NOTE PURCHASE AGREEMENT

Exhibit 10.8

 

 

NOTE PURCHASE AGREEMENT

 

Dated as of June 28, 2005

 

among

 

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2005-A,

Issuer,

 

ALLIANCE LAUNDRY SYSTEMS LLC,

as the Servicer,

 

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2005 LLC,

as the Transferor,

 

THE NOTE PURCHASERS PARTY HERETO,

 

IXIS FINANCIAL PRODUCTS INC.,

as Administrative Agent and an Agent

 

LEHMAN BROTHERS HOLDINGS INC.,

as an Agent,

 

and

 

THE OTHER AGENTS PARTY HERETO

 

 

Relating to

Alliance Laundry Equipment Receivables Trust 2005-A

Equipment Loan Notes

Receivables Notes

 

 

TABLE OF CONTENTS

 

 

-i-

TABLE OF CONTENTS

(continued)

 

 

-ii-

NOTE PURCHASE AGREEMENT, dated as of June 28, 2005, by and among ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2005-A, a Delaware statutory trust (together with its successors and assigns, the “ Issuer ”), ALLIANCE LAUNDRY SYSTEMS LLC, a Delaware limited liability company (“ ALS ”), individually and as the Servicer, ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2005 LLC, a Delaware limited liability company (“ Alliance Equipment Receivables ”), as the Transferor (the “ Transferor ”), the NOTE PURCHASERS (as hereinafter defined) from time to time party hereto, the AGENTS for the Purchaser Groups from time to time party hereto (each such party, together with their respective successors in such capacity, an “ Agent ”), and IXIS FINANCIAL PRODUCTS INC. (“ IXIS ”), as administrative agent for the Note Purchasers (the “ Administrative Agent ”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer, the Servicer and the Transferor are parties to that certain Pooling and Servicing Agreement, dated as of June 28, 2005 (as the same may from time to time be amended or otherwise modified, the “ Pooling and Servicing Agreement ”), pursuant to which, among other things, the Transferor has assigned, transferred and conveyed, and has agreed to assign, transfer and convey, its right, title and interest in, to and under certain Equipment Loans and Receivables (as defined therein) to the Issuer, and the Servicer has agreed to service such Equipment Loans and Receivables;

 

WHEREAS, the Issuer and The Bank of New York, as trustee (together with its successors in such capacity, the “ Indenture Trustee ”), are parties to that certain Indenture, dated as of June 28, 2005 (as the same may from time to time be amended or otherwise modified, the “ Indenture ”);

 

WHEREAS, the Issuer proposes to issue its Equipment Loan Notes (the “ Equipment Loan Notes ”) pursuant to the Indenture;

 

WHEREAS, the Issuer also proposes to issue its Receivables Notes (the “ Receivables Notes ”) pursuant to the Indenture;

 

WHEREAS, the Equipment Loan Note Purchasers are willing to purchase the Equipment Loan Notes in the amount of the Equipment Loan Initial Advance on the Closing Date and from time to time thereafter to purchase Equipment Loan Advance Increases on the terms and conditions provided for herein;

 

WHEREAS, the Receivables Note Purchasers are willing to purchase the Receivables Notes in the amount of the Receivables Initial Advance on the Closing Date and from time to time thereafter to purchase Receivables Advance Increases on the terms and conditions provided for herein;

 

NOW THEREFORE, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereto agree as follows:

ARTICLE 1 DEFINITIONS

 

1.1 Definitions . All capitalized terms used herein as defined terms and not defined herein shall have the meanings given to them in Part I of Appendix A to the Pooling and Servicing Agreement, as in effect on the date of this Agreement and as they may be amended or otherwise modified from time to time with the consent of the Required Equipment Loan Note Owners, the Required Equipment Loan Note Purchasers, the Required Receivables Note Owners, the Required Receivables Note Purchasers and the Administrative Agent.

 

“ Additional Amounts ” shall mean on any date of determination, any amounts then due and payable by the Issuer (determined without regard to limitations on the sources of payment thereof) pursuant to this Agreement, other than Equipment Loan Monthly Interest the Equipment Loan Note Principal Balance, Receivables Monthly Interest and the Receivables Note Principal Balance.

 

“ Adjusted Commitment ” shall mean on any date of determination, (i) with respect to a CPC Committed Purchaser, such CPC Committed Purchaser’s Commitment minus the aggregate outstanding principal amount of its Support Advances to its related CP Conduit or (ii) with respect to a Committed Purchaser that is not a CPC Committed Purchaser, such Committed Purchaser’s Commitment.

 

“ Administrative Agent ” has the meaning specified in the preamble to this Agreement.

 

“ Advance Increase Notice ” shall mean a notice delivered by the Issuer to each Agent and the Indenture Trustee pursuant to Section 2.1(c) requesting an Equipment Loan Advance Increase or a Receivables Advance Increase with the most recently delivered Borrowing Base Certificate attached thereto.

 

“ Affected Party ” shall mean, with respect to any CP Conduit, any Support Party of such CP Conduit.

 

“ Agent ” has the meaning specified in the preamble to this Agreement.

 

“ Agreement ” shall mean this Note Purchase Agreement, as amended, supplemented or otherwise modified from time to time.

 

“ Alliance Equipment Receivables ” has the meaning specified in the preamble to this Agreement.

 

“ ALS ” has the meaning specified in the preamble to this Agreement.

 

“ Applicable Margin Fee Letter ” has the meaning specified in the Pooling and Servicing Agreement.

 

“ Assignee ” and “ Assignment ” have the respective meanings specified in subsection 7.1(e) .

 

-2-

“ Cap Strike Rate ” shall mean (i) at all times on or prior to the Distribution Date occurring in July 2008, 6.50% and (ii) at all times thereafter, 6.75%.

 

“ Closing Date ” shall mean June 28, 2005.

 

“ Code ” shall mean the Internal Revenue Code of 1986, as amended.

 

“ Commitment ” shall mean, for any Committed Purchaser, the maximum amount of such Note Purchaser’s commitment to purchase a portion of the Equipment Loan Note Principal Balance or Receivables Note Principal Balance, as applicable, as set forth on the signature pages hereto or the Transfer Supplement by which such Committed Purchaser became a party to this Agreement or assumed the Commitment (or a portion thereof) of another Note Purchaser pursuant to Transfer Supplement(s) executed by such Purchaser and its Assignee(s) and delivered pursuant to Section 7.1 . In the event that a Note Purchaser is a CPC Committed Purchaser which maintains a portion of its Commitment hereunder in relation to more than one CP Conduit, such Note Purchaser shall be deemed to hold separate Commitments hereunder in each such capacity, and in the event that a Note Purchaser is both an Equipment Loan Note Purchaser and a Receivables Note Purchaser, such Note Purchaser shall be deemed to hold separate Commitments hereunder in each such capacity.

 

“ Committed Purchaser ” shall mean each Note Purchaser identified as a Committed Purchaser on the signature pages hereto or in the Transfer Supplement pursuant to which such Note Purchaser, and any Assignee of such Note Purchaser to the extent such Assignee has assumed, pursuant to a Transfer Supplement, the Commitment of such Note Purchaser.

 

“ Conduit Assignee ” means any commercial paper conduit designated by a CP Conduit from time to time to accept an assignment from such CP Conduit of all or a portion of its Percentage Interest.

 

“ Consented Transferee Letter ” shall mean the letter, dated as of the date of this Agreement and referring to this Agreement (or any replacement therefor from time to time in effect), from the Transferor, consented to by the Control Party, and to and accepted by, the Administrative Agent, as such letter may be amended or otherwise modified from time to time by the Transferor with the consent of the Administrative Agent and the Insurer (if the Insurer is then the Control Party).

 

“ CP Conduit ” shall mean any Note Purchaser which is designated as a CP Conduit on the signature pages hereto or in the Transfer Supplement pursuant to which it became a party to this Agreement.

 

“ CPC Committed Purchaser ” shall mean, with respect to a CP Conduit, each Note Purchaser identified as a Committed Purchaser for such CP Conduit on the signature pages hereto or in the Transfer Supplement pursuant to which such CP Conduit became a party hereto, and any Assignee of such Note Purchaser to the extent such Assignee has assumed, pursuant to a Transfer Supplement, the Commitment of such Note Purchaser.

 

“ Downgraded Purchaser ” has the meaning specified in subsection 7.1(j) .

 

-3-

“ Equipment Loan Advance Increase ” shall mean the amount of each Advance made on the Equipment Loan Notes on each Equipment Loan Borrowing Date.

 

“ Equipment Loan Borrowing Date ” shall mean each date on which an Equipment Loan Advance Increase occurs.

 

“ Equipment Loan Facility Limit ” shall mean, for any day, $330,000,000, minus the Receivables Note Principal Balance on such day.

 

“ Equipment Loan Initial Advance ” shall mean the amount of the Advance made on the Equipment Loan Notes on the Closing Date.

 

“ Equipment Loan Monthly Interest ” shall mean, for any Distribution Date, the Equipment Loan Monthly Interest and Fees for the Interest Period ended on the day preceding such Distribution Date.

 

“ Equipment Loan Monthly Interest and Fees ” shall mean, for any Interest Period, the sum of (i) interest on the Equipment Loan Note Principal Balance for the Interest Period ended on such Distribution Date computed pursuant to subsection 2.2(a) and subsection 2.2(e) , plus (ii) the Equipment Loan Unused Facility Fee with respect to such Interest Period.

 

“ Equipment Loan Note Owners ” shall mean the Equipment Loan Note Purchasers that are owners of record of the Equipment Loan Notes or, with respect to any Equipment Loan Note held by an Agent hereunder as nominee on behalf of Equipment Loan Note Purchasers in an Equipment Loan Purchaser Group, the Equipment Loan Note Purchasers that are beneficial owners of such Equipment Loan Note as reflected on the books of such Agent in accordance with this Agreement and the Related Documents.

 

“ Equipment Loan Note Principal Balance ” shall mean the outstanding principal balance of all Advances made on the Equipment Loan Notes.

 

“ Equipment Loan Note Purchasers ” shall mean, collectively, the CP Conduits and the Committed Purchasers that are members of an Equipment Loan Purchaser Group.

 

“ Equipment Loan Notes ” has the meaning specified in the recitals to this Agreement.

 

“ Equipment Loan Percentage Interest ” shall mean, for an Equipment Loan Note Purchaser on any day, the percentage equivalent of (a) the sum of (i) the portion of the Equipment Loan Initial Principal Balance (if any) purchased by such Equipment Loan Note Purchaser, plus (ii) the aggregate portion of Equipment Loan Advance Increases (if any) purchased by such Equipment Loan Note Purchaser prior to such day pursuant to this Agreement, plus (iii) any portion of the Equipment Loan Note Principal Balance acquired by such Equipment Loan Note Purchaser as an Assignee from another Equipment Loan Note Purchaser pursuant to a Transfer Supplement executed and delivered pursuant to Section 7.1 , minus (iv) the aggregate amount of principal payments made with respect to the Equipment Loan Notes to such Equipment Loan Note Purchaser prior to such day, minus (v) any portion of the Equipment Loan Note Principal Balance assigned by such Equipment Loan Note Purchaser to an

 

-4-

Assignee pursuant to a Transfer Supplement executed and delivered pursuant to Section 7.1 , divided by (b) the aggregate Equipment Loan Note Principal Balance on such day.

 

“ Equipment Loan Purchaser Group ” shall mean each group of Equipment Loan Note Purchasers consisting of at least one Committed Purchaser and an Agent. Purchaser Groups may also contain a CP Conduit. The initial Equipment Loan Note Purchaser Groups shall be (i) Mica Funding, LLC, as CP Conduit, and Lehman, as a Committed Purchaser and Agent and (ii) Eiffel Funding, LLC, as CP Conduit, and IXIS, as a Committed Purchaser and Agent.

 

“ Equipment Loan Unused Facility Fee ” shall have the meaning, with respect to each Equipment Loan Purchaser Group, specified in the Applicable Margin Fee Letter.

 

“ Excess Funds ” has the meaning specified in Section 8.15 .

 

“ Excluded Taxes ” has the meaning specified in subsection 2.4(a) .

 

“ Governmental Authority ” shall mean any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any accounting board or authority (whether or not a part of government) which is responsible for the establishment or interpretation of national or international accounting principles.

 

“ Indemnitee ” has the meaning specified in subsection 2.5(a) .

 

“ Indenture ” has the meaning specified in the recitals to this Agreement.

 

“ Indenture Trustee ” has the meaning specified in the recitals to this Agreement.

 

“ Interest Period ” shall mean the period commencing on each Determination Date and ending on the day prior to the subsequent Determination Date; provided that the initial Interest Period will be the period commencing on the Closing Date and ending on the day prior to the first Determination Date and the final Interest Period will end on the final Distribution Date.

 

“ Investing Office ” shall mean initially, the office of any Note Purchaser (if any) designated as such on the signature pages hereto or in the Transfer Supplement by which it became a party to this Agreement, and thereafter, such other office of such Note Purchaser or such Assignee as may be designated in writing to the applicable Agent, the Administrative Agent, the Issuer, the Transferor, the Servicer and the Indenture Trustee by such Note Purchaser or Assignee.

 

“ Investment Letter ” shall mean the letter delivered by each Note Purchaser that is substantially in the form attached as Exhibit D to the Indenture.

 

“ Issuer ” has the meaning specified in the recitals to this Agreement.

 

“ IXIS ” has the meaning specified in the preamble to this Agreement.

 

-5-

“ Lehman ” means Lehman Brothers Holdings Inc.

 

“ Liquidity Percentage ” shall mean, for a CPC Committed Purchaser, such CPC Committed Purchaser’s Adjusted Commitment with respect to its related CP Conduit as a percentage of the aggregate Adjusted Commitments of all CPC Committed Purchasers for such CP Conduit.

 

“ Maximum Purchase Amount ” shall mean (i) for any CP Conduit, the aggregate Commitments of the CPC Committed Purchasers in its Purchaser Group and (ii) for any Committed Purchaser, its Commitment.

 

“ Moody’s ” shall mean Moody’s Investors Service, Inc., or any successor that is a nationally recognized statistical rating organization.

 

“ Note Agent ” has the meaning specified in subsection 6.1(a) .

 

“ Note Owner ” shall mean an Equipment Loan Note Owner or a Receivables Note Owner, as applicable.

 

“ Note Purchaser ” shall mean an Equipment Loan Note Purchaser or a Receivables Note Purchaser, as applicable.

 

“ Participant ” has the meaning specified in subsection 7.1(d) .

 

“ Participation ” has the meaning specified in subsection 7.1(d) .

 

“ Percentage Interest ” shall mean the Equipment Loan Percentage Interest or the Receivables Percentage Interest, as applicable. In the event that a Note Purchaser is both an Equipment Loan Note Purchaser and a Receivables Note Purchaser, such Note Purchaser shall be deemed to hold separate Percentage Interests hereunder in each such capacity.

 

“ Permitted Transferee ” shall mean (i) prior to the Conversion Date, each initial Equipment Loan Note Purchaser or Receivables Note Purchaser, as applicable, each initial Agent (in its individual capacity), the Administrative Agent (in its individual capacity), each Conduit Assignee which has been consented to as a potential Transferee by the Insurer (if the Insurer is then the Control Party) (which consent shall not be unreasonably withheld), each Person listed in the Consented Transferee Letter as in effect on the date of the related Transfer, at such time and each other Person who has been consented to as a potential Transferee by the Transferor and the Insurer (if the Insurer is then the Control Party) (which consents shall not be unreasonably withheld) or (ii) after the Conversion Date or otherwise if the Transferee is a Transferee of an Equipment Loan Note, a Receivables Note or the rights thereunder and not of any Commitment, any Transferee.

 

“ Person ” shall mean an individual, partnership, corporation, business trust, statutory trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

-6-

“ Pooling and Servicing Agreement ” shall have the meaning specified in the recitals to this Agreement.

 

“ Primary Purchaser ” shall mean with respect to each Purchaser Group, each CP Conduit, and to the extent that a Purchaser Group does not contain a CP Conduit, each Note Purchaser in such Purchaser Group.

 

“ Purchaser Group ” shall mean each Equipment Loan Purchaser Group and each Receivables Purchaser Group, as applicable.

 

“ Purchaser Percentage ” shall mean, with respect to a Primary Purchaser, its Maximum Purchase Amount as a percentage of the Equipment Loan Facility Limit or Receivables Loan Facility Limit, as applicable.

 

“ Qualified Special Purpose Entity ” has the meaning set forth in the Statement of Financial Accounting Standards No. 140, and any successor promulgation.

 

“ Receivables Advance Increase ” shall mean the amount of each Advance made to the Receivables Notes on each Receivables Borrowing Date.

 

“ Receivables Borrowing Date ” shall mean each date on which a Receivables Advance Increase occurs.

 

“ Receivables Facility Limit ” shall mean, for any day, $60,000,000, minus the excess, if any, of (x) the Equipment Loan Note Principal Balance on such day over (y) $270,000,000.

 

“ Receivables Initial Advance ” shall mean the amount of the Advance made on the Receivables Notes on the Closing Date.

 

“ Receivables Monthly Interest ” shall mean, for any Distribution Date, the Receivables Monthly Interest and Fees for the Interest Period ended on the day preceding such Distribution Date.

 

“ Receivables Monthly Interest and Fees ” shall mean, for any Interest Period, the sum of (i) interest on the Receivables Note Principal Balance for the Interest Period ended on such Distribution Date computed pursuant to subsection 2.2(a) and subsection 2.2(e) , plus (ii) the Receivables Unused Facility Fee with respect to such Interest Period.

 

“ Receivables Note Owners ” shall mean the Receivables Note Purchasers that are owners of record of the Receivables Notes or, with respect to any Receivables Note held by an Agent hereunder as nominee on behalf of Receivables Note Purchasers in a Receivables Purchaser Group, the Receivables Note Purchasers that are beneficial owners of such Receivables Note as reflected on the books of such Agent in accordance with this Agreement and the Related Documents.

 

“ Receivables Note Principal Balance ” shall mean the outstanding principal balance of all Advances on such Receivables Notes.

 

-7-

“ Receivables Note Purchasers ” shall mean, collectively, the CP Conduits and the Committed Purchasers that are members of a Receivables Purchase Group.

 

“ Receivables Notes ” has the meaning specified in the recitals to this Agreement.

 

“ Receivables Percentage Interest ” shall mean, for a Receivables Note Purchaser on any day, the percentage equivalent of (a) the sum of (i) the portion of the Receivables Initial Advance (if any) purchased by such Receivables Note Purchaser, plus (ii) the aggregate portion of Receivables Advance Increases (if any) purchased by such Receivables Note Purchaser prior to such day pursuant to this Agreement, plus (iii) any portion of the Receivables Note Principal Balance acquired by such Receivables Note Purchaser as an Assignee from another Receivables Note Purchaser pursuant to a Transfer Supplement executed and delivered pursuant to Section 7.1 , minus (iv) the aggregate amount of principal payments made with respect to the Receivables Notes to such Receivables Note Purchaser prior to such day, minus (v) any portion of the Receivables Note Principal Balance assigned by such Receivables Note Purchaser to an Assignee pursuant to a Transfer Supplement executed and delivered pursuant to Section 7.1 , divided by (b) the aggregate Receivables Note Principal Balance on such day.

 

“ Receivables Purchaser Group ” shall mean each group of Receivables Note Purchasers consisting of at least one Committed Purchaser and an Agent. Purchaser Groups may also contain a CP Conduit. The initial Receivables Note Purchaser Groups shall be (i) Mica Funding, LLC, as CP Conduit, and Lehman, as a Committed Purchaser and Agent, and (ii) Eiffel Funding, LLC, as CP Conduit, and IXIS, as a Committed Purchaser and Agent.

 

“ Receivables Unused Facility Fee ” shall have the meaning, with respect to each Receivables Purchaser Group, specified in the Applicable Margin Fee Letter.

 

“ Regulatory Change ” shall mean, as to each Note Purchaser, Participant or Affected Party, any change, or any generally accepted change in the interpretation or application, occurring after the date of the execution and delivery of this Agreement or, if later, the date of the execution and delivery of the Transfer Supplement by which it became party to this Agreement; in the case of a Participant, any change occurring after the date on which its Participation became effective; or in the case of an Affected Party, any change occurring after the date it became such an Affected Party, in any (or the adoption after such date of any new):

 

(i) United States federal or state law or foreign law applicable to such Note Purchaser, Participant or Affected Party; or

 

(ii) regulation, interpretation, directive, guideline or request (whether or not having the force of law) applicable to such Note Purchaser, Participant or Affected Party of any court or other judicial authority or any Governmental Authority charged with the interpretation or administration of any law referred to in clause (i) or of any fiscal, monetary, banking or other Governmental Authority or central bank having jurisdiction over such Note Purchaser, Participant or Affected Party or charged with the administration, interpretation or application of any such regulation, interpretation, directive, guideline or request. For avoidance of doubt, any interpretation of Accounting Research Bulletin No. 51 (or any revision or

 

-8-

amendment to any existing interpretation thereof) by the Financial Accounting Standards Board shall constitute a Regulatory Change herein.

 

“ Related Documents ” shall mean, collectively, this Agreement (including all effective Fee Letters and Transfer Supplements), the Transfer and Servicing Agreements, the Indenture, the Trust Agreement, the Administration Agreement, the Notes, the Custodial Agreement, and all agreements and instruments related thereto.

 

“ Replacement Purchaser ” has the meaning specified in subsection 7.1(j) .

 

“ Required Equipment Loan Note Owners ” as to any Purchaser Group, shall mean, at any time, Equipment Loan Note Owners having more than two-thirds of the aggregate Percentage Interests of all Equipment Loan Note Owners in such Purchaser Group.

 

“ Required Equipment Loan Note Purchasers ” as to any Purchaser Group, shall mean, at any time, Committed Purchasers having Commitments aggregating more than two-thirds of all of the Commitments in such Purchaser Group.

 

“ Required Receivables Note Owners ” as to any Purchaser Group, shall mean, at any time, Receivables Note Owners having more than two-thirds of the aggregate Percentage Interests of all Receivables Note Owners in such Purchaser Group.

 

“ Required Receivables Note Purchasers ” as to any Purchaser Group, shall mean, at any time, Committed Purchasers having Commitments aggregating more than two-thirds of all of the Commitments in such Purchaser Group.

 

“ Requirement of Law ” shall mean, as to any Person, any law, treaty, rule or regulation, or determination of an arbitrator or Governmental Authority, in each case applicable to or binding upon such or to which such Person is subject, whether federal, state or local (including usury laws, the Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System).

 

“ Standard & Poor’s ” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor that is a nationally recognized statistical rating organization.

 

“ Successor Servicer ” shall have the meaning specified in Section 8.5 .

 

“ Support Advances ” shall mean, with respect to a CPC Committed Purchaser and its related CP Conduit, any participation held by such CPC Committed Purchaser in such CP Conduit’s Percentage Interest in the Equipment Loan Note Principal Balance or Receivables Note Principal Balance, as applicable, which was purchased from such CP Conduit pursuant to a Support Facility and any loans or other advances made by such CPC Committed Purchaser to such CP Conduit pursuant to a Support Facility to fund such CP Conduit’s making or maintaining its purchases hereunder up to the amount of the related Advance (but excluding any such loans or advances made to fund such CP Conduit’s obligations to pay interest, fees or other similar amounts relating to the funding of its making or maintaining its purchases hereunder). In the event that such CPC Committed Purchaser and its related CP Conduit are both Equipment

 

-9-

Loan Note Purchasers and Receivables Note Purchasers, such CPC Purchaser shall be deemed to hold separate Support Advances hereunder in each such capacity.

 

“ Support Facility ” shall mean any liquidity or credit support agreement with a CP Conduit which relates to this Agreement (including any master repurchase agreement or an agreement to purchase an assignment of or participation in Equipment Loan Notes or Receivables Notes), it being understood that such liquidity or credit support may also relate to other transactions.

 

“ Support Party ” shall mean any other bank, insurance company or other financial institution extending or having a commitment to extend funds to or for the account of or to provide credit support for the benefit of a CP Conduit (including by agreement to purchase an assignment of or participation in Equipment Loan Notes or Receivables Notes) under a Support Facility. Each CPC Committed Purchaser for a CP Conduit which is a CP Conduit shall be deemed to be a Support Party for such CP Conduit.

 

“ Taxes ” has the meaning specified in subsection 2.4(a) .

 

“ Total Equipment Loan Commitment ” shall mean, on any date of determination, the aggregate of all the Commitments of all Committed Purchasers in all Equipment Loan Purchaser Groups.

 

“ Total Receivables Commitment ” shall mean, on any date of determination, the aggregate of all the Commitments of all Committed Purchasers in all Receivables Purchaser Groups.

 

“ Transfer ” has the meaning specified in subsection 7.1(c) .

 

“ Transfer Supplement ” has the meaning specified in subsection 7.1(e) .

 

“ Transferee ” has the meaning specified in subsection 7.1(c) .

 

“ Transferor ” has the meaning specified in the preamble to this Agreement.

 

“ written ” or “ in writing ” (and other variations thereof) shall mean any form of written communication or a communication by means of telex, telecopier device, telegraph or cable.

 

1.2 Other Definitional Provisions .

 

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings as set forth herein when used in any certificate or other document made or delivered pursuant hereto.

 

(b) The words “hereof,” “herein,” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and Section, subsection and Exhibit references are to this Agreement, unless otherwise specified. The words “including” and “include” shall be deemed to

 

-10-

be followed by the words “without limitation.” References to any Person include that Person’s successors in interest.

 

ARTICLE 2 AMOUNT AND TERMS OF COMMITMENTS

 

2.1 Purchases .

 

(a) On and subject to the terms and conditions of this Agreement (including Article 3 and clause (g) below), on the Closing Date each initial Primary Purchaser may purchase its Purchaser Percentage of the Equipment Loan Initial Advance or the Receivables Initial Advance, as applicable, for a purchase price equal to the portion of the Equipment Loan Initial Advance or the Receivables Initial Advance, as applicable, so purchased. The determination of whether an initial Primary Purchaser will make such purchase may, less such amounts as the Issuer and the initial Primary Purchasers shall agree, be made by the related Agent for such Primary Purchaser.

 

(b) On and subject to the terms and conditions of this Agreement (including Article 3 and clause (g) below) and prior to the Conversion Date, each Primary Purchaser may purchase its Purchaser Percentage of any Equipment Loan Advance Increase or Receivables Advance Increase, as applicable, offered for purchase hereunder for a purchase price equal to the Equipment Loan Advance Increase or the Receivables Advance Increase, as applicable, so purchased. The determination of whether an initial Primary Purchaser will make such purchase may be made by the related Agent for such Primary Purchaser.

 

(c) Each purchase of any Equipment Loan Advance Increase or Receivables Advance Increase hereunder shall be in accordance with the provisions hereof upon delivery of an Advance Increase Notice by the Issuer to each Agent and the Indenture Trustee received no later than 3:00 p.m., New York City time, at least two Business Days prior to the applicable Equipment Loan Borrowing Date or one Business Day prior to the applicable Receivables Borrowing Date (or such shorter period as may be agreed to by each Agent). Each Advance Increase Notice shall be irrevocable and shall specify an Advance of at least $1,000,000, unless each Committed Purchaser otherwise agrees, and in an integral multiple of $100,000. The Issuer may not deliver more than one Advance Increase Notice with respect to an Equipment Loan Advance Increase and more than two Advance Increase Notices with respect to a Receivables Advance Increase in any calendar week, unless each Agent otherwise agrees, which consent shall not be unreasonably withheld.

 

(d) Each CP Conduit shall notify the Agent for its Purchaser Group by 10:00 a.m., New York City time, on the applicable Purchase Date whether it has elected to make the purchase offered to it pursuant to subsection 2.1 (a) or 2.1(b) . In the event that a CP Conduit shall not have timely provided such notice, such CP Conduit shall be deemed to have elected not to make such purchase. Such Agent shall notify each CPC Committed Purchaser for such CP Conduit on or prior to 11:00 a.m., New York City time, on the applicable Purchase Date if such CP Conduit has not elected to purchase its entire Purchaser Percentage of the Equipment Loan Initial Advance, the Equipment Loan Advance Increase, the Receivables Initial Advance, or the Receivables Advance Increase, as the case may be, which notice shall specify (i) the identity of such CP Conduit, (ii) the portion of the Equipment Loan Initial Advance, the Equipment Loan

 

-11-

Advance Increase, the Receivables Initial Advance, or the Receivables Advance Increase, as the case may be, which such CP Conduit has not elected to purchase as provided above, and (iii) the respective Liquidity Percentages of such CPC Committed Purchasers on such Purchase Date (as determined by such Agent in good faith; for purposes of such determination, such Agent shall be entitled to rely conclusively on the most recent information provided by such CP Conduit or its agent or by the agent for its Support Parties). Subject to receiving such notice and the satisfaction of the applicable conditions set forth in Article 3 and clause (g) below, each of such CP Conduit’s CPC Committed Purchasers shall make a purchase of Equipment Loan Notes or Receivables Notes, as applicable, on the applicable Purchase Date in an amount equal to its Liquidity Percentage of the portion of the Equipment Loan Initial Advance, the Equipment Loan Advance Increase, the Receivables Initial Advance, or the Receivables Advance Increase, as the case may be, which such CP Conduit has not elected to purchase, for a purchase price equal to its share of the Equipment Loan Initial Advance, the Equipment Loan Advance Increase, the Receivables Initial Advance, or the Receivables Advance Increase, as applicable, so purchased.

 

(e) All purchases made pursuant to this Note Purchase Agreement by each Note Purchaser in a Purchaser Group shall be evidenced by one Equipment Loan Note or Receivables Note, as applicable, for such Purchaser Group issued pursuant to the Indenture in the name of the related Agent for such Purchaser Group or, if requested by such Agent, in the name of the relevant Primary Purchaser. Each Equipment Loan Note Purchaser’s or Receivables Note Purchaser’s, as applicable, purchase price payable pursuant to subsection 2.1(a) , 2.1(b) or 2.1(d) shall be made available to the Issuer at such account as it shall direct or to the Agent for its Purchaser Group at the account of the Agent specified in Section 8.2(b) , subject to the fulfillment of the applicable conditions set forth in Article 3 , if to the Agent, at or prior to 2:00 p.m., New York City time, and if to the Issuer, at or prior to 3:00 p.m., New York City time, on the applicable Purchase Date, by deposit of immediately available funds. If such funds are to be remitted to an Agent, such Agent shall promptly notify the Issuer and the Transferor in the event that any Equipment Loan Note Purchaser or Receivables Note Purchaser either fails to make such funds available to such Agent before such time or notifies such Agent that it will not make such funds available to such Agent before such time. Subject to (i) such Agent’s receipt of such funds and (ii) the fulfillment of the applicable conditions set forth in Article 3 , as determined by such Agent, such Agent will, not later than 3:00 p.m., New York City time on such Purchase Date, make such funds available, in the same type of funds received, by wire transfer thereof to the account of the Issuer in the United States specified in the applicable Advance Increase Notice or, in the case of the purchase on the Closing Date, specified in writing by the Issuer to such Agent not later than the one Business Day prior to the Closing Date.

 

(f) Notwithstanding the fulfillment of the applicable conditions set forth in Article 3 with respect to a purchase, in the event that a CP Conduit elected to make a purchase on a Purchase Date but failed to make its purchase price available to the Agent for its Purchaser Group when required by subsection 2.1(e) , such CP Conduit shall be deemed to have rescinded its election to make such purchase, and none of the Issuer, the Transferor or any other Person shall have any claim against such CP Conduit by reason of its failure to timely make such purchase. In any such case, such Agent shall give notice of such failure not later than 1:00 p.m., New York City time, on the Purchase Date to each CPC Committed Purchaser for such CP Conduit and to the Issuer and the Transferor, which notice shall specify (i) the identity of such CP Conduit, (ii) the amount of the purchase which it had elected but failed to make and (iii) the

 

-12-

respective Liquidity Percentages of such CPC Committed Purchasers on such Purchase Date (as determined by such Agent in good faith; for purposes of such determination, such Agent shall be entitled to rely conclusively on the most recent information provided by such CP Conduit or its agent or by the agent for its Support Parties). Subject to receiving such notice, each of such CP Conduit’s CPC Committed Purchasers shall purchase a portion of the Equipment Loan Note Principal Balance or Receivables Note Principal Balance, as applicable, in an amount equal to its Liquidity Percentage of the amount described in clause (ii) above at or before 2:00 p.m., New York City time, on such Purchase Date and otherwise in accordance with subsection 2.1(d) . Subject to such Agent’s receipt of such funds, such Agent will not later than 3:00 p.m., New York City time, on such Purchase Date make such funds available, in the same type of funds received, by wire transfer thereof to the account of the Issuer described in subsection 2.1(e) , which payment shall be deemed to be timely for purposes hereof and of the Indenture.

 

(g) Notwithstanding anything herein to the contrary, in no event (i) shall a Committed Purchaser be required on any date to make a purchase of the Equipment Loan Initial Advance or purchase an Equipment Loan Advance Increase which would result in its Percentage Interest of the Equipment Loan Note Principal Balance, determined after giving effect to such purchase, exceeding its Adjusted Commitment with respect thereto; or (ii) may any Equipment Loan Advance Increase or the Equipment Loan Initial Advance be offered for purchase hereunder, nor shall any Equipment Loan Note Purchaser be obligated to purchase any Equipment Loan Advance Increase or the Equipment Loan Initial Advance, to the extent that, after giving effect to such Equipment Loan Advance Increase or purchase of the Equipment Loan Initial Advance, the Equipment Loan Note Principal Balance would exceed the Equipment Loan Facility Limit.

 

(h) Notwithstanding anything herein to the contrary, in no event (i) shall a Committed Purchaser be required on any date to make a purchase of the Receivables Initial Advance or purchase a Receivables Advance Increase which would result in its Percentage Interest of the Receivables Note Principal Balance, determined after giving effect to such purchase, exceeding its Adjusted Commitment with respect thereto; or (ii) may any Receivables Advance Increase or the Receivables Initial Advance be offered for purchase hereunder, nor shall any Receivables Note Purchaser be obligated to purchase any Receivables Advance Increase or the Receivables Initial Advance, to the extent that, after giving effect to such Receivables Advance Increase or purchase of the Receivables Initial Advance, the Receivables Note Principal Balance would exceed the Receivables Facility Limit.

 

2.2 Interest, Fees, Expenses, Payments, Etc.

 

(a) The interest and fees (including the Equipment Loan Facility Fee and the Receivables Facility Fee) on the Equipment Loan Notes and Receivables Notes shall be paid as provided in the Indenture (including Sections 2.7 and 8.2 ).

 

(b) The principal of, and interest and fees in respect of the Equipment Loan Notes shall be paid as provided in Sections 2.7 and 8.2 of the Indenture. Equipment Loan Monthly Interest and Fees for each Interest Period (including the last Interest Period) shall be due and payable on the Distribution Date immediately following such Interest Period. In the case of Equipment Loan Notes held by an Agent as nominee on behalf of an Equipment Loan

 

-13-

Note Purchaser in its Purchaser Group, such Agent shall allocate to each Equipment Loan Note Owner in its Purchaser Group each payment in respect of the Equipment Loan Notes received by such Agent in its capacity as Equipment Loan Noteholder as provided herein. Payments in reduction of the portion of the Equipment Loan Note Principal Balance evidenced by an Equipment Loan Note shall be allocated and applied to the Equipment Loan Note Owners of such Equipment Loan Note pro rata based on their respective Percentage Interests of the Equipment Loan Note Principal Balance, or in any such case in such other proportions as each affected Equipment Loan Note Purchaser may agree upon in writing from time to time with such Agent and the Issuer. Payments of interest in respect of the portion of the Equipment Loan Note Principal Balance evidenced by an Equipment Loan Note shall be allocated and applied to Equipment Loan Note Owners of such Equipment Loan Note pro rata based upon the respective amounts of interest due and payable to them, determined as provided above in this Section 2.2 .

 

(c) The principal of, and interest and fees in respect of the Receivables Notes shall be paid as provided in Sections 2.7 and 8.2 of the Indenture. In the case of Receivables Notes held by an Agent as nominee on behalf of a Receivables Note Purchaser in its Purchaser Group, such Agent shall allocate to each Receivables Note Owner in its Purchaser Group each payment in respect of the Receivables Notes received by such Agent in its capacity as Receivables Noteholder as provided herein. Payments in reduction of the portion of the Receivables Note Principal Balance evidenced by a Receivables Note shall be allocated and applied to the Receivables Note Owners of such Receivables Note pro rata based on their respective Percentage Interests of the Receivables Note Principal Balance, or in any such case in such other proportions as each affected Receivables Note Purchaser may agree upon in writing from time to time with such Agent and the Issuer. Payments of interest in respect of the portion of the Receivables Note Principal Balance evidenced by a Receivables Note shall be allocated and applied to Receivables Note Owners of such Receivables Note pro rata based upon the respective amounts of interest due and payable to them, determined as provided above in this Section 2.2 . Payments of the Receivables Unused Facility Fee shall be allocated and paid to Receivables Note Owners pro rata based upon their respective interest in the Receivables Note Principal Balance for the applicable Interest Period.

 

(d) Any fees and any interest thereon or other amounts due and payable hereunder (without regard to any limitations set forth herein on the sources from which such amount may be paid) which are not paid on the due date thereof (including interest payable pursuant to this clause (d) ) shall accrue interest (after as well as before judgment) at 2% per annum above the Base Rate plus the Applicable Margin in effect on the date the payment was due from and including the due date thereof to but excluding the date such amount is actually paid.

 

(e) Unless otherwise specified in the Applicable Margin Fee Letter, interest calculated by reference to the Adjusted Eurodollar Rate shall be calculated on the basis of a 360-day year for the actual days elapsed. Periodic fees or other periodic amounts payable hereunder shall be calculated, unless otherwise specified in the Fee Letter, on the basis of a 360-day year and for the actual days elapsed.

 

(f) All payments to be made hereunder or under the Indenture, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and

 

-14-

shall be made prior to 11:30 a.m., New York City time, on the due date thereof to the applicable Agent, at its account specified in subsection 8.2(b) , in Dollars and in immediately available funds. Payments received by such Agent after 11:30 a.m., New York City time, shall be deemed to have been made on the next Business Day, unless otherwise agreed to by such Agent. Notwithstanding anything herein to the contrary, if any payment due hereunder becomes due and payable on a day other than a Business Day, the payment date thereof shall be extended to the next succeeding Business Day and interest shall accrue thereon at the applicable rate during such extension. To the extent that (i) the Issuer, the Indenture Trustee, the Transferor or the Servicer makes a payment to the Administrative Agent or an Agent or Note Purchaser or (ii) the Administrative Agent or an Agent or Note Purchaser receives or is deemed to have received any payment or proceeds for application to an obligation, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy or insolvency law, state or federal law, common law, or for equitable cause, then, to the extent such payment or proceeds are set aside, the obligation or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received or deemed received by the Administrative Agent, such Agent or such Note Purchaser, as the case may be.

 

2.3 Requirements of Law .

 

(a) In the event that any Note Purchaser, Participant or Affected Party, as applicable, shall have reasonably determined that any Regulatory Change shall impose, modify, hold or deem applicable any reserve, special deposit, compulsory loan or similar requirement (including any such requirement imposed by the Board of Governors of the Federal Reserve System and any such establishment or interpretation of accounting principles) against assets of or held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, such Note Purchaser or Affected Party, as applicable, or shall impose on any Note Purchaser, Affected Party or the London interbank market any other condition affecting this Agreement, the Indenture or any Transfer and Servicing Agreement, the ownership, maintenance or financing of the Notes, the Trust Estate or payments of amounts due hereunder or its obligations to advance funds hereunder or under a Support Facility and the result of any of the foregoing is to increase the cost to such Note Purchaser or Affected Party, by an amount which such Note Purchaser or Affected Party in good faith deems to be material, of maintaining its Commitment or its interest in the Equipment Loan Notes or Receivables Notes, as applicable, or to reduce any amount receivable in respect thereof, then , in any such case, after submission by such Note Purchaser or Affected Party to the Agent for the related Purchaser Group of a written request therefor and the submission by such Agent to the Issuer, the Transferor and the Servicer of such written request therefor, together with the certificate described in subsection 2.3(d) below, the Servicer shall pay to such Agent for the account of such Note Purchaser or Affected Party any additional amounts necessary to compensate such Note Purchaser or Affected Party for such increased cost or reduced amount receivable, to the extent not already reflected in the applicable interest rate (other than with respect to the applicable margin), together with interest on any such unpaid amount from the Distribution Date following receipt by the Issuer of such request for compensation under this subsection 2.3(a) , if such request is received by the Issuer at least five Business Days prior to the Determination Date related to such Distribution Date, and otherwise from the following

 

-15-

Distribution Late, until payment in full thereof (after as well as before judgment) at the Federal Funds Rate in effect from time to time.

 

(b) In the event that any Note Purchaser or Affected Party, as applicable, shall have reasonably determined that any Regulatory Change regarding capital adequacy or any change in the application of generally accepted accounting principles has the effect of reducing the rate of return on such Note Purchaser’s or Affected Party’s capital or on the capital of any Person controlling such Note Purchaser or Affected Party as a consequence of its obligations hereunder or with respect hereto or its maintenance of its Commitment or its interest in the Equipment Loan Notes or Receivables Notes, as applicable, to a level below that which such Note Purchaser, Affected Party or such Person could have achieved but for such Regulatory Change (taking into consideration such Note Purchaser’s, Affected Party’s or Person’s policies with respect to capital adequacy) or such accounting change by an amount in good faith deemed by such Note Purchaser, Affected Party or Person to be material, then , from time to time, after submission by such Note Purchaser or Affected Party to the Agent for the related Purchaser Group of a written request therefor and the submission by such Agent to the Issuer, the Transferor and the Servicer of such written request therefor, together with the certificate described in subsection 2.3(d) below, the Issuer and the Servicer shall, on a joint and several basis, pay to such Agent for the account of such Note Purchaser or Affected Party such additional amount or amounts as will compensate such Note Purchaser, Affected Party or Person, as applicable, for such reduction, together with interest on any such unpaid amount from the Distribution Date following receipt by the Issuer of such request for compensation under this subsection 2.3(b) , if such request is received by the Issuer at least five Business Days prior to the Determination Date related to such Distribution Date, and otherwise from the following Distribution Date, until payment in full thereof (after as well as before judgment) at the Federal Funds Rate in effect from time to time. Nothing in this subsection 2.3(b) shall be deemed to require the Issuer or the Servicer to pay any amount to a Note Purchaser or Affected Party to the extent such Note Purchaser or Affected Party has been compensated therefor under another provision of this Agreement or to the extent such amount is already reflected in the applicable interest rate (other than with respect to the applicable margin).

 

(c) Each Note Purchaser and Affected Party agrees that it shall use its reasonable efforts to reduce or eliminate any claim for compensation pursuant to subsections 2.3(a) and 2.3(b) , including but not limited to designating a different Investing Office for their Equipment Loan Notes or Receivables Notes, as applicable (or any interest therein), if such efforts will avoid the need for, or reduce the amount of, any increased amounts referred to in subsection 2.3(a) or 2.3(b) and will not, in the reasonable opinion of such Note Purchaser or Affected Party, as applicable, be unlawful or otherwise disadvantageous to such Note Purchaser or Affected Party or inconsistent with its policies or regulatory restrictions or result in any unreimbursed cost or expense to such Note Purchaser or Affected Party or in an increase in the aggregate amount payable under subsections 2.3(a) and 2.3(b) .

 

(d) Each Note Purchaser or Affected Party claiming increased amounts described in subsection 2.3(a) or 2.3(b) will furnish to the Agent for the related Purchaser Group (together with its request for compensation) a certificate prepared in good faith setting forth the basis (which may include the use of estimates derived using commercially reasonable methods) and the calculation of the amount (in reasonable detail) of each request by such Note Purchaser

 

-16-

or Affected Party for any such increased amounts referred to in subsection 2.3(a) or 2.3(b) . Any such certificate shall be conclusive absent manifest error, and such Agent shall deliver a copy thereof to the Issuer, the Transferor and the Servicer. Failure on the part of any Note Purchaser or Affected Party to demand compensation for any amount pursuant to subsection 2.3(a) or 2.3(b) with respect to any period shall not constitute a waiver of such Note Purchaser’s or Affected Party’s right to demand compensation with respect to such period; provided , however , that notwithstanding the foregoing provisions of this Section 2.3 , a Note Purchaser or Affected Party, as applicable, shall not be compensated for any such amount relating to any period ending more than six months prior to the date that the related Agent for such Note Purchaser or Affected Party notifies the Issuer, the Transferor and the Servicer in writing thereof or for any amounts resulting from a change by any Note Purchaser or Affected Party of its Investing Office (other than changes required by law or changes made pursuant to subsection 2.3(c) or subsection 2.4(d) ). Amounts owing under this Section 2.3 by the Issuer shall be due and payable in accordance with Section 8.2 of the Indenture.

 

2.4 Taxes .

 

(a) All payments made to a Note Purchaser, an Affected Party, the Agents or the Administrative Agent under this Agreement and the Indenture (including all amounts payable with respect to the Equipment Loan Notes or Receivables Notes, as applicable) shall, to the extent allowed by law, be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp, excise, franchise or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority (collectively, “ Taxes ”), excluding (i) income taxes (including branch profit taxes, minimum taxes and taxes computed under alternative methods, at least one of which is based on or measured by net income), franchise taxes (imposed in lieu of income taxes), or any other taxes based on or measured by the net income of the Administrative Agent or such Note Purchaser, Affected Party, Participant or Agent (as the case may be) or the gross receipts or income of the Administrative Agent or such Note Purchaser, Affected Party, Participant or Agent (as the case may be); (ii) any Taxes that would not have been imposed but for the failure of the Administrative Agent or such Note Purchaser, Affected Party, Participant or Agent, as applicable, to provide and keep current (to the extent legally able) any certification or other documentation required to qualify for an exemption from, or reduced rate of, any such Taxes or required by this Agreement to be furnished by the Administrative Agent or such Note Purchaser, Affected Party, Participant or Agent, as applicable; and (iii) any Taxes imposed as a result of a change by any Note Purchaser, Affected Party or Participant of its Investing Office (other than changes pursuant to this Agreement, including subsection 2.4(c) , or required by law) (all such excluded taxes being hereinafter called “ Excluded Taxes ”). If, as a result of any change in law, treaty or regulation or in the interpretation or administration thereof by any governmental or regulatory agency or body charged with the administration or interpretation thereof, or the adoption of any law, treaty or regulation, any Taxes, other than Excluded Taxes, are required to be withheld from any amounts payable to the Administrative Agent or a Note Purchaser, Affected Party or Agent hereunder or under the Indenture, then after submission by any Note Purchaser or Affected Party to the Agent for the related Purchaser Group and by any Agent or the Administrative Agent to the Issuer, the Transferor and the Servicer of a written request therefor, together with the certificate described in subsection 2.4(b) below, the amounts so payable to the Administrative Agent or such Note

 

-17-

Purchaser, Affected Party or Agent, as applicable, shall be increased by the Issuer, and the Servicer shall pay to the applicable Agent for the account of such Note Purchaser or Affected Party or for its own account or to the Administrative Agent, as applicable, the amount of such increase to the extent necessary to yield to the Administrative Agent or such Note Purchaser, Affected Party or Agent, as applicable (after payment of all such Taxes) interest or any such other amounts payable hereunder or thereunder at the rates or in the amounts specified in this Agreement and the Indenture; provided , however , that the amounts so payable to the Administrative Agent or such Note Purchaser, Affected Party or Agent shall not be increased pursuant to this subsection 2.4(a) if such requirement to withhold results from the failure of such Person to comply with subsection 2.4(c) ; and provided further , however , that the Servicer shall not be required to pay any such additional amounts (or any related interest or penalties) to the extent arising from the result of and attributable to the failure of the Administrative Agent or a Note Purchaser, Affected Party or Agent to file in a timely manner any tax returns required to be filed by the Administrative Agent or such Note Purchaser, Affected Party or Agent, as applicable, necessary to ensure that the net amount actually received by such Person will equal the full amount such Person would have received had no such deduction or withholding been required. Whenever any Taxes are payable on or with respect to amounts distributed to the Administrative Agent or a Note Purchaser, Affected Party or Agent, as promptly as possible thereafter the Servicer shall send to the Agent, on behalf of such Note Purchaser or Affected Party, or to the Administrative Agent or such Agent, as applicable, a certified copy of an original official receipt showing payment thereof. If either the Issuer or Servicer fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Agent, on behalf of itself or such Note Purchaser or Affected Party, or to the Administrative Agent or such Agent, as applicable, the required receipts or other required documentary evidence, the Servicer shall pay to such Agent on behalf of such Note Purchaser or Affected Party or to the Administrative Agent or such Agent for its own account, as applicable, any incremental taxes, interest or penalties that may become payable by the Administrative Agent or such Note Purchaser, Affected Party or Agent, as applicable, as a result of any such failure.

 

(b) A Note Purchaser or Affected Party claiming increased amounts under subsection 2.4(a) for Taxes paid or payable by such Note Purchaser or Affected Party will furnish to the applicable Agent a certificate prepared in good faith setting forth the basis (which may include the use of estimates derived using commercially reasonable methods) and amount of each request by such Note Purchaser or Affected Party for such Taxes, and such Agent shall deliver a copy thereof to the Issuer, the Transferor and the Servicer. The Administrative Agent or an Agent, as the case may be, claiming increased amounts under subsection 2.4(a) for its own account for Taxes paid or payable by the Administrative Agent or such Agent, as applicable, will furnish to the Issuer, the Transferor and the Servicer a certificate prepared in good faith setting forth the basis (which may include the use of estimates derived using commercially reasonable methods) and amount of each request by the Administrative Agent or such Agent for such Taxes. Any such certificate of the Administrative Agent or a Note Purchaser, Affected Party or Agent shall be conclusive absent manifest error. Failure on the part of the Administrative Agent or any Note Purchaser, Affected Party or Agent to demand additional amounts pursuant to subsection 2.4(a) with respect to any period shall not constitute a waiver of the right of the Administrative Agent or such Note Purchaser, Affected Party or Agent, as the case may be, to demand compensation with respect to such period. All such amounts shall be due and payable to such Agent on behalf of such Note Purchaser or Affected Party or to the Administrative Agent or such

 

-18-

Agent, as the case may be, for its own account on the Distribution Date following receipt by the Issuer of such certificate, if such certificate is received by the Issuer at least five Business Days prior to the Determination Date related to such Distribution Date and otherwise shall be due and payable on the following Distribution Date (or, if earlier, on the Final Scheduled Distribution Date).

 

(c) Each Equipment Loan Note Purchaser, each Receivables Note Purchaser and each Participant holding an interest in either the Equipment Loan Notes or Receivables Notes agrees that prior to the date on which the first interest or fee payment hereunder is due thereto, it will deliver to the Issuer, the Transferor, the Servicer, the Indenture Trustee, the applicable Agent and the Administrative Agent (i) if such Equipment Loan Note Purchaser, Receivables Note Purchaser or Participant is not incorporated under the laws of the United States or any state thereof or the District of Columbia, two duly completed copies of the U.S. Internal Revenue Service Form W-8ECI or Form W-8BEN (claiming treaty benefits) or in either case successor applicable forms required to evidence that the Equipment Loan Note Purchaser, Receivables Note Purchaser or Participant is entitled to receive payments under this Agreement and with respect to the Equipment Loan Notes or Receivables Notes, as applicable, without deduction or withholding of any United States federal income taxes, (ii) if such Equipment Loan Purchaser, Receivable Note Purchaser or Participant is incorporated under the laws of the United States of America or any state thereof, or the District of Columbia, a duly completed U.S. Internal Revenue Service Form W-9 or successor applicable or required forms, and (iii) such other forms and information as may be required to confirm the availability of any applicable exemption from United States federal, state or local withholding taxes. Each Equipment Loan Note Purchaser, Receivables Note Purchaser or Participant holding an interest in Equipment Loan Notes or Receivables Notes also agrees to deliver to the Issuer, the Transferor, the Servicer, the Indenture Trustee, the applicable Agent and the Administrative Agent two further copies of such Form W-8ECI, Form W-8BEN or Form W-9, or such successor applicable forms or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it hereunder, and such extensions or renewals thereof as may reasonably be requested by the Servicer, the Issuer, the Transferor, an Agent or the Administrative Agent, unless in any such case, solely as a result of a change in treaty, law or regulation occurring prior to the date on which any such delivery would otherwise be required, the Equipment Loan Note Purchaser or the Receivables Note Purchaser, as applicable, is no longer eligible to deliver the then-applicable form set forth above and so advises the Servicer, the Issuer, the Transferor and the applicable Agent and the Administrative Agent. Each Equipment Loan Note Purchaser and each Receivables Note Purchaser certifies, represents and warrants as of the Closing Date, each Assignee and each Participant (in either case other than a Support Party) shall certify, represent and warrant as a condition of acquiring its Assignment or Participation as of the effective date of the Transfer Supplement to which it is a party or of such Participation, as the case may be, and each Support Party shall certify, represent and warrant as of the effective date of its becoming a Support Party, that (x) it is entitled to receive payments under this Agreement and with respect to the Equipment Loan Notes or Receivables Notes, as applicable, without deduction or withholding of any United States federal income taxes and (y) it is entitled to an exemption from United States backup withholding.

 

-19-

(d) Each Note Purchaser and Affected Party agrees that it shall use reasonable efforts to reduce or eliminate any amount due under Section 2.3 or this Section 2.4 , including but not limited to designating a different Investing Office for its Equipment Loan Notes or Receivables Notes, as applicable, (or any interest therein) if such designation will eliminate or materially reduce any amount due under Section 2.3 or this Section 2.4 and will not, in the reasonable opinion of such Note Purchaser or Affected Party be unlawful or otherwise disadvantageous to such Note Purchaser or Affected Party or inconsistent with its policies or result in any unreimbursed cost or expense to such Note Purchaser or Affected Party or in an increase in the aggregate amount payable under subsections 2.3(a) and 2.3(b) . If such amount is not eliminated by any such designation or no such designation is done and the Note Purchaser does not waive payment of such amount, such Note Purchaser and the Agent for its Purchaser Group hereby severally agree to use reasonable efforts to procure a replacement purchaser not so affected and which is reasonably acceptable to the Transferor, such Agent and the Administrative Agent (a “ Replacement Purchaser ”) to replace such affected Note Purchaser. The Transferor shall also have the right to procure a Replacement Purchaser, provided that such proposed Replacement Purchaser is reasonably acceptable to the Agent for the affected Purchaser Group and the Administrative Agent. No replacement of a Note Purchaser shall be effected pursuant to this subsection 2.4(d) if, after giving effect thereto, any amounts shall be owing to the replaced Note Purchaser hereunder. Each affected Note Purchaser hereby agrees to take all actions necessary to permit a Replacement Purchaser to succeed to its rights and obligations hereunder.

 

Notwithstanding the foregoing, (i) if the Note Purchaser being replaced pursuant to this subsection is a CPC Committed Purchaser, the Replacement Purchaser shall be acceptable to the related CP Conduit and (ii) if the Note Purchaser being replaced pursuant to this subsection is a CP Conduit, the Replacement Purchaser shall be acceptable to all related CPC Committed Purchasers; and it shall be a condition of such replacement that such Replacement Purchaser enter into substitute Support Facilities for those to which the Note Purchaser being replaced is a party on terms mutually acceptable to the parties thereto. In the event that a proposed Replacement Purchaser which has been approved by the Transferor, the applicable Agent and the Administrative Agent as provided in this subsection is not acceptable to the applicable CP Conduit or the applicable Committed Purchasers, as applicable, or has not within a reasonable period entered into applicable Support Facilities, and another replacement Note Purchaser has not been promptly procured as provided in this subsection with the consent of all affected parties, then the Note Purchaser which failed to consent to such replacement or to enter into such Support Facilities may be replaced by a Replacement Purchaser and shall use reasonable efforts to procure a Replacement Purchaser, in each case as provided in this subsection. Amounts owing under this Section 2.4 by the Issuer shall be due and payable in accordance with Section 8.2 of the Indenture.

 

If such amount is not eliminated due to the failure to find an acceptable Replacement Purchaser (or such Replacement Purchaser not being acceptable to the related CP Conduit), and the affected Note Purchaser does not waive payment of such amount, the Transferor shall have the right to procure a replacement purchaser for such Note Purchaser and any additional Note Purchaser in such Note Purchaser’s Purchaser Group (the “ Exiting Note Purchaser Group ”) and a replacement agent for the respective Agent in the Exiting Note Purchaser Group (collectively, the “ Replacement Purchaser Group ”), provided that if the Exiting Note Purchaser Group contains a member that is the Administrative Agent, such proposed

 

-20-

Replacement Purchaser Group is reasonably acceptable to the Administrative Agent. No replacement of an Exiting Note Purchaser Group shall be effected pursuant to this subsection 2.4(d) if, after giving effect thereto, any amounts shall be owing to any replaced member of such Exiting Note Purchaser Group hereunder. Each member of the Exiting Note Purchaser Group hereby agrees to take all actions necessary to permit the members of the Replacement Note Purchaser Group to succeed to its rights and obligations hereunder.

 

2.5 Indemnification .

 

(a) The Issuer and ALS agree to jointly and severally indemnify and hold harmless the Administrative Agent, each Agent, each Note Purchaser and each Affected Party and any director, officer, employee or agent thereof (each such Person being an “ Indemnitee ”) from and against any and all claims, damages, losses, liabilities, costs or expenses (including reasonable fees and out-of-pocket expenses of counsel) whatsoever (including claims under federal or state securities laws), which the Indemnitee incurs (or which may be claimed against the Indemnitee) by reason of or in connection with (i) the failure of the offer and sale by or on behalf of the Issuer, the Transferor or any of their affiliates of the Notes in accordance with this Agreement and the other Basic Documents to comply with applicable law, (ii) the failure by the Issuer, the Transferor, ALS or the Servicer (if the Servicer is ALS or an Affiliate thereof) to comply with any covenant set forth in this Agreement or any other Basic Document (provided that ALS shall not be liable for any indemnity arising under this clause (ii) as a result of the Issuer’s failure to increase or replenish the Letter of Credit after the Closing Date pursuant to Section 3.27 of the Indenture), (iii) reliance on any written false representation or warranty made (including reaffirmation) by the Issuer, the Transferor, ALS or the Servicer (if the Servicer is ALS or an Affiliate thereof) set forth in this Agreement or any other Basic Document, (iv) the failure to vest in the Indenture Trustee a first priority perfected security interest in the Trust Estate, (v) any failure of ALS, as Servicer or otherwise, to perform its duties or obligations in accordance with the provisions of this Agreement or any of the other Basic Documents, (vi) third party claims arising from the commingling of Collections by the Issuer, the Servicer or the Transferor at any time with its other funds or the funds of another Person, (vii) claims by third parties (including parties to the Basic Documents only at a time when a Rapid Amortization Event exists and at all times excluding claims arising among the Agents, the Administrative Agent and the Note Purchasers) arising out of the servicing of the Loans or Receivables, the use or ownership of the Equipment, or the repossession (other than Losses related to a decline in value of the Equipment repossessed) or operation by the Servicer or any Affiliate thereof of any item of Equipment or collateral therefore, but only so long as and with respect for actions taken while ALS is the Servicer, (viii) any statement, omission or act in connection with the offering, issuance, sale or delivery of any of the Notes and (ix) claims by third parties relating to products liability, lender liability or any other claims by third parties (including parties to the Basic Documents only at a time when a Rapid Amortization Event exists and at all times excluding claims arising among the Agents, the Administrative Agent and the Note Purchasers) arising from the transactions contemplated by this Agreement or any other Basic Document, except (A) to the extent that any such claim, damage, loss, liability, cost or expense shall be caused by the bad faith, willful misconduct or gross negligence of an Indemnitee within the same Equipment Loan Purchaser Group or Receivables Purchaser Group, as applicable, as the Indemnitee making the claim in performing its obligations under this Agreement, (B) for recourse as a result of nonpayment by Obligors for credit reasons on the Accounts or the related Equipment Loans, (C)

 

-21-

for recourse as a result of nonpayment by Obligors for credit reasons on the Accounts or the related Receivables or (D) to the extent the same constitute consequential, special or punitive damages. Subject to the limitations set forth above, but without limiting the generality of the foregoing, the Issuer agrees to indemnify and hold harmless each Indemnitee from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including at any time following the payment of the obligations under this Agreement, including payment of the Equipment Loan Note Principal Balance and payment of the Receivables Note Principal Balance) be imposed on, incurred by or asserted against such Indemnitee in any way relating to or arising out of this Agreement, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by any Indemnitee under or in connection with any of the foregoing; provided that the Issuer shall not be liable under this sentence for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of an Indemnitee within the same Equipment Loan Purchaser Group or Receivables Purchaser Group, as applicable, as the Indemnitee making the claim resulting from its own gross negligence or willful misconduct. Promptly after receipt by an Indemnitee of notice of the commencement of any action, such Indemnitee, as the case may be, will, if a claim in respect thereof is to be made under this subsection 2.5(a) , notify the Issuer and the Transferor in writing of the commencement thereof; provided , however , the omission to so notify the Issuer or the Transferor will not relieve the Issuer or the Transferor from any liability which it may have to such Indemnitee under this subsection 2.5(a) except to the extent the Issuer or the Transferor was actually prejudiced by the failure to give such notices promptly. Amounts owing under this Section 2.5(a) by the Issuer shall be due and payable in accordance with Section 8.2 of the Indenture.

 

(b) If any action or proceeding (including any governmental investigation) shall be brought or asserted against any Indemnitee in respect of which the indemnity provided above may be sought from ALS or the Issuer (the “ Indemnifying Party ”) each such Indemnitee shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party may, within a reasonable time, irrevocably assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnitee and the payment of all expenses and reasonable legal fees; provided that failure to notify the Indemnifying Party shall not relieve it from any liability it may have to such Indemnitee except to the extent that it shall be actually prejudiced thereby; provided , further , that, the Indemnifying Party shall not be entitled to assume the defense of any such action or proceeding (i) unless the Indemnifying Party shall have acknowledged in writing to the Indemnitee that such action or proceeding is covered by the indemnification set forth in Section 2.5(a) , (ii) if the proceeding is a governmental proceeding involving the possible imposition of any criminal liability or penalty, (iii) if the relief sought in such action or proceeding is the seeing of injunctive relief against the Indemnifying Party affecting property, assets or activity not related to this transaction, or (iv) in the reasonable opinion of the Indemnitee, such defense or compromise involves a conflict of interest between such Indemnitee and an Indemnifying Party. The Indemnitee shall have the right to employ separate counsel in any such action and to participate in the defense thereof at the expense of the Indemnitee; provided , however that the fees and expenses of separate counsel to the Indemnitee in any such proceeding shall be at the expense of the Indemnifying Party if (i) the Indemnifying Party has agreed to pay such fees and expenses, (ii) the Indemnifying Party shall have failed to assume the defense of such action or proceeding or employ counsel reasonably satisfactory to the

 

-22-

Indemnitee in any such action or proceeding within a reasonable time after the commencement of such action or (iii) the named parties to any such action or proceeding (including any impleaded parties) include both the Indemnitee and the Indemnifying Party, and the Indemnitee shall have been advised in writing by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Indemnifying Party which gives rise to a conflict of interest (in which case, if the Indemnitee notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnitee, it being understood, however, that the Indemnifying Party shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys at any time for the Indemnified Parties, which firm shall be designated in writing by the Indemnitee and shall be reasonably acceptable to the Indemnitee). The Indemnifying Party shall not be liable for any settlement of any such action or proceeding effected without its written consent to the extent that any such settlement shall be prejudicial to the Indemnifying Party (to which the Indemnified Party did not consent), but, if settled with its written consent, or if there is a final non-appealable judgment for the plaintiff in any such action or proceeding with respect to which the Indemnifying Party shall have received notice in accordance with this paragraph, the Indemnifying Party agrees to indemnify and hold the Indemnitees harmless from and against any loss or liability by reason of such settlement or judgment.

 

(c) Any Successor Servicer, by accepting its appointment pursuant to the Pooling and Servicing Agreement, (i) shall agree to be bound by the terms, covenants and conditions contained herein applicable to the Servicer and to be subject to the duties and obligations of the Servicer hereunder, (ii) as of the date of its acceptance, shall be deemed to have made with respect to itself only the representations and warranties made by the Servicer in Section 4.2 (with appropriate factual changes) and (iii) shall agree to indemnify and hold harmless any Indemnitee from and against any and all claims, damages, losses, liabilities, costs or expenses (including the fees and expenses of counsel) whatsoever which such Indemnitee may incur (or which may be claimed against such Indemnitee) by reason of the bad faith, negligence or willful misconduct of such Servicer in exercising its powers and carrying out its obligations under this Agreement, the Pooling and Servicing Agreement or any Related Document.

 

(d) In the event that for any reason, any Note Purchaser receives any repayment of (i) its share of the Equipment Loan Note Principal Balance (A) other than on a Distribution Date or (B) on a Distribution Date if less than 2 Business Days’ prior notice of such Distribution Date repayment is received (which notice must specify the amount of such repayment), or (ii) its share of the Receivables Note Principal Balance upon fewer than 1 Business Day’s prior written notice no later than 3:00 p.m., New York City time (which notice must specify the amount of such repayment), then in any such case the Issuer agrees to indemnify and hold harmless each affected Note Purchaser against, and to promptly pay on demand directly to such Note Purchaser the amount equal to any loss, cost or expense incurred or suffered by such Note Purchaser as a result of such change, repayment or other action, including any hedge breakage costs and any loss, cost or reasonable out-of-pocket expense incurred or suffered by such Note Purchaser (other than loss of profit) by reason of any prepayment expense

 

-23-

incurred or suffered by reason of the liquidation on redeployment of deposits or other funds prepaid, repaid or otherwise acquired by such Note Purchaser, in amounts which correspond to its share of the Equipment Loan Note Principal Balance or Receivables Note Purchase Balance, as applicable. A statement setting forth in reasonable detail the calculations of any additional amounts payable pursuant to this Section 2.5 submitted by a Note Purchaser, an Agent, or the Administrative Agent, as the case may be, to the Issuer, the Transferor and the