CLASS A-1 NOTE PURCHASE AGREEMENT DATED DECEMBER 20, 2006

Exhibit 99.3

 

CLASS A-1 NOTE PURCHASE AGREEMENT

(SERIES 2006-1 VARIABLE FUNDING SENIOR NOTES, CLASS A-1)

dated as of December 20, 2006

among

SONIC CAPITAL LLC,

SONIC INDUSTRIES FRANCHISING LLC,

AMERICA’S DRIVE-IN HOLDING INC.,

AMERICA’S DRIVE-IN BRAND PROPERTIES LLC,

AMERICA’S DRIVE-IN RESTAURANTS LLC,

SRI REAL ESTATE HOLDING LLC and

SRI REAL ESTATE PROPERTIES LLC

each as a Co-Issuer,

SONIC INDUSTRIES SERVICES INC.,

as Servicer,

CERTAIN CONDUIT INVESTORS,

each as a Conduit Investor,

CERTAIN FINANCIAL INSTITUTIONS,

each as a Committed Note Purchaser,

CERTAIN FUNDING AGENTS,

BANK OF AMERICA, N.A.,

as L/C Provider,

LEHMAN COMMERCIAL PAPER INC.,

as Swingline Lender,

and

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

 

TABLE OF CONTENTS

 

 

i

 

ii

SCHEDULES AND EXHIBITS

 

 

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CLASS A-1 NOTE PURCHASE AGREEMENT

THIS CLASS A-1 NOTE PURCHASE AGREEMENT, dated as of December 20, 2006 (as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof, this “ Agreement ”), is made by and among:

(a) SONIC CAPITAL LLC, a Delaware limited liability company (the “ Master Issuer ”), SONIC INDUSTRIES FRANCHISING LLC, a Delaware limited liability company (the “ Franchise Assets Holder ”), AMERICA’S DRIVE-IN HOLDING INC., a Kansas corporation (“ ADIC Holdco ”), AMERICA’S DRIVE-IN BRAND PROPERTIES LLC, a Kansas limited liability company (the “ IP Holder ”), AMERICA’S DRIVE-IN RESTAURANTS LLC, a Kansas limited liability company (“ New ADIC ”), SRI REAL ESTATE HOLDING LLC, a Delaware limited liability company (“ SRI Real Estate Holdco ”), and SRI REAL ESTATE PROPERTIES LLC, a Delaware limited liability company (“ SRI Real Estate Assets Holder ”, each, a “ Co-Issuer ” and, together with the Master Issuer, the Franchise Assets Holder, ADIC Holdco, the IP Holder, New ADIC, SRI Real Estate Holdco, collectively, the “ Co-Issuers ”),

(b) SONIC INDUSTRIES SERVICES INC., an Oklahoma corporation (“ SISI ” or the “ Servicer ”),

(c) the several commercial paper conduits listed on Schedule I as Conduit Investors and their respective permitted successors and assigns (each, a “ Conduit Investor ” and, collectively, the “ Conduit Investors ”),

(d) the several financial institutions listed on Schedule I as Committed Note Purchasers and their respective permitted successors and assigns (each, a “ Committed Note Purchaser ” and, collectively, the “ Committed Note Purchasers ”),

(e) for each Investor Group, the financial institution entitled to act on behalf of the Investor Group set forth opposite the name of such Investor Group on Schedule I as Funding Agent and its permitted successors and assigns (each, the “ Funding Agent ” with respect to such Investor Group and, collectively, the “ Funding Agents ”),

(f) BANK OF AMERICA, N.A., as L/C Provider,

(g) LEHMAN COMMERCIAL PAPER INC., as Swingline Lender, and

(h) LEHMAN COMMERCIAL PAPER INC., in its capacity as administrative agent for the Conduit Investors, the Committed Note Purchasers, the Funding Agents, the L/C Provider and the Swingline Lender (together with its permitted successors and assigns in such capacity, the “ Administrative Agent ” or the “ Series 2006-1 Class A-1 Administrative Agent ”).

BACKGROUND

1. Contemporaneously with the execution and delivery of this Agreement, the Co-Issuers and Citibank, N.A., as Trustee, are entering into the Series 2006-1 Supplement, of even date herewith (as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof, the “ Series 2006-1 Supplement ”), to the Base Indenture, of even date herewith (as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof, the “ Base Indenture ” and, together with the Series 2006-1 Supplement, the “ Indenture ”), among the Co-Issuers and the Trustee, pursuant to which the Co-Issuers have determined to issue Series 2006-1 Class A-1 Notes (as defined in the Series 2006-1 Supplement) in accordance with the Indenture.

2. The Co-Issuers wish to (a) issue the Series 2006-1 Class A-1 Advance Notes to each Funding Agent on behalf of the Investors in the related Investor Group, and obtain the agreement of the applicable Investors to make loans from time to time (each, an “ Advance ” or a “ Series 2006-1 Class A-1 Advance ” and, collectively, the “ Advances ” or the “ Series 2006-1 Class A-1 Advances ”) that will constitute the purchase of Series 2006-1 Class A-1 Outstanding Principal Amounts on the terms and conditions set forth in this Agreement; (b) issue the Series 2006-1 Class A-1 Swingline Note to the Swingline Lender and obtain the agreement of the Swingline Lender to make Swingline Loans on the terms and conditions set forth in this Agreement; and (c) issue the Series 2006-1 Class A-1 L/C Note to the L/C Provider and obtain the agreement of the L/C Provider to provide Letters of Credit on the terms and conditions set forth in this Agreement. SISI has joined in this Agreement to confirm certain representations, warranties and covenants made by it for the benefit of each Lender Party.

ARTICLE I

DEFINITIONS

SECTION 1.01 Definitions . As used in this Agreement and unless the context requires a different meaning, capitalized terms used but not defined herein (including the preamble and the recitals hereto) shall have the meanings assigned to such terms in the Series 2006-1 Supplemental Definitions List attached to the Series 2006-1 Supplement as Annex A or in the Base Indenture Definitions List attached to the Base Indenture as Annex A , as applicable. Unless otherwise specified herein, all Article, Exhibit, Section or Subsection references herein shall refer to Articles, Exhibits, Sections or Subsections of this Agreement.

ARTICLE II

PURCHASE AND SALE OF CLASS A-1 NOTES

SECTION 2.01 The Initial Advance Notes . On the terms and conditions set forth in the Indenture and this Agreement, and in reliance on the covenants, representations and agreements set forth herein and therein, the Co-Issuers shall issue and shall request the Trustee to authenticate the initial Series 2006-1 Class A-1 Advance Notes, which the Co-Issuers shall deliver to each Funding Agent on behalf of the

 

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Investors in the related Investor Group on the Series 2006-1 Closing Date. Such initial Series 2006-1 Class A-1 Advance Note for each Investor Group shall be dated the Series 2006-1 Closing Date, shall be registered in the name of the related Funding Agent or its nominee, as agent for the related Investors, or in such other name as such Funding Agent may request, shall have a maximum principal amount equal to the Maximum Investor Group Principal Amount for such Investor Group, shall have an initial outstanding principal amount equal to such Investor Group’s Commitment Percentage of the Series 2006-1 Class A-1 Initial Advance Principal Amount, and shall be duly authenticated in accordance with the provisions of the Indenture.

SECTION 2.02 Advances .

(a) Subject to the terms and conditions of this Agreement and the Indenture, each Eligible Conduit Investor, if any, may and, if such Conduit Investor determines that it will not make (or it does not in fact make) an Advance or any portion of an Advance, its related Committed Note Purchaser(s) shall or, if there is no Eligible Conduit Investor with respect to any Investor Group, the Committed Note Purchaser with respect to such Investor Group shall, upon the Co-Issuers’ request delivered in accordance with the provisions of Section 2.03 and the satisfaction of all conditions precedent thereto (or under the circumstances set forth in Section 2.05 , 2.06 or 2.08 ), make Advances from time to time during the Commitment Term; provided that such Advances shall be made ratably by each Investor Group based on their respective Commitment Percentages and the portion of any such Advance made by any Committed Note Purchaser in such Investor Group shall be its Committed Note Purchaser Percentage of the Advances to be made by such Investor Group (or the portion thereof not being made by any Conduit Investor in such Investor Group); provided further that no Advance shall be required or permitted to be made by any Investor on any date if, after giving effect to such Advance, (i) the related Investor Group Principal Amount would exceed the related Maximum Investor Group Principal Amount or (ii) the Series 2006-1 Class A-1 Outstanding Principal Amount would exceed the Series 2006-1 Class A-1 Maximum Principal Amount.

(b) Notwithstanding anything herein or in any other Related Document to the contrary, at no time will a Conduit Investor be obligated to make Advances hereunder. If at any time any Conduit Investor is not an Eligible Conduit Investor, (i) such Conduit Investor shall promptly notify the Administrative Agent (who shall promptly notify the related Funding Agent and the Co-Issuers) thereof, and (ii) the Co-Issuers shall have the right, exercisable upon three Business Days’ prior written notice to the Administrative Agent (who shall promptly notify the related Funding Agent), to require such Conduit Investor to transfer all of its then-outstanding CP Advances to its related Committed Note Purchaser(s) or, at such Committed Note Purchaser’s option, to another permitted transferee in accordance with Section 9.03 or 9.17 , as applicable. From and after the date of such transfer, such Advances shall bear interest at the Base Rate or the Eurodollar Rate, as applicable, in accordance with the second sentence of Section 3.01(a) .

 

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(c) Each of the Advances to be made on any date shall be made as part of a single borrowing (each such single borrowing being a “ Borrowing ”). The Advances made as part of the initial Borrowing on the Series 2006-1 Closing Date will be evidenced by the Series 2006-1 Class A-1 Advance Notes issued in connection herewith and will constitute purchases of Series 2006-1 Class A-1 Initial Advance Principal Amounts corresponding to the amount of such Advances. All of the other Advances will constitute Increases evidenced by the Series 2006-1 Class A-1 Advance Notes issued in connection herewith and will constitute purchases of Series 2006-1 Class A-1 Outstanding Principal Amounts corresponding to the amount of such Advances.

(d) Section 2.2(b) of the Series 2006-1 Supplement specifies the procedures to be followed in connection with any Voluntary Decrease of the Series 2006-1 Class A-1 Outstanding Principal Amount. Each such Voluntary Decrease in respect of any Advances shall be in an aggregate minimum principal amount of $200,000 and integral multiples of $100,000 in excess thereof.

(e) Subject to the terms of this Agreement and the Series 2006-1 Supplement, the aggregate principal amount of the Advances evidenced by the Series 2006-1 Class A-1 Advance Notes may be increased by Borrowings or decreased by Voluntary Decreases from time to time.

SECTION 2.03 Borrowing Procedures .

(a) Whenever the Co-Issuers wish a Borrowing to be made, the Co-Issuers shall (or shall cause the Servicer to) notify the Administrative Agent (who shall promptly, and in any event by 4:00 p.m. (New York time) on the same Business Day as its receipt of the same, notify each Funding Agent of its pro rata share thereof and notify the Trustee, the Series 2006-1 Insurer, the Swingline Lender and the L/C Provider in writing of such Borrowing) upon irrevocable written notice in the form of an Advance Request delivered to the Administrative Agent no later than 12:00 p.m. (New York time) on the Business Day (or, in the case of any Eurodollar Advances for purposes of Section 3.01(b) , on the third Business Day) prior to the date of Borrowing, which date of Borrowing shall be a Business Day during the Commitment Term. Each such notice shall be irrevocable and shall in each case refer to this Agreement and specify (i) the Borrowing date, (ii) the aggregate amount of the requested Borrowing to be made on such date, (iii) the amount of outstanding Swingline Loans and Unreimbursed L/C Drawings to be repaid with the proceeds of such Borrowing on the Borrowing date, which amount shall constitute all outstanding Swingline Loans and Unreimbursed L/C Drawings outstanding on the date of such notice, and (iv) sufficient instructions for application of the balance, if any, of the proceeds of such Borrowing on the Borrowing date (which proceeds shall be allocated among the Co-Issuers pro rata based on the percentage of the proceeds of the issuance of the Series 2006-1 Class A-2 Notes received by each such Co-Issuer on the Series 2006-1 Closing Date). Requests for any Borrowing may not be made in an aggregate principal amount of less than $1,000,000 or in an aggregate principal amount that is not an integral multiple of $500,000 in excess thereof (except as otherwise provided herein with respect to Borrowings for the purpose of repaying then-outstanding Swingline Loans or Unreimbursed L/C Drawings). The

 

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Co-Issuers agree to cause requests for Borrowings to be made upon notice of any drawing under a Letter of Credit and in any event at least one time per week if any Swingline Loans or Unreimbursed L/C Drawings are outstanding, in each case, in amounts at least sufficient to repay in full all Swingline Loans and Unreimbursed L/C Drawings outstanding on the date of the applicable request. Each Borrowing shall be ratably allocated among the Investor Groups’ respective Maximum Investor Group Principal Amounts. Each Funding Agent shall promptly advise its related Conduit Investor, if any, of any notice given pursuant to this Section 2.03(a)  and shall promptly thereafter (but in no event later than 11:00 a.m. (New York time) on the date of Borrowing) notify the Administrative Agent, the Co-Issuers and the related Committed Note Purchaser(s) whether such Conduit Investor has determined to make all or any portion of the Advances in such Borrowing that are to be made by its Investor Group. On the date of each Borrowing and subject to the other conditions set forth herein and in the Series 2006-1 Supplement (and, if requested by the Administrative Agent, confirmation from the Swingline Lender and the L/C Provider, as applicable, as to (x) the amount of outstanding Swingline Loans and Unreimbursed L/C Drawings to be repaid with the proceeds of such Borrowing on the Borrowing date, (y) the Undrawn L/C Face Amount of all Letters of Credit then outstanding and (z) the principal amount of any other Swingline Loans or Unreimbursed L/C Drawings then outstanding), the applicable Investors in each Investor Group shall make available to the Administrative Agent the amount of the Advances in such Borrowing that are to be made by such Investor Group by wire transfer in U.S. Dollars of such amount in same day funds no later than 3:00 p.m. (New York time) on the date of such Borrowing, and upon receipt thereof the Administrative Agent shall immediately make such proceeds available, first , to the Swingline Lender and the L/C Provider for application to repayment of the amount of outstanding Swingline Loans and Unreimbursed L/C Drawings as set forth in the applicable Advance Request, ratably in proportion to such respective amounts, and, second , to the Co-Issuers as instructed in the applicable Advance Request.

(b) The failure of any Committed Note Purchaser to make the Advance to be made by it as part of any Borrowing shall not relieve any other Committed Note Purchaser (whether or not in the same Investor Group) of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Committed Note Purchaser shall be responsible for the failure of any other Committed Note Purchaser to make the Advance to be made by such other Committed Note Purchaser on the date of any Borrowing.

(c) Unless the Administrative Agent shall have received notice from a Funding Agent prior to the date of any Borrowing that an applicable Investor in the related Investor Group will not make available to the Administrative Agent such Investor’s share of the Advances to be made by such Investor Group as part of such Borrowing, the Administrative Agent may (but shall not be obligated to) assume that such Investor has made such share available to the Administrative Agent on the date of such Borrowing in accordance with Section 2.02(a) and the Administrative Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the Swingline Lender, the L/C Provider and/or the Co-Issuers, as applicable, on such date a corresponding amount, and shall, if such corresponding amount has not been made

 

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available by the Administrative Agent, make available to the Swingline Lender, the L/C Provider and/or the Co-Issuers, as applicable, on such date a corresponding amount once such Investor has made such portion available to the Administrative Agent. If and to the extent that any Investor shall not have so made such amount available to the Administrative Agent, such Investor and the Co-Issuers jointly and severally agree to repay (without duplication) to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon, for each day from the date such amount is made available to the Co-Issuers until the date such amount is repaid to the Administrative Agent, at (i) in the case of the Co-Issuers, the interest rate applicable at the time to the Advances comprising such Borrowing and (ii) in the case of such Investor, the Federal Funds Rate and without deduction by such Investor for any withholding taxes. If such Investor shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Investor’s Advance as part of such Borrowing for purposes of this Agreement.

SECTION 2.04 The Series 2006-1 Class A-1 Notes . On each date an Advance or Swingline Loan is funded or a Letter of Credit is issued hereunder, and on each date the outstanding amount thereof is reduced, a duly authorized officer, employee or agent of the related Series 2006-1 Class A-1 Noteholder shall make appropriate notations in its books and records of the amount, evidenced by the related Series 2006-1 Class A-1 Advance Note, of such Advance, Swingline Loan or Letter of Credit and the amount of such reduction, as applicable. The Co-Issuers hereby authorize each duly authorized officer, employee and agent of such Series 2006-1 Class A-1 Noteholder to make such notations on the books and records as aforesaid and every such notation made in accordance with the foregoing authority shall be prima facie evidence of the accuracy of the information so recorded; provided , however , that in the event of a discrepancy between the books and records of such Series 2006-1 Class A-1 Noteholder and the records maintained by the Trustee pursuant to the Indenture, such discrepancy shall be resolved by such Series 2006-1 Class A-1 Noteholder, the Series 2006-1 Insurer and the Trustee, in consultation with the Co-Issuers ( provided that such consultation with the Co-Issuers will not in any way limit or delay such Series 2006-1 Class A-1 Noteholders’, the Series 2006-1 Insurer’s and the Trustee’s ability to resolve such discrepancy), and such resolution shall control in the absence of manifest error; provided further that the failure of any such notation to be made, or any finding that a notation is incorrect, in any such records shall not limit or otherwise affect the obligations of the Co-Issuers under this Agreement or the Indenture.

SECTION 2.05 Reduction in Commitments .

(a) The Co-Issuers may, upon three Business Days’ notice to the Administrative Agent (who shall promptly notify the Trustee, the Series 2006-1 Insurer, each Funding Agent and each Investor), effect a permanent reduction in the Series 2006-1 Class A-1 Maximum Principal Amount and a corresponding reduction in each Commitment Amount and Maximum Investor Group Principal Amount on a pro rata basis; provided that (i) any such reduction will be limited to the undrawn portion of the Commitments, although any such reduction may be combined with a Voluntary Decrease effected pursuant to and in accordance with Section 2.2(a) of the Series 2006-1

 

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Supplement, (ii) any such reduction must be in a minimum amount of $10,000,000, (iii) after giving effect to such reduction, the Series 2006-1 Class A-1 Maximum Principal Amount equals or exceeds $50,000,000, unless reduced to zero, and (iv) no such reduction shall be permitted if, after giving effect thereto, (x) the aggregate Commitment Amounts would be less than the Series 2006-1 Class A-1 Outstanding Principal Amount (excluding any Undrawn L/C Face Amounts with respect to which cash collateral is held by the L/C Provider pursuant to Section 4.03 ) or (y) the aggregate Commitment Amounts would be less than the sum of the Swingline Commitment and the L/C Commitment. Any reduction made pursuant to this Section 2.05(a) shall be made ratably among the Investor Groups on the basis of their respective Maximum Investor Group Principal Amounts.

(b) If any of the following events shall occur, then the Commitments shall be automatically and permanently reduced on the dates and in the amounts set forth below with respect to the applicable event and the other consequences set forth below with respect to the applicable event shall ensue (and the Co-Issuers shall give the Trustee, the Series 2006-1 Insurer, each Funding Agent and the Administrative Agent prompt written notice thereof):

(i) if the Series 2006-1 Final Payment has not been made on or before the Business Day immediately preceding the Series 2006-1 Anticipated Repayment Date (A) on such Business Day, (x) the principal amount of all then-outstanding Swingline Loans and Unreimbursed L/C Drawings shall be repaid in full with proceeds of Advances made on such date (and the Co-Issuers shall be deemed to have delivered such Advance Requests under Section 2.03 as may be necessary to cause such Advances to be made), and (y) the Swingline Commitment and the L/C Commitment shall both be automatically and permanently reduced to zero; (B) on the Series 2006-1 Anticipated Repayment Date, (x) all undrawn portions of the Commitments shall automatically and permanently terminate (all Undrawn L/C Face Amounts having expired by their terms prior to such date), and (y) the corresponding portions of the Series 2006-1 Class A-1 Maximum Principal Amount, the Commitment Amounts and the Maximum Investment Group Principal Amounts shall be automatically and permanently reduced by a corresponding amount and (C) each payment of principal on the Series 2006-1 Class A-1 Outstanding Principal Amount occurring on or after the Series 2006-1 Anticipated Repayment Date shall result automatically and permanently in a dollar-for-dollar reduction of the Series 2006-1 Class A-1 Maximum Principal Amount and a corresponding reduction in each Commitment Amount and Maximum Investor Group Principal Amount on a pro rata basis;

(ii) if a Rapid Amortization Event occurs prior to the Series 2006-1 Anticipated Repayment Date, then (A) on the date such Rapid Amortization Event occurs, (x) all portions of the Commitments in excess of the Series 2006-1 Class A-1 Outstanding Principal Amount (excluding any Undrawn L/C Face Amounts to the extent cash collateral is held with respect thereto by the L/C Provider pursuant to Section 4.03 ) shall automatically and permanently

 

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terminate, (y) the corresponding portions of the Series 2006-1 Class A-1 Maximum Principal Amount, the Commitment Amounts and the Maximum Investment Group Principal Amounts shall be automatically and permanently reduced by a corresponding amount and (z) the Swingline Commitment and the L/C Commitment shall both be automatically and permanently reduced to zero; (B) no later than the second Business Day after the occurrence of such Rapid Amortization Event, the principal amount of all then-outstanding Swingline Loans and Unreimbursed L/C Drawings shall be repaid in full with proceeds of Advances (and the Co-Issuers shall be deemed to have delivered such Advance Requests under Section 2.03 as may be necessary to cause such Advances to be made); and (C) each payment of principal on the Series 2006-1 Class A-1 Outstanding Principal Amount occurring on or after the date of such Rapid Amortization Event (excluding the repayment of any outstanding Swingline Loans and Unreimbursed L/C Obligations with proceeds of Advances pursuant to clause (B) above but including payments that are used to cash collateralize any Undrawn L/C Face Amounts) shall result automatically and permanently in a dollar-for-dollar reduction of the Series 2006-1 Class A-1 Maximum Principal Amount and a corresponding reduction in each Commitment Amount and Maximum Investor Group Principal Amount on a pro rata basis;

(iii) if a Change of Control occurs (unless the Control Party has provided its prior written consent thereto), then (A) on the date such Change of Control occurs, (x) all portions of the Commitments in excess of the Series 2006-1 Class A-1 Outstanding Principal Amount (excluding any Undrawn L/C Face Amounts to the extent cash collateral is held with respect thereto by the L/C Provider pursuant to Section 4.03 ) shall automatically and permanently terminate, (y) the corresponding portions of the Series 2006-1 Class A-1 Maximum Principal Amount, the Commitment Amounts and the Maximum Investment Group Principal Amounts shall be automatically and permanently reduced by a corresponding amount and (z) the Swingline Commitment and the L/C Commitment shall both be automatically and permanently reduced to zero; (B) if the Series 2006-1 Prepayment Date specified in the applicable Prepayment Notice is scheduled to occur more than two Business Days after such occurrence, then no later than the second Business Day after the occurrence of such Change of Control, the principal amount of all then-outstanding Swingline Loans and Unreimbursed L/C Drawings shall be repaid in full with proceeds of Advances (and the Co-Issuers shall be deemed to have delivered such Advance Requests under Section 2.03 as may be necessary to cause such Advances to be made); and (C) on the Series 2006-1 Prepayment Date specified in the applicable Prepayment Notice, (x) the Series 2006-1 Class A-1 Maximum Principal Amount, the Commitment Amounts and the Maximum Investment Group Principal Amounts shall all be automatically and permanently reduced to zero, and (y) the Co-Issuers shall cause the Series 2006-1 Class A-1 Outstanding Principal Amount to be paid in full (or, in the case of any then-outstanding Undrawn L/C Face Amounts, to be fully cash collateralized pursuant to Sections 4.02 and 4.03 ), together with accrued interest and fees and all other amounts then due and payable to the Lender Parties, the Administrative Agent and the Funding Agents under this Agreement and the other Related Documents;

 

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(iv) if Indemnification Payments are allocated to and deposited in the applicable Series Distribution Account for the Series 2006-1 Notes in accordance with Section 3.6(j) of the Series 2006-1 Supplement at a time when no Senior Notes other than Class A-1 Senior Notes are Outstanding, (x) the aggregate amount of the Commitments shall be automatically and permanently reduced on the date of such deposit by an amount (the “ Series 2006-1 Class A-1 Allocated Payment Reduction Amount ”) equal to the product of (A) the portion, if any, of such Indemnification Payments remaining after depositing the applicable portion thereof in the applicable Series Distribution Accounts for all Classes of Senior Notes other than any Class A-1 Senior Notes and (B) the percentage that the then-outstanding amount of the Commitments bears to the aggregate amount of all then-outstanding commitments to extend credit in respect of all Class A-1 Senior Notes, (y) the corresponding portions of the Series 2006-1 Class A-1 Maximum Principal Amount, the Commitment Amounts and the Maximum Investor Group Principal Amounts shall be automatically and permanently reduced by a corresponding amount on such date (and, if after giving effect to such reduction the aggregate Commitment Amounts would be less than the sum of the Swingline Commitment and the L/C Commitment, then the aggregate amount of the Swingline Commitment and the L/C Commitment shall be reduced by the amount of such difference, with such reduction to be allocated between them in accordance with the written instructions of the Co-Issuers delivered prior to such date; provided that after giving effect thereto the aggregate amount of the Swingline Loans and the L/C Obligations do not exceed the Swingline Commitment and the L/C Commitment, respectively, as so reduced; provided further that in the absence of such instructions, such reduction shall be allocated first to the Swingline Commitment and then to the L/C Commitment) and (z) the Series 2006-1 Class A-1 Outstanding Principal Amount shall be repaid or prepaid in an aggregate amount equal to such Series 2006-1 Class A-1 Allocated Payment Reduction Amount on the date and in the order required by such Section 3.6(j) of the Series 2006-1 Supplement; and

(v) if any Event of Default shall occur and be continuing (and shall not have been waived in accordance with the Base Indenture) and as a result the payment of the Series 2006-1 Class A-1 Notes is accelerated pursuant to Section 9.2 of the Base Indenture (and such acceleration shall not have been rescinded in accordance with the Base Indenture), then in addition to the consequences set forth in clause (ii) above in respect of the Rapid Amortization Event resulting from such Event of Default, the Series 2006-1 Class A-1 Maximum Principal Amount, the Commitment Amounts and the Maximum Investment Group Principal Amounts shall all be automatically and permanently reduced to zero upon such acceleration and the Co-Issuers shall immediately cause the Series 2006-1 Class A-1 Outstanding Principal Amount to be paid in full (or, in the case of any then-outstanding Undrawn L/C Face Amounts, to be fully cash collateralized pursuant to Sections 4.02 and 4.03 ), together with

 

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accrued interest and fees and all other amounts then due and payable to the Lender Parties, the Administrative Agent and the Funding Agents under this Agreement and the other Related Documents.

SECTION 2.06 Swingline Commitment .

(a) On the terms and conditions set forth in the Indenture and this Agreement, and in reliance on the covenants, representations and agreements set forth herein and therein, the Co-Issuers shall issue and shall cause the Trustee to authenticate the initial Series 2006-1 Class A-1 Swingline Note, which the Co-Issuers shall deliver to the Swingline Lender on the Series 2006-1 Closing Date. Such initial Series 2006-1 Class A-1 Swingline Note shall be dated the Series 2006-1 Closing Date, shall be registered in the name of the Swingline Lender or its nominee, or in such other name as the Swingline Lender may request, shall have a maximum principal amount equal to the Swingline Commitment, shall have an initial outstanding principal amount equal to the Series 2006-1 Class A-1 Initial Swingline Principal Amount, and shall be duly authenticated in accordance with the provisions of the Indenture. Subject to the terms and conditions hereof, the Swingline Lender, in reliance on the agreements of the Committed Note Purchasers set forth in this Section 2.06 , agrees to make swingline loans (each, a “ Swingline Loan ” or a “ Series 2006-1 Class A-1 Swingline Loan ” and, collectively, the “ Swingline Loans ” or the “ Series 2006-1 Class A-1 Swingline Loans ”) to the Co-Issuers from time to time during the period commencing on the Series 2006-1 Closing Date and ending on the date that is two Business Days prior to the Commitment Termination Date; provided that the Swingline Lender shall have no obligation or right to make any Swingline Loan if, after giving effect thereto, (i) the aggregate principal amount of Swingline Loans outstanding would exceed the Swingline Commitment then in effect (notwithstanding that the Swingline Loans outstanding at any time, when aggregated with the Swingline Lender’s other outstanding Advances hereunder, may exceed the Swingline Commitment then in effect) or (ii) the Series 2006-1 Class A-1 Outstanding Principal Amount would exceed the Series 2006-1 Class A-1 Maximum Principal Amount. Each such borrowing of a Swingline Loan will constitute a Subfacility Increase in the outstanding principal amount evidenced by the Series 2006-1 Class A-1 Swingline Note in an amount corresponding to such borrowing. Subject to the terms of this Agreement and the Series 2006-1 Supplement, the outstanding principal amount evidenced by the Series 2006-1 Class A-1 Swingline Note may be increased by borrowings of Swingline Loans or decreased by payments of principal thereon from time to time.

(b) Whenever the Co-Issuers desire that the Swingline Lender make Swingline Loans they shall (or shall cause the Servicer to) give the Swingline Lender and the Administrative Agent irrevocable notice in writing not later than 1:00 p.m. (New York time) on the proposed borrowing date, specifying (i) the amount to be borrowed, (ii) the requested borrowing date (which shall be a Business Day during the Commitment Term not later than the date that is two Business Days prior to the Commitment Termination Date) and (iii) the payment instructions for the proceeds of such borrowing (which shall be consistent with the terms and provisions of this Agreement and the Indenture and which proceeds shall be allocated among the Co-Issuers

 

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pro rata based on the percentage of the proceeds of the issuance of the Series 2006-1 Class A-2 Notes received by each such Co-Issuer on the Series 2006-1 Closing Date). Such notice shall be in the form of a Swingline Advance Request in the form attached hereto as Exhibit A-1 hereto (a “ Swingline Loan Request ”). Promptly upon receipt of any Swingline Loan Request (but in no event later than 1:00 p.m. on the date of such receipt), the Swingline Lender shall promptly notify the Administrative Agent, the Trustee and the Series 2006-1 Insurer thereof in writing. Each borrowing under the Swingline Commitment shall be in a minimum amount equal to $100,000. Promptly upon receipt of any Swingline Loan Request (but in no event later than 2:30 p.m. on the date of such receipt), the Administrative Agent (based, with respect to any portion of the Series 2006-1 Class A-1 Outstanding Subfacility Amount held by any Person other than the Administrative Agent, solely on written notices received by the Administrative Agent under this Agreement) will inform the Swingline Lender whether or not, after giving effect to the requested Swingline Loan, the Series 2006-1 Class A-1 Outstanding Principal Amount would exceed the Series 2006-1 Class A-1 Maximum Principal Amount. If the Administrative Agent confirms that the Series 2006-1 Class A-1 Outstanding Principal Amount would not exceed the Series 2006-1 Class A-1 Maximum Principal Amount after giving effect to the requested Swingline Loan, then not later than 3:00 p.m. (New York time) on the borrowing date specified in the Swingline Loan Request, subject to the other conditions set forth herein and in the Series 2006-1 Supplement, the Swingline Lender shall make available to the Co-Issuers in accordance with the payment instructions set forth in such notice an amount in immediately available funds equal to the amount of the requested Swingline Loan.

(c) The Co-Issuers hereby agree that each Swingline Loan made by the Swingline Lender to the Co-Issuers pursuant to Section 2.06(a) shall constitute the promise and obligation of the Co-Issuers jointly and severally to pay to the Swingline Lender the aggregate unpaid principal amount of all Swingline Loans made by such Swingline Lender pursuant to Section 2.06(a) , which amounts shall be due and payable (whether at maturity or by acceleration) as set forth in the Indenture for Series 2006-1 Class A-1 Outstanding Principal Amount.

(d) The Swingline Lender, at any time and from time to time during the Commitment Term in its sole and absolute discretion, may, on behalf of the Co-Issuers (which hereby irrevocably direct the Swingline Lender to act on their behalf), on one Business Day’s notice given by the Swingline Lender to the Administrative Agent (who shall promptly, and in any event by 4:00 p.m. (New York time) on the same Business Day as its receipt of the same, notify each Funding Agent of its pro rata share thereof and shall notify the Trustee and the Series 2006-1 Insurer of such borrowing in writing) no later than 12:00 noon (New York time), request each Investor Group to make, and the applicable Investors in each Investor Group hereby agree to make Advances in an aggregate amount for each Investor Group equal to such Investor Group’s Commitment Percentage of the aggregate amount of the Swingline Loans (the “ Refunded Swingline Loans ”) outstanding on the date of such notice, to repay the Swingline Lender. Such Investors shall make the amount of such Advances available to the Administrative Agent in immediately available funds not later than 10:00 a.m. (New York time) one Business Day after the date of such notice and the proceeds of such Advances shall be

 

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immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded Swingline Loans; provided that after giving effect thereto, (i) the related Investor Group Principal Amount would not exceed the related Maximum Investor Group Principal Amount and (ii) the Series 2006-1 Class A-1 Outstanding Principal Amount would not exceed the Series 2006-1 Class A-1 Maximum Principal Amount.

(e) If prior to the time Advances would have otherwise been made pursuant to Section 2.06(d) , an Event of Bankruptcy shall have occurred and be continuing with respect to any Co-Issuer or the Guarantor or if for any other reason, as determined by the Swingline Lender in its sole and absolute discretion, Advances may not be made as contemplated by Section 2.06(d) , each Committed Note Purchaser shall, on the date such Advances were to have been made pursuant to the notice referred to in Section 2.06(d) (the “ Refunding Date ”), purchase for cash an undivided participating interest in the then-outstanding Swingline Loans by paying to the Swingline Lender an amount (the “ Swingline Participation Amount ”) equal to (i) its Committed Note Purchaser Percentage of the related Investor Group’s Commitment Percentage times (ii) the sum of the aggregate principal amount of Swingline Loans then outstanding that were to have been repaid with such Advances.

(f) Whenever, at any time after the Swingline Lender has received from any Investor such Investor’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Investor its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Investor’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Investor’s pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided , however , that in the event that such payment received by the Swingline Lender is required to be returned, such Investor will return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

(g) Each applicable Investor’s obligation to make the Advances referred to in Section 2.06(d) and each Committed Note Purchaser’s obligation to purchase participating interests pursuant to Section 2.06(e) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Investor, Committed Note Purchaser or the Co-Issuers may have against the Swingline Lender, the Co-Issuers or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Article VII other than at the time the related Swingline Loan was made; (iii) any adverse change in the condition (financial or otherwise) of the Co-Issuers; (iv) any breach of this Agreement or any other Indenture Document by any Co-Issuer or any other Person; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

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(h) The Co-Issuers may, upon three Business Days’ notice to the Administrative Agent and the Swingline Lender, effect a permanent reduction in the Swingline Commitment; provided that any such reduction will be limited to the undrawn portion of the Swingline Commitment. If requested by the Co-Issuers in writing and with the prior written consent of the Administrative Agent, the Swingline Lender may (but shall not be obligated to) increase the amount of the Swingline Commitment; provided that, after giving effect thereto, the aggregate amount of the Swingline Commitment and the L/C Commitment does not exceed the aggregate amount of the Commitments.

(i) The Co-Issuers may, upon notice to the Swingline Lender (who shall promptly notify the Administrative Agent and the Trustee thereof in writing), at any time and from time to time, voluntarily prepay Swingline Loans in whole or in part without premium or penalty; provided that (x) such notice must be received by the Swingline Lender not later than 1:00 p.m. (New York time) on the date of the prepayment and (y) any such prepayment shall be in a minimum principal amount of $100,000 or a whole multiple of $100,000 in excess thereof or, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment. If such notice is given, the Co-Issuers shall make such prepayment directly to the Swingline Lender and the payment amount specified in such notice shall be due and payable on the date specified therein.

SECTION 2.07 L/C Commitment .

(a) Subject to the terms and conditions hereof, the L/C Provider, in reliance on the agreements of the Committed Note Purchasers set forth in Sections 2.08 and 2.09 , agrees to provide standby letters of credit (each, a “ Letter of Credit ” and, collectively, the “ Letters of Credit ”) for the account of the Co-Issuers on any Business Day during the period commencing on the Series 2006-1 Closing Date and ending on the date that is seven Business Days prior to the Commitment Termination Date to be issued in accordance with Section  2.07(h) in such form as may be approved from time to time by the L/C Provider; provided that the L/C Provider shall have no obligation or right to provide any Letter of Credit if, after giving effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the Series 2006-1 Class A-1 Outstanding Principal Amount would exceed the Series 2006-1 Class A-1 Maximum Principal Amount. Each Letter of Credit shall (x) be denominated in Dollars, (y) have a face amount of at least $100,000 (unless otherwise agreed by the L/C Provider) and (z) expire no later than the earlier of (A) the first anniversary of its date of issuance and (B) the date that is seven Business Days prior to the Commitment Termination Date; provided that any Letter of Credit may provide for the renewal thereof for additional periods, each individually, not to exceed one year (which shall in no event extend beyond the date referred to in clause (B) above). The L/C Provider shall not at any time be obligated to (I) provide any Letter of Credit hereunder if such issuance would conflict with, or cause any L/C Issuing Bank to exceed any limits imposed by, any applicable Requirement of Law or (II) amend any Letter of Credit hereunder if (1) the L/C Provider would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof or (2) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

 

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(b) On the terms and conditions set forth in the Indenture and this Agreement, and in reliance on the covenants, representations and agreements set forth herein and therein, the Co-Issuers shall issue and shall cause the Trustee to authenticate the initial Series 2006-1 Class A-1 L/C Note, which the Co-Issuers shall deliver to the L/C Provider on the Series 2006-1 Closing Date. Such initial Series 2006-1 Class A-1 L/C Note shall be dated the Series 2006-1 Closing Date, shall be registered in the name of the L/C Provider or its nominee, or in such other name as the L/C Provider may request, shall have a maximum principal amount equal to the L/C Commitment, shall have an initial outstanding principal amount equal to the Series 2006-1 Class A-1 Initial Aggregate Undrawn L/C Face Amount, and shall be duly authenticated in accordance with the provisions of the Indenture. Each issuance of a Letter of Credit after the Series 2006-1 Closing Date will constitute a Subfacility Increase in the outstanding principal amount evidenced by the Series 2006-1 Class A-1 L/C Note in an amount corresponding to the Undrawn L/C Face Amount of such Letter of Credit. All L/C Obligations (whether in respect of Undrawn L/C Face Amounts or Unreimbursed L/C Drawings) shall be deemed to be principal outstanding under the Series 2006-1 Class A-1 L/C Note for all purposes of this Agreement, the Indenture and the other Related Documents other than, in the case of Undrawn L/C Face Amounts, for purposes of accrual of interest. Any payment of such principal in respect of Undrawn L/C Face Amounts shall be deposited into a cash collateral account as provided in Sections 4.02 and 4.03 . Subject to the terms of this Agreement and the Series 2006-1 Supplement, the outstanding principal amount evidenced by the Series 2006-1 Class A-1 L/C Note may be increased by issuances of Letters of Credit or decreased by expirations thereof or payments of drawings thereunder or other circumstances resulting in the permanent reduction in any Undrawn L/C Face Amounts from time to time. The L/C Provider and the Co-Issuers agree to promptly notify the Administrative Agent and the Trustee of any such decreases for which notice to the Administrative Agent is not otherwise provided hereunder.

(c) The Co-Issuers may from time to time request that the L/C Provider provide a Letter of Credit by delivering to the L/C Provider at its address for notices specified herein an Application therefor (in the form required by the applicable L/C Issuing Bank as notified to the Co-Issuers by the L/C Provider), completed to the satisfaction of the L/C Provider, and such other certificates, documents and other papers and information as the L/C Provider may request on behalf of the L/C Issuing Bank. Upon receipt of any completed Application, the L/C Provider will notify the Administrative Agent and the Trustee in writing of the amount, the beneficiary and the requested expiration of the requested Letter of Credit (which shall comply with Section 2.07(a) ) and subject to the other conditions set forth herein and in the Series 2006-1 Supplement and upon receipt of written confirmation from the Administrative Agent (based, with respect to any portion of the Series 2006-1 Class A-1 Outstanding Subfacility Amount held by any Person other than the Administrative Agent, solely on written notices received by the Administrative Agent under this Agreement) that after giving effect to the requested issuance, the Series 2006-1 Class A-1 Outstanding Principal Amount would not exceed the Series 2006-1 Class A-1 Maximum Principal Amount ( provided that (x) if the L/C Provider provides or the L/C Issuing Bank issues a Letter of Credit hereunder without the L/C Provider having received such prior written confirmation from the Administrative Agent as described above, then notwithstanding

 

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anything to the contrary herein, no Person other than the L/C Provider and the L/C Issuing Bank, to the extent that such Letter of Credit in any manner causes the Series 2006-1 Class A-1 Outstanding Principal Amount to exceed the Series 2006-1 Class A-1 Maximum Principal Amount, will have any obligation whatsoever hereunder or under any other Related Document with respect to any such Letter of Credit and (y) the L/C Provider shall be entitled to rely upon any written statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons of the Administrative Agent for purposes of determining whether the L/C Provider received such prior written confirmation from the Administrative Agent with respect to any Letter of Credit), the L/C Provider will cause such Application to be processed and the certificates, documents and other papers and information delivered in connection therewith in accordance with the L/C Issuing Bank’s customary procedures and shall promptly provide the Letter of Credit requested thereby (but in no event shall the L/C Provider be required to provide any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the L/C Provider and the Co-Issuers. The L/C Provider shall furnish a copy of such Letter of Credit to the Servicer (with a copy to the Administrative Agent) promptly following the issuance thereof. The L/C Provider shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the Funding Agents, the Investors, the Trustee and the Series 2006-1 Insurer, written notice of the issuance of each Letter of Credit (including the amount thereof).

(d) The Co-Issuers shall jointly and severally pay to the Administrative Agent for the ratable account of the Committed Note Purchasers fees (the “ L/C Monthly Insured Fees ”) with respect to each Letter of Credit at a per annum rate equal to 0.50% calculated on the daily maximum amount then available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit or if such maximum amount increases periodically pursuant to the terms of such Letter of Credit) during the applicable Interest Period payable in arrears on each Payment Date in accordance with the applicable provisions of the Indenture.

(e) In addition, the Co-Issuers shall jointly and severally pay to or reimburse the L/C Provider for the following amounts for the account of the applicable L/C Issuing Bank: (i) fronting fees (the “ L/C Fronting Fees ”) with respect to each Letter of Credit issued by it at a per annum rate equal to 0.125% calculated on the daily maximum amount then available to be drawn under such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit or if such maximum amount increases periodically pursuant to the terms of such Letter of Credit) during the applicable Interest Period, payable in arrears on each Payment Date in accordance with the applicable provisions of the Indenture and (ii) such normal and customary costs and expenses as are incurred or charged by the L/C Issuing Bank in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit and separately charged to account parties (the “ L/C Additional Charges ”). Subject to the Priority of Payments, the L/C Additional Charges are due and payable within ten (10) Business Days of demand and are nonrefundable.

 

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(f) To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Article II , the provisions of this Article II shall apply.

(g) The Co-Issuers may, upon three Business Days’ notice to the Administrative Agent and the L/C Provider, effect a permanent reduction in the L/C Commitment; provided that any such reduction will be limited to the undrawn portion of the L/C Commitment. If requested by the Co-Issuers in writing and with the prior written consent of the Administrative Agent, the L/C Provider may (but shall not be obligated to) increase the amount of the L/C Commitment; provided that, after giving effect thereto, the aggregate amount of the Swingline Commitment and the L/C Commitment does not exceed the aggregate amount of the Commitments.

(h) The L/C Provider shall have the right to satisfy its obligations under this Section 2.07 with respect to providing any Letter of Credit hereunder either by issuing such Letter of Credit itself or by causing another Person selected by the L/C Provider to issue such Letter of Credit (the L/C Provider in its capacity as the issuer of such Letter of Credit or such other Person selected by the L/C Provider being referred to as the “ L/C Issuing Bank ”); provided that the L/C Issuing Bank is a U.S. commercial bank that has, at the time of such issuance, (i) a short-term certificate of deposit rating of not less than “P-1” from Moody’s and “A-1” from S&P and (ii) a long-term unsecured debt rating of not less than “Aa1” from Moody’s and “A+” from S&P.

(i) No Letter of Credit shall be denominated in any currency other than Dollars.

SECTION 2.08 L/C Reimbursement Obligations .

(a) For the purpose of reimbursing the payment of any draft presented under any Letter of Credit, the Co-Issuers jointly and severally agree to pay the L/C Provider for its own account (if it has already reimbursed the applicable L/C Issuing Bank for the payment of such draft) or for the account of the L/C Issuing Bank, as applicable, on the first Business Day after the Business Day on which the L/C Provider notifies the Co-Issuers and the Administrative Agent by 10:00 a.m. (New York time) (or, on the second Business Day after the Business Day on which the L/C Provider notifies the Co-Issuers and the Administrative Agent after 10:00 a.m. (New York time)) (and in each case the Administrative Agent shall promptly, and in any event by 4:00 p.m. (New York time) on the same Business Day as its receipt of the same, notify the Funding Agents) of the date, the amount of such draft and an amount in Dollars equal to the sum of (i) the amount of such draft so paid (the “ L/C Reimbursement Amount ”) and (ii) any taxes, fees, charges or other costs or expenses (collectively, the “ L/C Other Reimbursement Costs ”) incurred by the L/C Issuing Bank in connection with such payment. Each drawing under any Letter of Credit shall (unless an Event of Bankruptcy shall have occurred and be continuing with respect to any Co-Issuer or the Guarantor, in which cases the procedures specified in Section 2.09 for funding by Committed Note Purchasers shall apply) constitute a request by the Co-Issuers to the Administrative Agent and each Funding Agent for a Borrowing pursuant to Section 2.02 in the amount of the

 

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applicable L/C Reimbursement Amount, and the Co-Issuers shall be deemed to have made such request pursuant to the procedures set forth in Section 2.03 . The applicable Investors in each Investor Group hereby agree to make Advances in an aggregate amount for each Investor Group equal to such Investor Group’s Commitment Percentage of the L/C Reimbursement Amount to pay the L/C Provider. The Borrowing date with respect to such Borrowing shall be the first date on which a Borrowing could be made pursuant to Section 2.02 if the Administrative Agent had received a notice of such Borrowing at the time the Administrative Agent receives notice from the L/C Provider of such drawing under such Letter of Credit. Such Investors shall make the amount of such Advances available to the Administrative Agent in immediately available funds not later than 3:00 p.m. (New York time) on such Borrowing date and the proceeds of such Advances shall be immediately made available by the Administrative Agent to the L/C Provider for application to the reimbursement of such drawing.

(b) The Co-Issuers’ obligations under Section 2.08(a) shall be absolute and unconditional, and shall be performed strictly in accordance with the terms of this Agreement, under any and all circumstances and irrespective of (i) any setoff, counterclaim or defense to payment that the Co-Issuers may have or have had against the L/C Provider, the L/C Issuing Bank, any beneficiary of a Letter of Credit or any other Person, (ii) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (iii) payment by the L/C Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, (iv) payment by the L/C Issuing Bank under a Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under the Bankruptcy Code or any other liquidation, conservatorship, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of any jurisdictions or (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.08(b) , constitute a legal or equitable discharge of, or provide a right of setoff against, any Co-Issuer’s obligations hereunder. The Co-Issuers also agree that the L/C Provider and the L/C Issuing Bank shall not be responsible for, and the Co-Issuers’ Reimbursement Obligations under Section 2.08(a) shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Co-Issuers and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Co-Issuers against any beneficiary of such Letter of Credit or any such transferee. Neither the L/C Provider nor the L/C Issuing Bank shall be liable for any error, omission, interruption, loss or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Co-Issuers to the extent permitted by applicable law) caused by errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the L/C

 

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Provider or the L/C Issuing Bank, as the case may be. The Co-Issuers agree that any action taken or omitted by the L/C Provider or the L/C Issuing Bank, as the case may be, under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct and in accordance with the standards of care specified in the UCC of the State of New York, shall be binding on the Co-Issuers and shall not result in any liability of the L/C Provider or the L/C Issuing Bank to the Co-Issuers. As between the Co-Issuers and the L/C Issuing Bank, the Co-Issuers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to such beneficiary’s or transferee’s use of any Letter of Credit. In furtherance of the foregoing and without limiting the generality thereof, the Co-Issuers agree with the L/C Issuing Bank that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the L/C Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(c) If any draft shall be presented for payment under any Letter of Credit, the L/C Provider shall promptly notify the Co-Issuers and the Administrative Agent of the date and amount thereof. The responsibility of the applicable L/C Issuing Bank to the Co-Issuers in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit and, in paying such draft, such L/C Issuing Bank shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of any Person(s) executing or delivering any such document.

SECTION 2.09 L/C Participations .

(a) The L/C Provider irrevocably agrees to grant and hereby grants to each Committed Note Purchaser, and, to induce the L/C Provider to provide Letters of Credit hereunder (and, if the L/C Provider is not the L/C Issuing Bank for any Letter of Credit, to induce the L/C Provider to agree to reimburse such L/C Issuing Bank for any payment of any drafts presented thereunder), each Committed Note Purchaser irrevocably and unconditionally agrees to accept and purchase and hereby accepts and purchases from the L/C Provider, on the terms and conditions set forth below, for such Committed Note Purchaser’s own account and risk an undivided interest equal to its Committed Note Purchaser Percentage of the related Investor Group’s Commitment Percentage of the L/C Provider’s obligations and rights under and in respect of each Letter of Credit provided hereunder and the L/C Reimbursement Amount with respect to each draft paid or reimbursed by the L/C Provider in connection therewith. Subject to Section 2.07(c) , each Committed Note Purchaser unconditionally and irrevocably agrees with the L/C Provider that, if a draft is paid under any Letter of Credit for which the L/C Provider is not paid in full by the Co-Issuers in accordance with the terms of this Agreement, such Committed

 

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Note Purchaser shall pay to the Administrative Agent upon demand of the L/C Provider an amount equal to its Committed Note Purchaser Percentage of the related Investor Group’s Commitment Percentage of the L/C Reimbursement Amount with respect to such draft, or any part thereof, that is not so paid.

(b) If any amount required to be paid by any Committed Note Purchaser to the Administrative Agent for forwarding to the L/C Provider pursuant to Section 2.09(a) in respect of any unreimbursed portion of any payment made or reimbursed by the L/C Provider under any Letter of Credit is paid to the Administrative Agent for forwarding to the L/C Provider within three Business Days after the date such payment is due, such Committed Note Purchaser shall pay to the Administrative Agent for forwarding to the L/C Provider on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the L/C Provider, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. If any such amount required to be paid by any Committed Note Purchaser pursuant to Section 2.09(a) is not made available to the Administrative Agent for forwarding to the L/C Provider by such Committed Note Purchaser within three Business Days after the date such payment is due, the L/C Provider shall be entitled to recover from such Committed Note Purchaser, on demand, such amount with interest thereon calculated from such due date at the Base Rate. A certificate of the L/C Provider submitted to any Committed Note Purchaser with respect to any amounts owing under this Section 2.09(b) , in the absence of manifest error, shall be conclusive and binding on such Committed Note Purchaser. Such amounts payable under this Section 2.09(b) shall be paid without any deduction for any withholding taxes.

(c) Whenever, at any time after payment has been made under any Letter of Credit and the L/C Provider has received from any Committed Note Purchaser its pro rata share of such payment in accordance with Section 2.09(a) , the Administrative Agent or the L/C Provider receives any payment related to such Letter of Credit (whether directly from the Co-Issuers or otherwise, including proceeds of collateral applied thereto by the L/C Provider), or any payment of interest on account thereof, the Administrative Agent or the L/C Provider, as the case may be, will distribute to such Committed Note Purchaser its pro rata share thereof; provided , however , that in the event that any such payment received by the Administrative Agent or the L/C Provider, as the case may be, shall be required to be returned by the Administrative Agent or the L/C Provider, such Committed Note Purchaser shall return to the Administrative Agent for the account of the L/C Provider the portion thereof previously distributed by the Administrative Agent or the L/C Provider, as the case may be, to it.

(d) Each Committed Note Purchaser’s obligation to make the Advances referred to in Section 2.08(a) and to pay its pro rata share of any unreimbursed draft pursuant to Section 2.09(a) shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such Committed Note Purchaser or the Co-Issuers may have against the L/C Provider, any L/C Issuing Bank, the Co-Issuers or any other Person for any reason

 

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whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Article VII other than at the time the related Letter of Credit was issued; (iii) an adverse change in the condition (financial or otherwise) of the Co-Issuers; (iv) any breach of this Agreement or any other Indenture Document by any Co-Issuer or any other Person; (v) any amendment, renewal or extension of any Letter of Credit in compliance with this Agreement or with the terms of such Letter of Credit, as applicable; or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

ARTICLE III

INTEREST AND FEES

SECTION 3.01 Interest .

(a) Each Advance funded or maintained by a Conduit Investor through the issuance of Commercial Paper shall bear interest at the CP Rate applicable to such Conduit Investor. Each Advance funded or maintained either by a Conduit Investor through means other than the issuance of Commercial Paper or by a Committed Note Purchaser or a Program Support Provider shall bear interest at (i) the Base Rate or (ii) if the required notice has been given pursuant to Section 3.01(b) with respect to such Advance for any Eurodollar Interest Period, the Eurodollar Rate applicable to such Eurodollar Interest Period for such Advance, in each case except as otherwise provided in the definition of Eurodollar Interest Period or in Section 3.03 or 3.04 . By (x) 11:00 a.m. (New York time) on the second Business Day preceding each Accounting Date, each Funding Agent shall notify the Administrative Agent of the applicable CP Rate for each Advance made by its Investor Group that was funded or maintained through the issuance of Commercial Paper and is outstanding during all or any portion of the Interest Period ending immediately prior to such Accounting Date and (y) 3:00 p.m. on such date, the Administrative Agent shall notify the Co-Issuers, the Servicer and the Funding Agents of such applicable CP Rate and of the applicable interest rate for each other Advance for such Interest Period.

(b) With respect to any Advance (other than one funded or maintained by a Conduit Investor through the issuance of Commercial Paper), so long as no Potential Rapid Amortization Period, Rapid Amortization Period, Default or Event of Default has commenced and is continuing, the Co-Issuers may elect that such Advance bear interest at the Eurodollar Rate for any Eurodollar Interest Period while such Advance is outstanding to the extent provided in Section 3.01(a) by giving notice thereof to the Funding Agents and the Administrative Agent prior to 12:00 p.m. (New York time) on the date that is three Eurodollar Business Days prior to the commencement of such Eurodollar Interest Period. If such notice is not given by such time on such date, such Advance shall bear interest at the Base Rate. Each such conversion to or continuation of Eurodollar Advances for a new Eurodollar Interest Period in accordance with this Section 3.01(b) shall be in an aggregate principal amount of $1,000,000 or an integral multiple of $500,000 in excess thereof.

 

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(c) Any outstanding Swingline Loans and Unreimbursed L/C Drawings shall bear interest at the Base Rate. By (x) 11:00 a.m. (New York time) on the second Business Day preceding each Accounting Date, the Swingline Lender shall notify the Administrative Agent in reasonable detail of the amount of interest accrued on any Swingline Loans during the Interest Period ending on such date and the L/C Provider shall notify the Administrative Agent in reasonable detail of the amount of interest accrued on any Unreimbursed L/C Drawings during such Interest Period and the amount of fees accrued on any Undrawn L/C Face Amounts during such Interest Period and (y) 3:00 p.m. on such date, the Administrative Agent shall notify the Co-Issuers and the Servicer of the amount of such accrued interest and fees as set forth in such notices.

(d) All accrued interest pursuant to Section 3.01(a) or (c)  shall be due and payable in arrears on each Payment Date in accordance with the applicable provisions of the Indenture.

(e) In addition, under the circumstances set forth in Section 3.4 of the Series 2006-1 Supplement, the Co-Issuers shall jointly and severally pay monthly interest in respect of the Series 2006-1 Class A-1 Outstanding Principal Amount in an amount equal to the Series 2006-1 Class A-1 Monthly Post-ARD Contingent Uninsured Interest payable pursuant to such Section 3.4 , which interest shall not be insured by the Series 2006-1 Insurer or any other Person.

(f) All computations of interest at the CP Rate and the Eurodollar Rate, all computations of Series 2006-1 Class A-1 Monthly Post-ARD Contingent Uninsured Interest (other than any accruing on any Base Rate Advances) and all computations of fees shall be made on the basis of a year of 360 days and the actual number of days elapsed. All computations of interest at the Base Rate and all computations of Series 2006-1 Class A-1 Monthly Post-ARD Contingent Uninsured Interest accruing on any Base Rate Advances shall be made on the basis of a 365 (or 366, as applicable) day year and actual number of days elapsed. Whenever any payment of interest, principal or fees hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the amount of interest owed. Interest shall accrue on each Advance, Swingline Loan and Unreimbursed L/C Drawing from and including the day on which it is made to but excluding the date of repayment thereof.

SECTION 3.02 Fees .

(a) The Co-Issuers jointly and severally shall pay to the Administrative Agent for its own account an annual fee of $100,000, payable monthly in advance in (i) a pro-rated installment of $16,666.70 on the Series 2006-1 Closing Date and (ii) installments of $8,333.33 each on each Payment Date occurring in any month other than December thereafter and $8,333.34 each on each Payment Date occurring in December thereafter (collectively, the “ Administrative Agent Fees ”).

(b) On each Payment Date on or prior to the Commitment Termination Date, the Co-Issuers jointly and severally shall, in accordance with Section 4.01 , pay to

 

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each Funding Agent, for the account of the related Committed Note Purchaser(s), undrawn commitment fees (the “ Undrawn Commitment Fees ”) equal to 0.22% per annum of the related Investor Group’s Commitment Percentage of the daily average amount by which (i) the aggregate Commitment Amounts exceed (ii) the sum of (x) the aggregate principal amount outstanding of all Advances plus (y) all L/C Obligations then outstanding during the related Interest Period, payable in arrears in accordance with the applicable provisions of the Indenture. For the avoidance of doubt, for purposes of calculating the Undrawn Commitment Fees only, no portion of the Commitments shall be deemed drawn as a result of any outstanding Swingline Loans.

(c) The Co-Issuers jointly and severally shall pay the fees required pursuant to Section 2.07 in respect of Letters of Credit.

(d) All fees payable pursuant to this Section 3.02 shall be calculated in accordance with Section 3.01(f) and paid on the date due in accordance with the applicable provisions of the Indenture. Once paid, all fees shall be nonrefundable under all circumstances.

SECTION 3.03 Eurodollar Lending Unlawful . If any Investor or Program Support Provider shall determine that any Change in Law makes it unlawful, or any Official Body asserts that it is unlawful, for any such Person to fund or maintain any Advance as a Eurodollar Advance, the obligation of such Person to fund or maintain any such Advance as a Eurodollar Advance shall, upon such determination, forthwith be suspended until such Person shall notify the Administrative Agent, the related Funding Agent and the Co-Issuers that the circumstances causing such suspension no longer exist, and all then-outstanding Eurodollar Advances of such Person shall be automatically converted into Base Rate Advances at the end of the then-current Eurodollar Interest Period with respect thereto or sooner, if required by such law or assertion.

SECTION 3.04 Deposits Unavailable . If the Administrative Agent shall have determined that:

(a) by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the interest rate applicable hereunder to the Eurodollar Advances; or

(b) with respect to any interest rate otherwise applicable hereunder to any Eurodollar Advances the Eurodollar Interest Period for which has not then commenced, Investor Groups holding in the aggregate more than 50% of the Eurodollar Advances have determined that such interest rate will not adequately reflect the cost to them of funding, agreeing to fund or maintaining such Eurodollar Advances for such Eurodollar Interest Period,

then, upon notice from the Administrative Agent (which, in the case of clause (b)  above, the Administrative Agent shall give upon obtaining actual knowledge that such percentage of the Investor Groups have so determined) to the Funding Agents and the Co-Issuers, the obligations of the Investors to fund or maintain any Advance as a

 

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Eurodollar Advance after the end of the then-current Eurodollar Interest Period, if any, with respect thereto shall forthwith be suspended and on the date such notice is given such Advances will convert to Base Rate Advances until the Administrative Agent has notified the Funding Agents and the Co-Issuers that the circumstances causing such suspension no longer exist.

SECTION 3.05 Increased Costs, etc. The Co-Issuers jointly and severally agree to reimburse each Investor and any Program Support Provider (each, an “ Affected Person ”, which term, for purposes of Sections 3.07 and 3.08 , shall also include the Swingline Lender and the L/C Issuing Bank) for any increase in the cost of, or any reduction in the amount of any sum receivable by any such Affected Person, including reductions in the rate of return on such Affected Person’s capital, in respect of funding or maintaining (or of its obligation to fund or maintain) any Advances as Eurodollar Advances that arise in connection with any Changes in Law, except for such Changes in Law with respect to increased capital costs and Taxes which shall be governed by Sections 3.07 and 3.08 , respectively (whether or not amounts are payable thereunder in respect thereof). Each such demand shall be provided to the related Funding Agent and the Co-Issuers in writing and shall state, in reasonable detail, the reasons therefor and the additional amount required fully to compensate such Affected Person for such increased cost or reduced amount of return. Such additional amounts (“ Increased Costs ”) shall be payable by the Co-Issuers to such Funding Agent and by such Funding Agent directly to such Affected Person within five Business Days of the Co-Issuers’ receipt of such notice, and such notice shall, in the absence of manifest error, be conclusive and binding on the Co-Issuers; provided that with respect to any notice given to the Co-Issuers under this Section 3.05 the Co-Issuers shall not be under any obligation to pay any amount with respect to any period prior to the date that is 180 days prior to such demand if the relevant Affected Person knew or could reasonably have been expected to know of the circumstances giving rise to such increased costs or reductions in the rate of return; provided further that the foregoing limitation shall not apply to any increased costs or reductions in rate of return arising out of any retroactive application of any Change in Law within such 180-day period.

SECTION 3.06 Funding Losses . In the event any Affected Person shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Person to fund or maintain any portion of the principal amount of any Advance as a Eurodollar Advance) as a result of:

(a) any conversion, repayment, prepayment or redemption (for any reason, including, without limitation, as a result of any Decrease or the acceleration of the maturity of such Eurodollar Advance) of the principal amount of any Eurodollar Advance on a date other than the scheduled last day of the Eurodollar Interest Period applicable thereto;

 

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(b) any Advance not being funded or maintained as a Eurodollar Advance after a request therefor has been made in accordance with the terms contained herein; or

(c) any failure of the Co-Issuers to make a Decrease, prepayment or redemption with respect to any Eurodollar Advance after giving notice thereof pursuant to the applicable provisions of the Series 2006-1 Supplement;

then, upon the written notice of any Affected Person to the related Funding Agent and the Co-Issuers, the Co-Issuers jointly and severally shall pay to such Funding Agent and such Funding Agent shall pay directly to such Affected Person, within five Business Days of its receipt thereof, such amount (“ Breakage Amount ” or “ Series 2006-1 Class A-1 Breakage Amount ”) as will (in the reasonable determination of such Affected Person) reimburse such Affected Person for such loss or expense; provided that with respect to any notice given to the Co-Issuers under this Section 3.06 the Co-Issuers shall not be under any obligation to pay any amount with respect to any period prior to the date that is 180 days prior to such notice if the relevant Affected Person knew or could reasonably have been expected to know of the circumstances giving rise to such loss or expense. Such written notice (which shall include calculations in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Co-Issuers.

SECTION 3.07 Increased Capital Costs . If any Change in Law affects or would affect the amount of capital required or reasonably expected to be maintained by any Affected Person or any Person controlling such Affected Person and such Affected Person determines in its sole and absolute discretion that the rate of return on its or such controlling Person’s capital as a consequence of its commitment hereunder or under a Program Support Agreement or the Advances, Swingline Loans or Letters of Credit made or issued by such Affected Person is reduced to a level below that which such Affected Person or such controlling Person would have achieved but for the occurrence of any such circumstance, then, in any such case after notice from time to time by such Affected Person (or in the case of an L/C Issuing Bank, by the L/C Provider) to the related Funding Agent and the Co-Issuers (or, in the case of the Swingline Lender or the L/C Provider, to the Co-Issuers), the Co-Issuers jointly and severally shall pay to such Funding Agent (or, in the case of the Swingline Lender or the L/C Provider, directly to such Person) and such Funding Agent shall pay to such Affected Person, within five Business Days of the Co-Issuers’ receipt of such notice, such amounts (“ Increased Capital Costs ”) as will be sufficient to compensate such Affected Person or such controlling Person for such reduction in rate of return; provided that with respect to any notice given to the Co-Issuers under this Section 3.07 the Co-Issuers shall not be under any obligation to pay any amount with respect to any period prior to the date that is 180 days prior to such notice if the relevant Affected Person knew or could reasonably have been expected to know of the Change in Law; provided further that the foregoing limitation shall not apply to any increased costs or reductions in rate of return arising out of any retroactive application of any Change in Law within such 180-day period. A statement of such Affected Person as to any such additional amount or amounts (including calculations thereof in reasonable detail), in the absence of manifest error,

 

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shall be conclusive and binding on the Co-Issuers. In determining such additional amount, such Affected Person may use any method of averaging and attribution that it (in its reasonable discretion) shall deem applicable so long as it applies such method to other similar transactions.

SECTION 3.08 Taxes

(a) Except as otherwise required by law, all payments by the Co-Issuers of principal of, and interest on, the Advances, the Swingline Loans and the L/C Obligations and all other amounts payable hereunder (including fees) shall be made free and clear of and without deduction or withholding for or on account of any present or future income, excise, documentary, property, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges in the nature of a tax imposed by any taxing authority including all interest, penalties or additions to tax and other liabilities with respect thereto (all such taxes, fees, duties, withholdings and other charges, and including all interest, penalties or additions to tax and other liabilities with respect thereto, being called “ Class A-1 Taxes ”), but excluding in the case of any Affected Person (i) net income, franchise (imposed in lieu of net income) or similar Class A-1 Taxes (and including branch profits or alternative minimum Class A-1 Taxes) and any other Class A-1 Taxes imposed or levied on the Affected Person as a result of a connection between the Affected Person and the jurisdiction of the governmental authority imposing such Class A-1 Taxes or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Affected Person having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Related Document) and (ii) with respect to any Affected Person organized under the laws of a jurisdiction other than the United States or any state of the United States (“ Foreign Affected Person ”), any withholding tax that is imposed on amounts payable to the Foreign Affected Person at the time the Foreign Affected Person becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Affected Person (or its assignor, if any) was already entitled, at the time of the designation of the new lending office (or assignment), to receive additional amounts from the Co-Issuers with respect to withholding tax (such Class A-1 Taxes not excluded by (i) and (ii) above being called “ Non-Excluded Taxes ”). If any Class A-1 Taxes are imposed and required by law to be deducted from any amount payable by the Co-Issuers hereunder to an Affected Person, then (x) if such Class A-1 Taxes are Non-Excluded Taxes, the amount of the payment shall be increased so that such payment is made, after withholding or deduction for or on account of such Non-Excluded Taxes, in an amount that is not less than the amount provided for hereunder and (y) the Co-Issuers shall withhold the amount of such Class A-1 Taxes from such payment (as increased, if applicable, pursuant to the preceding clause (x)) and shall pay such amount to the taxing authority imposing such Class A-1 Taxes in accordance with applicable law.

(b) Moreover, if any Non-Excluded Taxes are directly asserted against any Affected Person or its agent with respect to any payment received by such Affected Person or its agent from the Co-Issuers or otherwise in respect of any Related Document or the transactions contemplated therein, such Affected Person or its agent may pay such Non-Excluded Taxes and the Co-Issuers will jointly and severally, within five Business

 

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Days of any Co-Issuer’s receipt of written notice stating the amount of such Non-Excluded Taxes (including the calculation thereof in reasonable detail), pay such additional amounts (collectively, “ Increased Tax Costs ,” which term shall include all amounts payable by or on behalf of any Co-Issuer pursuant to this Section 3.08 ) as is necessary in order that the net amount received by such Affected Person or agent after the payment of such Non-Excluded Taxes (including any Non-Excluded Taxes on such additional amount) shall equal the amount such Person would have received had no such Non-Excluded Taxes been asserted. Any amount payable to an Affected Person under this Section 3.08 shall be reduced by, and Increased Tax Costs shall not include, the amount of incremental damages (including Taxes) due or payable by any Co-Issuer as a direct result of such Affected Person’s failure to demand from the Co-Issuers additional amounts pursuant to this Section 3.08 within 180 days from the date on which the related Non-Excluded Taxes were incurred.

(c) As promptly as practicable after the payment of any Class A-1 Taxes, and in any event within thirty days of any such payment being due, the Co-Issuers shall furnish to each applicable Affected Person or its agents a certified copy of an official receipt (or other documentary evidence satisfactory to such Affected Person and agents) evidencing the payment of such Class A-1 Taxes. If the Co-Issuers fail to pay any Class A-1 Taxes when due to the appropriate taxing authority or fail to remit to the Affected Persons or their agents the required receipts (or such other documentary evidence), the Co-Issuers shall jointly and severally indemnify each Affected Person and its agents for any Non-Excluded Taxes that may become payable by any such Affected Person or its agents as a result of any such failure. For purposes of this Section 3.08 , a distribution hereunder by the agent for the relevant Affected Person shall be deemed a payment by the Co-Issuers.

(d) Each Affected Person (other than any Affected Person that is not a Foreign Affected Person and is a corporation for federal tax purposes whose name contains any of the following: Incorporated, Inc., Corporation, Corp., P.C., Insurance Company, Reinsurance Company or Assurance Company) on or prior to the date it becomes a party to this Agreement (and from time to time thereafter as soon as practicable after the obsolescence, expiration or invalidity of any form or document previously delivered) and to the extent permissible under then current law, shall deliver to any Co-Issuer (or to more than one Co-Issuer, as the Co-Issuers may reasonably request), a United States Internal Revenue Service Form W-8BEN, Form W-8ECI, Form W-8IM4 or Form W-9, as applicable, or applicable successor form, or such other forms or documents (or successor forms or documents), appropriately completed and executed, as may be applicable to establish the extent to which a payment to such Affected Person is exempt from withholding or deduction of United States federal withholding taxes. At the times prescribed in the preceding sentence, each Affected Person shall deliver to any Co-Issuer (or to more than one Co-Issuer, as the Co-Issuers may reasonably request), any other forms or documents (or successor forms or documents), appropriately completed and executed, as may be applicable to establish the extent to which a payment to such Affected Person is exempt from withholding or deduction of Non-Excluded Taxes other than United States federal withholding taxes. The Co-Issuers shall not be required to pay any increased amount under Section 3.08(a) or Section 3.08(b) to an Affected Person in

 

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respect of the withholding or deduction of United States federal withholding taxes or other Non-Excluded Taxes imposed as the result of the failure or inability (other than as a result of a Change in Law) of such Affected Person to comply with the requirements set forth in this Section 3.08(d) . The Co-Issuers may rely on any form or document provided pursuant to this Section 3.08(d) until notified otherwise by the Affected Person that delivered such form or document.

(e) If an Affected Person determines, in its sole reasonable discretion, that it has received a refund of any Non-Excluded Taxes as to which it has been indemnified pursuant to this Section 3.08 or as to which it has been paid additional amounts pursuant to this Section 3.08 , it shall promptly notify a Co-Issuer in writing of such refund and shall, within 30 days after receipt of a written request from the Co-Issuers, pay over such refund to a Co-Issuer (but only to the extent of indemnity payments made or additional amounts paid to such Affected Person under this Section 3.08 with respect to the Non-Excluded Taxes giving rise to such refund), net of all out-of-pocket expenses (including the net amount of Taxes, if any, imposed on or with respect to such refund or payment) of the Affected Person and without interest (other than any interest paid by the relevant taxing authority that is directly attributable to such refund of such Non-Excluded Taxes); provided that the Co-Issuers, immediately upon the request of the Affected Person to any Co-Issuer (which request shall include a calculation in reasonable detail of the amount to be repaid), agree to repay the amount of the refund (and any applicable interest) (plus any penalties, interest or other charges imposed by the relevant taxing authority with respect to such amount) to the Affected Person in the event the Affected Person or any other Person is required to repay such refund to such taxing authority. This Section 3.08 shall not be construed to require the Affected Person to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Co-Issuers or any other Person.

SECTION 3.09 Change of Lending Office . Each Committed Note Purchaser agrees that, upon the occurrence of any event giving rise to the operation of Section 3.05 or 3.07 or the payment of additional amounts to it under Section 3.08(a) or (b)  with respect to such Committed Note Purchaser, it will, if requested by the Co-Issuers, use reasonable efforts (subject to overall policy considerations of such Committed Note Purchaser) to designate anot