m bur s e m e nt Obl i ga t i ons or i nc r e a s e t he a m ount of a ny Com m i t m e nt of a ny Le nde r he r e unde r ; ( b) wi t hout t he c ons e nt of a l l of t he Le nde r s , c ha nge t he de f i ni t i on of Re qui r e d Le nde r s or t he Pr o Ra t a Sha r e s ( or pa ym e nt m e c ha ni c s pr ovi de d i n Se c t i on 6. 9) r e qui r e d t o t a ke a ny a c t i on he r e unde r ; ( c ) wi t hout t he c ons e nt of a l l of t he Le nde r s , e xt e nd t he Te r m i na t i on Da t e , or pe r m i t a ny Bor r owe r t o a s s i gn i t s r i ght s unde r t hi s Agr e e m e nt ; ( d) wi t hout t he c ons e nt of a l l of t he Le nde r s , a m e nd t hi s Se c t i on 17. 9, or a ny pr ovi s i on he r e i n whi c h r e qui r e s c ons e nt or ot he r a c t i on by a l l Le nde r s ; ( e ) wi t hout t he c ons e nt of a l l of t he Le nde r s , e xc e pt a s pe r m i t t e d by t hi s Agr e e m e nt , r e l e a s e a ny Gua r a nt or or , e xc e pt a s pr ovi de d he r e i n or i n t he Col l a t e r a l Doc um e nt s , r e l e a s e a l l or a s ubs t a nt i a l pa r t of t he Col l a t e r a l ; ( f ) wi t hout t he c ons e nt of a l l of t he Le nde r s , e xc e pt pur s ua nt t o a n I nt e r c r e di t or Agr e e m e nt or
a s ot he r wi s e pe r m i t t e d by t hi s Agr e e m e nt , ( i ) s ubor di na t e , or ha ve t he e f f e c t of s ubor di na t i ng, t he Obl i ga t i ons he r e unde r t o a ny ot he r I nde bt e dne s s or ot he r obl i ga t i on or ( i i ) s ubor di na t e , or ha ve t he e f f e c t of s ubor di na t i ng, t he Li e ns s e c ur i ng t he Obl i ga t i ons t o Li e ns s e c ur i ng a ny ot he r I nde bt e dne s s or ot he r obl i ga t i on; or ( g) wi t hout t he c ons e nt of a l l of t he Le nde r s , a m e nd Se c t i on 14. 3 or Se c t i on 17. 7. No a m e ndm e nt of a ny pr ovi s i on of t hi s Agr e e m e nt r e l a t i ng t o t he Age nt s ha l l be e f f e c t i ve wi t hout t he wr i t t e n c ons e nt of t he Age nt , a nd no a m e ndm e nt of a ny pr ovi s i on r e l a t i ng t o t he LC I s s ue r s ha l l be e f f e c t i ve wi t hout t he wr i t t e n c ons e nt of t he LC I s s ue r . No a m e ndm e nt t o a ny pr ovi s i on of t hi s Agr e e m e nt r e l a t i ng t o t he Swi ng Li ne Le nde r or a ny Swi ng Li ne Loa ns s ha l l be e f f e c t i ve wi t hout t he wr i t t e n c ons e nt of t he Swi ng Li ne Le nde r . 17. 9. 2 Not wi t hs t a ndi ng t he f or e goi ng, or t he pr ovi s i ons of t hi s Se c t i on 17. 9, a ny f e e or ot he r a m ount pa ya bl e by a ny Bor r owe r or Bor r owe r s s ol e l y t o t he Age nt , t he Swi ng Li ne Le nde r or t he LC I s s ue r , m a y be
c ha nge d wi t h t he c ons e nt of onl y s uc h Bor r owe r or Bor r owe r s a nd t he Age nt a nd, i f a ppl i c a bl e , t he a f f e c t e d Swi ng Li ne Le nde r or LC I s s ue r , pr ovi de d t ha t no Le nde r wi l l be r e qui r e d t o pa y a ny s uc h f e e t o whi c h i t ha s not a gr e e d. 17. 10 W a i ve r ; Cum ul a t i ve Re m e di e s 177 115525625. 4 0063724- 00082
. No f a i l ur e or de l a y on t he pa r t of t he Age nt or a ny Le nde r i n e xe r c i s i ng a ny r i ght , powe r , r e m e dy or pr i vi l e ge he r e unde r or unde r a ny of t he ot he r Loa n Doc um e nt s a nd no c our s e of de a l i ng be t we e n a ny Loa n Pa r t y a nd t he Age nt or a ny Le nde r wi l l ope r a t e a s a wa i ve r of s uc h r i ght , powe r , r e m e dy or pr i vi l e ge , nor wi l l a ny s i ngl e or pa r t i a l e xe r c i s e of a ny r i ght , powe r or pr i vi l e ge he r e unde r pr e c l ude ot he r or f ur t he r e xe r c i s e t he r e of or t he e xe r c i s e of a ny ot he r r i ght , powe r , r e m e dy or pr i vi l e ge . W a i ve r of a ny De f a ul t s ha l l not be a wa i ve r of a ny ot he r s ubs e que nt or pr i or De f a ul t . No wa i ve r of a ny De f a ul t ( whe t he r or not Age nt or a ny Le nde r knows or s houl d ha ve known of s uc h De f a ul t ) s ha l l be de e m e d t o ha ve oc c ur r e d unl e s s Age nt ( t o t he e xt e nt a ut hor i z e d unde r Se c t i on 14. 2. 4 or 17. 9. 2) or t he Re qui r e d Le nde r s ha s e xpr e s s l y a gr e e d i n wr i t i ng s pe c i f yi ng s uc h wa i ve r . No a m e ndm e nt , m odi f i c a t i on or wa i ve r of , or c ons e nt wi t h r e s pe c t t o, a ny pr ovi s i on of t hi s Agr e e m e nt s ha l l i n a ny e ve nt be e f f e c t i ve unl e s s t he s a m e s ha l l be i n wr i t i ng a nd s i gne d a nd
de l i ve r e d by t he Age nt , t he Re qui r e d Le nde r s , or a l l of t he Le nde r s , a s ot he r wi s e s e t f or t h i n t hi s Agr e e m e nt . Any wa i ve r of a ny pr ovi s i on of t hi s Agr e e m e nt , a nd a ny c ons e nt t o a ny de pa r t ur e by a ny Loa n Pa r t y f r om t he t e r m s of a ny pr ovi s i on of t hi s Agr e e m e nt , s ha l l be e f f e c t i ve onl y i n t he s pe c i f i c i ns t a nc e a nd f or t he s pe c i f i c pur pos e f or whi c h gi ve n. No not i c e t o or de m a nd on a ny Loa n Pa r t y not r e qui r e d he r e unde r s ha l l i n a ny e ve nt e nt i t l e a ny Loa n Pa r t y t o a ny ot he r or f ur t he r not i c e or de m a nd i n s i m i l a r or ot he r c i r c um s t a nc e s or c ons t i t ut e a wa i ve r of t he r i ght of t he Age nt or a ny Le nde r t o a ny ot he r or f ur t he r a c t i on i n a ny c i r c um s t a nc e s wi t hout not i c e or de m a nd. The r i ght s a nd r e m e di e s he r e i n s pe c i f i e d a r e c um ul a t i ve a nd a r e not e xc l us i ve of a ny r i ght s or r e m e di e s whi c h t he Age nt or a ny Le nde r woul d ot he r wi s e ha ve a t l a w or i n e qui t y or ot he r wi s e by a gr e e m e nt . 17. 11 Not i c e s . 17. 11. 1 Not i c e s Ge ne r a l l y. Exc e pt i n t he c a s e of not i c e s a nd ot he r c om m uni c a t i ons e xpr e s s l y pe r m i t t e d t o be gi ve n by t e l e phone ( a nd e xc e pt a s pr ovi de d i n
Se c t i on 17. 11. 2 be l ow) , a l l not i c e s a nd ot he r c om m uni c a t i ons pr ovi de d f or he r e i n s ha l l be i n wr i t i ng a nd s ha l l be de l i ve r e d by ha nd or ove r ni ght c our i e r s e r vi c e , m a i l e d by c e r t i f i e d or r e gi s t e r e d m a i l or s e nt by f a c s i m i l e a s f ol l ows : ( a ) i f t o a ny Bor r owe r , a t i t s a ddr e s s or f a c s i m i l e num be r s e t f or t h on t he s i gna t ur e pa ge he r e of ; ( b) i f t o t he Age nt , a t i t s a ddr e s s or f a c s i m i l e num be r s e t f or t h on t he s i gna t ur e pa ge he r e of ; ( c ) i f t o LC I s s ue r , a t i t s a ddr e s s or f a c s i m i l e num be r s e t f or t h on t he s i gna t ur e pa ge he r e of ; ( d) i f t o a Le nde r , t o i t a t i t s a ddr e s s or f a c s i m i l e num be r s e t f or t h i n i t s Adm i ni s t r a t i ve Que s t i onna i r e , a c opy of whi c h Adm i ni s t r a t i ve Que s t i onna i r e s ha l l be pr ovi de d t o t he Com pa ny. Not i c e s s e nt by ha nd or ove r ni ght c our i e r s e r vi c e , or m a i l e d by c e r t i f i e d or r e gi s t e r e d m a i l , s ha l l be de e m e d t o ha ve be e n gi ve n whe n r e c e i ve d; not i c e s s e nt by f a c s i m i l e s ha l l be de e m e d t o ha ve be e n gi ve n whe n s e nt ( e xc e pt t ha t , i f not gi ve n dur i ng nor m a l bus i ne s s hour s f or t he r e c i pi e nt , s ha l l be de e m e d t o ha ve be e n gi ve n a t t he
ope ni ng of bus i ne s s on t he ne xt 178 115525625. 4 0063724- 00082 Bus i ne s s Da y f or t he r e c i pi e nt ) . Not i c e s de l i ve r e d t hr ough e l e c t r oni c c om m uni c a t i ons t o t he e xt e nt pr ovi de d i n Se c t i on 17. 11. 2 be l ow, s ha l l be e f f e c t i ve a s pr ovi de d i n s a i d Se c t i on 17. 11. 2. Not wi t hs t a ndi ng a ny c ont r a r y pr ovi s i on he r e of , a ny r e que s t f or a Cr e di t Ext e ns i on s ha l l not be e f f e c t i ve unt i l r e c e i ve d by t he Age nt . 17. 11. 2 El e c t r oni c Com m uni c a t i ons . ( a ) Not i c e s a nd ot he r c om m uni c a t i ons t o t he Le nde r s a nd t he LC I s s ue r he r e unde r m a y be de l i ve r e d or f ur ni s he d by e l e c t r oni c c om m uni c a t i on ( i nc l udi ng e - m a i l a nd i nt e r ne t or i nt r a ne t we bs i t e s ) pur s ua nt t o pr oc e dur e s a ppr ove d by t he Age nt or a s ot he r wi s e de t e r m i ne d by t he Age nt , pr ovi de d t ha t t he f or e goi ng s ha l l not a ppl y t o not i c e s t o a ny Le nde r or t he LC I s s ue r i f s uc h Le nde r or t he LC I s s ue r , a s a ppl i c a bl e , ha s not i f i e d t he Age nt t ha t i t i s i nc a pa bl e of r e c e i vi ng not i c e s by e l e c t r oni c c om m uni c a t i on. The Age nt or a ny Bor r owe r m a y, i n i t s r e s pe c t i ve di s c r e t i on, a gr e e t o a c c e pt not i c e s a nd ot he r c om m uni c a t i ons t o i t he r e unde r
by e l e c t r oni c c om m uni c a t i ons pur s ua nt t o pr oc e dur e s a ppr ove d by i t or a s i t ot he r wi s e de t e r m i ne s , pr ovi de d t ha t s uc h de t e r m i na t i on or a ppr ova l m a y be l i m i t e d t o pa r t i c ul a r not i c e s or c om m uni c a t i ons . ( b) Unl e s s t he Age nt ot he r wi s e pr e s c r i be s , ( i ) not i c e s a nd ot he r c om m uni c a t i ons s e nt t o a n e - m a i l a ddr e s s s ha l l be de e m e d r e c e i ve d upon t he s e nde r ’ s r e c e i pt of a n a c knowl e dge m e nt f r om t he i nt e nde d r e c i pi e nt ( s uc h a s by t he " r e t ur n r e c e i pt r e que s t e d” f unc t i on, a s a va i l a bl e , r e t ur n e - m a i l or ot he r wr i t t e n a c knowl e dge m e nt ) , pr ovi de d t ha t i f s uc h not i c e or ot he r c om m uni c a t i on i s not gi ve n dur i ng t he nor m a l bus i ne s s hour s of t he r e c i pi e nt , s uc h not i c e or c om m uni c a t i on s ha l l be de e m e d t o ha ve be e n gi ve n a t t he ope ni ng of bus i ne s s on t he ne xt Bus i ne s s Da y f or t he r e c i pi e nt , a nd ( i i ) not i c e s or c om m uni c a t i ons pos t e d t o a n I nt e r ne t or i nt r a ne t we bs i t e s ha l l be de e m e d r e c e i ve d upon t he de e m e d r e c e i pt by t he i nt e nde d r e c i pi e nt a t i t s e - m a i l a ddr e s s a s de s c r i be d i n t he f or e goi ng c l a us e ( a ) of not i f i c a t i on t ha t s uc h not i c e or c om m uni c a t i on
i s a va i l a bl e a nd i de nt i f yi ng t he we bs i t e a ddr e s s t he r e f or . 17. 11. 3 Cha nge of Addr e s s . Any pa r t y he r e t o m a y c ha nge i t s a ddr e s s or f a c s i m i l e num be r f or not i c e s a nd ot he r c om m uni c a t i ons he r e unde r by not i c e t o t he ot he r pa r t i e s he r e t o. 17. 12 I nt e gr a t i on; Conf l i c t i ng Te r m s . Thi s Agr e e m e nt ( i nc l udi ng t he e xhi bi t s a nd s c he dul e s ) t oge t he r wi t h t he ot he r Loa n Doc um e nt s e m body t he e nt i r e a gr e e m e nt of t he pa r t i e s on t he s ubj e c t m a t t e r he r e of a nd e xc e pt a s ot he r wi s e s pe c i f i c a l l y s e t f or t h i n t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt , s upe r s e de s a nd r e pl a c e s a l l pr i or a gr e e m e nt s , or a l a nd wr i t t e n, on s uc h s ubj e c t m a t t e r . I f a ny t e r m of a ny of t he ot he r Loa n Doc um e nt s e xpr e s s l y c onf l i c t s wi t h t he pr ovi s i ons of t hi s Agr e e m e nt , t he pr ovi s i ons of t hi s Agr e e m e nt s ha l l c ont r ol ; pr ovi de d, howe ve r , t ha t t he i nc l us i on of a ddi t i ona l , gr e a t e r or s uppl e m e nt a l r i ght s a nd r e m e di e s of t he Age nt a nd Le nde r s or t he i nc l us i on of a ddi t i ona l or gr e a t e r obl i ga t i ons a nd r e s pons i bi l i t i e s of t he Loa n Pa r t i e s , i n a ny of t he ot he r Loa n Doc um e nt s s ha l l not be de e m e d
a c onf l i c t wi t h t hi s Agr e e m e nt . 17. 13 Gove r ni ng La w 179 115525625. 4 0063724- 00082
. Exc e pt t o t he e xt e nt t ha t t he Age nt or a ny Le nde r ha s gr e a t e r r i ght s a nd r e m e di e s unde r f e de r a l l a w or t o t he e xt e nt ot he r wi s e s pe c i f i c a l l y s t a t e d i n a ny Loa n Doc um e nt , t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s s ha l l be gove r ne d by a nd c ons t r ue d a nd e nf or c e d i n a c c or da nc e wi t h t he l a ws of t he St a t e of Or e gon wi t hout r e ga r d t o c onf l i c t s of l a w pr i nc i pl e s but gi vi ng e f f e c t t o f e de r a l l a ws a ppl i c a bl e t o na t i ona l ba nks , e xc e pt t ha t m a t t e r s c onc e r ni ng t he va l i di t y a nd pe r f e c t i on of s e c ur i t y i nt e r e s t s c ove r e d t he r e by s ha l l be gove r ne d by t he c onf l i c t s of l a w pr ovi s i ons of t he a ppl i c a bl e Uni f or m Com m e r c i a l Code . 17. 14 Cons e nt To J ur i s di c t i on . EACH BORROW ER HEREBY I RREVOCABLY SUBM I TS TO THE NON- EXCLUSI VE J URI SDI CTI ON OF ANY UNI TED STATES FEDERAL OR STATE COURT LOCATED I N OR W I TH J URI SDI CTI ON OVER PORTLAND, OREGON I N ANY ACTI ON OR PROCEEDI NG ARI SI NG OUT OF OR RELATI NG TO THE OBLI GATI ONS AND THE LOAN DOCUM ENTS AND EACH BORROW ER HEREBY I RREVOCABLY AGREES THAT ALL CLAI M S I N RESPECT OF SUCH ACTI ON OR PROCEEDI NG M AY BE HEARD AND DETERM I NED I N
ANY SUCH COURT AND I RREVOCABLY W AI VES ANY OBJ ECTI ON I T M AY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUI T, ACTI ON OR PROCEEDI NG BROUGHT I N SUCH A COURT OR THAT SUCH COURT I S AN I NCONVENI ENT FORUM . NOTHI NG HEREI N SHALL LI M I T THE RI GHT OF THE AGENT, THE LC I SSUER OR ANY LENDER TO BRI NG PROCEEDI NGS AGAI NST ANY BORROW ER I N THE COURTS OF ANY OTHER J URI SDI CTI ON. ANY J UDI CI AL PROCEEDI NG BY ANY BORROW ER AGAI NST THE AGENT, THE LC I SSUER OR ANY LENDER OR ANY AFFI LI ATE OF THE AGENT, THE LC I SSUER OR ANY LENDER I NVOLVI NG, DI RECTLY OR I NDI RECTLY, ANY M ATTER I N ANY W AY ARI SI NG OUT OF, RELATED TO, OR CONNECTED W I TH ANY LOAN DOCUM ENT SHALL BE BROUGHT ONLY I N A COURT LOCATED I N OR W I TH J URI SDI CTI ON OVER PORTLAND, OREGON. 17. 15 Doc um e nt s Sa t i s f a c t or y t o t he Age nt a nd Re qui r e d Le nde r s . Al l i nf or m a t i on, doc um e nt s a nd i ns t r um e nt s r e qui r e d t o be e xe c ut e d or de l i ve r e d t o t he Age nt s ha l l be i n f or m a nd s ubs t a nc e r e a s ona bl y s a t i s f a c t or y t o t he Age nt a nd t he Re qui r e d Le nde r s . 17. 16 Exhi bi t s . Al l e xhi bi t s a nd s c he dul e s r e f e r r e d t o he r e i n a r e a t t a c he d
he r e t o a nd he r e by i nc or por a t e d by r e f e r e nc e a s i f f ul l y s e t f or t h he r e i n. 17. 17 He a di ngs . Se c t i on he a di ngs i n t he Loa n Doc um e nt s a r e f or c onve ni e nc e of r e f e r e nc e onl y, a nd s ha l l not gove r n t he i nt e r pr e t a t i on of a ny of t he pr ovi s i ons of t he Loa n Doc um e nt s . 17. 18 Nonl i a bi l i t y of Le nde r s 180 115525625. 4 0063724- 00082 . The r e l a t i ons hi p be t we e n t he Bor r owe r s on t he one ha nd a nd t he Le nde r s , t he LC I s s ue r a nd t he Age nt on t he ot he r ha nd s ha l l be s ol e l y t ha t of bor r owe r a nd l e nde r . Ne i t he r t he Age nt , t he Ar r a nge r , t he LC I s s ue r nor a ny Le nde r s ha l l ha ve a ny f i duc i a r y r e s pons i bi l i t i e s t o a ny Bor r owe r . Ne i t he r t he Age nt , t he Ar r a nge r , t he LC I s s ue r nor a ny Le nde r unde r t a ke s a ny r e s pons i bi l i t y t o a ny Bor r owe r t o r e vi e w or i nf or m a ny Bor r owe r of a ny m a t t e r i n c onne c t i on wi t h a ny pha s e of a ny Bor r owe r ’ s bus i ne s s or ope r a t i ons . Ea c h Bor r owe r a gr e e s t ha t ne i t he r t he Age nt , t he Ar r a nge r , t he LC I s s ue r nor a ny Le nde r s ha l l ha ve l i a bi l i t y t o a ny Bor r owe r ( whe t he r s oundi ng i n t or t , c ont r a c t or ot he r wi s e ) f or l os s e s s uf f e r e d by a ny Bor r owe r i n c onne c t i on wi t h,
a r i s i ng out of , or i n a ny wa y r e l a t e d t o, t he t r a ns a c t i ons c ont e m pl a t e d a nd t he r e l a t i ons hi p e s t a bl i s he d by t he Loa n Doc um e nt s , or a ny a c t , om i s s i on or e ve nt oc c ur r i ng i n c onne c t i on t he r e wi t h, unl e s s i t i s de t e r m i ne d i n a f i na l non- a ppe a l a bl e j udgm e nt by a c our t of c om pe t e nt j ur i s di c t i on t ha t s uc h l os s e s r e s ul t e d f r om t he gr os s ne gl i ge nc e or wi l l f ul m i s c onduc t of t he pa r t y f r om whi c h r e c ove r y i s s ought . Ne i t he r t he Age nt , t he Ar r a nge r , t he LC I s s ue r nor a ny Le nde r s ha l l ha ve a ny l i a bi l i t y wi t h r e s pe c t t o, a nd e a c h Bor r owe r he r e by wa i ve s , r e l e a s e s a nd a gr e e s not t o s ue f or , a ny s pe c i a l , i ndi r e c t , c ons e que nt i a l or puni t i ve da m a ge s s uf f e r e d by a ny Bor r owe r i n c onne c t i on wi t h, a r i s i ng out of , or i n a ny wa y r e l a t e d t o t he Loa n Doc um e nt s or t he t r a ns a c t i ons c ont e m pl a t e d t he r e by. I t i s a gr e e d t ha t t he Ar r a nge r s ha l l , i n i t s c a pa c i t y a s s uc h, ha ve no dut i e s or r e s pons i bi l i t i e s unde r t he Agr e e m e nt or a ny ot he r Loa n Doc um e nt . Ea c h Le nde r a c knowl e dge s t ha t i t ha s not r e l i e d a nd wi l l not r e l y on t he Ar r a nge r i n de c i di ng t o e nt e r i nt o t he Agr e e m e nt
or a ny ot he r Loa n Doc um e nt or i n t a ki ng or not t a ki ng a ny a c t i on. 17. 19 Sur vi va l of Re pr e s e nt a t i ons . Al l r e pr e s e nt a t i ons a nd wa r r a nt i e s of a ny Bor r owe r c ont a i ne d i n t hi s Agr e e m e nt s ha l l s ur vi ve t he m a ki ng of t he Cr e di t Ext e ns i ons he r e i n c ont e m pl a t e d. 17. 20 Gove r nm e nt a l Re gul a t i on . Anyt hi ng c ont a i ne d i n t hi s Agr e e m e nt t o t he c ont r a r y not wi t hs t a ndi ng, ne i t he r t he LC I s s ue r nor a ny Le nde r s ha l l be obl i ga t e d t o e xt e nd c r e di t t o t he Bor r owe r s i n vi ol a t i on of a ny l i m i t a t i on or pr ohi bi t i on pr ovi de d by a ny Appl i c a bl e La w. 17. 21 Count e r pa r t s . Thi s Agr e e m e nt m a y be e xe c ut e d i n c ount e r pa r t s ( a nd by di f f e r e nt pa r t i e s he r e t o i n di f f e r e nt c ount e r pa r t s ) , e a c h of whi c h s ha l l c ons t i t ut e a n or i gi na l , but a l l of whi c h whe n t a ke n t oge t he r s ha l l c ons t i t ut e a s i ngl e c ont r a c t . De l i ve r y of a n e xe c ut e d c ount e r pa r t of a s i gna t ur e pa ge of t hi s Agr e e m e nt by t e l e c opy s ha l l be e f f e c t i ve a s de l i ve r y of a m a nua l l y e xe c ut e d c ount e r pa r t of t hi s Agr e e m e nt . 17. 22 Se ve r a bi l i t y . W he ne ve r pos s i bl e , e a c h pr ovi s i on of t hi s Agr e e m e nt a nd e a c h of t he ot he r Loa n Doc um e nt s
s ha l l be i nt e r pr e t e d i n s uc h a m a nne r a s t o be va l i d a nd e f f e c t i ve unde r Appl i c a bl e La w. Any pr ovi s i on i n a ny Loa n Doc um e nt t ha t i s he l d t o be i nope r a t i ve , une nf or c e a bl e , or i nva l i d i n a ny j ur i s di c t i on s ha l l , a s t o t ha t j ur i s di c t i on, be i nope r a t i ve , une nf or c e a bl e , or i nva l i d wi t hout a f f e c t i ng t he r e m a i ni ng pr ovi s i ons i n t ha t j ur i s di c t i on or t he ope r a t i on, e nf or c e a bi l i t y, or 181 115525625. 4 0063724- 00082
va l i di t y of t ha t pr ovi s i on i n a ny ot he r j ur i s di c t i on, a nd t o t hi s e nd t he pr ovi s i ons of a l l Loa n Doc um e nt s a r e de c l a r e d t o be s e ve r a bl e . 17. 23 Cons t r uc t i on . Thi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s a r e t he r e s ul t of ne got i a t i ons a m ong, a nd ha ve be e n r e vi e we d by, e a c h Loa n Pa r t y, e a c h Le nde r , t he Age nt a nd t he i r r e s pe c t i ve c ouns e l ( or , i f a ny pa r t y ha s not ha d t he Loa n Doc um e nt s r e vi e we d by i t s c ouns e l , s uc h pa r t y ha s ha d t he oppor t uni t y t o do s o a nd ha s vol unt a r i l y c hos e n not t o do s o) . Ac c or di ngl y, t he Loa n Doc um e nt s s ha l l be de e m e d t o be t he pr oduc t of a l l pa r t i e s he r e t o, a nd no a m bi gui t y s ha l l be c ons t r ue d i n f a vor of or a ga i ns t a ny Loa n Pa r t y, t he Age nt , or a ny Le nde r . 17. 24 USA Pa t r i ot Ac t Not i f i c a t i on . The f ol l owi ng not i f i c a t i on i s pr ovi de d t o e a c h Bor r owe r pur s ua nt t o Se c t i on 326 of t he USA Pa t r i ot Ac t of 2001, 31 U. S. C. Se c t i on 5318: Ea c h Le nde r t ha t i s s ubj e c t t o t he r e qui r e m e nt s of t he PATRI OT Ac t he r e by not i f i e s e a c h Bor r owe r a nd e a c h ot he r Loa n Pa r t y t ha t pur s ua nt t o t he r e qui r e m e nt s of t he PATRI OT Ac t , i t i s r e qui r e d t o
obt a i n, ve r i f y a nd r e c or d i nf or m a t i on t ha t i de nt i f i e s s uc h Loa n Pa r t y, whi c h i nf or m a t i on i nc l ude s t he na m e a nd a ddr e s s of s uc h Loa n Pa r t y a nd ot he r i nf or m a t i on t ha t wi l l a l l ow s uc h Le nde r t o i de nt i f y s uc h Loa n Pa r t y i n a c c or da nc e wi t h t he PATRI OT Ac t . 17. 25 Nonr e l i a nc e . Ea c h Le nde r he r e by r e pr e s e nt s t ha t i t i s not r e l yi ng on or l ooki ng t o a ny m a r gi n s t oc k ( a s de f i ne d i n Re gul a t i on U) of t he Boa r d f or t he r e pa ym e nt of t he Cr e di t Ext e ns i ons pr ovi de d f or he r e i n. 17. 26 Conf i de nt i a l i t y . The Age nt a nd e a c h Le nde r a gr e e t o t a ke r e a s ona bl e pr e c a ut i ons , i n a c c or da nc e wi t h c us t om a r y pr oc e dur e s , t o m a i nt a i n t he c onf i de nt i a l i t y of a l l non- publ i c i nf or m a t i on pr ovi de d t o i t by a ny Loa n Pa r t y unde r t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt , whi c h i s i de nt i f i e d a s c onf i de nt i a l a t t he t i m e s uc h Pe r s on pr ovi de s t he i nf or m a t i on, a nd a gr e e s t ha t i t s ha l l not us e a ny s uc h i nf or m a t i on ot he r t ha n i n c onne c t i on wi t h or i n e nf or c e m e nt of t hi s Agr e e m e nt a nd t he ot he r Loa n Doc um e nt s or i n c onne c t i on wi t h ot he r bus i ne s s now or he r e a f t e r e xi s t i ng or
c ont e m pl a t e d wi t h a ny Loa n Pa r t y, e xc e pt t o t he e xt e nt s uc h i nf or m a t i on ( a ) wa s or be c om e s ge ne r a l l y a va i l a bl e t o t he publ i c ot he r t ha n a s a r e s ul t of di s c l os ur e by t he Age nt or Le nde r , or ( b) wa s or be c om e s a va i l a bl e on a non- c onf i de nt i a l ba s i s f r om a s our c e ot he r t ha n a Loa n Pa r t y, pr ovi de d t ha t s uc h s our c e i s not bound by a c onf i de nt i a l i t y a gr e e m e nt wi t h a Loa n Pa r t y known t o t he Age nt or s uc h Le nde r ; pr ovi de d, howe ve r , t ha t t he Age nt or a ny Le nde r m a y di s c l os e s uc h c onf i de nt i a l i nf or m a t i on ( p) a t t he r e que s t or pur s ua nt t o a ny r e qui r e m e nt of a ny Gove r nm e nt a l Body or i n c onne c t i on wi t h a n e xa m i na t i on of t he Age nt or s uc h Le nde r by a ny s uc h a ut hor i t y; ( q) pur s ua nt t o s ubpoe na or ot he r c our t pr oc e s s ; ( r ) whe n r e que s t e d or r e qui r e d t o do s o i n a c c or da nc e wi t h t he pr ovi s i ons of a ny Appl i c a bl e La w; ( s ) t o t he e xt e nt r e a s ona bl y r e qui r e d i n c onne c t i on wi t h a ny l i t i ga t i on or pr oc e e di ng t o whi c h t he Age nt , a ny Le nde r or t he i r r e s pe c t i ve a f f i l i a t e s m a y be pa r t y; ( t ) t o t he e xt e nt r e a s ona bl y r e qui r e d i n c onne c t i on wi t h t he e xe r c i s e of 182
115525625. 4 0063724- 00082 a ny r e m e dy he r e unde r or unde r a ny ot he r Loa n Doc um e nt ; ( u) t o t he Age nt ’ s or s uc h Le nde r ’ s a nd i t s a f f i l i a t e s , di r e c t or s , of f i c e r s , e m pl oye e s a nd a ge nt s , i nc l udi ng a c c ount a nt s , a t t or ne ys a nd ot he r pr of e s s i ona l a dvi s or s who a r e s ubj e c t t o s i m i l a r l i m i t a t i ons ; ( v) t o a ny Pa r t i c i pa nt or As s i gne e , a c t ua l or pot e nt i a l , pr ovi de d t ha t s uc h Pe r s on a gr e e s i n wr i t i ng t o ke e p s uc h i nf or m a t i on c onf i de nt i a l t o t he s a m e e xt e nt r e qui r e d of t he Le nde r s he r e unde r ; ( w) t o i t s di r e c t or i ndi r e c t c ont r a c t ua l c ount e r pa r t i e s i n s wa p a gr e e m e nt s or t o l e ga l c ouns e l , a c c ount a nt s a nd ot he r pr of e s s i ona l a dvi s or s t o s uc h c ount e r pa r t i e s , ( x) t o r a t i ng a ge nc i e s i f r e que s t e d or r e qui r e d by s uc h a ge nc i e s i n c onne c t i on wi t h a r a t i ng r e l a t i ng t o t he Obl i ga t i ons he r e unde r ; ( y) a s t o t he Age nt or a ny Le nde r or i t s a f f i l i a t e s , a s e xpr e s s l y pe r m i t t e d unde r t he t e r m s of a ny ot he r doc um e nt or a gr e e m e nt r e ga r di ng c onf i de nt i a l i t y t o whi c h a ny Loa n Pa r t y i s pa r t y or i s de e m e d pa r t y wi t h t he Age nt or s uc h Le nde r or a f f i l i a t e ; a nd ( z ) t o i t s a f f i l i a t e s ;
pr ovi de d, t ha t wi t h r e s pe c t t o di s c l os ur e s unde r c l a us e s ( q) a nd ( r ) , s uc h Le nde r s ha l l us e c om m e r c i a l l y r e a s ona bl e e f f or t s t o not i f y t he Com pa ny ( unl e s s s uc h not i f i c a t i on i s pr ohi bi t e d by a ny Appl i c a bl e La w) of t he pr opos e d di s c l os ur e be f or e s uc h di s c l os ur e i s m a de t o r e a s ona bl y a f f or d t he Com pa ny t he oppor t uni t y t o s e e k t o pr e ve nt s uc h di s c l os ur e . 17. 27 For d Le t t e r Agr e e m e nt . Ea c h Le nde r he r e by a gr e e s t o t he t e r m s a nd c ondi t i ons s e t f or t h i n t he l e t t e r a gr e e m e nt r e ga r di ng Cl a r i f i c a t i on of Suppl e m e nt a l Te r m s a nd Condi t i ons Agr e e m e nt da t e d Apr i l 5, 2012 a nd a gr e e d t o on Apr i l 10, 2012 be t we e n For d M ot or Com pa ny a nd t he Com pa ny, a c opy of whi c h ha s be e n pr ovi de d t o e a c h Le nde r . 17. 28 W a i ve r of J ur y Tr i a l . TO THE FULLEST EXTENT PERM I TTED BY APPLI CABLE LAW , EACH BORROW ER, THE AGENT, THE LC I SSUER AND EACH LENDER HEREBY W AI VE TRI AL BY J URY I N ANY J UDI CI AL PROCEEDI NG I NVOLVI NG, DI RECTLY OR I NDI RECTLY, ANY M ATTER ( W HETHER SOUNDI NG I N TORT, CONTRACT OR OTHERW I SE) I N ANY W AY ARI SI NG OUT OF, RELATED TO, OR CONNECTED W I TH THE
OBLI GATI ONS AND THE LOAN DOCUM ENTS OR THE RELATI ONSHI P ESTABLI SHED THEREUNDER. EACH OF THEM REPRESENTS TO THE OTHER PARTI ES THAT THI S W AI VER I S KNOW I NGLY, W I LLI NGLY AND VOLUNTARI LY GI VEN. 17. 29 Di s c l os ur e . Unde r Or e gon l a w, m os t a gr e e m e nt s pr om i s e s a nd c om m i t m e nt s m a de by a ny Le nde r c onc e r ni ng l oa ns a nd ot he r c r e di t e xt e ns i ons whi c h a r e not f or pe r s ona l , f a m i l y or hous e hol d pur pos e s or s e c ur e d s ol e l y by t he bor r owe r 's r e s i de nc e m us t be i n wr i t i ng, e xpr e s s c ons i de r a t i on a nd be s i gne d by t he Le nde r t o be e nf or c e a bl e . 17. 30 Ac knowl e dge m e nt a nd Cons e nt t o Ba i l - I n of Af f e c t e d Fi na nc i a l I ns t i t ut i ons . Not wi t hs t a ndi ng a nyt hi ng t o t he c ont r a r y i n a ny Loa n Doc um e nt or i n a ny ot he r a gr e e m e nt , a r r a nge m e nt or unde r s t a ndi ng a m ong a ny s uc h pa r t i e s , e a c h pa r t y he r e t o a c knowl e dge s t ha t a ny l i a bi l i t y of a ny Af f e c t e d Fi na nc i a l I ns t i t ut i on a r i s i ng unde r a ny Loa n 183 115525625. 4 0063724- 00082
Doc um e nt , t o t he e xt e nt s uc h l i a bi l i t y i s uns e c ur e d, m a y be s ubj e c t t o t he wr i t e - down a nd c onve r s i on powe r s of t he a ppl i c a bl e Re s ol ut i on Aut hor i t y a nd a gr e e s a nd c ons e nt s t o, a nd a c knowl e dge s a nd a gr e e s t o be bound by: ( a ) t he a ppl i c a t i on of a ny W r i t e - Down a nd Conve r s i on Powe r s by t he a ppl i c a bl e Re s ol ut i on Aut hor i t y t o a ny s uc h l i a bi l i t i e s a r i s i ng he r e unde r t ha t m a y be pa ya bl e t o i t by a ny pa r t y he r e t o t ha t i s a n Af f e c t e d Fi na nc i a l I ns t i t ut i on; a nd ( b) t he e f f e c t s of a ny Ba i l - I n Ac t i on on a ny s uc h l i a bi l i t y, i nc l udi ng, i f a ppl i c a bl e : ( i ) a r e duc t i on i n f ul l or i n pa r t or c a nc e l l a t i on of a ny s uc h l i a bi l i t y; ( i i ) a c onve r s i on of a l l , or a por t i on of , s uc h l i a bi l i t y i nt o s ha r e s or ot he r i ns t r um e nt s of owne r s hi p i n s uc h Af f e c t e d Fi na nc i a l I ns t i t ut i on, i t s pa r e nt unde r t a ki ng, or a br i dge i ns t i t ut i on t ha t m a y be i s s ue d t o i t or ot he r wi s e c onf e r r e d on i t , a nd t ha t s uc h s ha r e s or ot he r i ns t r um e nt s of owne r s hi p wi l l be a c c e pt e d by i t i n l i e u of a ny r i ght s wi t h r e s pe c t t o a ny s uc h l i a bi l i t y unde r t hi s Agr e e m e nt or a ny ot he r Loa n Doc um e nt ; or ( i i i ) t he
va r i a t i on of t he t e r m s of s uc h l i a bi l i t y i n c onne c t i on wi t h t he e xe r c i s e of t he wr i t e - down a nd c onve r s i on powe r s of t he a ppl i c a bl e Re s ol ut i on Aut hor i t y. 17. 31 Am e ndm e nt a nd Re s t a t e m e nt . Thi s Agr e e m e nt c ons t i t ut e s a n a m e ndm e nt a nd r e s t a t e m e nt of t he Exi s t i ng Loa n Agr e e m e nt e f f e c t i ve f r om a nd a f t e r t he Cl os i ng Da t e . The e xe c ut i on a nd de l i ve r y of t hi s Agr e e m e nt s ha l l not c ons t i t ut e a nova t i on of a ny i nde bt e dne s s or ot he r obl i ga t i ons owi ng t o t he e xi s t i ng Le nde r s or Age nt unde r t he Exi s t i ng Loa n Agr e e m e nt . On t he Cl os i ng Da t e , t he c r e di t f a c i l i t i e s de s c r i be d i n t he Exi s t i ng Loa n Agr e e m e nt s ha l l be a m e nde d, s uppl e m e nt e d, m odi f i e d a nd r e s t a t e d i n t he i r e nt i r e t y a s de s c r i be d he r e i n, a nd a l l l oa ns a nd ot he r obl i ga t i ons of t he Com pa ny a nd t he ot he r Bor r owe r s out s t a ndi ng a s of s uc h da t e unde r t he Exi s t i ng Loa n Agr e e m e nt s ha l l be de e m e d t o be l oa ns a nd obl i ga t i ons out s t a ndi ng unde r t he c or r e s pondi ng f a c i l i t i e s de s c r i be d he r e i n, wi t hout a ny f ur t he r a c t i on by a ny Pe r s on, e xc e pt t ha t t he Age nt s ha l l m a ke s uc h t r a ns f e r s of f unds a s a r e ne c e s s a r y
i n or de r t ha t t he out s t a ndi ng ba l a nc e of s uc h l oa ns , t oge t he r wi t h a ny e xt e ns i ons of c r e di t m a de on t he Cl os i ng Da t e , r e f l e c t t he Com m i t m e nt s of t he Le nde r s he r e unde r . 17. 32 Ac knowl e dge m e nt Re ga r di ng a ny Suppor t e d QFCs . To t he e xt e nt t ha t t he Loa n Doc um e nt s pr ovi de s uppor t , t hr ough a gua r a nt e e or ot he r wi s e , f or a ny Swa p or a ny ot he r a gr e e m e nt or i ns t r um e nt t ha t i s a QFC ( s uc h s uppor t , " QFC Cr e di t Suppor t ” , a nd e a c h s uc h QFC, a " Suppor t e d QFC” ) , t he pa r t i e s a c knowl e dge a nd a gr e e a s f ol l ows wi t h r e s pe c t t o t he r e s ol ut i on powe r of t he Fe de r a l De pos i t I ns ur a nc e Cor por a t i on unde r t he Fe de r a l De pos i t I ns ur a nc e Ac t a nd Ti t l e I I of t he Dodd- Fr a nk W a l l St r e e t Re f or m a nd Cons um e r Pr ot e c t i on Ac t ( t oge t he r wi t h t he r e gul a t i ons pr om ul ga t e d t he r e unde r , t he 184 115525625. 4 0063724- 00082 " U. S. Spe c i a l Re s ol ut i on Re gi m e s ” ) i n r e s pe c t of s uc h Suppor t e d QFC a nd QFC Cr e di t Suppor t ( wi t h t he pr ovi s i ons be l ow a ppl i c a bl e not wi t hs t a ndi ng t ha t t he Loa n Doc um e nt s a nd a ny Suppor t e d QFC m a y i n f a c t be s t a t e d t o be gove r ne d by t he l a ws of t he St a t e of Ne w Yor k
a nd/ or of t he Uni t e d St a t e s or a ny ot he r s t a t e of t he Uni t e d St a t e s ) : ( a ) I n t he e ve nt a Cove r e d Ent i t y t ha t i s pa r t y t o a Suppor t e d QFC ( e a c h, a " Cove r e d Pa r t y” ) be c om e s s ubj e c t t o a pr oc e e di ng unde r a U. S. Spe c i a l Re s ol ut i on Re gi m e , t he t r a ns f e r of s uc h Suppor t e d QFC a nd t he be ne f i t of s uc h QFC Cr e di t Suppor t ( a nd a ny i nt e r e s t a nd obl i ga t i on i n or unde r s uc h Suppor t e d QFC a nd s uc h QFC Cr e di t Suppor t , a nd a ny r i ght s i n pr ope r t y s e c ur i ng s uc h Suppor t e d QFC or s uc h QFC Cr e di t Suppor t ) f r om s uc h Cove r e d Pa r t y wi l l be e f f e c t i ve t o t he s a m e e xt e nt a s t he t r a ns f e r woul d be e f f e c t i ve unde r t he U. S. Spe c i a l Re s ol ut i on Re gi m e i f t he Suppor t e d QFC a nd s uc h QFC Cr e di t Suppor t ( a nd a ny s uc h i nt e r e s t , obl i ga t i on a nd r i ght s i n pr ope r t y) we r e gove r ne d by t he l a ws of t he Uni t e d St a t e s or a s t a t e of t he Uni t e d St a t e s . I n t he e ve nt a Cove r e d Pa r t y or a BHC Ac t Af f i l i a t e of a Cove r e d Pa r t y be c om e s s ubj e c t t o a pr oc e e di ng unde r a U. S. Spe c i a l Re s ol ut i on Re gi m e , De f a ul t Ri ght s unde r t he Loa n Doc um e nt s t ha t m i ght ot he r wi s e a ppl y t o s uc h Suppor t e d QFC or a ny QFC
Cr e di t Suppor t t ha t m a y be e xe r c i s e d a ga i ns t s uc h Cove r e d Pa r t y a r e pe r m i t t e d t o be e xe r c i s e d t o no gr e a t e r e xt e nt t ha n s uc h De f a ul t Ri ght s c oul d be e xe r c i s e d unde r t he U. S. Spe c i a l Re s ol ut i on Re gi m e i f t he Suppor t e d QFC a nd t he Loa n Doc um e nt s we r e gove r ne d by t he l a ws of t he Uni t e d St a t e s or a s t a t e of t he Uni t e d St a t e s . W i t hout l i m i t a t i on of t he f or e goi ng, i t i s unde r s t ood a nd a gr e e d t ha t r i ght s a nd r e m e di e s of t he pa r t i e s wi t h r e s pe c t t o a De f a ul t i ng Le nde r s ha l l i n no e ve nt a f f e c t t he r i ght s of a ny Cove r e d Pa r t y wi t h r e s pe c t t o a Suppor t e d QFC or a ny QFC Cr e di t Suppor t . ( b) As us e d i n t hi s Se c t i on 17. 31, t he f ol l owi ng t e r m s ha ve t he f ol l owi ng m e a ni ngs : " BHC Ac t Af f i l i a t e ” of a pa r t y m e a ns a n " a f f i l i a t e ” ( a s s uc h t e r m i s de f i ne d unde r , a nd i nt e r pr e t e d i n a c c or da nc e wi t h, 12 U. S. C. 1841( k) ) of s uc h pa r t y. " Cove r e d Ent i t y” m e a ns a ny of t he f ol l owi ng: ( i ) a " c ove r e d e nt i t y” a s t ha t t e r m i s de f i ne d i n, a nd i nt e r pr e t e d i n a c c or da nc e wi t h, 12 C. F. R. § 252. 82( b) ; ( i i ) a " c ove r e d ba nk” a s t ha t t e r m i s de f i ne d i n, a nd i nt e r pr e t e d i n a c c or da nc e
wi t h, 12 C. F. R. § 47. 3( b) ; or ( i i i ) a " c ove r e d FSI ” a s t ha t t e r m i s de f i ne d i n, a nd i nt e r pr e t e d i n a c c or da nc e wi t h, 12 C. F. R. § 382. 2( b) . " De f a ul t Ri ght ” ha s t he m e a ni ng a s s i gne d t o t ha t t e r m i n, a nd s ha l l be i nt e r pr e t e d i n a c c or da nc e wi t h, 12 C. F. R. §§ 252. 81, 47. 2 or 382. 1, a s a ppl i c a bl e . " QFC” ha s t he m e a ni ng a s s i gne d t o t he t e r m " qua l i f i e d f i na nc i a l c ont r a c t ” i n, a nd s ha l l be i nt e r pr e t e d i n a c c or da nc e wi t h, 12 U. S. C. 5390( c ) ( 8) ( D) . [ Si gna t ur e pa ge s f ol l ow] 185 115525625. 4 0063724- 00082
SCHEDULE 1 Na m e of Fi na nc i a l I ns t i t ut i on Pr o Ra t a Sha r e of Aggr e ga t e Le nde r Com m i t m e nt Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Re vol vi ng Loa n Com m i t m e nt Se r vi c e Loa ne r Ve hi c l e Com m i t m e nt U. S. Ba nk [ ***] [ ***] [ ***] [ ***] [ ***] J P M or ga n Cha s e Ba nk [ ***] [ ***] [ ***] [ ***] [ ***] Toyot a M ot or Cr e di t [ ***] [ ***] [ ***] [ ***] [ ***] Ba nk of Am e r i c a [ ***] [ ***] [ ***] [ ***] [ ***] M e r c e de s - Be nz Fi na nc i a l [ ***] [ ***] [ ***] [ ***] [ ***] Am e r i c a n Honda Fi na nc e Cor por a t i on [ ***] [ ***] [ ***] [ ***] [ ***] TD Ba nk [ ***] [ ***] [ ***] [ ***] [ ***] Tr ui s t Ba nk [ ***] [ ***] [ ***] [ ***] [ ***] W e l l s Fa r go Ba nk, NA [ ***] [ ***] [ ***] [ ***] [ ***] Ca pi t a l One NA [ ***] [ ***] [ ***] [ ***] [ ***] BM W Fi na nc i a l Se r vi c e s [ ***] [ ***] [ ***] [ ***] [ ***] PNC Ba nk, Na t i ona l As s oc i a t i on [ ***] [ ***] [ ***] [ ***] [ ***] Sa nt a nde r Ba nk, N. A. [ ***] [ ***] [ ***] [ ***] [ ***] Al l y Ba nk [ ***] [ ***] [ ***] [ ***] [ ***] The Hunt i ngt on Na t i ona l Ba nk [ ***] [ ***] [ ***] [ ***] [ ***] VW Cr e di t , I nc . [ ***] [ ***] [ ***] [ ***] [ ***] BM O Ha r r i s Ba nk [ ***] [ ***] [ ***]
[ ***] [ ***] Hyunda i Ca pi t a l Am e r i c a [ ***] [ ***] [ ***] [ ***] [ ***] M & T Ba nk [ ***] [ ***] [ ***] [ ***] [ ***] Ni s s a n M ot or Ac c e pt a nc e Cor por a t i on [ ***] [ ***] [ ***] [ ***] [ ***] 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
115525625. 4 0063724- 00082 0. 75% Le ve r a ge Ra t i o Gr e a t e r t ha n 4. 50 t o 1. 00 Gr e a t e r t ha n 3. 50 t o 1. 00 but l e s s t ha n or e qua l t o 4. 00 t o 1. 00 1. 50% 2. 00% 0. 25% LC Fe e Pe r c e nt a ge / Re vol vi ng Loa n M a r gi n 0. 50% 0. 40% PRI CI NG SCHEDULE I n a ddi t i on t o t he t e r m s de f i ne d e l s e whe r e i n t hi s Agr e e m e nt , f or pur pos e s of de t e r m i ni ng t he a ppl i c a bl e i nt e r e s t r a t e s a nd f e e s , t he f ol l owi ng t e r m s s ha l l ha ve t he m e a ni ngs s e t f or t h i n t hi s Pr i c i ng Sc he dul e : " Al t e r na t e Ba s e Ra t e M a r gi n ( Ne w Ve hi c l e ) ” m e a ns a pe r c e nt a ge r a t e pe r a nnum e qua l t o 0. 10% . " Al t e r na t e Ba s e Ra t e M a r gi n ( Se r vi c e Loa ne r Ve hi c l e ) ” m e a ns a pe r c e nt a ge r a t e pe r a nnum e qua l t o 0. 10% . " Al t e r na t e Ba s e Ra t e M a r gi n ( Us e d Ve hi c l e ) ” m e a ns a pe r c e nt a ge r a t e pe r a nnum e qua l t o 0. 40% . " LC Fe e Pe r c e nt a ge ” m e a ns t he a ppl i c a bl e pe r c e nt a ge r a t e s pe r a nnum s e t f or t h be l ow oppos i t e t he a ppl i c a bl e Le ve r a ge Ra t i o, a s a dj us t e d f r om t i m e t o t i m e . " Ne w Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e ” m e a ns a pe r c e nt a ge r a t e pe r a nnum e qua l t o 0. 15% . " Ne w Ve hi c l e Fl oor pl a n M a r gi n” m e a ns a pe r c e nt a ge r a t e
pe r a nnum e qua l t o 1. 10% . " Re vol vi ng Loa n M a r gi n” , " Re vol vi ng Loa n Com m i t m e nt Fe e Ra t e ” a nd " Al t e r na t e Ba s e Ra t e M a r gi n ( Re vol vi ng) ” m e a n t he a ppl i c a bl e pe r c e nt a ge r a t e s pe r a nnum s e t f or t h be l ow oppos i t e t he a ppl i c a bl e Le ve r a ge Ra t i o, a s a dj us t e d f r om t i m e t o t i m e . Gr e a t e r t ha n 2. 50 t o 1. 00 but l e s s t ha n or e qua l t o 3. 50 t o 1. 00 1. 00% 1. 25% Re vol vi ng Loa n Com m i t m e nt Fe e Ra t e 0. 20% 0. 25% Gr e a t e r t ha n 4. 00 t o 1. 00 but l e s s t ha n or e qua l t o 4. 50 t o 1. 00 Le s s t ha n or e qua l t o 2. 50 t o 1. 00 Al t e r na t e Ba s e Ra t e M a r gi n ( Re vol vi ng) 1. 00% 1. 75% 0. 15% 0. 15% 0. 30% The Re vol vi ng Loa n M a r gi n ( " Appl i c a bl e M a r gi n” ) a nd Re vol vi ng Loa n Com m i t m e nt Fe e Ra t e ( " Appl i c a bl e Fe e Ra t e ” ) s ha l l be de t e r m i ne d by t he Age nt f r om t i m e t o t i m e ba s e d upon t he i nf or m a t i on s e t f or t h i n Bor r owe r ’ s f i na nc i a l s t a t e m e nt s a nd Com pl i a nc e Ce r t i f i c a t e f ur ni s he d t o t he Age nt pur s ua nt t o t hi s Agr e e m e nt a s of t he e nd of e a c h f i s c a l qua r t e r a nd s ha l l be ba s e d upon t he Le ve r a ge Ra t i o a s of s uc h da t e . Any c ha nge i n t he Appl i c a bl e M a r gi n or Appl i c a bl e Fe e Ra t e
s ha l l t a ke e f f e c t on t he f i r s t Bus i ne s s Da y of t he m ont h f ol l owi ng t he da t e of de l i ve r y t o t he Age nt of t he a ppl i c a bl e f i na nc i a l s t a t e m e nt s a nd Com pl i a nc e Ce r t i f i c a t e , a nd t he Appl i c a bl e M a r gi n a nd Appl i c a bl e Fe e Ra t e , a s s o de t e r m i ne d, s ha l l r e m a i n i n e f f e c t unt i l t he e a r l i e r of : a . t he f i r s t Bus i ne s s Da y of t he m ont h f ol l owi ng t he de l i ve r y t o t he Age nt of a s ubs e que nt f i na nc i a l s t a t e m e nt a nd Com pl i a nc e Ce r t i f i c a t e i ndi c a t i ng a Le ve r a ge Ra t i o r e qui r i ng a c ha nge i n t he Appl i c a bl e M a r gi n or Appl i c a bl e Fe e Ra t e , or b. t he da y upon whi c h t he Com pa ny f a i l s t o de l i ve r t o t he Age nt t he a ppl i c a bl e f i na nc i a l s t a t e m e nt s a nd Com pl i a nc e Ce r t i f i c a t e wi t hi n t he t i m e pr ovi de d unde r t hi s Agr e e m e nt . Upon a ny f a i l ur e of t he Com pa ny t o de l i ve r t o t he Age nt t he a ppl i c a bl e f i na nc i a l s t a t e m e nt s a nd Com pl i a nc e Ce r t i f i c a t e wi t hi n t he t i m e r e qui r e d by t hi s Agr e e m e nt , t he Appl i c a bl e M a r gi n a nd Appl i c a bl e Fe e Ra t e s ha l l be t he hi ghe s t Appl i c a bl e M a r gi n a nd Appl i c a bl e Fe e Ra t e s e t f or t h i n t he f or e goi ng t a bl e , whi c h s ha l l r e m a i n i n e f f e c t unt i l f i ve
Bus i ne s s Da ys f ol l owi ng t he da t e of de l i ve r y t o t he Age nt of f i na nc i a l s t a t e m e nt s a nd Com pl i a nc e Ce r t i f i c a t e r e f l e c t i ng a Le ve r a ge Ra t i o f or whi c h a l owe r Appl i c a bl e M a r gi n a nd Appl i c a bl e Fe e Ra t e woul d be a ppl i c a bl e . Not wi t hs t a ndi ng t he f or e goi ng, t he Re vol vi ng Loa n M a r gi n s ha l l be 1. 25% a nd t he Re vol vi ng Loa n Com m i t m e nt Fe e Ra t e s ha l l be 0. 20% f r om t he Cl os i ng Da t e unt i l t he e a r l i e r of ( a ) t he f i r s t Bus i ne s s Da y of t he m ont h f ol l owi ng t he de l i ve r y t o t he Age nt of a f i na nc i a l s t a t e m e nt a nd Com pl i a nc e Ce r t i f i c a t e i ndi c a t i ng a Le ve r a ge Ra t i o r e qui r i ng a c ha nge i n t he Appl i c a bl e M a r gi n or Appl i c a bl e Fe e Ra t e , pe r t he de l i ve r y r e qui r e m e nt s s e t f or t h i n Se c t i on 11. 2. 5, or ( b) t he da y upon whi c h t he Com pa ny f a i l s t o de l i ve r t o t he Age nt t he a ppl i c a bl e f i na nc i a l s t a t e m e nt s a nd Com pl i a nc e Ce r t i f i c a t e wi t hi n t he t i m e pr ovi de d unde r t hi s Agr e e m e nt . I f , a s a r e s ul t of a ny r e s t a t e m e nt of or ot he r a dj us t m e nt t o t he f i na nc i a l s t a t e m e nt s of t he Com pa ny a nd i t s Subs i di a r i e s or f or a ny ot he r r e a s on, t he Age nt de t e r m i ne s t ha t t he c a l c ul a t i on
of t he Le ve r a ge Ra t i o by t he Com pa ny a s of t he l a s t da y of a ny f i s c a l qua r t e r wa s i na c c ur a t e a nd a c or r e c t c a l c ul a t i on of t he Le ve r a ge Ra t i o woul d ha ve r e s ul t e d i n a hi ghe r Appl i c a bl e M a r gi n a nd Appl i c a bl e Fe e Ra t e , t he Appl i c a bl e M a r gi n a nd Appl i c a bl e Fe e Ra t e s ha l l be r e t r oa c t i ve l y a dj us t e d t o t he r a t e t ha t woul d ha ve be e n a ppl i c a bl e i f t he Le ve r a ge Ra t i o ha d be e n c or r e c t l y c a l c ul a t e d. Pr om pt l y upon de m a nd by t he Age nt , t he Re vol vi ng Loa n Bor r owe r s ha l l pa y t o t he Age nt f or t he a c c ount of t he Le nde r s t he a ddi t i ona l i nt e r e s t a nd f e e s t ha t woul d ha ve be e n pa ya bl e ba s e d upon t he c or r e c t c a l c ul a t i on of t he Le ve r a ge Ra t i o. Not hi ng s e t f or t h he r e i n s ha l l l i m i t t he Re qui r e d Le nde r s ’ r i ght t o i nc r e a s e t he i nt e r e s t r a t e upon t he oc c ur r e nc e of a n Eve nt of De f a ul t . 115525625. 4 0063724- 00082
" Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e ” m e a ns a pe r c e nt a ge r a t e pe r a nnum e qua l t o 0. 15% . " Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n M a r gi n” m e a ns a pe r c e nt a ge r a t e pe r a nnum e qua l t o 1. 20% . " Us e d Ve hi c l e Fl oor pl a n Com m i t m e nt Fe e Ra t e ” m e a ns a pe r c e nt a ge r a t e pe r a nnum e qua l t o 0. 15% . " Us e d Ve hi c l e Fl oor pl a n M a r gi n” m e a ns a pe r c e nt a ge r a t e pe r a nnum e qua l t o 1. 40% . 115525625. 4 0063724- 00082
Exe c ut i on Copy 154966862v3 AM ENDM ENT NO. 8 TO AM ENDED AND RESTATED LOAN AGREEM ENT Thi s AM ENDM ENT NO. 8, da t e d a s of Nove m be r 17, 2022 ( t hi s " Am e ndm e nt " ) , i s e xe c ut e d by a nd a m ong SCFC BUSI NESS SERVI CES LLC ( t he " Bor r owe r " ) , CHARI OT FUNDI NG LLC ( " Cha r i ot " ) , a nd J PM ORGAN CHASE BANK, N. A. ( " J PM or ga n" ) , i n i t s c a pa c i t i e s a s a dm i ni s t r a t i ve a ge nt ( i n s uc h c a pa c i t y, t he " Adm i ni s t r a t i ve Age nt " ) , a s a Com m i t t e d Le nde r , a nd a s t he Age nt f or t he J PM or ga n Le nde r Gr oup ( i n s uc h c a pa c i t y, t he " J PM or ga n Age nt " ) , a nd a m e nds t he Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt , da t e d a s of De c e m be r 31, 2020 ( a s a m e nde d, r e s t a t e d, s uppl e m e nt e d or ot he r wi s e m odi f i e d f r om t i m e t o t i m e , t he " Loa n Agr e e m e nt " ) , by a nd a m ong t he Bor r owe r , Dr i ve wa y Fi na nc e Cor por a t i on ( " DFC" ) , a s t he s e r vi c e r a nd t he c ol l a t e r a l c us t odi a n, t he l e nde r s f r om t i m e t o t i m e pa r t i e s t he r e t o, t he a ge nt s f r om t i m e t o t i m e pa r t i e s t he r e t o, a nd J PM or ga n, a s Adm i ni s t r a t i ve Age nt a nd a s t he a c c ount ba nk. Ca pi t a l i z e d t e r m s us e d, but not ot he r wi s e de f i ne d, he r e i n s ha l l ha ve t he
m e a ni ngs a s c r i be d t he r e t o i n t he Loa n Agr e e m e nt . W I TNESSETH: W HEREAS, a s of t he da t e of t hi s Am e ndm e nt , Cha r i ot i s t he s ol e Condui t Le nde r unde r t he Loa n Agr e e m e nt a nd J PM or ga n i s t he s ol e Com m i t t e d Le nde r unde r t he Loa n Agr e e m e nt ( Cha r i ot a nd J PM or ga n, t oge t he r i n s uc h r e s pe c t i ve c a pa c i t i e s , t he " Le nde r s " ) ; W HEREAS, t he Bor r owe r a nd t he Le nde r s de s i r e t o a m e nd t he Loa n Agr e e m e nt , i n a c c or da nc e wi t h Se c t i on 13. 01 t he r e of , on t he t e r m s s e t f or t h he r e i n; W HEREAS, t he Cons e nt i ng Le nde r s de s i r e t o pr ovi de t he wa i ve r s s e t f or t h be l ow, i n a c c or da nc e wi t h Se c t i on 13. 01 of t he Loa n Agr e e m e nt ; a nd NOW , THEREFORE, i n c ons i de r a t i on of t he pr e m i s e s a nd t he m ut ua l a gr e e m e nt s he r e i na f t e r s e t f or t h, a nd f or ot he r good a nd va l ua bl e c ons i de r a t i on, t he r e c e i pt a nd s uf f i c i e nc y of whi c h a r e he r e by a c knowl e dge d, t he pa r t i e s he r e t o he r e by a gr e e a s f ol l ows : SECTI ON 1. Am e ndm e nt s t o t he Loa n Agr e e m e nt . The Loa n Agr e e m e nt i s he r e by a m e nde d a s f ol l ows : ( a ) Se c t i on 1. 01 ( De f i ni t i ons ) i s a m e nde d by de l e t i ng t he de f i ni t i on of " W e i ght e d Ave r a ge He dge
Ra t e " i n i t s e nt i r e t y a nd r e pl a c i ng i t wi t h t he f ol l owi ng: " 'W e i ght e d Ave r a ge He dge Ra t e ' m e a ns , a s of a ny da t e of de t e r m i na t i on, e i t he r ( i ) i f t he Bor r owe r i s pa r t y t o one or m or e He dge Tr a ns a c t i ons on s uc h da t e ( a f t e r gi vi ng e f f e c t t o a ny He dge Tr a ns a c t i ons t ha t t he Bor r owe r e nt e r s i nt o or t e r m i na t e s on s uc h da t e ) , t he we i ght e d a ve r a ge ( we i ght e d by t he not i ona l a m ount of t he r e l a t e d He dge Tr a ns a c t i on wi t h r e s pe c t t o e a c h a m ount de s c r i be d i n c l a us e ( a ) or c l a us e ( b) a nd by t he e xc e s s , i f a ny, of t he Loa ns Out s t a ndi ng ove r t he a ggr e ga t e not i ona l a m ount of a l l out s t a ndi ng He dge Tr a ns a c t i ons wi t h r e s pe c t t o t he a m ount de s c r i be d i n c l a us e ( c ) ) of ( a ) f or e a c h s uc h He dge Tr a ns a c t i on t ha t i s i n t he f or m of a n i nt e r e s t r a t e c a p t r a ns a c t i on, t he t hr e s hol d r a t e a bove whi c h pa ym e nt s a r e m a de by t he r e l a t e d He dge Count e r pa r t y t o t he Bor r owe r , ( b) wi t h r e s pe c t t o e a c h s uc h He dge Tr a ns a c t i on t ha t i s i n t he f or m of a n i nt e r e s t r a t e s wa p
- 2 - 154966862v3 t r a ns a c t i on, t he f i xe d r a t e pa ya bl e by t he Bor r owe r t he r e unde r , a nd ( c ) wi t h r e s pe c t t o a n a m ount e qua l t o t he e xc e s s , i f a ny, of t he Loa ns Out s t a ndi ng ove r t he a ggr e ga t e not i ona l a m ount of a l l out s t a ndi ng He dge Tr a ns a c t i ons on s uc h da t e ( a f t e r gi vi ng e f f e c t t o a ny He dge Tr a ns a c t i ons t ha t t he Bor r owe r e nt e r s i nt o or t e r m i na t e s on s uc h da t e ) , t he c a p r a t e s e t f or t h i n c l a us e ( B) of t he de f i ni t i on of 'He dge Re s e r ve Ac c ount Re qui r e d Am ount ' or ( i i ) i f t he Bor r owe r i s not pa r t y t o a ny He dge Tr a ns a c t i ons on s uc h da t e ( a f t e r gi vi ng e f f e c t t o a ny He dge Tr a ns a c t i ons t ha t t he Bor r owe r e nt e r s i nt o or t e r m i na t e s on s uc h da t e ) , t he c a p r a t e s e t f or t h i n c l a us e ( B) of t he de f i ni t i on of 'He dge Re s e r ve Ac c ount Re qui r e d Am ount . '" ( b) Sc he dul e F ( Fi na nc i a l Cove na nt s ( Li t hi a ) ) i s de l e t e d i n i t s e nt i r e t y a nd r e pl a c e d wi t h Exhi bi t A t o t hi s Am e ndm e nt . SECTI ON 2. Re pr e s e nt a t i ons , W a r r a nt i e s a nd Conf i r m a t i ons . The Bor r owe r he r e by c onf i r m s t ha t a l l r e pr e s e nt a t i ons a nd wa r r a nt i e s m a de by i t pur s ua nt t o Se c t i ons 5. 01 a nd 5. 02 of t he Loa n Agr e e m e nt
we r e t r ue a nd c or r e c t a s of t he da t e a s of whi c h t he y we r e m a de a nd t ha t i t i s i n c om pl i a nc e wi t h a l l c ove na nt s m a de by i t pur s ua nt t o t he Loa n Agr e e m e nt a s of t he da t e he r e of . By i t s a c knowl e dgm e nt of t hi s Am e ndm e nt , DFC he r e by c onf i r m s t ha t a l l r e pr e s e nt a t i ons a nd wa r r a nt i e s m a de by i t pur s ua nt t o Se c t i on 5. 03 of t he Loa n Agr e e m e nt we r e t r ue a nd c or r e c t a s of t he da t e a s of whi c h t he y we r e m a de a nd t ha t i t i s i n c om pl i a nc e wi t h a l l c ove na nt s m a de by i t pur s ua nt t o t he Loa n Agr e e m e nt a s of t he da t e he r e of . Fur t he r m or e , t he Bor r owe r a nd DFC e a c h he r e by r e pr e s e nt s a nd wa r r a nt s a s t o i t s e l f t ha t : ( a ) I t ha s t he powe r t o e xe c ut e , de l i ve r a nd pe r f or m t hi s Am e ndm e nt a nd t he t r a ns a c t i ons c ont e m pl a t e d he r e by. ( b) The e xe c ut i on a nd de l i ve r y of t hi s Am e ndm e nt a nd t he pe r f or m a nc e of t hi s Am e ndm e nt a nd t he Loa n Agr e e m e nt ( a s a m e nde d he r e by) ha ve be e n dul y a ut hor i z e d by i t by a l l ne c e s s a r y c om pa ny a c t i on ( i nc l udi ng a ny ne c e s s a r y a c t i on by i t s m e m be r s ) . ( c ) Thi s Am e ndm e nt ha s be e n dul y e xe c ut e d a nd de l i ve r e d on i t s be ha l f . Thi s
Am e ndm e nt a nd t he Loa n Agr e e m e nt ( a s a m e nde d he r e by) c ons t i t ut e i t s l e ga l , va l i d a nd bi ndi ng obl i ga t i ons , e nf or c e a bl e a ga i ns t i t i n a c c or da nc e wi t h t he i r r e s pe c t i ve t e r m s , e xc e pt a s e nf or c e m e nt of s uc h t e r m s m a y be l i m i t e d by I ns ol ve nc y La ws a f f e c t i ng t he e nf or c e m e nt of c r e di t or s ' r i ght s ge ne r a l l y a nd by t he a va i l a bi l i t y of e qui t a bl e r e m e di e s . ( d) I t i s i n c om pl i a nc e i n a l l m a t e r i a l r e s pe c t s wi t h a l l Appl i c a bl e La ws . SECTI ON 3. Ef f e c t i ve ne s s of Am e ndm e nt . ( a ) Thi s Am e ndm e nt s ha l l be e f f e c t i ve , a s of t he da t e he r e of , upon t he de l i ve r y of a f ul l y e xe c ut e d c opy he r e of t o t he Adm i ni s t r a t i ve Age nt . ( b) Exc e pt a s e xpr e s s l y a m e nde d by t he t e r m s of t hi s Am e ndm e nt , a l l t e r m s a nd c ondi t i ons of t he Loa n Agr e e m e nt s ha l l r e m a i n i n f ul l f or c e a nd e f f e c t a nd a r e he r e by r a t i f i e d a nd c onf i r m e d. Thi s Am e ndm e nt i s e f f e c t i ve onl y f or t he s pe c i f i c pur pos e f or whi c h i t i s gi ve n a nd s ha l l not ope r a t e a s a c ons e nt , wa i ve r , a m e ndm e nt or ot he r m odi f i c a t i on of a ny ot he r
- 3 - 154966862v3 t e r m or c ondi t i on s e t f or t h i n t he Loa n Agr e e m e nt . Upon t he e f f e c t i ve ne s s of t hi s Am e ndm e nt , ( i ) e a c h r e f e r e nc e i n t he Loa n Agr e e m e nt t o " t hi s Agr e e m e nt " or " t hi s Loa n Agr e e m e nt " or wor ds of l i ke i m por t s ha l l m e a n a nd be r e f e r e nc e s t o t he Loa n Agr e e m e nt a s a m e nde d he r e by a nd ( i i ) e a c h r e f e r e nc e i n a ny ot he r Ba s i c Doc um e nt t o t he Loa n Agr e e m e nt or t o a ny t e r m s de f i ne d i n t he Loa n Agr e e m e nt whi c h a r e m odi f i e d he r e by s ha l l m e a n a nd be r e f e r e nc e s t o t he Loa n Agr e e m e nt or t o s uc h t e r m s a s m odi f i e d he r e by. The pa r t i e s he r e t o a c knowl e dge a nd a gr e e t ha t t hi s Am e ndm e nt s ha l l c ons t i t ut e a Ba s i c Doc um e nt . Thi s Am e ndm e nt doe s not c ons t i t ut e a nova t i on or t e r m i na t i on of t he Loa n Agr e e m e nt or a ny ot he r Ba s i c Doc um e nt a nd a l l obl i ga t i ons t he r e unde r a r e i n a l l r e s pe c t s c ont i nui ng wi t h onl y t he t e r m s t he r e of be i ng m odi f i e d a s pr ovi de d he r e i n. SECTI ON 4. Am e ndm e nt s , e t c . No pr ovi s i on of t hi s Am e ndm e nt s ha l l be wa i ve d, a m e nde d or ot he r wi s e m odi f i e d e xc e pt a s pr ovi de d i n Se c t i on 13. 01 of t he Loa n Agr e e m e nt . SECTI ON
5. GOVERNI NG LAW . THI S AM ENDM ENT SHALL BE GOVERNED BY, AND CONSTRUED AND I NTERPRETED I N ACCORDANCE W I TH, THE LAW S OF THE STATE OF NEW YORK. SECTI ON 6. Se ve r a bi l i t y. I f one or m or e of t he c ove na nt s , a gr e e m e nt s , pr ovi s i ons or t e r m s of t hi s Am e ndm e nt s ha l l be f or a ny r e a s on wha t s oe ve r he l d i nva l i d, t he n s uc h c ove na nt s , a gr e e m e nt s , pr ovi s i ons or t e r m s s ha l l be de e m e d s e ve r a bl e f r om t he r e m a i ni ng c ove na nt s , a gr e e m e nt s , pr ovi s i ons or t e r m s of t hi s Am e ndm e nt a nd s ha l l i n no wa y a f f e c t t he va l i di t y or e nf or c e a bi l i t y of t he ot he r pr ovi s i ons of t hi s Am e ndm e nt or t he Loa n Agr e e m e nt a s a m e nde d he r e by. SECTI ON 7. Bi ndi ng Ef f e c t . Thi s Am e ndm e nt s ha l l be bi ndi ng upon a nd s ha l l be e nf or c e a bl e by t he pa r t i e s he r e t o a nd t he i r r e s pe c t i ve s uc c e s s or s a nd pe r m i t t e d a s s i gns . SECTI ON 8. Ca pt i ons , e t c . The c a pt i ons a nd s e c t i on num be r s a ppe a r i ng i n t hi s Am e ndm e nt a r e i ns e r t e d onl y a s a m a t t e r of c onve ni e nc e a nd do not de f i ne , l i m i t , c ons t r ue or de s c r i be t he s c ope or i nt e nt of t he pr ovi s i ons of t hi s Am e ndm e nt . SECTI ON 9. Count e r pa r t s . Thi s
Am e ndm e nt m a y be e xe c ut e d i n a ny num be r of c ount e r pa r t s a nd by di f f e r e nt pa r t i e s he r e t o i n s e pa r a t e c ount e r pa r t s , e a c h of whi c h whe n s o e xe c ut e d s ha l l be de e m e d t o be a n or i gi na l a nd a l l of whi c h whe n t a ke n t oge t he r s ha l l c ons t i t ut e one a nd t he s a m e a gr e e m e nt . De l i ve r y of a n e xe c ut e d c ount e r pa r t of a s i gna t ur e pa ge t o t hi s Am e ndm e nt by f a c s i m i l e or by e l e c t r oni c m a i l i n a " . pdf " f i l e s ha l l be e f f e c t i ve a s de l i ve r y of a m a nua l l y e xe c ut e d c ount e r pa r t of t hi s Am e ndm e nt . Ea c h pa r t y a gr e e s t ha t t hi s Am e ndm e nt a nd a ny ot he r doc um e nt s t o be de l i ve r e d i n c onne c t i on he r e wi t h m a y be e l e c t r oni c a l l y s i gne d, a nd t ha t a ny e l e c t r oni c s i gna t ur e s a ppe a r i ng on t hi s Am e ndm e nt or s uc h ot he r doc um e nt s a r e t he s a m e a s ha ndwr i t t e n s i gna t ur e s f or t he pur pos e s of va l i di t y, e nf or c e a bi l i t y, a nd a dm i s s i bi l i t y. [ Si gna t ur e Pa ge Fol l ows ]
I N W I TNESS W HEREOF, t he pa r t i e s he r e t o ha ve c a us e d t hi s Am e ndm e nt t o be dul y e xe c ut e d a nd de l i ve r e d by t he i r r e s pe c t i ve a ut hor i z e d of f i c e r s a s of t he da t e f i r s t a bove wr i t t e n. SCFC BUSI NESS SERVI CES LLC, a s Bor r owe r By: - - - " & 4. . . . : . . : . . . , __· f f . _, / 4, f '- - - - _ Na m e : Ti t l e : ACKNOW LEDGED AND AGREED: DRI VEW AY FI NANCE CORPORATI ON, a s Se r vi c e r a nd Col l a t e r a l Cus t odi a n By: - ~- / ) - - - =- - _ ~ - - - 0#- - - Na m e : Ti t l e : ( Si gna t ur e Pa ge t o Am e ndm e nt No. 8 t o A& R Loa n Agt . ( SCFC Bus i ne s s Se r vi c e s LLC) ] I S4966862v2 Cha r l e s D. Li e t z Pr e s i de nt Cha r l e s D. Li e t z Pr e s i de nt
[ Si gna t ur e Pa ge t o Am e ndm e nt No. 8 t o A& R Loa n Agt . ( SCFC Bus i ne s s Se r vi c e s LLC) ] 154966862v2 CHARI OT FUNDI NG LLC, a s Condui t Le nde r By: J PM ORGAN CHASE BANK, N. A. , a s i t s a t t or ne y- i n- f a c t By: Na m e : Ti t l e : J PM ORGAN CHASE BANK N. A. , a s J PM or ga n Age nt , a s a Com m i t t e d Le nde r , a nd a s Adm i ni s t r a t i ve Age nt By: Na m e : Ti t l e : El i z a be t h S. Tr a i nor Exe c ut i ve Di r e c t or El i z a be t h S. Tr a i nor Exe c ut i ve Di r e c t or
* - No a m e ndm e nt s t ha t a r e m a de t o, wa i ve r s t ha t a r e gr a nt e d wi t h r e s pe c t t o, or ot he r m odi f i c a t i ons t ha t a r e m a de wi t h r e s pe c t t o t he Li t hi a Loa n Agr e e m e nt t ha t woul d c ha nge t he a m ount of Funde d De bt t ha t i s pe r m i t t e d unde r s uc h Se c t i on s ha l l be gi ve n e f f e c t he r e unde r unl e s s c ons e nt e d t o by t he Adm i ni s t r a t i ve Age nt . 154966862v3 Exhi bi t A SCHEDULE F FI NANCI AL COVENANTS ( LI THI A) " Fi na nc i a l Cove na nt s ( Li t hi a ) " m e a ns e a c h of : ( i ) a s of a ny da t e of de t e r m i na t i on, t he r a t i o f or t he f our c ons e c ut i ve f i s c a l qua r t e r s e ndi ng on t he l a s t da y of t he m os t r e c e nt l y c om pl e t e d f i s c a l qua r t e r of ( a ) ( 1) EBI TDAR, m i nus ( 2) di vi de nds a nd ot he r di s t r i but i ons i n r e s pe c t of Equi t y I nt e r e s t s a nd a m ount s e xpe nde d t o r e pur c ha s e Equi t y I nt e r e s t s f r om a Pe r s on t ha t i s not a Loa n Pa r t y, m i nus ( 3) i nc om e t a x e xpe ns e t o t he e xt e nt pa i d i n c a s h, m i nus ( 4) a n a l l owa nc e f or m a i nt e na nc e c a pi t a l e xpe ndi t ur e s i n a n a m ount e qua l t o $85, 000 f or e a c h De a l e r s hi p l oc a t i on, pl us ( 5) i f a ny Pe r m i t t e d Ac qui s i t i on ha s oc c ur r e d dur i ng a ny M e a s ur e m e nt Pe r i od, Pr o For m a
EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e a t t r i but a bl e t o a ny ne w Ac qui s i t i on Subs i di a r y or bus i ne s s a c qui r e d i n c onne c t i on wi t h s uc h Pe r m i t t e d Ac qui s i t i on, a s a ppl i c a bl e , c a l c ul a t e d a s i f t he Pe r m i t t e d Ac qui s i t i on ha d oc c ur r e d on t he f i r s t da y of s uc h M e a s ur e m e nt Pe r i od ( i t be i ng unde r s t ood a nd a gr e e d t ha t Pr o For m a EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e m a y not be i nc l ude d i n t hi s c a l c ul a t i on t o t he e xt e nt t ha t i t r e s ul t s i n a n a nnua l i z e d i nc r e a s e of m or e t ha n 10% i n Li t hi a 's c ons ol i da t e d EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e pr i or t o s uc h a dj us t m e nt , unl e s s Li t hi a pr ovi de s t o t he Age nt a nd t he Re qui r e d Le nde r s t he s uppor t i ng c a l c ul a t i ons f or s uc h a dj us t m e nt a nd s uc h ot he r i nf or m a t i on a s t he y m a y r e a s ona bl y r e que s t t o de t e r m i ne t he a c c ur a c y of s uc h c a l c ul a t i ons ) ; t o ( b) t he s um f or t he a ppl i c a bl e M e a s ur e m e nt Pe r i od of ( 1) c a s h i nt e r e s t , pl us ( 2) r e qui r e d pr i nc i pa l pa ym e nt s on I nde bt e dne s s pl us ( 3) r e nt a l or l e a s e e xpe ns e , s ha l l not be l e s s t ha n 1. 20 t o 1. 0; a nd ( i i ) a s of a ny da t e of de t e r m i na t i on, t he r a t i o f or Li t hi a a nd a l l Re l a t e d
Subs i di a r i e s of Li t hi a on a c ons ol i da t e d ba s i s of ( a ) ( 1) t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of a l l Funde d De bt ( m i nus t he s um of ( A) unr e s t r i c t e d c a s h a nd c a s h e qui va l e nt s pl us ( B) a ny a m ount s he l d i n t he PR Ac c ount s pl us ( C) a ny a m ount s he l d i n a c c ount s e s t a bl i s he d by Dua l Subs i di a r i e s or Si l o Subs i di a r i e s a s a n of f s e t t o f l oor pl a n not e s pa ya bl e ( or i nt e r e s t t he r e on) ; pr ovi de d t ha t t he a ggr e ga t e r e duc t i on f or a l l of t he f or e goi ng c l a us e s ( A) t hr ough ( C) s ha l l not e xc e e d $200, 000, 000) , m i nus ( 2) t he s um of t he t he n out s t a ndi ng pr i nc i pa l ba l a nc e of t he Ne w Ve hi c l e Fl oor pl a n Loa ns , Ne w Ve hi c l e Swi ng Li ne Loa ns , Us e d Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns , pr i nc i pa l a m ount of a ny Ot he r Se r vi c e Loa ne r Fl oor pl a n Fi na nc i ng, Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( o) of Se c t i on 13. 10 of t he Li t hi a Loa n Agr e e m e nt * ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( p) of Se c t i on 13. 10 of t he Li t hi a
Loa n Agr e e m e nt * ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( r ) of
* - No a m e ndm e nt s t ha t a r e m a de t o, wa i ve r s t ha t a r e gr a nt e d wi t h r e s pe c t t o, or ot he r m odi f i c a t i ons t ha t a r e m a de wi t h r e s pe c t t o t he Li t hi a Loa n Agr e e m e nt t ha t woul d c ha nge t he a m ount of Funde d De bt t ha t i s pe r m i t t e d unde r s uc h Se c t i on s ha l l be gi ve n e f f e c t he r e unde r unl e s s c ons e nt e d t o by t he Adm i ni s t r a t i ve Age nt . A- 2 154966862v3 Se c t i on 13. 10 of t he Li t hi a Loa n Agr e e m e nt * ( but onl y t o t he e xt e nt not gua r a nt e e d by Li t hi a ) a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( s ) of Se c t i on 13. 10 of t he Li t hi a Loa n Agr e e m e nt * a nd, wi t hout dupl i c a t i on, Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( f ) of Se c t i on 13. 10 of t he Li t hi a Loa n Agr e e m e nt * ( but onl y t o t he e xt e nt t he unde r l yi ng i nde bt e dne s s t ha t i s gua r a nt e e d c ons t i t ut e s f l oor pl a n f i na nc i ng) , pl us ( 3) s i x t i m e s r e nt a l or l e a s e e xpe ns e f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e ; t o ( b) ( 1) Pr o For m a EBI TDAR f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e ( i t be i ng unde r s t ood a nd a gr e e d t ha t Pr o For m a EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e m a y not be i nc l ude d i n t hi s c a l c ul a t i on t o t he
e xt e nt t ha t i t r e s ul t s i n a n a nnua l i z e d i nc r e a s e of m or e t ha n 10% i n Li t hi a ’ s c ons ol i da t e d EBI TDAR m i nus r e nt a l or l e a s e e xpe ns e pr i or t o s uc h a dj us t m e nt , unl e s s Li t hi a pr ovi de s t o t he Age nt a nd t he Re qui r e d Le nde r s t he s uppor t i ng c a l c ul a t i ons f or s uc h a dj us t m e nt a nd s uc h ot he r i nf or m a t i on a s t he y m a y r e a s ona bl y r e que s t t o de t e r m i ne t he a c c ur a c y of s uc h c a l c ul a t i ons ) , m i nus ( 2) i nt e r e s t e xpe ns e wi t h r e s pe c t t o t he Ne w Ve hi c l e Fl oor pl a n Loa ns , Ne w Ve hi c l e Swi ng Li ne Loa ns , Us e d Ve hi c l e Fl oor pl a n Loa ns , Us e d Ve hi c l e Swi ng Li ne Loa ns , Se r vi c e Loa ne r Ve hi c l e Fl oor pl a n Loa ns , Se r vi c e Loa ne r Ve hi c l e Swi ng Li ne Loa ns a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( o) of Se c t i on 13. 10 of t he Li t hi a Loa n Agr e e m e nt * ( but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( p) of Se c t i on 13. 10 of t he Li t hi a Loa n Agr e e m e nt * but onl y t o t he e xt e nt c ons t i t ut i ng f l oor pl a n f i na nc i ng) , Funde d De bt pe r m i t t e d unde r s ubs e c t i on ( r ) of Se c t i on 13. 10 of t he Li t hi a Loa n Agr e e m e nt * ( but onl y t o t he e xt e nt not gua r a nt e e d by
Li t hi a ) a nd Funde d De bt pe r m i t t e d unde r s ubs e c t i on( s ) of Se c t i on 13. 10 of t he Li t hi a Loa n Agr e e m e nt *, i n e a c h c a s e f or t he M e a s ur e m e nt Pe r i od e ndi ng on s uc h da t e , s ha l l not be gr e a t e r t ha n 5. 75 t o 1. 0. For pur pos e s of t he f or e goi ng Fi na nc i a l Cove na nt s ( Li t hi a ) , " Li t hi a Loa n Agr e e m e nt " m e a ns t he Four t h Am e nde d a nd Re s t a t e d Loa n Agr e e m e nt , da t e d a s of Apr i l 29, 2021, by a nd a m ong Li t hi a , Li t hi a 's s ubs i di a r i e s t ha t a r e f r om t i m e t o t i m e pa r t i e s t he r e t o, e a c h f i na nc i a l i ns t i t ut i on t ha t i s f r om t i m e t o t i m e pa r t y t he r e t o a s a l e nde r , a nd U. S. Ba nk Na t i ona l As s oc i a t i on, a s a ge nt f or t he l e nde r s t he r e unde r a nd " Re l a t e d Subs i di a r i e s of Li t hi a " m e a ns , a s of a ny da t e of de t e r m i na t i on, a l l e nt i t i e s t ha t a r e de f i ne d a s " s ubs i di a r i e s " of Li t hi a i n a c c or da nc e wi t h t he Li t hi a Loa n Agr e e m e nt a s of s uc h da t e ( wi t hout gi vi ng e f f e c t t o a ny a m e ndm e nt s t o t he r e l a t e d de f i ni t i on of " s ubs i di a r y" on or a f t e r t he Cl os i ng Da t e ot he r t ha n t hos e t ha t ha ve be e n c ons e nt e d t o by t he Adm i ni s t r a t i ve Age nt ) . Fur t he r m or e , a l l c a pi t a l i z e d t e r m s us e d i n t he
f or e goi ng Fi na nc i a l Cove na nt s ( Li t hi a ) t ha t a r e not de f i ne d i n Se c t i on 1. 01 of t he Agr e e m e nt ha ve t he m e a ni ngs a s s i gne d t he r e t o i n t he Li t hi a Loa n Agr e e m e nt , wi t hout gi vi ng e f f e c t t o a ny a m e ndm e nt s t ha t a r e m a de t o, wa i ve r s t ha t a r e gr a nt e d wi t h r e s pe c t t o, or ot he r m odi f i c a t i ons t ha t a r e m a de wi t h r e s pe c t t o t he Li t hi a Loa n Agr e e m e nt on or a f t e r t he Cl os i ng Da t e unl e s s t he s a m e ha ve be e n c ons e nt e d t o by t he Adm i ni s t r a t i ve Age nt .
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
797 Valley Street LLC
6200 Centennial Center Holdco, LLC
7150 West Sahara Holdco, LLC
7200 West Sahara Property Holdco II, LLC
Ann Arbor-B, LLC
Ann Arbor-CC, LLC
Ann Arbor-CJD, LLC
Ann Arbor-M, LLC
Austin-H, Inc.
Howdy Honda
Austin-KI, Inc.
Avondale-N, Inc.
Back in Texas Auto Sales, LLC
Baierl Auto Parts, LLC
Baierl Automotive Corporation
Baierl Chevrolet, Inc.
Baierl Chevrolet Collision Center
Baierl Holding, LLC
Bellevue-S, LLC
Bellevue-T, LLC
Bend-CDJR, LLC
Lithia Chrysler Dodge Jeep Ram of Bend
Bend-N, LLC
Lithia Nissan of Bend
Cadillac of Portland Lloyd Center, LLC
Caldwell-Air, LLC
Camp Automotive, Inc.
Lithia Downtown Body and Paint
Carbone Auto Body, LLC
Carbone Collision Center
Centennial-Hy, LLC
Chamblee-H, LLC
Clackamas-Air, LLC
Clackamas Ultimate Airstreams, LLC
Clear Lake-I, Inc.
Clear Lake Infiniti
Clinton-C, LLC
Coral Springs-A, LLC
Costa Mesa-CJD, Inc.
Cranberry Automotive, Inc.
Baierl Toyota
Dah Chong Hong CA Trading LLC
Dah Chong Hong Trading Corporation
New Jersey
Nevada
Nevada
Nevada
Michigan
Michigan
Michigan
Michigan
Texas
Texas
Arizona
Texas
Pennsylvania
Pennsylvania
Pennsylvania
Pennsylvania
Washington
Washington
Oregon
Oregon
Oregon
Idaho
Washington
New York
Nevada
Georgia
Oregon
Oregon
Texas
Michigan
Florida
California
Pennsylvania
Delaware
New Jersey
BMW of Ann Arbor
Suburban Chevrolet Cadillac of Ann Arbor
Suburban Chrysler Dodge Jeep Ram Fiat of Ann Arbor
Mercedes-Benz of Ann Arbor
Kia of North Austin
Avondale Nissan
Grapevine Honda
Baierl Acura
Baierl Chevrolet
Michael’s Subaru of Bellevue
Michael’s Toyota of Bellevue
Cadillac of Portland
Boise Airstream Adventures
Camp Chevrolet
Centennial Hyundai
Curry Honda
Portland Airstream Adventures
Ultimate Airstreams
Audi Coral Springs
Orange Coast Chrysler Dodge Jeep Ram Fiat
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
Dallas-H, Inc.
Dallas-K, Inc.
Dallas-T, Inc.
John Eagle Sport City Toyota
Dallas Collision, Inc.
Daron Motors LLC
DCH Bloomfield LLC
DCH (Oxnard) Inc.
DCH Auto Group (USA) Inc.
DCH CA LLC
DCH Calabasas-A, LLC
Audi Calabasas
DCH California Investments LLC
DCH California Motors Inc.
DCH Del Norte, Inc.
DCH DMS NJ, LLC
DCH Essex Inc.
DCH Millburn Audi
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 Kia of Temecula
DCH Mamaroneck LLC
DCH Toyota City
DCH Mission Valley LLC
DCH Monmouth LLC
BMW of Freehold
DCH Montclair LLC
DCH Motors LLC
DCH Nanuet LLC
DCH Honda of Nanuet
DCH North America Inc.
DCH NY Motors LLC
DCH Wappingers Falls Auto Group
DCH Oxnard 1521 Imports Inc.
Audi of Oxnard
DCH Riverside-S, Inc.
DCH Support Services, LLC
DCH Temecula Imports LLC
DCH Honda Temecula
DCH Temecula Motors LLC
DCH Chrysler Jeep of Temecula
DCH Dodge Temecula
Texas
Texas
Texas
Texas
New Jersey
New Jersey
California
Delaware
California
California
California
California
California
New Jersey
New Jersey
New Jersey
New Jersey
Delaware
New Jersey
New York
California
Delaware
California
New Jersey
New Jersey
New Jersey
New York
Delaware
Delaware
California
California
New Jersey
California
California
ASSUMED BUSINESS NAME(S)
(if different than entity name)
John Eagle Honda of Dallas
Southwest Kia
All American Collision Center of Dallas
DCH Academy Honda
BMW of Bloomfield
DCH Honda of Oxnard
DCH Toyota of Oxnard
DCH Freehold Toyota
Dah Chong Hong (USA)
DCH Honda of Mission Valley
DCH Montclair Acura
DCH Kay Honda
DCH Wappingers Falls Toyota
DCH Audi of Oxnard
DCH Subaru of Riverside
DCH Honda of Temecula
DCH Chrysler Jeep Dodge of Temecula
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
DCH Thousand Oaks-F, Inc.
DCH TL Holdings LLC
DCH TL NY Holdings LLC
DCH Torrance Imports Inc.
DCH Toyota of Torrance
Torrance Toyota
Denver Exotics, LLC
Bentley Denver
Lotus of Denver
Rimac Denver
Pininfarina Denver
Morgan Denver
SSC Denver
Karma Denver
Desert-CJD, LLC
DFC Funding, LLC
Doral-A, LLC
Doral-G, LLC
Doral-Hy, LLC
Doral-K, LLC
Doral-VW, LLC
Driveway Motors, LLC
Driveway
Driveway & Logistics LLC
Edmonds-T, LLC
Elk Grove-F, Inc.
Fairfield-Air, Inc.
Farmington Hills Imports, LLC
Porsche Farmington Hills
Suburban Imports of FH
Suburban Mazda
Suburban Mazda of Farmington Hills
Suburban Volkswagen
Suburban Volkswagen of Farmington Hills
Farmington Hills-CJD, LLC
Suburban CDJR of FH
Suburban Chrysler Dodge Jeep Ram of Farmington Hills
The Suburban Collection
Farmington Hills-H, LLC
The Suburban Collection
Farmington Hills-N, LLC
Suburban Nissan of Farmington Hills
Suburban Nissan of FH
The Suburban Collection
California
Delaware
Delaware
California
Colorado
Nevada
Delaware
Florida
Florida
Florida
Florida
Florida
Delaware
Delaware
Washington
California
California
Michigan
ASSUMED BUSINESS NAME(S)
(if different than entity name)
DCH Ford of Thousand Oaks
Ferrari of Denver
Desert 215 Superstore
Doral Acura
Doral Genesis
Doral Hyundai
Doral Kia
Doral Volkswagen
Elk Grove Ford
Bay Area Airstream Adventures
Audi Farmington Hills
Michigan
Suburban CDJR of Farmington Hills
Michigan
Michigan
Suburban Honda
Suburban Nissan
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Farmington Hills-T, LLC
Suburban Toyota of Farmington Hills
Suburban Toyota of FH
The Suburban Collection
Ferndale Collision, LLC
Ferndale-BG, LLC
Suburban Buick GMC of Ferndale
The Suburban Collection
Ferndale-F, LLC
The Suburban Collection
FH Collision, LLC
Suburban Collision of Farmington Hills
The Suburban Collection
Florida City-H, LLC
Frisco-K, Inc.
Lithia Florida Holding, Inc.
Florida SS, LLC
Fontana-H, Inc.
Fort Worth-CJD, LLC
Freehold Nissan LLC
Freehold Nissan
Wesley Chapel-C, LLC (formerly known as Fort Pierce-CJD, LLC)
Chevrolet of Wesley Chapel
Fuse Auto Sales, LLC
Garden City-CJD, LLC
Suburban CDJR of GC
Suburban Chrysler Dodge Jeep Ram of Garden City
Suburban Chrysler Dodge Jeep Ram Collision of Garden City
The Suburban Collection
Suburban Collision Centers
Greencars, Inc.
Henderson-Hy, LLC
Genesis of Henderson
Houston-A, Inc.
John Eagle Acura
Houston-H, Inc.
Houston-I, Inc.
Southwest Infiniti
Hutchins Eugene Nissan, Inc.
Hutchins Imported Motors, Inc.
Jackson-T, LLC
Katy-H, Inc.
Honda Cars of Katy
Michigan
Suburban Toyota
Michigan
Michigan
Michigan
Michigan
Florida
Texas
Florida
Florida
California
Texas
New Jersey
Florida
Oregon
Michigan
Oregon
Nevada
Texas
Texas
Texas
Oregon
Oregon
Mississippi
Texas
Suburban Collision of Ferndale
Suburban Buick GMC
Suburban Ford of Ferndale
Suburban Collision Centers
Largo Honda
Rock Honda
DCH Freehold Nissan
Suburban CDJR of Garden City
Henderson Hyundai Superstore &
John Eagle Honda of Houston
Lithia Nissan of Eugene
Lithia Toyota of Springfield
Toyota of Jackson
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
Knoxville-CJD, LLC
LA Motors Holding, LLC
LAD Advertising, Inc.
LAD Printing
The Print Shop at the Commons
The Print Shop
LAD Carson-N, LLC
Carson Nissan
LAD Mission Viejo-JLR, Inc.
Jaguar Land Rover Mission Viejo
LAD Mobu, Inc.
LAD-AU, LLC
Audi Downtown LA
LAD-F, LLC
LAD-MB, LLC
Downtown LA Motors
LAD-N, LLC
Nissan of Downtown LA
LAD-P, LLC
LAD-T, LLC
Toyota of Downtown LA
LAD-V, LLC
Las Vegas-CJD, LLC
Las Vegas-G, LLC
Las Vegas-Hy, LLC
Las Vegas-J, LLC
Latham Ford-F, LLC
Lauderdale-A, LLC
LBMP, LLC
BMW Portland
League City-H, Inc.
Honda of Clear Lake
Lexington-CJD, LLC
LFKF, LLC
LGPAC, Inc.
Xpress Lube
Lithia AcDM, Inc.
Acura of Johnston
Lithia Aircraft, Inc.
Lithia Anchorage-C, LLC
Chevrolet of Wasilla
Lithia Anchorage-H, LLC
Lithia Armory Garage, LLC
Lithia Auction & Recon, LLC
Lithia Auto Services, Inc.
Tennessee
California
Oregon
California
California
Delaware
California
California
California
California
California
California
California
Nevada
Nevada
Nevada
Nevada
New York
Florida
Oregon
Texas
Kentucky
Oregon
Oregon
Iowa
Oregon
Alaska
Alaska
Delaware
Delaware
Oregon
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Jim Cogdill Chrysler Dodge Jeep Ram
LAD Advertising
Ford of Downtown LA
Mercedes-Benz of Downtown LA
Porsche of Downtown LA
Volkswagen of Downtown LA
Sahara CJDR
Genesis of Las Vegas
Hyundai of Las Vegas
Jeep Only
Ford of Latham
Audi Fort Lauderdale
TBD
Lithia Ford of Klamath Falls
Lithia’s Grants Pass Auto Center
Lithia Kia of Anchorage
Armory Chrysler Dodge Jeep Ram Fiat of Albany
Auction & Recon
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Lithia Body & Paint
Assured Dealer Services
Lithia BA Holding, Inc.
Lithia Baierl-S, LLC
Baierl Subaru
Lithia BNM, Inc. (non operating)
Lithia Bryan Texas, Inc.
Lithia CDH, Inc.
Lithia CIMR, Inc.
Lithia CJDO, Inc.
Lithia CJDSA, Inc.
All American Autoplex
Lithia CJDSF, Inc.
Lithia CM, Inc.
Lithia CO, Inc.
All American Collision
Lithia Community Development Company, Inc.
Lithia Crater Lake-F, Inc.
Crater Lake Ford Lincoln
Lithia Crater Lake-M, Inc.
Crater Lake Mazda
Lithia CSA, Inc.
Lithia DE, Inc.
Lithia Des Moines-VW, LLC
Lithia DM, Inc.
Lithia Dodge
Xpress Lube
Lithia DMID, Inc.
All American Chrysler Jeep Dodge of Midland
Lithia Dodge of Tri-Cities, Inc.
Lithia Chrysler Jeep Dodge of Tri-Cities
Lithia Eatontown-F, LLC
DCH Ford of Eatontown
Lithia Financial Corporation (previously Lithia Leasing, Inc. and Lithia
Credit, Inc.)
Lithia FLCC, LLC
Lithia FMF, Inc.
Lithia Ford Lincoln of Fresno
Lithia Ford of Boise, Inc.
Lithia Ford of Boise
Auto Credit of Idaho
Delaware
Pennsylvania
Oregon
Texas
Montana
California
Texas
Texas
New Mexico
Texas
Texas
Oregon
Delaware
Delaware
Texas
Oregon
Iowa
Oregon
Texas
Washington
New Jersey
Oregon
Texas
California
Idaho
Lithia Chrysler Jeep Dodge of Bryan College Station
Lithia Chrysler Jeep Dodge of Helena
Lithia Chevrolet of Redding
All American Chrysler Jeep Dodge of Odessa
All American Chrysler Dodge Jeep Fiat of San Angelo
Lithia Chrysler Dodge Jeep Fiat of Santa Fe
All American Chevrolet of Midland
All American Chevrolet of Odessa
All American Chevrolet of San Angelo
Lithia Chrysler Dodge Jeep Ram Fiat of Eugene
Lithia Volkswagen of Des Moines
Lithia Chrysler, Jeep, Dodge
All American Dodge of Midland
Lithia Dodge of Tri-Cities
Lithia Leasing
Access Ford Lincoln of Corpus Christy
Lithia Ford of Fresno
Lithia Ford Lincoln of Boise
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Lithia Body & Paint of Boise
Lithia Fresno, Inc.
Fresno Mitsubishi
Lithia Hamilton-H, LLC
DCH Hamilton Honda
Lithia Hazleton-H, LLC
Lithia HDM, Inc.
Honda of Ames
Lithia HGF, Inc.
Lithia HMID, Inc.
Hyundai of Odessa
Lithia HPI, Inc. (non operating)
Lithia Idaho Falls-F, Inc.
Lithia Body and Paint of Idaho Falls
Lithia Imports of Anchorage, Inc.
Lithia-Hyundai of Anchorage
Lithia JEF, Inc.
Genesis of Fresno
Lithia Klamath, Inc.
Lithia Toyota of Klamath Falls
Lithia Klamath Falls Auto Center
Lithia Body and Paint of Klamath Falls
Lithia Klamath-T, Inc.
Lithia LBGGF, Inc.
Lithia LHGF, Inc.
Lithia MBDM, Inc.
European Motorcars Des Moines
Lithia McMurray-C, LLC
Lithia Medford HON, Inc.
Lithia Honda
Lithia Michigan Holding, Inc.
Lithia Middletown-L, LLC
Lexus of Orange County
Lithia Monroeville-A, LLC
Lithia Monroeville-C, LLC
Lithia Monroeville-F, LLC
Ford of Monroeville
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’s Pre-Owned Outlet
Lithia NA, Inc.
California
New Jersey
Pennsylvania
Iowa
Montana
Texas
Oregon
Delaware
Alaska
California
Oregon
Oregon
Montana
Montana
Iowa
Pennsylvania
Oregon
Michigan
New York
Pennsylvania
Pennsylvania
Pennsylvania
Pennsylvania
Pennsylvania
West Virginia
West Virginia
West Virginia
Oregon
Oregon
Alaska
Lithia Subaru of Fresno
Honda of Great Falls
Lithia Ford of Idaho Falls
Lithia Anchorage Auto Body
Lithia Hyundai of Fresno
Lithia Chrysler Jeep Dodge of Klamath Falls
Lithia Toyota of Klamath Falls
Mercedes Benz of Des Moines
DCH Prestige Lexus of Middletown
Subaru of Moon Township
Volkswagen of Moon Township
Chrysler Dodge Jeep Ram Fiat of Morgantown
Ford Lincoln of Morgantown
Subaru of Morgantown
Lithia’s LAD Travel Service
Lithia Toyota
BMW of Anchorage
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
MINI of Anchorage
Lithia NC, Inc.
Nissan of Clovis
Lithia ND Acquisition Corp. #1
Lithia ND Acquisition Corp. #3
Lithia NDM, Inc.
Lithia NF, Inc.
Lithia Nissan of Fresno
Lithia Northeast Real Estate, LLC
Lithia Northwest Real Estate, LLC
Lithia NSA, Inc.
All American Autoplex
Los Angeles-M, Inc.
Lithia of Anchorage, Inc.
Lithia Value Autos
Lithia of Bend #1, LLC
Bend Honda
Lithia of Bend #2, LLC
Lithia Body & Paint of Bend
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
Subaru of Clear Lake
Lithia of Corpus Christi, Inc.
Lithia Chrysler Jeep Dodge of Corpus Christi
Lithia of Des Moines, Inc.
European Motorcars Des Moines
Lithia Body and Paint of Des Moines
Lithia of Eureka, Inc.
Lithia of Fairbanks, Inc.
Lithia of Great Falls, Inc.
Lithia of Helena, Inc.
Chevrolet of Helena
Lithia of Honolulu-A, Inc.
Acura of Honolulu
Lithia of Honolulu-BGMCC, LLC
Honolulu Buick GMC
Honolulu Buick GMC Cadillac
California
North Dakota
North Dakota
Iowa
California
New Jersey
Oregon
Texas
California
Alaska
Oregon
Oregon
Vermont
Vermont
Vermont
Vermont
Montana
Montana
Wyoming
Texas
Texas
Iowa
California
Alaska
Montana
Montana
Hawaii
Hawaii
Lithia Ford Lincoln of Grand Forks
Lithia Chrysler Jeep Dodge of Grand Forks
Lithia Nissan of Ames
Honda of San Angelo
Keyes European
Lithia Chrysler Dodge Jeep Ram Fiat of Anchorage
Chevrolet Cadillac of Bend
Bennington Ford
Bennington Hyundai
Bennington Honda
Bennington Toyota
Lithia Toyota of Billings
Lithia Chrysler Jeep Dodge of Billings
Greiner Ford Lincoln of Casper
Lithia Dodge of Corpus Christi
BMW of Des Moines
Lithia Chrysler Dodge Jeep Ram Fiat of Eureka
Chevrolet Buick GMC of Fairbanks
Lithia Chrysler Jeep Dodge of Great Falls
Chevrolet of Helena
Honolulu Cadillac
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Lithia of Honolulu-F, LLC
Honolulu Ford
Lithia of Honolulu-V, LLC
Honolulu Volkswagen
Lithia of Killeen, LLC
Lithia of Lodi, Inc.
Lithia of Maui-H, LLC
Island Honda
Lithia of Missoula II, LLC
Lithia of Missoula III, Inc.
Lithia Ford of Missoula
Lithia of Missoula, Inc.
Lithia Auto Center of Missoula
Lithia of Pocatello, Inc.
Lithia Chrysler Jeep Dodge of Pocatello
Lithia Dodge Trucks of Pocatello
Lithia of Portland I, LLC
Lithia of Portland, LLC
Lithia of Robstown, LLC
Lithia of Roseburg, Inc.
Lithia Roseburg Auto Center
Lithia of Seattle, Inc.
BMW Seattle
Lithia of South Central AK, Inc.
Lithia of Spokane II, Inc.
Lithia of Spokane, Inc.
Lithia of Stockton, Inc.
Kia of Stockton
Lithia of Stockton-V, Inc.
Volkswagen of Stockton
Lithia of TF, Inc.
Lithia of Troy, LLC
Carbone Subaru
Lithia of Utica - 2, LLC
Don’s Ford
Lithia of Utica - 3, LLC
Don’s Subaru
Lithia of Utica - 4, LLC
Carbone Cadillac of Utica
Lithia of Walnut Creek, Inc.
Lithia of Wasilla, LLC
Lithia of Yorkville - 1, LLC
Carbone Chevrolet of Yorkville
Lithia of Yorkville - 2, LLC
Chrysler Dodge Jeep Ram of Utica
Lithia of Yorkville - 3, LLC
Delaware
Hawaii
Texas
California
Hawaii
Montana
Montana
Montana
Idaho
Oregon
Oregon
Delaware
Oregon
Washington
Alaska
Washington
Washington
California
California
Idaho
New York
New York
New York
Delaware
California
Alaska
New York
New York
New York
All American Chevrolet of Killeen
Lodi Toyota
Lithia Toyota of Missoula
Lithia Chrysler Jeep Dodge of Missoula
Lithia Hyundai of Pocatello
Lithia Chrysler Dodge Jeep Ram of Portland
Buick GMC of Beaverton
Chrysler Dodge Jeep Ram of Calallen
Lithia Chrysler Jeep Dodge of Roseburg
Chevrolet of South Anchorage
Lithia Chrysler Dodge Jeep Ram of Spokane
Nissan of Stockton
Lithia Chrysler Jeep Dodge of Twin Falls
Carbone Buick GMC Cadillac of Utica
Diablo Subaru of Walnut Creek
Lithia Chrysler Jeep Dodge Ram of Wasilla
Carbone Chevrolet Buick Cadillac GMC
Carbone Chrysler Dodge Jeep Ram
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Carbone Honda
Lithia of Yorkville - 4, LLC
Carbone Hyundai
Lithia of Yorkville - 5, LLC
Carbone Nissan
Lithia Orchard Park-H, LLC
Ray Laks Honda
Lithia Paramus-M, LLC
DCH Prestige Mercedes-Benz of Paramus
Mercedes-Benz of Paramus
Lithia Pittsburgh-S, LLC
Subaru of South Hills
Lithia Ramsey-B, LLC
DCH Prestige BMW of Ramsey
BMW of Ramsey
Lithia Ramsey-L, LLC
DCH Prestige Lexus of Ramsey
Lithia Ramsey-M, LLC
DCH Prestige MINI of Ramsey
MINI of Ramsey
Prestige MINI of Dutchess County
DCH Prestige MINI of Dutchess County
MINI of Wappingers Falls
Lithia Ramsey-T, LLC
DCH Prestige Toyota of Ramsey
Lithia Real Estate, Inc.
Lithia Reno-CJ, LLC
Lithia Reno-VW, LLC
Lithia Reno Sub-HYUN, Inc.
Lithia Body & Paint
Lithia Rose-FT, Inc.
Assured Dealer Services of Roseburg
Lithia RV Holdings, Inc.
Lithia Salmir, Inc.
Lithia Hyundai of Reno
Lithia Sea P, Inc.
Porsche Monterey
Lithia Seaside, Inc.
Lithia SOC, Inc.
Lithia Spokane-B, LLC
Lithia Spokane-S, LLC
Lithia SSP, LLC
Lithia TA, Inc.
Lithia Tennessee Holding, Inc.
New York
New York
Delaware
Ray Laks Honda of Orchard Park
New Jersey
Prestige Mercedes-Benz of Paramus
Pennsylvania
New Jersey
New Jersey
New Jersey
Prestige BMW of Ramsey
Prestige Lexus of Ramsey
Prestige MINI of Ramsey
New Jersey
Prestige Toyota of Ramsey
Oregon
Nevada
Nevada
Nevada
Oregon
Oregon
Nevada
California
California
Oregon
Washington
Washington
Oregon
Texas
Tennessee
Lithia Chrysler Jeep of Reno
Lithia Volkswagen of Reno
Lithia Ford Lincoln of Roseburg
BMW of Monterey
Lithia Subaru of Oregon City
BMW of Spokane
Subaru of Spokane
Lithia Toyota of Abilene
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
Texas
California
Pennsylvania
Virginia
Iowa
California
Virginia
Pennsylvania
California
Oregon
Delaware
Oregon
Oregon
Wisconsin
Florida
Oregon
Texas
Texas
Florida
Florida
Florida
Florida
Florida
Washington
Lithia TO, Inc.
Lithia TR, Inc.
Lithia Uniontown-C, LLC
Lithia VA Real Estate, LLC
Lithia VAuDM, Inc.
Audi Des Moines
Lithia VF, Inc.
Lithia Virginia Holding, Inc.
Lithia Wexford-H, LLC
Baierl Honda
LLL Sales Co LLC
Gardena Honda
Gardena Honda, a DCH Company
All-Savers Auto Sales & Leasing
LMBB, LLC
LMBP, LLC
Smart Center of Portland
LMOP, LLC
MINI of Portland
LSTAR, LLC
Madison-H, Inc.
Wesley Chapel-M, LLC (formerly known as Margate-CJD, LLC)
Mazda of Wesley Chapel
Medford Insurance, LLC
Mesquite-K, Inc.
Mesquite-M, Inc.
Miami Gardens-BG, LLC
Miami Gardens-G, LLC
Miami Gardens-Hy, LLC
Miami Gardens-M, LLC
Miami Gardens-S, LLC
Milton-Air, LLC
Mission Hills-H, Inc.
California
Mobile-S, LLC
Morgan Hill-Air, Inc.
Northland Ford Inc.
Baierl Ford
Novi-I, LLC
Suburban Infiniti of Novi
The Suburban Collection
Orlando-JLR, LLC
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Lithia Toyota of Odessa
Lithia Toyota of Redding
DCH Gardena Honda
Mercedes-Benz of Beaverton
Mercedes-Benz of Portland
Wilde East Town Honda | Madison
TBD
Lehman Buick GMC
Lehman Genesis
Lehman Hyundai
William Lehman Mitsubishi
Subaru of North Miami
Seattle Airstream Adventures
Keyes Hyundai of Mission Hills
Alabama
California
Pennsylvania
TBD
South Bay Airstream Adventures
Michigan
Suburban Infiniti
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Florida
Oxnard Business Services Inc.
Wesley Chapel-Hy, LLC (formerly known as Palm Beach-CJD, LLC)
PA Real Estate, LLC
PA Support Services, LLC
Paramus Collision, LLC
Prestige Collision Center
Paramus World Motors LLC
Paramus Honda
Crown Leasing
Personalized Marketing, LLC
Philadelphia-F, LLC
Phoenix-T, Inc.
Arizona
Bell Road Toyota
Driveway Bell Road Toyota
Bell Road Certified Collision Center
Plymouth-C, LLC
Suburban Cadillac
Suburban Cadillac Collision of Plymouth
Suburban Cadillac of Plymouth
Suburban Collision Centers
The Suburban Collection
Ramsey HoldingCo, Inc.
Redwood-Hy, LLC
RFA Holdings, LLC
Rock Business Services, Inc.
Rockwall-H, Inc.
Honda Cars of Rockwall
Rockwall-K, Inc.
Roseville-C, Inc.
Roseville-K, Inc.
Roseville-T, Inc.
Round Rock-K, Inc.
Sacramento-L, Inc.
Lexus of Sacramento
Salem-B, LLC
BMW of Salem
Salem-H, LLC
Honda of Salem
Salem-V, LLC
Volkswagen of Salem
Sanford-CJD, LLC
San Francisco-B, Inc.
California
Florida
Pennsylvania
Pennsylvania
New Jersey
New Jersey
Oregon
Pennsylvania
Michigan
Iowa
Nevada
Oregon
California
Texas
Texas
California
California
California
Texas
California
Oregon
Oregon
Oregon
Florida
California
Hyundai of Wesley Chapel
Prestige Auto Body
DCH Paramus Honda
ABC Hyundai
TBD
John L. Sullivan Chevrolet
John L. Sullivan’s Roseville Kia
Roseville Toyota
Lexus of Roseville
Chrysler Dodge Jeep Ram of Seminole County
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
BMW of San Francisco
SCFC Business Services LLC
Sharlene Realty LLC
Brunswick Toyota
DCH Collision Center
Sherman Oaks-A, Inc.
California
Keyes Audi
Sherman Oaks-Ac, Inc.
Sherman Oaks-B, Inc.
Shift Portland, LLC
Smyrna-F, LLC
Driveway Finance Corporation (formerly known as Southern Cascades
Finance Corporation
Southeast SS, LLC
Southwest Realty Holdings Holdco, LLC
Spokane Valley-Air, LLC
Sterling Heights-F, LLC
Quick Lane Tire and Auto Center of Sterling Heights
Suburban Collision Centers
Suburban Ford of Sterling Heights
Suburban Used Car Outlet
The Suburban Collection
Sterling-BM, LLC
MINI of Sterling
Sterling-RLM, LLC
Lamborghini Washington
McLaren Washington
Rolls-Royce Motor Cars Washington
Bugatti Washington
Suburban Auto Agency, LLC
New Port Richey-H, LLC (formerly known as Tamarac-CJD, LLC)
Hyundai of New Port Richey
New Port Richey-V, LLC
Tampa-F, LLC
Tampa-H, LLC
Thousand Oaks-S, Inc.
TN Real Estate, LLC
Tennessee
Troy Collision, LLC
Suburban Collision of Troy
The Suburban Collection
Troy Exotics, LLC
Aston Martin Troy
Delaware
New Jersey
California
California
Oregon
Georgia
Oregon
Tennessee
Nevada
Washington
Michigan
Virginia
Virginia
Michigan
Florida
Florida
Florida
Florida
California
Michigan
Michigan
DCH Brunswick Toyota
Acura of Sherman Oaks
BMW of Sherman Oaks
TBD
Southeast Support Services
Spokane Airstream Adventures
BMW of Sterling
Volkswagen of New Port Richey
Elder Ford of Tampa
Tampa Honda
DCH Subaru of Thousand Oaks
Suburban Collision Centers
Aston Martin Detroit
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Bentley Troy
Bugatti Troy
Lamborghini Troy
Maserati of Troy
Maserati Troy
McLaren Troy
Rolls-Royce Motor Cars of Michigan
Suburban Exotics
The Suburban Collection
Troy-A, LLC
Troy-F, LLC
Troy-BG, LLC
Suburban Buick GMC of Troy
The Suburban Collection
Troy-C, LLC
Suburban Cadillac of Troy
The Suburban Collection
Troy-CJD, LLC
Suburban Chrysler Dodge Jeep Ram of Troy
The Suburban Collection
Troy-H, LLC
Suburban Hyundai of Troy
Suburban Hyundai
The Suburban Collection
Troy-I, LLC
Suburban Infiniti of Troy
The Suburban Collection
Troy-JLR, LLC
Jaguar Land Rover Troy
Jaguar Troy
Land Rover Troy
The Suburban Collection
Troy-N, LLC
Suburban Nissan of Troy
The Suburban Collection
Troy-S, LLC
Suburban Subaru of Troy
The Suburban Collection
Troy-T, LLC
Suburban Toyota of Troy
The Suburban Collection
Troy-V, LLC
The Suburban Collection
Troy-VW, LLC
Suburban Nissan
Michigan
Michigan
Michigan
Michigan
Michigan
Michigan
Michigan
Michigan
Michigan
Michigan
Michigan
Michigan
Michigan
Elder Ford
Suburban Buick GMC
Suburban Cadillac
Suburban CDJR of Troy
Hyundai of Troy
Suburban Infiniti
Suburban Nissan
Suburban Subaru
Suburban Toyota
Suburban Volvo Cars
SUBSIDIARIES OF LITHIA MOTORS, INC.
(as of December 31, 2021)
EXHIBIT 21
NAME OF ENTITY
STATE OF ORIGIN
ASSUMED BUSINESS NAME(S)
(if different than entity name)
Suburban Volkswagen
Suburban Volkswagen of Troy
The Suburban Collection
Troy-M, LLC
Tustin Motors Inc.
Tustin Acura
Union-H, LLC
Union-K, LLC
Urbandale-S, LLC
Ramsey Mazda
Valencia-A, Inc.
Van Nuys-C, Inc.
Van Nuys-H, Inc.
Van Nuys-L, Inc.
Keyes Lexus of Valencia
Van Nuys-T, Inc.
Washington-F, LLC
Waterford-F, LLC
Suburban Collision Centers
Suburban Ford of Waterford
Suburban Ford Collision Centers of Waterford
The Suburban Collection
Waukesha-CJD, Inc.
Waukesha-H, Inc.
Waukesha-S, Inc.
Wesley Chapel-H, LLC
Wesley Chapel-T, LLC
West Allis-T, Inc.
Yuba City-CJD, Inc.
Zelienople Real Estate, L.L.C.
Zelienople Real Estate I, L.P.
Michigan
California
New Jersey
New Jersey
Iowa
California
California
California
California
California
Michigan
Michigan
Wisconsin
Wisconsin
Wisconsin
Florida
Florida
Wisconsin
California
Pennsylvania
Pennsylvania
Suburban Mazda of Troy
DCH Tustin Acura
Ramsey Subaru of Des Moines
Audi Valencia
Keyes Chevrolet
Keyes Hyundai of Van Nuys
Keyes Lexus
Keyes Toyota
Elder Ford of Romeo
Wilde Chrysler Jeep Dodge Ram
Wilde Honda | Metro Milwaukee
Wilde Subaru
Wilde Toyota
John L. Sullivan Chrysler Dodge Jeep RAM
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
EXHIBIT 23
The Board of Directors
Lithia Motors, Inc.:
We consent to the incorporation by reference in the registration statements (Nos. 333-190192, 333-43593, 333-69169, 333-156410, 333-39092, 333-61802, 333-106686, 333-116839, 333-
116840, 333-135350, 333-161590, 333-168737, 333-231255) on Form S-8 and (No. 333-239969) on Form S-3 of our reports dated February 24, 2023, with respect to the consolidated
financial statements of Lithia Motors, Inc, and the effectiveness of internal control over financial reporting.
/s/ KPMG LLP
Portland, Oregon
February 24, 2023
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
I, Bryan B. DeBoer, certify that:
1.
I have reviewed this annual report on Form 10-K of Lithia Motors, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-
15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit
committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 24, 2023
By: /s/ Bryan B. DeBoer
Bryan B. DeBoer
Chief Executive Officer, President, Director, and Principal Executive Officer
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
I, Tina Miller, certify that:
1.
I have reviewed this annual report on Form 10-K of Lithia Motors, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-
15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit
committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: February 24, 2023
By: /s/ Tina Miller
Tina Miller
Chief Financial Officer, Senior Vice President, and Principal Accounting Officer
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. SECTION 1350
In connection with the Annual Report of Lithia Motors, Inc. (the "Company”) on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on
the date hereof (the "Report”), I, Bryan B. DeBoer, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the
Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: February 24, 2023
By: /s/ Bryan B. DeBoer
Bryan B. DeBoer
Chief Executive Officer, President, Director, and Principal Executive Officer
EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. SECTION 1350
In connection with the Annual Report of Lithia Motors, Inc. (the "Company”) on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission on
the date hereof (the "Report”), I, Tina Miller, Senior Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley
Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: February 24, 2023
By: /s/ Tina Miller
Tina Miller
Chief Financial Officer, Senior Vice President, and Principal Accounting Officer