Document:

Exhibit 4.65

 

TAL ADVANTAGE III LLC
 Issuer

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
 Indenture Trustee

 

 

AMENDED AND RESTATED INDENTURE

 

Dated as of August 12, 2011

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
4
    
	
 
    	
 
    	
 
    
	
Section 101.
    	
Defined Terms
    	
4
    
	
Section 102.
    	
Other Definitional Provisions
    	
4
    
	
Section 103.
    	
Computation of Time Periods
    	
4
    
	
Section 104.
    	
Duties of Administrative Agent
    	
4
    
	
Section 105.
    	
General Interpretive Principles
    	
5
    
	
Section 106.
    	
Statutory References
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE II THE NOTES
    	
5
    
	
 
    	
 
    	
 
    
	
Section 201.
    	
Authorization of Notes
    	
5
    
	
Section 202.
    	
Form of Notes; Global Notes
    	
6
    
	
Section 203.
    	
Execution; Recourse Obligation
    	
8
    
	
Section 204.
    	
Certificate of Authentication
    	
9
    
	
Section 205.
    	
Registration; Registration of Transfer and Exchange of Notes
    	
9
    
	
Section 206.
    	
Mutilated Destroyed, Lost and Stolen Notes
    	
12
    
	
Section 207.
    	
Delivery, Retention and Cancellation of Notes
    	
13
    
	
Section 208.
    	
ERISA Deemed Representations
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE III PAYMENT OF   NOTES; STATEMENTS TO NOTEHOLDERS
    	
13
    
	
 
    	
 
    
	
Section 301.
    	
Principal and Interest
    	
13
    
	
Section 302.
    	
Trust Account
    	
14
    
	
Section 303.
    	
Investment of Monies Held in the Trust Account, the   Restricted Cash Account, and Series Accounts; Control over Eligible   Investments
    	
20
    
	
Section 304.
    	
Reports to Noteholders
    	
22
    
	
Section 305.
    	
Records
    	
23
    
	
Section 306.
    	
Restricted Cash Account
    	
23
    
	
Section 307.
    	
CUSIP Numbers
    	
24
    
	
Section 308.
    	
No Claim
    	
24
    
	
Section 309.
    	
Compliance with Withholding Requirements
    	
24
    
	
Section 310.
    	
Tax Treatment of Notes
    	
24
    
	
 
    	
 
    	
 
    
	
ARTICLE IV COLLATERAL
    	
24
    
	
 
    	
 
    
	
Section 401.
    	
Collateral
    	
24
    
	
Section 402.
    	
Pro Rata Interest
    	
25
    
	
Section 403.
    	
Indenture Trustee’s Appointment as Attorney-in-Fact
    	
26
    
	
Section 404.
    	
Release of Security Interest
    	
27
    
	
Section 405.
    	
Administration of Collateral
    	
27
    
	
Section 406.
    	
Quiet Enjoyment
    	
29
    
	
 
    	
 
    	
 
    
	
ARTICLE V RIGHTS OF   NOTEHOLDERS; ALLOCATION AND APPLICATION OF COLLECTIONS; REQUISITE GLOBAL   MAJORITY
    	
29
    
	
 
    	
 
    
	
Section 501.
    	
Rights of Noteholders
    	
29
    

 

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TABLE OF CONTENTS
  (continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 502.
    	
Collections and Allocations
    	
30
    
	
Section 503.
    	
Determination of Requisite Global Majority
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE VI COVENANTS
    	
30
    
	
 
    	
 
    
	
Section 601.
    	
Payment of Principal and Interest; Payment of Taxes
    	
30
    
	
Section 602.
    	
Maintenance of Office
    	
30
    
	
Section 603.
    	
Corporate Existence
    	
31
    
	
Section 604.
    	
Protection of Collateral
    	
31
    
	
Section 605.
    	
Performance of Obligations
    	
32
    
	
Section 606.
    	
Negative Covenants
    	
32
    
	
Section 607.
    	
Corporate Separateness of the Issuer
    	
34
    
	
Section 608.
    	
No Bankruptcy Petition
    	
35
    
	
Section 609.
    	
Liens
    	
35
    
	
Section 610.
    	
Other Debt
    	
35
    
	
Section 611.
    	
Guarantees, Loans, Advances and Other Liabilities
    	
35
    
	
Section 612.
    	
Consolidation, Merger and Sale of Assets
    	
36
    
	
Section 613.
    	
Other Agreements; Amendment of Transaction Documents
    	
36
    
	
Section 614.
    	
Charter Documents
    	
36
    
	
Section 615.
    	
Capital Expenditures
    	
36
    
	
Section 616.
    	
Permitted Activities; Compliance with Organizational   Documents
    	
36
    
	
Section 617.
    	
Investment Company Act
    	
37
    
	
Section 618.
    	
Payments of Collateral
    	
37
    
	
Section 619.
    	
Notices
    	
37
    
	
Section 620.
    	
Books and Records
    	
37
    
	
Section 621.
    	
Subsidiaries
    	
37
    
	
Section 622.
    	
Investments
    	
37
    
	
Section 623.
    	
Use of Proceeds
    	
37
    
	
Section 624.
    	
Asset Base Certificate
    	
38
    
	
Section 625.
    	
Financial Statements
    	
38
    
	
Section 626.
    	
UNIDROIT Convention
    	
39
    
	
Section 627.
    	
Other Information
    	
39
    
	
Section 628.
    	
Hedging Requirement
    	
39
    
	
Section 629.
    	
Ownership of Issuer
    	
40
    
	
Section 630.
    	
[Intentionally Omitted]
    	
40
    
	
Section 631.
    	
Tax Election of the Issuer
    	
40
    
	
Section 632.
    	
Rating Agency Notices
    	
40
    
	
Section 633.
    	
Compliance with Law
    	
40
    
	
Section 634.
    	
OFAC
    	
40
    
	
 
    	
 
    	
 
    
	
ARTICLE VII DISCHARGE OF   INDENTURE; PREPAYMENTS
    	
41
    
	
 
    	
 
    	
 
    
	
Section 701.
    	
Full Discharge
    	
41
    
	
Section 702.
    	
Prepayment of Notes
    	
41
    
	
Section 703.
    	
Unclaimed Funds
    	
42
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII DEFAULT   PROVISIONS AND REMEDIES
    	
43
    
	
 
    	
 
    
	
Section 801.
    	
Event of Default
    	
43
    

 

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TABLE OF CONTENTS
  (continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 802.
    	
Acceleration of Stated Maturity; Rescission and Annulment
    	
47
    
	
Section 803.
    	
Collection of Indebtedness
    	
48
    
	
Section 804.
    	
Remedies
    	
48
    
	
Section 805.
    	
Indenture Trustee May Enforce Claims Without   Possession of Notes
    	
49
    
	
Section 806.
    	
Allocation of Money Collected
    	
49
    
	
Section 807.
    	
Limitation on Suits
    	
51
    
	
Section 808.
    	
Unconditional Right of Noteholders to Receive   Principal, Interest and Commitment Fees
    	
52
    
	
Section 809.
    	
Restoration of Rights and Remedies
    	
52
    
	
Section 810.
    	
Rights and Remedies Cumulative
    	
52
    
	
Section 811.
    	
Delay or Omission Not Waiver
    	
52
    
	
Section 812.
    	
Control by Requisite Global Majority
    	
53
    
	
Section 813.
    	
Waiver of Past Defaults
    	
53
    
	
Section 814.
    	
Undertaking for Costs
    	
53
    
	
Section 815.
    	
Waiver of Stay or Extension Laws
    	
54
    
	
Section 816.
    	
Sale of Collateral
    	
54
    
	
Section 817.
    	
Action on Notes
    	
55
    
	
 
    	
 
    	
 
    
	
ARTICLE IX CONCERNING THE   INDENTURE TRUSTEE
    	
55
    
	
 
    	
 
    
	
Section 901.
    	
Duties of the Indenture Trustee
    	
55
    
	
Section 902.
    	
Certain Matters Affecting the Indenture Trustee
    	
56
    
	
Section 903.
    	
Indenture Trustee Not Liable
    	
57
    
	
Section 904.
    	
Indenture Trustee May Own Notes
    	
58
    
	
Section 905.
    	
Indenture Trustee’s Fees and Expenses
    	
58
    
	
Section 906.
    	
Eligibility Requirements for the Indenture Trustee
    	
59
    
	
Section 907.
    	
Resignation and Removal of the Indenture Trustee
    	
59
    
	
Section 908.
    	
Successor Indenture Trustee
    	
60
    
	
Section 909.
    	
Merger or Consolidation of the Indenture Trustee
    	
61
    
	
Section 910.
    	
Separate Indenture Trustees, Co-Indenture Trustees and   Custodians
    	
61
    
	
Section 911.
    	
Representations and Warranties
    	
62
    
	
Section 912.
    	
Indenture Trustee Offices
    	
63
    
	
Section 913.
    	
Notice of Event of Default
    	
63
    
	
Section 914.
    	
Notices
    	
63
    
	
 
    	
 
    	
 
    
	
ARTICLE X   SUPPLEMENTAL INDENTURES
    	
64
    
	
 
    	
 
    	
 
    
	
Section 1001.
    	
Supplemental Indentures Not Creating a New   Series Without Consent of Noteholders
    	
64
    
	
Section 1002.
    	
Supplemental Indentures Not Creating a New Series with   Consent of Noteholders
    	
65
    
	
Section 1003.
    	
Execution of Supplemental Indentures
    	
66
    
	
Section 1004.
    	
Effect of Supplemental Indentures
    	
67
    
	
Section 1005.
    	
Reference in Notes to Supplemental Indentures
    	
67
    
	
Section 1006.
    	
Issuance of Series of Notes
    	
67
    
	
 
    	
 
    	
 
    
	
ARTICLE XI NOTEHOLDERS LISTS
    	
68
    
	
 
    	
 
    	
 
    
	
Section 1101.
    	
Issuer to Furnish Indenture Trustee Names and Addresses of   Noteholders
    	
68
    

 

iii

 

TABLE OF CONTENTS
  (continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 1102.
    	
Preservation of Information; Communications to Noteholders
    	
69
    
	
 
    	
 
    	
 
    
	
ARTICLE XII EARLY   AMORTIZATION EVENTS
    	
69
    
	
 
    	
 
    
	
Section 1201.
    	
Early Amortization Events
    	
69
    
	
Section 1202.
    	
Remedies
    	
70
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII MISCELLANEOUS   PROVISIONS
    	
70
    
	
 
    	
 
    	
 
    
	
Section 1301.
    	
Compliance Certificates and Opinions
    	
70
    
	
Section 1302.
    	
Form of Documents Delivered to Indenture Trustee
    	
70
    
	
Section 1303.
    	
Acts of Noteholders
    	
71
    
	
Section 1304.
    	
Inspection
    	
72
    
	
Section 1305.
    	
Limitation of Right
    	
72
    
	
Section 1306.
    	
Severability
    	
72
    
	
Section 1307.
    	
Notices
    	
73
    
	
Section 1308.
    	
Consent to Jurisdiction
    	
74
    
	
Section 1309.
    	
Captions
    	
74
    
	
Section 1310.
    	
Governing Law
    	
74
    
	
Section 1311.
    	
No Petition
    	
74
    
	
Section 1312.
    	
WAIVER OF JURY TRIAL
    	
75
    
	
Section 1313.
    	
Waiver of Immunity
    	
75
    
	
Section 1314.
    	
Judgment Currency
    	
75
    
	
Section 1315.
    	
[Reserved]
    	
76
    
	
Section 1316.
    	
Consents and Approvals
    	
76
    
	
Section 1317.
    	
Counterparts
    	
76
    
	
Section 1318.
    	
Transactions under Original Indenture
    	
76
    

 

	
Schedule   I
    	
Maximum   Concentrations for Lessees
    
	
 
    	
 
    	
 
    
	
EXHIBIT A
    	
—
    	
Form of   Non-Recourse Release
    
	
EXHIBIT B
    	
—
    	
Investment   Letter
    
	
EXHIBIT C
    	
—
    	
Form of   Control Agreement
    
	
EXHIBIT D
    	
—
    	
Depreciation   Methods by Type of Managed Container
    
	
EXHIBIT E
    	
—
    	
Form of   Asset Base Certificate
    
	
EXHIBIT F
    	
 
    	
Interest   Rate Hedge Agreement Policy
    
	
 
    	
 
    	
 
    
	
APPENDIX   A
    	
—
    	
Master   Index of Defined Terms
    
				

 

iv

 

This AMENDED AND RESTATED INDENTURE, dated as of August 12, 2011 (as amended, modified or supplemented from time to time as permitted hereby, this “Indenture”), between TAL ADVANTAGE III LLC, a limited liability company organized under the laws of Delaware  (the “Issuer”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as the Indenture Trustee (the “Indenture Trustee”).

 

WHEREAS, the Issuer desires to issue Notes pursuant to this Indenture;

 

WHEREAS, the Notes will be full recourse obligations of the Issuer and will be secured by the Collateral;

 

WHEREAS, all acts and things have been done and performed which are necessary to make the Notes, when executed by the Issuer, authenticated by the Indenture Trustee and issued, the legal, valid and binding obligations of the Issuer, enforceable in accordance with their terms, and to make this Indenture a valid and binding agreement for the security of the Notes authenticated and delivered under this Indenture and the payment of all Outstanding Obligations;

 

WHEREAS, on October 23, 2009, the Issuer and the Indenture Trustee entered into an Indenture (as previously amended, the “Original Indenture”); and

 

WHEREAS, the parties hereto have agreed to amend and restate the Original Indenture as of the Restatement Effective Date;

 

NOW, THEREFORE, each party agrees as follows for the benefit of the other party, the Noteholders, each Series Enhancer, if any, and each Hedge Counterparty.

 

GRANTING CLAUSE

 

To secure the payment of all Outstanding Obligations and the performance of all of the Issuer’s covenants and agreements in this Indenture and all other Transaction Documents, the Issuer hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers to the Indenture Trustee, for the benefit of Noteholders, each Series Enhancer, if any, and each Hedge Counterparty, a security interest in and to all of the Issuer’s right, title and interest in, to and under the following, whether now existing or hereafter created or acquired: (i) the Managed Containers (including any and all substitutions therefor acquired from time to time) and other Transferred Assets, (ii) the Trust Account, the Restricted Cash Account, any Series Account and all amounts and Eligible Investments, Financial Assets, Investment Property, Securities Entitlements and all other instruments, assets or amounts credited to any of the foregoing or otherwise on deposit from time to time in the foregoing, (iii) the Contribution and Sale Agreement, all Hedge Agreements, the Management Agreement and the Intercreditor Agreement, (iv) all other assets and properties of the Issuer, whether now existing or hereafter acquired, (v) all income, payments and proceeds of the foregoing and all other assets granted, assigned, conveyed, mortgaged, pledged, hypothecated and transferred to the Indenture Trustee pursuant to this clause, and (vi) all of the following, whether now existing or hereafter acquired:

 

(a)           All Accounts;

 

(b)           All Chattel Paper;

 

 

(c)           All Lease Agreements;

 

(d)           All Contracts;

 

(e)           All Documents;

 

(f)            All General Intangibles;

 

(g)           All Instruments;

 

(h)           All Inventory;

 

(i)            All Supporting Obligations;

 

(j)            All Equipment;

 

(k)           All Letter-of-Credit Rights;

 

(l)            All Commercial Tort Claims;

 

(m)          All Investment Property;

 

(n)           All Deposit Accounts;

 

(o)           All property of the Issuer held by the Indenture Trustee including, without limitation, all property of every description now or hereafter in the possession or custody of or in transit to the Indenture Trustee for any purpose, including, without limitation, safekeeping, collection or pledge, for the account of the Issuer, or as to which the Issuer may have any right or power;

 

(p)           To the extent not included above and without limiting the foregoing, all Chattel Paper, all Leases and all schedules, supplements, amendments, modifications, renewals, extensions, and guarantees thereof in every case whether now owned or hereafter acquired and all amounts, rentals, proceeds and other sums of money due and to become due under the Container Related Agreements, including (in each case only to the extent related to the Managed Containers), without limitation, (i) all rentals, payments and other monies, including all insurance payments and claims for losses due and to become due to the Issuer under, and all claims for damages arising out of the breach of, any Container Related Agreement; (ii) the right of the Issuer to terminate, perform under, or compel performance of the terms of the Container Related Agreements; (iii) any guarantee of the Container Related Agreements and (iv) any rights of the Issuer in respect of any subleases or assignments permitted under the Container Related Agreements;

 

(q)           All insurance proceeds of the Collateral and all proceeds of the voluntary or involuntary disposition of the Collateral or such proceeds;

 

(r)            Any and all payments made or due to the Issuer in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Authority and any other cash or non-cash receipts from the sale, exchange, collection or other disposition of the Collateral; and

 

2

 

(s)           To the extent not otherwise included, all income and Proceeds of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing.

 

All of the property described in this Granting Clause is herein collectively called the “Collateral” and as such is security for all Outstanding Obligations; provided that notwithstanding anything to the contrary in this Indenture, Collateral shall not include monies paid to the Issuer under this Indenture, including monies received by the Issuer pursuant to Section 302 or Section 806; provided further, that  notwithstanding the foregoing Grant, (i) no account, instrument, chattel paper or other obligation or property of any kind due from, owed by, or belonging to, a Sanctioned Person, and (ii) no Lease in which the Lessee is a Sanctioned Person, shall, in either instance, constitute Collateral.

 

The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the provisions hereof, and agrees to perform the duties herein required as hereinafter provided.  Notwithstanding the foregoing, the Indenture Trustee does not assume, and shall have no liability to perform, any of the Issuer’s obligations under any agreement included in the Collateral and shall have no liability arising from the failure of the Issuer or any other Person to duly perform any such obligations.

 

3

 

ARTICLE I

 

DEFINITIONS

 

Section 101.           Defined Terms.  Capitalized terms used in this Indenture shall have the meanings set forth in Appendix A hereto and the definitions of such terms shall be equally applicable to both the singular and plural forms of such terms.

 

Section 102.           Other Definitional Provisions.  (a)  With respect to any Series, all terms used herein and not otherwise defined herein shall have meanings ascribed to such terms in the related Supplement.

 

(b)           As used in this Indenture and in any certificate or other document made or delivered pursuant hereto, accounting terms not defined in this Indenture or in any such certificate or other document, and accounting terms partly defined in this Indenture or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under GAAP consistently applied. To the extent that the definitions of accounting terms in this Indenture or in any such certificate or other document are inconsistent with the meanings of such terms under GAAP or regulatory accounting principles, the definitions contained in this Indenture or in any such certificate or other document shall control.

 

(c)           With respect to any Collection Period, the “related Record Date,” the “related Determination Date,” and the “related Payment Date” shall mean the Record Date occurring on the last Business Day of such Collection Period and the Determination Date and Payment Date occurring in the month immediately following the end of such Collection Period.

 

(d)           With respect to any Series of Notes, the “related Supplement” shall mean the Supplement pursuant to which such Series of Notes is issued and the “related Series Enhancer” shall mean the Series Enhancer for such Series of Notes.

 

(e)           With respect to any ratio analysis required to be performed as of the most recently completed fiscal quarter of a Person, the most recently completed fiscal quarter shall mean the most recently completed fiscal quarter for which financial statements were required hereunder to have been delivered.

 

(f)            With respect to the calculations of the ratios set forth in this Indenture, the components of such calculations are to be determined in accordance with GAAP, consistently applied, with respect to the Issuer or the Manager, as the case may be.

 

Section 103.           Computation of Time Periods.  Unless otherwise stated in this Indenture or any Supplement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding.”

 

Section 104.           Duties of Administrative Agent.  All of the duties and responsibilities of the Administrative Agent set forth in this Indenture, any Supplement or any other Transaction Document are subject in all respects to the terms and conditions of the Administration Agreement. Each of the Issuer, the Indenture Trustee and, by acceptance of its Notes, each Noteholder hereby acknowledges the terms of the Administration Agreement and

 

4

 

agrees to cooperate with the Administrative Agent in its execution of its duties and responsibilities.

 

Section 105.           General Interpretive Principles.  For purposes of this Indenture (including Appendix A hereto) except as otherwise expressly provided or unless the context otherwise requires:

 

(a)           the defined terms in this Indenture shall include the plural as well as the singular, and the use of any gender herein shall be deemed to include any other gender;

 

(b)           references herein to “Articles”, “Sections”, “Subsections”, “paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, paragraphs and other subdivisions of this Indenture;

 

(c)           a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to paragraphs and other subdivisions;

 

(d)           the words “herein”, “hereof’, “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular provision;

 

(e)           the term “include” or “including” shall mean without limitation by reason of enumeration; and

 

(f)            When referring to Section 302 or Section 806 of this Indenture, the term “or” shall be additive and not exclusive.

 

Section 106.           Statutory References.  References in this Indenture to any section of the Uniform Commercial Code or the UCC shall mean, on or after the effective date of adoption of any revision to the Uniform Commercial Code or the UCC in the applicable jurisdiction, such revised or successor section thereto.

 

ARTICLE II

 

THE NOTES

 

Section 201.           Authorization of Notes.  (a)  The number of Series or Classes of Notes which may be created by this Indenture is not limited; provided, however, that, the issuance of any Series of Notes shall not result in, or with the giving of notice or the passage of time or both would not result in, the occurrence of an Early Amortization Event or an Event of Default. The aggregate principal amount of Notes of each Series which may be issued, authenticated and delivered under this Indenture is not limited except as shall be set forth in any Supplement and as restricted by the provisions of this Indenture.

 

(b)           The Notes issuable under this Indenture shall be issued in such Series, and such Class or Classes within a Series, as may from time to time be created by Supplement pursuant to this Indenture. Each Series shall be created by a different Supplement and shall be designated to differentiate the Notes of such Series from the Notes of any other Series. The

 

5

 

Issuer intends that each such Note shall constitute a “security” within the meaning of Article 8 of the UCC.

 

(c)           Upon satisfaction of and compliance with the requirements and conditions to Closing set forth in the related Supplement, Notes of the Series to be executed and delivered on a particular Series Issuance Date pursuant to such related Supplement, may be executed by the Issuer and delivered to the Indenture Trustee for authentication following the execution and delivery of the related Supplement creating such Series or from time to time thereafter, and the Indenture Trustee shall authenticate and deliver Notes upon a request set forth in an Officer’s Certificate of the Issuer signed by one of its Authorized Signatories, without further action on the part of the Issuer.

 

Section 202.           Form of Notes; Global Notes.  (a)  Notes of any Series or Class (other than Subject Notes) may be issued, authenticated and delivered, at the option of the Issuer, as Regulation S Global Notes, Rule 144A Global Notes, or as Definitive Notes or as may otherwise be set forth in a Supplement and shall be substantially in the form of the exhibits attached to the related Supplement. Notes of each Series shall be dated the date of their authentication and shall bear interest at such rate, be payable as to principal, premium, if any, and interest on such date or dates, and shall contain such other terms and provisions as shall be established in the related Supplement. Except as otherwise provided in any Supplement, the Notes shall be issued in minimum denominations of $15,000,000 and in integral multiples of $1,000,000 in excess thereof; provided that one Note of each Class may be issued in a nonstandard denomination.  Notwithstanding any other provision of this Indenture or any Supplement thereto, Subject Notes shall only be issued in certificated form.

 

(b)           If the Issuer shall choose to issue Regulation S Global Notes or Rule 144A Global Notes, such notes shall be issued in the form of one or more Regulation S Global Notes or one or more Rule 144A Global Notes which (i) shall represent, and shall be denominated in an aggregate amount equal to, the aggregate principal amount of all Notes to be issued under the related Supplement, (ii) shall be delivered as one or more Notes held by the Book-Entry Custodian, or, if appointed to hold such Notes as provided below, the Notes shall be registered in the name of the Depositary or its nominee, (iii) shall be substantially in the form of the exhibits attached to the related Supplement, with such changes therein as may be necessary to reflect that each such Note is a Global Note, and (iv) shall each bear a legend substantially to the effect included in the form of the exhibits attached to the related Supplement.

 

(c)           Notwithstanding any other provisions of this Section 202 or of Section 205, unless and until a Global Note is exchanged in whole for Definitive Notes, a Global Note may be transferred, in whole, but not in part, and in the manner provided in this Section 202, only by (i) the Depositary to a nominee of such Depositary, or (ii) by a nominee of such Depositary to such Depositary or another nominee of such Depositary or (iii) by such Depositary or any such nominee to a successor Depositary selected or approved by the Issuer or to a nominee of such successor Depositary or in the manner specified in Section 202(d). The Depositary or the Issuer shall order the Note Registrar to authenticate and deliver any Global Notes and any Global Note for each Class of Notes having an aggregate initial outstanding principal balance equal to the initial outstanding balance of such Class. Noteholders shall hold their respective Ownership Interests in and to such Notes through the book-entry facilities of the

 

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Depositary. Without limiting the foregoing, any Noteholders shall hold their respective Ownership Interests, if any, in Global Notes only through Depositary Participants.

 

(d)           If (i) the Issuer elects to issue Definitive Notes, (ii) the Depositary for the Notes represented by one or more Global Notes at any time notifies the Issuer that it is unwilling or unable to continue as Depositary of the Notes or if at any time the Depositary shall no longer be a clearing agency registered under the Exchange Act, and a successor Depositary is not appointed or approved by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such condition, as the case may be, (iii) the Indenture Trustee, at the written direction of the Control Party for a Series, elects to terminate the book-entry system through the Depositary for such Series or (iv) after an Event of Default or a Manager Default, the Control Party for a Series notifies the Depositary or Book-Entry Custodian for such Series, as the case may be, in writing that the continuation of a book-entry system through the Depositary or the Book-Entry Custodian, as the case may be, is no longer in the best interest of the Noteholders of such Series, the Issuer will promptly execute, and the Indenture Trustee, upon receipt of an Officer’s Certificate evidencing such determination by the Issuer, will promptly authenticate and make available for delivery, Definitive Notes, in authorized denominations and in an aggregate principal amount equal to the principal amount of one or more Global Notes so exchanged in exchange for such one or more Global Notes or as an original issuance of Notes and this Section 202(d) shall no longer be applicable to the Notes of such Series. Upon the exchange of the Global Notes for such Definitive Notes without coupons, in authorized denominations, such Global Notes shall be canceled by the Indenture Trustee. All Definitive Notes shall be issued without coupons. Such Definitive Notes issued in exchange of the Global Notes pursuant to this Section 202(d) shall be registered in such names and in such authorized denominations as the Depositary in the case of an exchange or the Note Registrar in the case of an original issuance, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Indenture Trustee. The Indenture Trustee may conclusively rely on any such instructions furnished by the Depositary or the Note Registrar, as the case may be, and shall not be liable for any delay in delivery of such instructions. The Indenture Trustee shall make such Notes available for delivery to the Persons in whose names such Notes are so registered.

 

(e)           As long as the Notes Outstanding are represented by one or more Global Notes:

 

(1)                                  the Note Registrar and the Indenture Trustee may deal with the Depositary for all purposes (including the payment of principal of and interest on the Notes) as the authorized representative of the Note Owners;

 

(2)                                  the rights of Note Owners shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such Note Owners and the Depositary or the Depositary Participants. Unless and until Definitive Notes are issued, the Depositary will make book-entry transfers among the Depositary Participants and receive and transmit payments of principal of, and interest on, the Notes to such Depositary Participants; and

 

(3)                                  whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Noteholders evidencing a specified percentage

 

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of the voting rights of a particular Series, the Depositary shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Depositary Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes (or Class of Notes) and has delivered such instruction to the Indenture Trustee.

 

(f)            Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes have been issued to the Noteholders, the Indenture Trustee shall give all such notices and communications to the Depositary.

 

(g)           The Indenture Trustee is hereby appointed as the Book-Entry Custodian and hereby agrees to act as such in accordance with the agreement that it has with the Depositary authorizing it to act as such.  If the Indenture Trustee resigns or is removed in accordance with the terms hereof, the successor Indenture Trustee or, if it so elects, the Depositary shall immediately succeed to its predecessor’s duties as Book-Entry Custodian.  The Issuer shall have the rights to inspect, and to obtain copies of, any Notes held as Global Notes by the Book-Entry Custodian.

 

(h)           The provisions of Section 205(g) shall apply to all transfers of Definitive Notes, if any, issued in respect of Ownership Interests in the Rule 144A Global Notes.

 

Section 203.           Execution; Recourse Obligation.  The Notes shall be executed on behalf of the Issuer by an Authorized Signatory of the Issuer.  The Notes shall be dated the date of their authentication by the Indenture Trustee.

 

In case any Authorized Signatory of the Issuer whose signature shall appear on the Notes shall cease to be an Authorized Signatory of the Issuer before the authentication by the Indenture Trustee and delivery of such Notes, such signature or facsimile signature shall nevertheless be valid and sufficient for all purposes.

 

All Notes and the interest and other amounts payable thereon shall be full recourse obligations of the Issuer and shall be secured by all of the Issuer’s right, title and interest in the Collateral. The Notes shall never constitute obligations of the Indenture Trustee, the Manager, the Seller or of any shareholder or any Affiliate of the Seller (other than the Issuer) or any member of the Issuer, or any officers, directors, employees or agents of any thereof, and no recourse may be had under or upon any obligation, covenant or agreement of this Indenture, any Supplement or of any Notes, or for any claim based thereon or otherwise in respect thereof, against any incorporator or against any past, present, or future owner, partner of an owner or any officer, employee or director thereof or of any successor entity, or any other Person, either directly or through the Issuer, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed that this Indenture and the obligations issued hereunder are solely obligations of the Issuer, and that no such personal liability whatever shall attach to, or is or shall be incurred by, any other Person under or by reason of this Indenture, any Supplement or any Notes or implied therefrom, or for any claim based thereon or in respect thereof, all such liability and any and all such claims being hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of such Notes. Except as provided in any Supplement, no Person

 

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other than the Issuer shall be liable for any obligation of the Issuer under this Indenture or any Note or any losses incurred by any Noteholder.

 

Section 204.           Certificate of Authentication.  No Notes shall be secured hereby or entitled to the benefit hereof or shall be or become valid or obligatory for any purpose unless there shall be endorsed thereon a certificate of authentication by the Indenture Trustee, substantially in the form set forth in the form of Note attached to the related Supplement. Such certificate on any Note shall be conclusive evidence and the only competent evidence that the Note has been duly authenticated and delivered hereunder.

 

At the written direction of the Issuer, the Indenture Trustee shall authenticate and deliver the Notes. It shall not be necessary that the same signatory of the Indenture Trustee execute the certificate of authentication on each of the Notes.

 

Section 205.           Registration; Registration of Transfer and Exchange of Notes.

 

(a)           The Indenture Trustee shall keep at its Corporate Trust Office books for the registration and transfer of the Notes (the “Note Register”).  The Issuer hereby appoints the Indenture Trustee as its registrar (the “Note Registrar”) and transfer agent to keep such books and make such registrations and transfers as are hereinafter set forth in this Section 205 and also authorizes and directs the Indenture Trustee to provide a copy of such registration record to each of the Administrative Agent and the Manager upon their request. The names and addresses of the Noteholders and all transfers of, and the names and addresses of the transferee of, all Notes will be registered in such Note Register. The Person in whose name any Note is so registered shall be deemed and treated as the owner and Noteholder thereof for all purposes of this Indenture, and none of the Indenture Trustee, any Series Enhancer, the Note Registrar or the Issuer shall be affected by any notice or knowledge to the contrary.

 

(b)           Payments of principal, premium, if any, and interest on any Note shall be payable on each Payment Date only to the Person that was the Noteholder thereof on the Record Date immediately preceding such Payment Date. The principal of, premium, if any, and interest on each Note shall be payable at the Corporate Trust Office of the Indenture Trustee in immediately available funds in such coin or currency of the United States of America as at the time for payment shall be legal tender for the payment of public and private debts.

 

(c)           Notwithstanding the foregoing or any provision in any Note to the contrary, if so requested by the Noteholder by written notice (given at least ten (10) days prior to the applicable Payment Date) to the Indenture Trustee, all amounts payable to such Noteholder may be paid either (i) by crediting the amount to be distributed to such Noteholder to an account maintained by such Noteholder with the Indenture Trustee or by transferring such amount by wire to such other bank in the United States, including a Federal Reserve Bank, as shall have been specified in such notice, for credit to the account of such Noteholder maintained at such bank, or (ii) by mailing a check to such address as such Noteholder shall have specified in such notice, in either case without any presentment or surrender of such Note to the Indenture Trustee at the Corporate Trust Office of the Indenture Trustee (except in the case of final payment).

 

(d)           All payments on the Notes shall be paid to the Noteholders by wire transfer of immediately available funds for receipt prior to noon (New York City time) on the

 

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related Payment Date. Any such payments received by the Noteholders after noon (New York City time) on any day shall be considered to have been received on the next succeeding Business Day; provided, however, that if the Issuer has deposited the required funds with the Indenture Trustee by close of business one (1) Business Day prior to the Payment Date, then the Issuer shall be deemed to have made such payment at the time so required on such date.  Notwithstanding the foregoing or any provision in any Note to the contrary, if so requested by the registered Noteholder by written notice to the Indenture Trustee, all amounts payable to such registered Noteholder may be paid by mailing a check to such address as such Noteholder shall have specified in such notice, in either case without any presentment or surrender of such Note to the Indenture Trustee at the Corporate Trust Office of the Indenture Trustee (except in the case of final payment).

 

(e)           Upon surrender for registration of transfer of any Note at the Corporate Trust Office, the Issuer shall execute and the Indenture Trustee, upon written request, shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of the same Series and Class, of any authorized denominations and of alike aggregate original principal amount.

 

(f)            All Notes issued upon any registration of transfer or exchange of Notes shall be the legal, valid and binding obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture and the relevant Supplement, as the Notes surrendered upon such registration of transfer or exchange.

 

(g)           Every Note presented or surrendered for registration of transfer or for exchange shall be duly endorsed, or be accompanied by a written instrument of transfer, in form satisfactory to the Issuer and the Indenture Trustee duly executed, by the Noteholder thereof or his attorney duly authorized in writing.

 

(h)           Any service charge, fees or expenses made or expense incurred by the Indenture Trustee for any such registration of transfer or exchange referred to in this Section 205 shall be paid by the applicable Noteholder. The Indenture Trustee or the Issuer may require payment by the applicable Noteholder of a sum sufficient to cover any tax, expense or other governmental charge payable in connection therewith.

 

(i)            Unless otherwise specified in the related Supplement, no transfer of any Note or interest therein shall be made unless that transfer is made pursuant to an effective registration statement under the Securities Act, and effective registration or qualification under applicable state securities laws, or is made in a transaction that does not require such registration or qualification. If a transfer of any Definitive Note is to be made without registration under the Securities Act (other than in connection with the initial issuance thereof or a transfer thereof by the Depositary or one of its Affiliates), then the Note Registrar shall refuse to register such transfer unless it receives (and upon receipt, may conclusively rely upon) either: (i) an Investment Letter signed by such Noteholder and such Noteholder’s prospective transferee; or (ii) an Opinion of Counsel satisfactory to the Indenture Trustee and the Issuer to the effect that such transfer may be made without registration under the Securities Act (which Opinion of Counsel shall not be an expense of the Issuer or any Affiliate thereof or of the Depositary, the Manager, the Indenture Trustee, any Series Enhancer or the Note Registrar in their respective capacities as such), together with the written certification(s) as to the facts surrounding such

 

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transfer from the Noteholder desiring to effect such transfer or such Noteholder’s prospective transferee on which such Opinion of Counsel is based. If such a transfer of any interest in a Global Note is to be made without registration under the Securities Act, the transferor will be deemed to have made each of the representations and warranties set forth on Exhibit B hereto in respect of such interest as if it was evidenced by a Definitive Note and the transferee will be deemed to have made each of the representations and warranties set forth in either Exhibit B hereto in respect of such interest as if it was evidenced by a Definitive Note. None of the Depositary, the Issuer, the Indenture Trustee or the Note Registrar is obligated to register or qualify any Class of Notes under the Securities Act or any other securities law or to take any action not otherwise required under this Indenture to permit the transfer of any Note or interest therein without such registration or qualification.  Any Noteholder or Note Owner desiring to effect such a transfer shall, and does hereby agree to, indemnify the Depositary, the Issuer, the Indenture Trustee and the Note Registrar against any liability that may result if any transfer made in accordance with the preceding sentence did in fact require registration under the Securities Act.

 

(j)            If Notes are issued or exchanged in definitive form under Section 202, such Notes will not be registered by the Indenture Trustee unless each prospective initial Noteholder acquiring a Note, each prospective transferee acquiring a Note and each prospective owner (or transferee thereof) of a beneficial interest in Notes (each, a “Prospective Owner”) acquiring such beneficial interest provides the Manager, the Issuer, the Indenture Trustee and any successor Manager with a written representation to the effect set forth in either (A) with respect to any Warehouse Notes, the first sentence of Section 208 or (B) with respect to any Term Note, either subsection (i) or (ii) of the second sentence of Section 208.

 

(k)           No sale, assignment or other transfer of a Note shall be effective or deemed effective if such sale, assignment or other transfer is to a Competitor (as determined by the Issuer).  Neither the Indenture Trustee nor the Issuer is under any obligation to register the Notes under the Securities Act or any other securities law or to bear any expense with respect to such registration by any other Person or monitor compliance of any transfer with the securities laws of the United States regulations promulgated in connection thereto or ERISA.

 

(l)            Any Note for which an Opinion of Counsel has not been rendered to the Issuer to the effect that such Note constitutes debt for United States federal income tax purposes (a “Subject Note”) shall be subject to the limitations of this Section 205(l).  No Subject Notes may be transferred, and no transfer (or purported transfer) of all or any part of a Subject Note (or any direct or indirect economic or beneficial interest therein) (a “Transferred Note”) whether to another Noteholder or to a Person that is not a Noteholder (a “Transferee”), shall be effective, and to the greatest extent permitted under Applicable Law any such transfer (or purported transfer) shall be void ab initio, and no Person shall otherwise become a Holder of a Subject Note, unless:  (i) the Transferee provides the Note Registrar with its representations and warranties made for the benefit of the Issuer to the effect that:  (A) either (I) it is not and will not become for U.S. federal income tax purposes a partnership, Subchapter S corporation or grantor trust (each such entity a “flow-through entity”) or (II) if it is or becomes a flow-through entity, then (x) none of the direct or indirect beneficial owners of any of the interests in the Transferee have or ever will have all or substantially all the value of its interest in the Transferee attributable to the interest of the Transferee in any Transferred Note, any other Notes, other interest (direct or indirect) in the Issuer, or any interest created under this Indenture and (y) it is not and will not be

 

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a principal purpose of the arrangement involving the investment of the Transferee in any Transferred Note to permit any partnership to satisfy the 100 partner limitation of Section 1.7704-1(h)(1)(ii) of the Treasury Regulations necessary for such partnership not to be classified as a publicly traded partnership under the Code, (B) the Transferee will not sell, assign, transfer or otherwise convey any participating interest in any Note or any financial instrument or contract the value of which is determined by reference in whole or in part to any Note, (C) it is not acquiring and will not sell, transfer, assign, participate, pledge or otherwise dispose of any Transferred Note(s) (or interest therein) or cause any Transferred Note(s) (or interest therein) to be marketed on or through an “established securities market” within the meaning of Section 7704(b) of the Code, including, without limitation, an interdealer quotation system that regularly disseminates firm buy or sell quotations, and (D) in the case of Subject Notes other than the Series 2009-1 Notes that it is a “U.S. Person” within the meaning of Section 7701(a)(30) of the Code, and (ii) after such transfer there would be no more than 90 members of the limited liability company that is the Issuer (including as members, solely for purposes of this Section 205(l), Holders of any Subject Notes and any other instruments subject to the transfer restrictions of this Section 205(l)).  The Issuer shall not recognize any prohibited Transfer described in this paragraph either (i) by redeeming the transferor’s interest, or (ii) by admitting the Transferee as such a member or otherwise recognizing any right of the Transferee (including, without limitation, any right of the Transferee to receive payments or other distributions from the Issuer, directly or indirectly).

 

Section 206.           Mutilated Destroyed, Lost and Stolen Notes.

 

(a)           If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as it and the Issuer may require to hold the Issuer, the Manager and the Indenture Trustee harmless, then the Issuer shall execute and the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of the same Series and Class and maturity and of like terms as the mutilated, destroyed, lost or stolen Note; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become, or within seven days shall be, due and payable, the Issuer may pay such destroyed, lost or stolen Note when so due or payable instead of issuing a replacement Note.

 

(b)           If, after the delivery of such replacement Note, or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a protected purchaser (as defined in the UCC) of the original Note in lieu of which such replacement Note was issued (or such payment was made) presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover upon the security or indemnity provided therefor to the extent of any and all loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

 

(c)           The Indenture Trustee and the Issuer may, for each new Note authenticated and delivered under the provisions of this Section 206, require the advance payment by the Noteholder of the expenses, including counsel fees, service charges and any tax or governmental charge that may be incurred by the Indenture Trustee or the Issuer in connection therewith. Any Note issued under the provisions of this Section 206 in lieu of any Note alleged to be destroyed, mutilated, lost or stolen, shall be equally and proportionately entitled to the

 

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benefits of this Indenture with all other Notes of the same Series and Class. The provisions of this Section 206 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

Section 207.           Delivery, Retention and Cancellation of Notes.  Each Noteholder is required, and hereby agrees, to return to the Indenture Trustee or, if any Series Enhancer has made any unreimbursed payment on such Notes, to such Series Enhancer, such return to be completed prior to the receipt of such payment, any Note on which the final payment due thereon is to be made. Any such Note as to which the Indenture Trustee has made or holds the final payment thereon shall be deemed canceled and unless any unreimbursed payment on such Note has been made by a Series Enhancer, shall no longer be Outstanding for any purpose of this Indenture, whether or not such Note is ever returned to the Indenture Trustee.  Matured Notes delivered prior to final payment to the Indenture Trustee and any Notes transferred or exchanged for other Notes shall be canceled and disposed of by the Indenture Trustee in accordance with its policy of disposal and the Indenture Trustee shall promptly deliver to the Issuer such canceled Notes. If the Indenture Trustee shall acquire, for its own account, any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Notes. If the Issuer shall acquire any of the Notes, such acquisition shall operate as a redemption or satisfaction of the indebtedness represented by such Notes. Notes which have been canceled by the Indenture Trustee shall be deemed paid and discharged for all purposes under this Indenture.

 

Section 208.           ERISA Deemed Representations.  Each prospective initial Noteholder and each Prospective Owner of a Warehouse Note will be deemed to have represented and warranted by such purchase that it is not acquiring the Warehouse Note with the plan assets of a Benefit Plan Investor.  Each prospective initial Noteholder and each Prospective Owner of a Term Note will be deemed to have represented and warranted by such purchase that either (i) it is not acquiring the Term Notes with the plan assets of a Benefit Plan or any other plan that is subject to a law that is similar to Title I of ERISA or Section 4975 of the Code; or (ii) the acquisition, holding and disposition of the Term Note will not give rise to a nonexempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or any similar applicable law.

 

ARTICLE III

 

PAYMENT OF NOTES; STATEMENTS TO NOTEHOLDERS

 

Section 301.           Principal and Interest.  Distributions of principal, premium, if any, and interest on any Series or Class of Notes shall be made to Noteholders of each Series and Class as set forth in Section 302 of this Indenture and in the related Supplement.  Additional interest calculated at the Default Rate shall be payable with respect to any payment of principal and/or interest on any Note which is not paid when due.  The maximum Default Rate for any Note of any Series shall be equal to the sum of (i) two percent (2%) per annum, plus (ii) the interest rate for such Note immediately prior to the occurrence of the relevant Event of Default. If interest or principal amounts owing on Notes are paid by a Series Enhancer and additional interest at the Default Rate otherwise would be owing to the Noteholders of such Notes, then the Default Rate shall be owed to such Series Enhancer and shall not be paid to applicable

 

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Noteholders of such Series unless the related Series Enhancer has failed to make payment of such amounts in accordance with the terms of any applicable Enhancement Agreement.  Except as set forth in any Supplement, all interest payable on the Notes and all commitment and other fees payable to the Noteholders shall be computed on the basis of a 360-day year for the actual number of days which have elapsed in the relevant calculation period.

 

Section 302.           Trust Account.  (a)  The Issuer shall establish and maintain so long as any Outstanding Obligation remains unpaid the Trust Account into which the Issuer shall deposit (or cause to be deposited) all of the following amounts:  (i) all amounts representing Estimated Net Operating Income (and adjustments thereof), Casualty Proceeds and Sales Proceeds with respect to the Managed Containers received from the Manager pursuant to the terms of the Management Agreement, (ii) all Manager Advances, (iii) all amounts received by the Issuer pursuant to the terms of all Hedge Agreements then in effect, and (iv) other payments specified to be deposited therein pursuant to the terms of this Indenture and the other Transaction Documents.  Such Trust Account shall be established and maintained with the Corporate Trust Office of the Indenture Trustee in trust for the Indenture Trustee, on behalf of the Noteholders, each Hedge Counterparty and each Series Enhancer, until all Outstanding Obligations are paid in full. The Trust Account shall at all times be an Eligible Account, shall be in the name of the Issuer and shall be pledged to the Indenture Trustee pursuant to the terms of this Indenture. The Issuer shall not establish any additional Trust Accounts without (in each instance) prior written notice to the Indenture Trustee and each Series Enhancer, if any.

 

(b)           The Issuer shall cause the Manager to deposit into the Trust Account in accordance with the provisions of Section 5.1 and 5.2 of the Management Agreement amounts representing the Estimated Net Operating Income (and adjustments thereof), Casualty Proceeds and Sales Proceeds with respect to the Managed Containers.  The Manager shall be permitted to require the Indenture Trustee to withdraw from amounts on deposit in the Trust Account on each Payment Date, or otherwise net out from amounts otherwise required to be deposited by the Manager in the Trust Account in accordance with the provisions of Section 5.1 and 5.2 of the Management Agreement, the amount of any Management Fees or Management Fee Arrearage that would otherwise be due and payable on the immediately succeeding Payment Date.

 

(c)           On or prior to each Determination Date, the Issuer shall cause the Manager, pursuant to Section 4.1.2 of the Management Agreement, to prepare and deliver the Manager Report.  On each Payment Date, the Indenture Trustee, based on the Manager Report (upon which Manager Report the Indenture Trustee shall be entitled to conclusively rely), shall distribute from the Trust Account an amount equal to the sum of (i) all amounts representing the Net Operating Income of the Eligible Containers received during the related Collection Period, (ii) all other amounts received by the Issuer subsequent to the immediately preceding Payment Date, (iii) all amounts transferred from the Restricted Cash Account in accordance with the provisions of Section 306 hereof; provided that the amounts described in this clause (iii) may be used only to make the payments described in Section 306 hereof, (iv) any earnings on Eligible Investments in the Trust Account, the Restricted Cash Account and any Series Accounts, (v) all Manager Advances made by the Manager in accordance with the terms of the Management Agreement subsequent to the immediately preceding Payment Date, (vi) the net amount received by the Issuer pursuant to any Hedge Agreement then in effect and (vii) if so directed by the Issuer, amounts, proceeds and funds contemplated by Section 302(f) (unless the Issuer directs otherwise, the amounts and proceeds contemplated by this clause (vii) shall be applied only in

 

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respect of principal on Notes of one or more Series) (the sum of the amounts described in clauses (i) through (vii) collectively, the “Available Distribution Amount”), to the following Persons, by wire transfer of immediately available funds, in the order of priority listed below (in the absence of any Manager Report, the Indenture Trustee shall distribute the Available Distribution Amount in accordance with written instructions from the Administrative Agent (with a copy to the Issuer, each Series Enhancer and each Hedge Counterparty) and shall hold until delivery of the Manager Report (i) any funds otherwise payable due to the Issuer and (ii) any other amounts which the Administrative Agent is unable to ascertain or allocate to a specific payment priority set forth in this Indenture):

 

(I)                                    If no Early Amortization Event or Event of Default shall have occurred and shall then be continuing:

 

(1)                                  To the Indenture Trustee, an amount equal to the sum of (A) all the Indenture Trustee’s Fees then due and payable for all Series then Outstanding (subject to the per annum dollar limitation in Section 905) and (B) any amounts payable to the Indenture Trustee in accordance with the provisions of Section 403(e) hereof;

 

(2)                                  To the Director Services Provider in the amount of any unpaid fees (to the extent not previously paid) owing pursuant to the Director Services Agreement (not to exceed $25,000 per annum)

 

(3)                                  To the Manager, an amount equal to the sum of: (i) the Management Fee then due and payable, (ii) the amount of any Management Fee Arrearage, and (iii) any Excess Deposit then due and payable, but in each case only to the extent not previously withheld by the Manager in accordance with the terms of the Transaction Documents;

 

(4)                                  To the Manager, reimbursement for any Manager Advances;

 

(5)                                  To the Administrative Agent, the Administrative Agent Fees then due and payable;

 

(6)                                  To the Persons entitled thereto:  (i) any auditing, accounting and related fees then due and payable which are classified as an Issuer Expense and (ii) any other Issuer Expenses then due and payable, so long as the aggregate amount paid pursuant to this clause (6) in any calendar year would not exceed Two Hundred Thousand Dollars ($200,000);

 

(7)                                  To each Series Enhancer, pro rata based on the amount of Premiums then due and payable, the amount of any Premium then due and payable pursuant to the terms of each applicable Enhancement Agreement;

 

(8)                                  To each Hedge Counterparty, the amount of any scheduled payments (but excluding termination payments) then due and payable pursuant to the terms of any Hedge Agreement then in effect.

 

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(9)                                  To each Series Account for each Series of Notes then Outstanding, an amount equal to the Priority Payments for each such Series; provided, that if sufficient funds do not exist to pay in full all such Priority Payments, such amounts shall be allocated among all Series of Notes in the same proportion as the ratio of (x) the Priority Payments of a particular Series of Notes then Outstanding on such Payment Date to (y) the sum of the Priority Payments for all Series of Notes then Outstanding on such Payment Date;

 

(10)                            To the Restricted Cash Account (if such account has been opened), an amount sufficient so that the total amount on deposit therein, is equal to the Restricted Cash Amount for such Payment Date;

 

(11)                            To each of the following on a pro rata basis: (i) to each Hedge Counterparty, on a pro rata basis, the amount of any unpaid payments then due and payable (including termination payments but excluding (x) any payments made pursuant to clause (8) above and (y) termination payments resulting from an “Event of Default” or a “Termination Event” (other than “Illegality” and “Tax Event”), each as defined in the related Hedge Agreement, where the related Hedge Counterparty is the “Defaulting Party” or sole “Affected Party” (each as defined in the related Hedge Agreement) pursuant to the terms of any Hedge Agreement then in effect, and (ii) to each Series Account for each Series of Notes then Outstanding in accordance with the provisions of Section 302(d), all Minimum Principal Payment Amounts for each such Series;

 

(12)                            To each Series Account for each Series of Notes then Outstanding in accordance with the provisions of Section 302(d), all Scheduled Principal Payment Amounts for each such Series;

 

(13)                            To each Series Account for each Series of Notes then Outstanding, an amount equal to that portion of the Supplemental Principal Payment Amounts allocable to such Series in accordance with the provisions of Section 702(a);

 

(14)                            To the Noteholders and any Series Enhancer, interest payments and Default Fees on the Notes not paid pursuant to clause (9) above and any Indemnity Amounts or other amounts then due and payable;

 

(15)                            To the Administrative Agent, any Administrative Agent Fees then due and payable, after giving effect to the payment made pursuant to clause (5) above;

 

(16)                            To the Indenture Trustee, any Indenture Trustee’s Fees then due and payable, after giving effect to the payment made pursuant to clause (1) above but not subject to the per annum dollar limitation in Section 905;

 

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(17)                            To the Director Services Provider in the amount of any unpaid Indemnified Amounts (as defined in the Director Services Agreement) owing pursuant to the Director Services Agreement;

 

(18)                            To each Hedge Counterparty, on a pro rata basis, the amount of any unpaid payments then due and payable (including termination payments resulting from an “Event of Default” or a “Termination Event” (other than “Illegality” and “Tax Event”), each as defined in the related Hedge Agreement where the related Hedge Counterparty is the “Defaulting Party” or sole “Affected Party” (each as defined in the related Hedge Agreement), but excluding any payments made pursuant to clause (8) or (11) above) pursuant to the terms of any Hedge Agreement then in effect;

 

(19)                            To each of the following on a pro rata basis: (i) to the Issuer, the amount of any indemnity payments payable to the officers, directors and/or managers of the Issuer required to be made by the Issuer, and (ii) to the Manager, the amount of any officer and director indemnity payments required to be made by the Manager; and

 

(20)                            To the Issuer, any remaining Available Distribution Amount which may be used by the Issuer for any purpose, including, without limitation, general corporate purposes, the distribution of dividends, repayment of debt, paying fees and expenses or any other purpose in the sole discretion of the Issuer.

 

(II)                                If an Early Amortization Event shall then be continuing, but no Event of Default shall then be continuing (or an Event of Default has occurred but the Notes have not been accelerated in accordance with Section 802 hereof):

 

(1)                                  To the Indenture Trustee, an amount equal to the sum of (A) all the Indenture Trustee’s Fees then due and payable for all Series then Outstanding (subject to the per annum dollar limitation in Section 905) and (B) any amounts payable to the Indenture Trustee in accordance with the provisions of Section 403(e) hereof;

 

(2)                                  To the Director Services Provider in the amount of any unpaid fees (to the extent not previously paid) owing pursuant to the Director Services Agreement (not to exceed $25,000 per annum)

 

(3)                                  To the Manager, an amount equal to the sum of: (i) the Management Fee then due and payable, (ii) the amount of any Management Fee Arrearage, and (iii) any Excess Deposit then due and payable, but in each case only to the extent not previously withheld by the Manager in accordance with the terms of the Transaction Documents;

 

(4)                                  To the Manager, reimbursement for any Manager Advances;

 

(5)                                  To the Administrative Agent, the Administrative Agent Fees then due and payable;

 

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(6)                                  To the Persons entitled thereto:  (i) any auditing, accounting and related fees then due and payable which are classified as an Issuer Expense and (ii) any other Issuer Expenses then due and payable, so long as the aggregate amount paid pursuant to this clause (6) in any calendar year would not exceed Five Hundred Thousand Dollars ($500,000);

 

(7)                                  To each Series Enhancer, pro rata based on the amount of Premiums then due and payable, the amount of any Premium then due and payable pursuant to the terms of each applicable Enhancement Agreement;

 

(8)                                  To each Hedge Counterparty, the amount of any scheduled payments (but excluding termination payments) then due and payable pursuant to the terms of any Hedge Agreement then in effect.

 

(9)                                  To each Series Account for each Series of Notes then Outstanding, an amount equal to the Priority Payments for each such Series; provided, that if sufficient funds do not exist to pay in full all such Priority Payments, such amounts shall be allocated among all Series of Notes in the same proportion as the ratio of (x) the Priority Payments of a particular Series of Notes then Outstanding on such Payment Date to (y) the sum of the Priority Payments for all Series of Notes then Outstanding on such Payment Date;

 

(10)                            To the Restricted Cash Account (if such account has been opened), an amount sufficient so that the total amount on deposit therein, is equal to the Restricted Cash Amount for such Payment Date;

 

(11)                            To each of the following on a pro rata basis: (i) to each Hedge Counterparty, on a pro rata basis, the amount of any unpaid payments then due and payable (including termination payments but excluding (x) any payments made pursuant to clause (8) above and (y) termination payments resulting from an “Event of Default” or a “Termination Event” (other than “Illegality” and “Tax Event”) (each as defined in the related Hedge Agreement where the related Hedge Counterparty is the “Defaulting Party” or sole “Affected Party” (each as defined in the related Hedge Agreement)) pursuant to the terms of any Hedge Agreement then in effect, and (ii) to each Series of Notes then Outstanding, pro rata based on unpaid principal amounts, until all Series of Notes have been paid in full;

 

(12)                            To the Noteholders and any Series Enhancer, interest payments on the Notes and Default Fees not paid pursuant to clause (9) above and any Indemnity Amounts or other amounts then due and payable;

 

(13)                            To the Administrative Agent, any Administrative Agent Fees then due and payable, after giving effect to the payment made pursuant to clause (5) above;

 

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(14)                            To the Indenture Trustee, any Indenture Trustee’s Fees then due and payable, after giving effect to the payment made pursuant to clause (1) above but not subject to the per annum dollar limitation in Section 905;

 

(15)                            To the Director Services Provider in the amount of any unpaid Indemnified Amounts (as defined in the Director Services Agreement) owing pursuant to the Director Services Agreement;

 

(16)                            To each Hedge Counterparty, on a pro rata basis, the amount of any unpaid payments then due and payable (including termination payments resulting from an “Event of Default” or a “Termination Event” (other than “Illegality” and “Tax Event”), each as defined in the related Hedge Agreement, where the related Hedge Counterparty is the “Defaulting Party” or sole “Affected Party” (each as defined in the related Hedge Agreement), but excluding any payments made pursuant to clause (8) or (11) above) pursuant to the terms of any Hedge Agreement then in effect;

 

(17)                            To each of the following on a pro rata basis: (i) to the Issuer, the amount of any indemnity payments payable to the officers, directors and/or managers of the Issuer required to be made by the Issuer, and (ii) to the Manager, the amount of any officer and director indemnity payments required to be made by the Manager; and

 

(18)                            To the Issuer, any remaining Available Distribution Amount which may be used by the Issuer for any purpose, including, without limitation, general corporate purposes, the distribution of dividends, repayment of debt, paying fees and expenses or any other purpose in the sole discretion of the Issuer.

 

(d)           If on any Payment Date described in section (c)(I) above, there are not sufficient funds to pay, in full, the Minimum Principal Payment Amounts and/or Scheduled Principal Payment Amounts owing to all Series of Notes then Outstanding, as the case may be, then, subject to the priority of payments set forth in (c)(I) above, any such principal payments having the same payment priority will be paid, in full, to the Series first issued (based on their respective dates of issuance or Conversion Dates, as applicable) in chronological order based on their respective dates of issuance or Conversion Dates, as applicable.  For purposes of this Section 302(d) only, any Series which was originally designated as Warehouse Notes and is subsequently considered to be a Series of Term Notes due to the occurrence of the Conversion Date for such Series will be deemed to have an issuance date equivalent to its Conversion Date.  If two or more Series of the Notes were issued on the same date or have the same Conversion Date, then principal payments having the same payment priority will be allocated among each such Series, on a pro rata basis, based on the principal payments then due with respect to such Series.

 

If on any Payment Date described in section (c)(II) above, there are not sufficient funds to pay, in full, all Minimum Principal Payment Amounts owing to all Series of Notes then Outstanding, then amounts available for the payment of Minimum Principal Payment Amounts pursuant to the priority of payments set forth in (c)(II) above shall be allocated among

 

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all Series of Notes for which Minimum Principal Payment Amounts are owing on such Payment Date on a pro rata basis, calculated based on the amount of the Minimum Principal Payment Amounts then owing to each such Series.

 

If on any Payment Date described in section (c)(II) above, there are not sufficient funds to pay, in full, all Scheduled Principal Payment Amounts owing to all Series of Notes then Outstanding, then amounts available for the payment of Scheduled Principal Payment Amounts pursuant to the priority of payments set forth in (c)(II) above shall be allocated among all Series of Notes for which Scheduled Principal Payment Amounts are owing on such Payment Date on a pro rata basis, calculated based on the amount of the Scheduled Principal Payment Amounts then owing to each such Series.

 

(e)           If any Series has more than one Class of Notes then Outstanding, then the Available Distribution Amount shall be calculated without regard to the payment priorities of the Classes of Notes within such Series.  Once the Available Distribution Amount has been allocated to each Series, then that portion of the Available Distribution Amount allocable to such Series shall be paid to each Class of Noteholders of such Series in accordance with the priority of payments set forth in the related Supplement.

 

(f)            The Issuer shall have the right, but not the obligation, to make (or to direct the Indenture Trustee to make) principal payments on any Series of Notes and payments of other Outstanding Obligations from some or all of (i) amounts that are payable or have been paid to the Issuer pursuant to this Section 302, (ii) amounts that the Issuer receives from advances or draws under any Series of Warehouse Notes, (iii) proceeds of the issuance of any Series of Notes, and (iv) other funds held by the Issuer.  Without limiting the foregoing, at the direction of the Issuer, amounts and proceeds contemplated by the preceding sentence may be included in distributions in respect of principal payments on the Notes of one or more Series and payments of other Outstanding Obligations pursuant to Section 302(c).

 

Section 303.           Investment of Monies Held in the Trust Account, the Restricted Cash Account, and Series Accounts; Control over Eligible Investments.

 

(a)           The Indenture Trustee shall invest any cash deposited in the Trust Account, the Restricted Cash Account, and each Series Account in such Eligible Investments as the Issuer shall direct in writing or by telephone and subsequently confirm in writing. Each Eligible Investment (including reinvestment of the income and proceeds of Eligible Investments) shall be held to its maturity and shall mature or shall be payable on demand not later than the Business Day immediately preceding the next succeeding Payment Date. If the Indenture Trustee has not received written instructions from the Issuer by 2:30 p.m. (New York time) on the day such funds are received as to the investment of funds then on deposit in any of the aforementioned accounts, the Issuer hereby instructs the Indenture Trustee to invest such funds in overnight investments of the type described in clause (vi) of the definition of Eligible Investments.  Eligible Investments shall be made in the name of the Securities Intermediary, and subject to the terms of the Control Agreements.  Any earnings on Eligible Investments in the Trust Account, the Restricted Cash Account, and each Series Account shall be retained in each such account and be distributed in accordance with the terms of this Indenture or any related Supplement. The Indenture Trustee shall not be liable or responsible for losses on any investments made by it pursuant to this Section 303.

 

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(b)           On or prior to the Closing Date (with respect to the Trust Account and any Series Account) or on or prior to the Restricted Cash Effective Date (with respect to the Restricted Cash Account), each of the Issuer and the Securities Intermediary shall enter into control agreements (each a “Control Agreement”, collectively, the “Control Agreements”) substantially in the form of Exhibit C hereto for each of the Trust Account, the Restricted Cash Account and any Series Accounts.  At all times on and after the Closing Date (or the related Closing Date or on Restricted Cash Effective Date, as applicable), each such account shall be the subject of a Control Agreement.

 

(c)           The Indenture Trustee, acting in accordance with the terms of this Indenture, shall be entitled to deliver an Entitlement Order to the Securities Intermediary at which such accounts are maintained at any time; provided, however, that the Indenture Trustee agrees not to invoke its right to provide an Entitlement Order (other than an order directing the transfer of funds from the Trust Account in accordance with Section 302(c)) from the Restricted Cash Account in accordance with Section 306 unless an Event of Default has occurred and is continuing. Such Control Agreements shall provide that upon receipt of the Entitlement Order in accordance with the provisions of this Indenture, the Indenture Trustee shall comply with such Entitlement Order without further consent by the Issuer or any other Person.

 

(d)           Each of the Trust Account, the Restricted Cash Account, and the Series Accounts shall be established with the Indenture Trustee and, so long as any Outstanding Obligation remains unpaid, shall be maintained with the Indenture Trustee so long as (A) the short-term unsecured debt obligations of the financial institution fulfilling the role of the Indenture Trustee are rated not less than the Required Deposit Rating, or (B) each of the Trust Account, the Restricted Cash Account, and the Series Accounts are maintained at the Corporate Trust Office of the Indenture Trustee.

 

(e)           Each of the Trust Account, the Restricted Cash Account and each Series Account shall be governed by the laws of the State of New York, regardless of any provision in any other agreement. Each Control Agreement shall provide for purposes of the UCC, that New York shall be deemed to be the Securities Intermediary’s jurisdiction and each of the Trust Account, the Restricted Cash Account and each Series Account (as well as the Securities Entitlements related thereto) shall be governed by the laws of the State of New York.

 

(f)            The Securities Intermediary has not entered into, and until the termination of this Indenture will not enter into, any agreement with any other Person relating to each of the Trust Account, the Restricted Cash Account, each Series Account or any Financial Assets credited thereto pursuant to which it has agreed to comply with Entitlement Orders of such other Person and the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with the Issuer, the Seller, the Manager or the Indenture Trustee purporting to limit or condition the obligation of the Securities Intermediary to comply with Entitlement Orders as set forth in Section 303(c) hereof.

 

(g)           Except for the claims and interest of the Indenture Trustee and of the Issuer hereunder in each of the Trust Account, the Restricted Cash Account and each Series Account, to the best of its knowledge without independent investigation, the Securities Intermediary knows of no claim to, or interest in, any of the Trust Account, the Restricted Cash Account, any Series Account or in any Financial Asset credited thereto. If any other Person

 

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asserts any Lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against any of the Trust Account, the Restricted Cash Account, each Series Account or in any Financial Asset credited thereto, the Securities Intermediary will promptly notify the Indenture Trustee, the Manager, each Series Enhancer, each Hedge Counterparty and the Issuer thereof.

 

(h)           The Indenture Trustee shall possess a perfected security interest in all right, title and interest in and to all funds on deposit from time to time in each of the Trust Account, the Restricted Cash Account, each Series Account and in all Proceeds thereof. Each of the Trust Account, the Restricted Cash Account and each Series Account shall be in the name of the Issuer subject to a securities account control agreement providing that such account shall be under the sole dominion and control of the Indenture Trustee (subject to the terms and conditions thereof), for the benefit of the Noteholders, each Hedge Counterparty and each Series Enhancer, if any. The Indenture Trustee shall make withdrawals and payments from each of the Trust Account, the Restricted Cash Account and the Series Accounts and apply such amounts in accordance with the provisions of the Manager Report and, in the absence of any Manager Report, in accordance with written instructions from the Administrative Agent.

 

(i)            The Issuer shall not direct the Indenture Trustee to make any investment of any funds or to sell any investment held in any of the Trust Account, the Restricted Cash Account or any Series Account unless the security interest of the Indenture Trustee in such account and any funds or investments held therein shall continue to be perfected without any further action by any Person.

 

(j)            Wells Fargo Bank, National Association (including in its capacity as Securities Intermediary) hereby agrees that any security interest it may have in the Trust Account, the Restricted Cash Account and any Series Account or any Security Entitlement credited thereto shall be subordinate to the security interest created by this Indenture. The Financial Assets and other items deposited to the Trust Account, the Restricted Cash Account and any Series Account will not be subject to deduction, set-off, banker’s lien, or any other right in favor of any Person except as created pursuant to this Indenture.  For the sake of clarity, the fees and expenses of the Indenture Trustee shall be payable solely pursuant to Section 302 or 806 of this Indenture and will not be subject to deduction, set-off, bankers lien or other right of the Indenture Trustee.

 

Section 304.           Reports to Noteholders.  The Indenture Trustee shall promptly upon the receipt thereof, make available to each Noteholder, the Administrative Agent, the Depositary, each Hedge Counterparty and each Series Enhancer, a copy of all reports, financial statements and notices received by the Indenture Trustee pursuant to the Contribution and Sale Agreement, the Indenture (including any Supplements issued pursuant thereto), the Administration Agreement, a Note Purchase Agreement or the Management Agreement, by posting copies thereof on its password-protected website (www.CTSLink.com) or at such other address as shall be specified by the Indenture Trustee from time to time in writing to each Noteholder, the Administrative Agent, the Depository, each Hedge Counterparty and each Series Enhancer; provided, however, the Indenture Trustee shall have no obligation to provide such information described in this Section 304 until it has received the requisite information from the applicable party.  The Indenture Trustee will make no representation or warranties as to the accuracy or completeness of such documents and will assume no responsibility therefor.  In

 

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connection with providing access to the Indenture Trustee’s website, the Indenture Trustee may require registration and the acceptance of a disclaimer.  The Indenture Trustee shall not be liable for the dissemination of information in accordance with the terms of this Indenture.

 

Section 305.           Records.  The Indenture Trustee shall cause to be kept and maintained customary records pertaining to the Trust Account, the Restricted Cash Account and each Series Account and all receipts and disbursements therefrom. The Indenture Trustee shall deliver monthly an accounting thereof in the form of a trust statement to the Issuer, the Seller, the Administrative Agent and the Manager, each Series Enhancer and each Hedge Counterparty.

 

Section 306.           Restricted Cash Account.  (a)  The Issuer shall establish on or prior to the Restricted Cash Effective Date, and shall thereafter maintain so long as any Outstanding Obligation remains unpaid, an Eligible Account in the name of the Issuer with the Indenture Trustee which shall be designated as the Restricted Cash Account, which account shall be held by the Indenture Trustee for the benefit of the Noteholders of all Series of Notes and each Series Enhancer pursuant to the terms of this Indenture and the related Supplements.  On the Restricted Cash Effective Date, the Issuer will deposit (or cause to be deposited) into the Restricted Cash Account an amount equal to the Restricted Cash Amount, and amounts thereafter shall be deposited in the Restricted Cash Account in accordance with Section 302 hereof. The Restricted Cash Account shall only be relocated to another financial institution in accordance with the express provisions of Section 303(d) hereof. Any and all monies on deposit in the Restricted Cash Account shall be invested in Eligible Investments in accordance with this Indenture and shall be distributed in accordance with this Section 306.

 

(b)           On each Determination Date following the Restricted Cash Effective Date, the Indenture Trustee shall, in accordance with the Manager Report (or, in the absence of any Manager Report, in accordance with written instructions from the Administrative Agent), withdraw from the Restricted Cash Account and deposit into the Series Account for each Series an amount equal to the Deficiency Amount (determined after giving effect to all other deposits to the Series Account for such Series (other than funds transferred from the Restricted Cash Account)) on or prior to such Determination Date.  Amounts transferred to the Series Account pursuant to the provisions of this Section 306(b) may only be used to pay amounts specified in the definition of “Permitted Payment Date Withdrawals”.  If the amount on deposit in the Restricted Cash Account on a Determination Date is not sufficient to pay in full the aggregate Permitted Payment Date Withdrawals referred to in this Section 306(b), then the amount of funds then available in the Restricted Cash Account will be allocated among the various Series on a pro rata basis in proportion to the amount of their respective Permitted Payment Date Withdrawals.

 

(c)           On each Payment Date following the Restricted Cash Effective Date, the Indenture Trustee shall, in accordance with the Manager Report (or, in the absence of any Manager Report, in accordance with written instructions from the Administrative Agent), deposit in the Trust Account for distribution in accordance with the terms of this Indenture the excess, if any, of (A) the amounts then on deposit in the Restricted Cash Account (after giving effect to any withdrawals therefrom on such Payment Date) over (B) an amount equal to the Restricted Cash Amount for such Payment Date. On the Legal Final Maturity Date for the Series with the latest Legal Final Maturity Date, any remaining funds in the Restricted Cash Account shall be deposited in the Trust Account and, subject to the limitations set forth in the related Supplement, distributed in accordance with Section 302 of this Indenture and the related Supplement.

 

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Section 307.           CUSIP Numbers.  The Issuer in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Indenture Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Noteholders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Indenture Trustee of any change in the “CUSIP” numbers.

 

Section 308.           No Claim.  Indemnities payable to the Indenture Trustee, the Manager, the Independent Director Provider, the Administrative Agent and any other Person, shall be non-recourse to the Issuer and shall not constitute a claim (as defined in Section 101(5) of the Bankruptcy Code) against the Issuer or the Collateral in the event such amounts are not paid in accordance with Section 302 or 806 of this Indenture.

 

Section 309.           Compliance with Withholding Requirements.  Notwithstanding any other provision of this Indenture, the Indenture Trustee shall comply with all United States federal income tax withholding requirements with respect to payments to Noteholders of interest, original issue discount, or other amounts that the Indenture Trustee reasonably believes are applicable under the Code. The consent of Noteholders shall not be required for any such withholding.

 

Section 310.           Tax Treatment of Notes.  The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for United States federal, state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness. The Issuer and the Indenture Trustee, by entering into this Indenture, and each Noteholder and beneficial owner of a Note, by its acceptance of its Note, agree to treat the Notes as indebtedness for United States federal, state and local income, single business and franchise tax purposes.

 

ARTICLE IV

 

COLLATERAL

 

Section 401.           Collateral.  (a) The Notes and all other Outstanding Obligations shall be obligations of the Issuer as provided in Section 203 hereof. The Indenture Trustee, on behalf of the Noteholders, each Hedge Counterparty and each Series Enhancer, if any, shall also have the benefit of, and the Outstanding Obligations shall be secured by and be payable from, the Issuer’s right, title and interest in the Collateral. The income, payments and proceeds of such Collateral shall be allocated to each such Person strictly in accordance with the applicable payment priorities set forth in Section 302 or Section 806 hereof.

 

(b)           Notwithstanding anything contained in this Indenture to the contrary, the Issuer expressly agrees that it shall remain liable under each of its Contracts and Leases to observe and perform all the conditions and obligations to be observed and performed by it thereunder and that it shall perform all of its duties and obligations thereunder, all in accordance with and pursuant to the terms and provisions of each such Contract or Lease, as the case may be.

 

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(c)           The Indenture Trustee hereby acknowledges the appointment by the Issuer of the Manager to service and administer the Collateral in accordance with the provisions of the Management Agreement.  So long as the Management Agreement shall not have been terminated in accordance with its terms, the Indenture Trustee hereby agrees to provide the Manager with such documentation, and to take all such actions with respect to the Collateral as the Manager may reasonably request in accordance with the express provisions of the Management Agreement; provided, however, that the Indenture Trustee shall be entitled to receive from the Manager reasonable compensation and cost reimbursement for any such action. Until such time as the Management Agreement has been terminated in accordance with its terms, the Manager, on behalf of the Issuer, shall continue to collect all Accounts and payments on the Leases of the Managed Containers in accordance with the provisions of the Management Agreement and deposit such amounts into the Trust Account in accordance with the provisions of the Management Agreement. Any Proceeds received directly by the Issuer in payment of any Account or Leases with respect to, or in payment for or in respect of, any of the Managed Containers or on account of any of the Contracts to which the Issuer is a party shall be promptly deposited by the Issuer in precisely the form received (with all necessary endorsements) in the Trust Account in accordance with the provisions of the Management Agreement, and until so deposited shall be deemed to be held in trust by the Issuer for the Indenture Trustee and shall continue to be collateral security for all of the obligations secured by this Indenture and shall not constitute payment thereof until applied as hereinafter provided. If (i) an Event of Default has occurred, (ii) any Sale of the Collateral pursuant to Section 816 hereof shall have occurred or (iii) a Manager Default has occurred, the Issuer shall at the request of the Indenture Trustee, acting with the consent of or at the direction of the Requisite Global Majority, to the extent practicable, deliver to the Indenture Trustee (or such other Person as the Indenture Trustee may direct) originals (or, to the extent originals cannot be delivered, copies) of all Leases and other documents evidencing, and relating to, the sale, lease and delivery of such Managed Containers and the Issuer shall, to the extent practicable, deliver originals (or, to the extent originals cannot be delivered, copies) of all other documents evidencing and relating to, the performance of any labor, maintenance, remarketing or other service which created any Accounts, including, without limitation, all original orders, invoices and shipping receipts.

 

Section 402.           Pro Rata Interest.

 

(a)           Except as expressly provided for herein or in any Supplement, the Notes of all Outstanding Series shall be equally and ratably entitled to the benefits of this Indenture without preference, priority or distinction, all in accordance with the terms and provisions of this Indenture and the related Supplement. All Notes of a particular Class issued hereunder are and are to be, to the extent (including any exceptions) provided in this Indenture and the related Supplement, equally and ratably secured by this Indenture without preference, priority or distinction on account of the actual time or times of the authentication or delivery of the Notes so that all Notes of a particular Series and Class at any time Outstanding (including Notes owned by the Seller and its Affiliates, other than the Issuer) shall have the same right, Lien and preference under this Indenture and shall all be equally and ratably secured hereby with like effect as if they had all been executed, authenticated and delivered simultaneously on the date hereof.

 

(b)           If the conditions specified in Section 701 of this Indenture are met with respect to such Series of Notes, the security interest, and all other estate and rights granted by this Indenture with respect to such Series of Notes shall cease and become null and void, and all

 

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of the property, rights, and interest granted as security for the Notes of such Series shall revert to and revest in the Issuer without any other act or formality whatsoever.

 

Section 403.           Indenture Trustee’s Appointment as Attorney-in-Fact.

 

(a)           The Issuer hereby irrevocably constitutes and appoints the Indenture Trustee, and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Issuer and in the name of the Issuer or in its own name, from time to time, for the purpose of carrying out the terms of this Indenture, to take any and all appropriate action and to execute and deliver any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Indenture; provided, however, that the Indenture Trustee has no obligation or duty to take such action or to determine whether to perfect, file, record or maintain any perfected, filed or recorded document or instrument (all of which the Issuer shall prepare, deliver and instruct the Indenture Trustee to execute) in connection with the grant or security interest in the Collateral hereunder.

 

(b)           The Indenture Trustee shall not exercise the power of attorney or any rights granted to the Indenture Trustee pursuant to this Section 403 unless an Event of Default shall have occurred and then be continuing. The Issuer hereby ratifies, to the extent permitted by law, all actions that said attorney shall lawfully do, or cause to be done, by virtue hereof. The power of attorney granted pursuant to this Section 403 is a power coupled with an interest and shall be irrevocable until all Series of Notes are paid and performed in full.

 

(c)           The powers conferred on the Indenture Trustee hereunder are solely to protect the Indenture Trustee’s interests in the Collateral and shall not impose any duty upon it to exercise any such powers except as set forth herein. The Indenture Trustee shall be accountable only for amounts that it actually receives as a result of the exercise of such powers and neither it nor any of its officers, directors, employees, agents or representatives shall be responsible to the Issuer for any act or failure to act, except for its own negligence or willful misconduct.

 

(d)           The Issuer also authorizes (but does not obligate) the Indenture Trustee to (i) so long as a Manager Default is continuing and a Manager Termination Notice has been delivered in accordance with the terms of the Management Agreement, communicate in its own name, or to direct any other Person, including the Manager or a replacement Manager, to communicate with any party to any Contract or Lease relating to a Managed Container and (ii) so long as an Event of Default is continuing, and a Manager Termination Notice has been delivered in accordance with the terms of the Management Agreement, execute in connection with the sale of Collateral provided for in Article VIII hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral.

 

(e)           If the Issuer fails to perform or comply with any of its agreements contained herein and a Responsible Officer of the Indenture Trustee shall receive notice of such failure, the Indenture Trustee, with the consent of the Requisite Global Majority, shall cause performance or compliance, or acting at the direction of the Requisite Global Majority shall perform or comply, with such agreement; provided, however, that the Indenture Trustee shall have no obligation to so perform or comply if it has reasonable grounds to believe that payment of its expenses and interest thereon (as set forth in the following sentence) is not reasonably

 

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assured. The reasonable and documented expenses, including reasonable and documented attorneys’ fees and expenses, of the Indenture Trustee incurred in connection with such performance or compliance, shall be payable by the Issuer to the Indenture Trustee on demand and shall constitute additional Outstanding Obligations secured hereby and shall be paid in accordance with the provisions of Section 302 or Section 806 hereof.

 

Section 404.           Release of Security Interest.  The Indenture Trustee, at the written direction of the Manager, shall release from the Lien of this Indenture, any Managed Container and the Related Assets sold or transferred pursuant to Section 606(a) hereof. In effectuating such release, the Indenture Trustee shall be provided with and entitled to rely on: (A) so long as no Early Amortization Event is then continuing, a written direction of the Manager (with a copy to the Administrative Agent and each Series Enhancer, if any) identifying each Managed Container or other items to be released from the Lien of this Indenture in accordance with the provisions of this Section 404 accompanied by an Asset Base Certificate, or (B) if an Early Amortization Event is then continuing, all of the following: (i) the items set forth in (A), (ii) a certificate from the Manager (with a copy to the Administrative Agent and each Series Enhancer) stating that such release is in compliance with Sections 404 and 606(a) hereof and (iii) a written direction from the Administrative Agent and each Series Enhancer approving such release. The Administrative Agent shall provide such direction if the Administrative Agent has received the items referred to in (B) above and the officers of the Administrative Agent who regularly deal with the Manager in connection with the transactions contemplated hereby do not have actual knowledge that such certificates are inaccurate in any significant manner.

 

The Indenture Trustee will, promptly upon receipt of such certificate from the Manager and at the Issuer’s expense, execute and deliver to the Issuer, the Seller or the Manager, as appropriate, each Series Enhancer, each Hedge Counterparty and the Administrative Agent, a non-recourse certificate of release substantially in the form of Exhibit A hereto and such additional documents and instruments (including, but not limited to, UCC termination filings) as that Person may reasonably request to evidence the termination and release from the Lien of this Indenture of such Managed Container and the Related Assets.

 

Section 405.           Administration of Collateral.  (a) The Indenture Trustee shall as promptly as practicable notify the Noteholders, each Series Enhancer, each Hedge Counterparty and the Administrative Agent of any Manager Default of which a Responsible Officer has actual knowledge. If a Manager Default shall have occurred and then be continuing, the Indenture Trustee, at the written direction of the Requisite Global Majority, shall deliver to the Manager (with a copy to the Administrative Agent, each Series Enhancer, each Hedge Counterparty and each Rating Agency) a Manager Termination Notice terminating the Manager of its responsibilities in accordance with the terms of the Management Agreement.  Pursuant to the Administration Agreement, the Administrative Agent shall seek to appoint a replacement Manager acceptable to the Requisite Global Majority. If the Administrative Agent is unable to locate and qualify a replacement Manager acceptable to the Requisite Global Majority within sixty (60) days after the date of delivery of the Manager Termination Notice, then the Indenture Trustee may (and shall, upon the direction of the Requisite Global Majority) appoint, or petition a court of competent jurisdiction to appoint, a company acceptable to the Requisite Global Majority, having a net worth of not less than $5,000,000 and whose regular business includes equipment leasing or servicing, as the successor to the Manager of all or any part of the responsibilities, duties or liabilities of the Manager under the Management Agreement and the

 

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other Transaction Documents to which it is a party. The Manager shall continue to fulfill its duties and responsibilities as Manager until such time as its replacement is appointed and has assumed such responsibilities. The replaced Manager shall not be entitled to receive any compensation for any period after the effective date of such replacement, but shall be entitled to receive compensation for services rendered through the effective date of such replacement except to the extent that it is unable to fulfill such duties pending the appointment of a replacement Manager. If the Manager is unable to fulfill such duties pending the appointment of a replacement Manager, the Administrative Agent shall take such actions, which it is reasonably capable of performing and as the Requisite Global Majority shall direct to aid in the transition of the Manager; provided, however, that no provisions of this Indenture or the Administration Agreement shall require the Administrative Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder or under the Administration Agreement, or in the exercise of any of its rights, powers or duties, if the Administrative Agent shall have reasonable grounds for believing that timely repayment in full of such funds or adequate security or indemnity against such risk or liability is not reasonably assured after taking into account the reimbursement provisions set forth in Section 302 or Section 806, as applicable. All reimbursements to the Administrative Agent shall (unless the Requisite Global Majority has otherwise agreed in writing to indemnify the Administrative Agent) be payable on the immediately succeeding Payment Date pursuant to the provisions of Section 302 or Section 806, as applicable, hereof. Each Noteholder, the Indenture Trustee, each Series Enhancer and each Hedge Counterparty shall, by accepting the benefits of this Indenture, be deemed to have agreed that the duties of the Administrative Agent are not to be construed as those of a replacement Manager. In connection with the appointment of a replacement Manager, the Indenture Trustee or Administrative Agent may, with the written consent of the Requisite Global Majority, make such arrangements for the compensation of such replacement Manager out of Collections as the Indenture Trustee, the Administrative Agent and such replacement Manager shall agree; provided, however, that no such revised compensation shall be in excess of the Management Fees permitted the Manager under the Management Agreement and the arrangement for reimbursement of expenses shall be no more favorable than that set forth in the Management Agreement unless the Requisite Global Majority shall approve such higher amounts; provided, further, that in no event shall any of the Indenture Trustee, any Series Enhancer, any Hedge Counterparty or the Administrative Agent be liable to any replacement Manager for the Management Fees or any additional amounts (including expenses and indemnifications) payable to such replacement Manager, either pursuant to the Management Agreement or otherwise. The Indenture Trustee and such successor shall take such action, consistent with the Management Agreement, as shall be necessary to effectuate any such succession including exercising the power of attorney granted by the Manager pursuant to Section 9.4 of the Management Agreement.

 

(b)           So long as a Manager Default has occurred and a Manager Termination Notice has been delivered in accordance with the terms of the Management Agreement, the Indenture Trustee may and shall, if directed in writing by the Requisite Global Majority, after first notifying the Issuer of its intention to do so, notify Account Debtors of the Issuer (and the Issuer hereby agrees to provide the Indenture Trustee all commercially reasonable information to identify and locate such Account Debtors), parties to the Contracts of the Issuer, obligors in respect of Instruments of the Issuer and obligors in respect of Chattel Paper of the Issuer that the Accounts and the right, title and interest of the Issuer in and under such Contracts, Instruments, and Chattel Paper (to the extent related to the Managed Containers) have been pledged to

 

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Indenture Trustee and that payments shall be made directly to the Indenture Trustee or the Trust Account; provided that a replacement Manager appointed pursuant to this Section 405 shall unless otherwise directed by the Requisite Global Majority exercise all of the foregoing rights, and that pending appointment of such replacement Manager, the then current Manager shall, unless otherwise directed by the Requisite Global Majority, be permitted to exercise such rights until the replacement Manager assumes the responsibility of the Manager.  Upon the request of the Requisite Global Majority, the Issuer shall, or shall direct Manager to, so notify such Account Debtors, parties to such Contracts, obligors in respect of such Instruments and obligors in respect of such Chattel Paper.  So long as a Manager Default has occurred and a Manager Termination Notice has been delivered in accordance with the terms of the Management Agreement, the Indenture Trustee shall at the written direction of the Requisite Global Majority communicate with such Account Debtors, parties to such Contracts, obligors in respect of such Instruments and obligors in respect of such Chattel Paper to verify with such parties, the existence, amount and terms of any such Accounts, Contracts, Instruments or Chattel Paper.

 

(c)           Upon a Responsible Officer’s obtaining actual knowledge or the actual receipt of written notice by the Indenture Trustee that any repurchase obligations of the Seller under Section 3.03 of the Contribution and Sale Agreement have arisen, the Indenture Trustee shall notify each Series Enhancer, each Rating Agency, each Hedge Counterparty and the Administrative Agent of such event and shall enforce such repurchase obligations at the written direction of the Requisite Global Majority.

 

(d)           The Indenture Trustee shall be under no obligation to take any of the actions specified in Section 405(b) or Section 405(c) unless the Indenture Trustee shall have security or indemnity reasonably satisfactory to it against the costs and expenses which may be incurred by the Indenture Trustee in taking such actions.

 

Section 406.           Quiet Enjoyment.  The security interest hereby granted to the Indenture Trustee by the Issuer is subject to the right of any lessee to the quiet enjoyment of the related Managed Container so long as such lessee is not in default under the Lease therefor.

 

ARTICLE V

 

RIGHTS OF NOTEHOLDERS; ALLOCATION AND APPLICATION OF COLLECTIONS; REQUISITE GLOBAL MAJORITY

 

Section 501.           Rights of Noteholders.  The Noteholders of each Series shall have the right to receive, to the extent necessary to make the required payments with respect to the Notes of such Series at the times and in the amounts specified in the related Supplement, (i) the portion of Collections allocable to Noteholders of such Series pursuant to this Indenture and the related Supplement, (ii) funds on deposit in the Trust Account (subject to the priorities set forth in Sections 302 and 806 hereof) and the Restricted Cash Account and (iii) funds on deposit in any Series Account for such Series, or payable with respect to any Series Enhancement for such Series. Each Noteholder, by acceptance of its Notes, (a) acknowledges and agrees that (except as expressly provided herein and in a Supplement entered into in accordance with Section 1006(b) hereof) the Noteholders of a Series or Class shall not have any interest in any Series Account or Series Enhancement for the benefit of any other Series or Class and (b) ratifies and confirms the terms of this Indenture and the Transaction Documents executed in connection with such Series.

 

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Section 502.           Collections and Allocations.  With respect to each Collection Period, Collections on deposit in the Trust Account will be allocated to each Series then Outstanding in accordance with Article III of this Indenture and the Supplements.

 

Section 503.           Determination of Requisite Global Majority.  A Requisite Global Majority shall exist with respect to any action proposed to be taken pursuant to the terms of this Indenture or any Supplement if (a) the Control Party or Control Parties representing more than fifty percent (50%) of the sum of the Existing Commitments of all Series of Outstanding Notes shall approve or direct such proposed action (in making such a determination, each Control Party shall be deemed to have voted the entire Existing Commitment of the related Series in favor of, or in opposition to, such proposed action, as the case may be) and (b) unless Control Parties representing more than sixty-six and two-thirds percent (66 2/3%) of the sum of the Existing Commitments of all Series shall have approved or directed such proposed action (in making such a determination, each Control Party shall be deemed to have voted the entire Existing Commitment of the related Series in favor of, or in opposition to, such proposed action, as the case may be), each Series Enhancer which is then a Control Party for any Series of Outstanding Notes shall have also approved or directed such proposed action.  The Indenture Trustee shall be responsible for identifying the Requisite Global Majority in accordance with the terms of this Section 503 based on information provided by the Note Registrar.

 

ARTICLE VI

 

COVENANTS

 

For so long as any Outstanding Obligations have not been paid or performed, the Issuer shall observe each of the following covenants:

 

Section 601.           Payment of Principal and Interest; Payment of Taxes.  (a)  The Issuer will duly and punctually pay the principal of, and interest, on the Notes in accordance with the terms of the Notes, this Indenture and the related Supplement.

 

(b)           The Issuer will take all actions as are necessary to insure that all taxes, assessments and governmental levies that are payable by the Issuer are paid when due except (i) such as are contested in good faith and by appropriate proceedings and (ii) if the failure to make such payment is not adverse in any material respect to the Noteholders and does not give rise to any Liens other than Permitted Encumbrances.

 

Section 602.           Maintenance of Office.  As of the Closing Date, the Issuer’s only “place of business” within the meaning of Section 9-307 of the UCC is located at its address set forth in Section 1307. The Issuer shall not establish a new place of business or location for its chief executive office or change its jurisdiction of formation unless (i) the Issuer shall provide each of the Indenture Trustee, each Rating Agency, the Administrative Agent, each Hedge Counterparty and each Series Enhancer not less than thirty (30) days’ prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Indenture Trustee, the Administrative Agent, each Hedge Counterparty or each Series Enhancer may reasonably request, (ii) not less than fifteen (15) days prior to the effective date of such relocation, the Issuer shall have taken, at its own cost, all action necessary so that such change of location does not impair the security interest of the

 

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Indenture Trustee in the Collateral, or the perfection of the sale or contribution of the Containers to the Issuer, and shall have delivered to the Indenture Trustee, the Administrative Agent, each Hedge Counterparty and each Series Enhancer copies of all filings required in connection therewith and (iii) the Issuer has delivered to the Indenture Trustee, the Administrative Agent, each Series Enhancer, each Hedge Counterparty and each Rating Agency, one or more Opinions of Counsel satisfactory to the Requisite Global Majority, stating that, after giving effect to such change of location: (A) the Seller and the Issuer will not, pursuant to applicable Insolvency Law, be substantively consolidated in the event of any Insolvency Proceeding by, or against, the Seller, (B) under applicable Insolvency Law, the transfers of Transferred Assets made in accordance with the terms of the Transaction Documents will be treated as a “true sale” in the event of any Insolvency Proceeding by, or against, the Seller and (C) either (1) in the opinion of such counsel, all registration of charges, financing statements, or other documents of similar import, and amendments thereto have been executed (if applicable) and filed that are necessary to perfect the interest of the Issuer and the Indenture Trustee in the Transferred Assets, or (2) stating that, in the opinion of such counsel, no such action shall be necessary to perfect such interest; provided that the opinions required in this Section 602(iii)(A) and (B) shall not be required unless the Issuer establishes a new place of business outside of the United States or a location for its chief executive office outside of the United States or changes its jurisdiction of formation to a location outside of the United States.

 

Section 603.           Corporate Existence.  The Issuer will keep in full effect its existence, rights and franchises as a limited liability company organized under the laws of the State of Delaware, and will obtain and preserve its qualification in each jurisdiction in which such qualification is necessary to protect the validity and enforceability of this Indenture, any Supplements and the Notes except where the failure to obtain or preserve such qualification is not reasonably expected to result in a Material Adverse Change.

 

Section 604.           Protection of Collateral.  The Issuer will from time to time execute (if applicable) and file all financing statements, all amendments thereto and continuation statements, instruments of further assurance and other instruments, and will, upon the reasonable request of the Manager, the Indenture Trustee, the Administrative Agent, any Hedge Counterparty or any Series Enhancer, take such other action necessary or advisable to:

 

(a)           maintain or preserve the Lien of this Indenture (and the priority thereof) including executing and filing such documents as may be required under any international convention for the perfection of interests in Managed Containers that may be adopted subsequent to the date of this Indenture;

 

(b)           perfect, publish notice of, and protect the validity of the security interest in the Collateral created pursuant to this Indenture;

 

(c)           enforce any of the items of the Collateral;

 

(d)           preserve and defend its right, title and interest to the Collateral and the rights of the Indenture Trustee in such Collateral against the claims of all Persons (other than the Noteholders or any Person claiming through the Noteholders); and

 

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(e)                                  pay any and all taxes levied or assessed upon all or any part of the Collateral, except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Noteholders.

 

In furtherance of clauses (b) and (c) above, the Issuer hereby agrees that if at any time subsequent to a Closing Date there is a change in Applicable Law (or a change in the interpretation of Applicable Law as in effect on such Closing Date) which, in the reasonable judgment of the Requisite Global Majority, may affect the perfection of the Indenture Trustee’s security interest in the Collateral, then the Issuer shall, within thirty (30) days after request from the Requisite Global Majority, furnish to the Indenture Trustee, the Administrative Agent, each Rating Agency and each Series Enhancer, an Opinion of Counsel either (i) stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, recording and refiling of this Indenture, any Supplements hereto and any other requisite documents, and with respect to the filing of any financing statements and continuation statements, as are necessary to maintain the Lien created by this Indenture and reciting the details of such action, or (ii) stating that, in the opinion of such counsel, no such action is necessary to maintain such Lien. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any Supplements hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that, in the opinion of such counsel, are required to maintain the lien and security interest of this Indenture.

 

Section 605.                                Performance of Obligations.

 

(a)                                  Except as otherwise permitted by this Indenture, the Management Agreement or the Contribution and Sale Agreement, the Issuer will not take, or fail to take, any action, and will use its best efforts not to permit any action to be taken by others, which would release any Person from any of such Person’s covenants or obligations under any agreement or instrument included in the Collateral, or which would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such agreement or instrument; provided that, nothing in this Indenture shall prohibit the Issuer, or the Manager on the Issuer’s behalf, from renegotiating, amending or consenting to waivers to Leases in accordance with the terms of the Management Agreement.

 

(b)                                 Nothing in this Indenture or any Supplement shall be construed as requiring the consent of the Indenture Trustee, any Series Enhancer or any Noteholder for the exercise by any Hedge Counterparty of its rights to (i) terminate the related Hedge Agreement in accordance with its terms in the event of any event of default or termination event (however defined) under such Hedge Agreement, (ii) undertake any permitted transfer under any Hedge Agreement, or (iii) reduce the notional amount in accordance with the terms of any Hedge Agreement in the event of a notional reduction event (however defined).

 

Section 606.                                Negative Covenants.  The Issuer will not, without the prior written consent of the Requisite Global Majority:

 

(a)                                  at any time sell, transfer, exchange or otherwise dispose of any of the Collateral, except as follows:

 

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(i)                                     in connection with a sale, conveyance or transfer pursuant to the provisions of Section 612 or Section 816 hereof; or

 

(ii)                                  in connection with a substitution or repurchase of Managed Containers as permitted or required in accordance with the terms of the Contribution and Sale Agreement; or

 

(iii)                               sales of Managed Containers (including any such sales resulting from the sell/repair decision of the Manager) to unaffiliated third parties that are not Sanctioned Persons, and to the extent that such sales are on terms and conditions that would be obtained in an ordinary course, arms-length transaction, to Affiliates regardless of the sales proceeds realized from such sales so long as an Asset Base Deficiency is not then continuing or would result from such sale of Managed Containers after giving effect to the application of the proceeds of such sales; provided, however, that (x) after giving effect to each such sale, the Issuer shall be in compliance with Section 628 hereof (and the Issuer shall provide each Interest Rate Hedge Provider notice of any such sale) and (y) if an Early Amortization Event has occurred and is continuing or would result from any such sale (after giving effect to the application of the proceeds thereof), no such sale may be made to an Affiliate under this clause (iii) unless the net proceeds from such sale are greater than or equal to the Adjusted Net Book Value of the Containers being sold; or

 

(iv)                              if an Asset Base Deficiency is then continuing or would result from such sale of Managed Containers after giving effect to the application of the proceeds of such sales, sales of Managed Containers (including any such sales resulting from the sell/repair decision of the Manager) regardless of the sales proceeds realized from such sales so long as (A) no Event of Default is then continuing or would result from such sale, (B) any sales to Affiliates made pursuant to this clause (iv) are made on terms and conditions that would be obtained in an ordinary course, arms-length transaction and the net proceeds from any such sale are greater than or equal to the Adjusted Net Book Value of the Managed Containers being sold, (C) after giving effect to each such sale, the Issuer shall be in compliance with Section 628 hereof (and the Issuer shall provide each Interest Rate Hedge Provider notice of any such sale) and (D) the aggregate sum of the Net Book Values of all Managed Containers that were sold pursuant to this clause (iv) during the applicable Collection Period and the three (3) immediately preceding Collection Periods for proceeds which are less than the Adjusted Net Book Value of the Managed Containers so sold does not exceed an amount equal to the product of (x) five percent (5%) times (y) an amount equal to a quotient (A) the numerator of which is equal to the sum of the aggregate Net Book Value of all Managed Containers as of the last day of each of the four (4) immediately preceding Collection Periods and (B) the denominator of which is equal to four (4); or

 

(v)                                 any other sales of Managed Containers to Persons that are not Sanctioned Persons which are not covered by the preceding clauses provided that each such sale shall be specifically approved by (A) the Requisite Global Majority

 

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and (B) the managers of the Issuer in accordance with the provisions of the Issuer’s limited liability company agreement; or

 

(vi)                              in connection with a Casualty Loss.

 

Notwithstanding the foregoing limitation of this Section 606(a), (A) sales of Managed Containers shall be permitted at such other times and in such other amounts as the Indenture Trustee (acting at the direction of the Requisite Global Majority) shall permit; and (B) in the case of the sale of Managed Containers by the Issuer to an Affiliate of the Issuer in order to permit such Affiliate to refinance Indebtedness secured by some or all of the Managed Containers, (x) the Requisite Global Majority may (but shall not be required to) approve the release of such Managed Containers from the Lien of this Indenture so long as the Sales Proceeds for such Managed Containers shall be used to prepay in full the Indebtedness hereunder that is related to such sold Managed Containers in accordance with Section 702(b) hereof and (y) if approved by the Requisite Global Majority, the Sales Proceeds from such sale (to the extent such Sales Proceeds shall represent the amount not used to repay in full the Indebtedness hereunder that is related to such sold Managed Containers) shall not be required to be deposited into the Trust Account pursuant to Section 302 hereof, but instead may be retained by the Manager as a deemed dividend from the Issuer, provided that no Early Amortization Event or Event of Default has occurred and is continuing, or would occur as a result of the transaction.

 

Notwithstanding anything to the contrary, during the continuation of an Early Amortization Event, the Issuer shall not sell all, or substantially all, of the Managed Containers without the consent of the Requisite Global Majority, each Hedge Counterparty and each Series Enhancer (if such Series Enhancer is then the Control Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement) if an Asset Base Deficiency shall have occurred and be continuing or would result from such proposed sale after giving effect to the application of the proceeds of such sales.

 

(b)                                 claim any credit on, make any deduction from the principal, premium, if any, or interest payable in respect of the Notes (other than amounts properly withheld from such payments under any Applicable Law) or assert any claim against any present or former Noteholder by reason of the payment of any taxes levied or assessed upon any of the Collateral; or

 

(c)                                  release any item from the Collateral, except as permitted pursuant to the terms of a Transaction Document.

 

Section 607.                                Corporate Separateness of the Issuer.

 

(a)                                  The Issuer shall (1) conduct its business in its own name, (2) maintain its books and records separate from those of any other Person, (3) not commingle its funds with any other Person (except for any commingling of Collections which may occur prior to the identification and segregation of such amounts in accordance with the terms of the Management Agreement) and maintain its bank accounts separate from those of any other Person, (4) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person, (5) hold itself out as a separate entity and (6) observe all other organizational formalities.

 

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(b)                                 Notwithstanding any provision of law which otherwise empowers the Issuer, the Issuer shall not (1) hold itself out as being liable for the debts of any other Person, (2) act other than in its limited liability company name and through its duly authorized officers, managers or agents, (3) enter into any transaction described in Section 610 (except pursuant to this Indenture) other than trade payables and expense accruals incurred in the ordinary course of its business, or (4) engage in any other activity not contemplated by this Indenture or other Transaction Documents.

 

Section 608.                                No Bankruptcy Petition.  The Issuer shall not (1) commence any Insolvency Proceeding seeking to have an order for relief entered with respect to it, or seeking reorganization, arrangement, adjustment, wind-up, liquidation, dissolution, composition or other relief with respect to it or its debts, (2) seek appointment of a receiver, trustee, custodian or other similar official for it or any part of its assets, (3) make a general assignment for the benefit of creditors, or (4) take any action in furtherance of, or consenting or acquiescing in, any of the foregoing.

 

Section 609.                                Liens.  The Issuer shall not (i) permit any Lien (except any Permitted Encumbrance) to be created on or extend to or otherwise arise upon or burden the Collateral or any part thereof or any interest therein or the Proceeds thereof, or (ii) permit the Lien of this Indenture not to constitute a valid first priority perfected security interest in the Collateral to the extent that such Lien can be perfected pursuant to Applicable Law.

 

Section 610.                                Other Debt.  The Issuer shall not contract for, create, incur, assume or suffer to exist any Indebtedness of the Issuer other than (i) the Notes issued pursuant to this Indenture or any Supplement, (ii) any Management Fee, Manager Advances and all other amounts payable pursuant to the provisions of the Management Agreement and reimbursements payable pursuant to the terms of the Parent Guaranty, (iii) any obligation (including a deferred purchase price note and any normal warranty) arising in connection with a purchase or sale of Containers permitted by the Transaction Documents (as in effect as of the date hereof and as amended, restated or otherwise modified after the date hereof in accordance with the terms thereof), but only to the extent of the time limit contemplated by Section 3.01(ii) of the Contribution and Sale Agreement, (iv) any Indebtedness (including any Hedge Agreement) that is permitted or required pursuant to the terms of any Transaction Document, and (v) trade payables and expense accruals incurred in the ordinary course and which are incidental to the purposes permitted pursuant to the Issuer’s organizational documents.

 

Section 611.                                Guarantees, Loans, Advances and Other Liabilities.  Except for investments in Eligible Investments, the Issuer will not make any loan, advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing, or otherwise), endorse (except for the endorsement of checks for collection or deposit) or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stock or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person.  However, the preceding sentence shall not limit the terms of any Note Purchase Agreement or Enhancement Agreement or prevent the execution, delivery and performance of any Note Purchase Agreement or Enhancement Agreement by the Issuer.

 

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Section 612.                                Consolidation, Merger and Sale of Assets.  (a) The Issuer shall not consolidate with or merge with, or into, any other Person or sell, convey, transfer or lease any of its assets, whether in a single transaction or a series of transactions, to any Person except for (i) any such sale, conveyance or transfer contemplated in this Indenture or any Supplement or the Management Agreement and (ii) the leasing or sale of the Managed Containers in accordance with the terms of the Management Agreement.

 

(b)                                 The obligations of the Issuer hereunder shall not be assignable nor shall any Person succeed to the obligations of the Issuer hereunder except in each case in accordance with the provisions of this Indenture.

 

Section 613.                                Other Agreements; Amendment of Transaction Documents.  (a)  The Issuer will not after the date of the issuance of any Notes enter into, or become a party to, any agreements or instruments other than the Transaction Documents and any other agreement(s) contemplated by the terms of the Transaction Documents, including, without limitation, (i) any agreement(s) for disposition of the Transferred Assets permitted by Sections 606, 804 or 816 hereof and (ii) any agreement(s) for the sale, repurchase, lease or re-lease of a Managed Container made in accordance with the provisions of the Contribution and Sale Agreement and the Management Agreement.

 

(b)                                 The Issuer will not amend, modify or waive any provision of any Transaction Document, or give any approval or consent or permission provided for therein, except in accordance with the express terms of such Transaction Document.

 

Section 614.                                Charter Documents.  The Issuer will not amend or modify (a) its certificate of formation or (b) Section 4.1, 8.3, 8.4, 16.1, 16.2, 16.3 or 16.9 of its limited liability company agreement without (i) the prior written consent of the Requisite Global Majority and (ii) satisfaction of the Rating Agency Condition.  Except as otherwise provided in clause (b) above, the Issuer shall deliver written notice to each Rating Agency of any amendment or modification to its limited liability company agreement.

 

Section 615.                                Capital Expenditures.  The Issuer will not make any expenditure (by long term or operating lease or otherwise) for capital assets (both realty and personalty), except for (a) acquisition of additional Managed Containers from the Seller in accordance with the terms of the Contribution and Sale Agreement or (b) capital improvements to the Managed Containers made in the ordinary course of its business and in accordance with the terms of the Management Agreement.

 

Section 616.                                Permitted Activities; Compliance with Organizational Documents.  The Issuer will not engage in any activity or enter into any transaction except for those activities that are specified in its organizational documents or that are contemplated by a Transaction Document. The Issuer will observe all organizational and managerial procedures required by its organizational documents and applicable law. The Issuer shall (i) keep complete minutes of the meetings of the managers and/or members of the Issuer and (ii) continuously maintain the resolutions, agreements and other instruments underlying the transaction contemplated by the Transaction Documents.

 

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Section 617.                                Investment Company Act.  The Issuer will conduct its operations in a manner which will not subject it to registration as an “investment company” under the Investment Company Act of 1940, as amended.

 

Section 618.                                Payments of Collateral.  If the Issuer shall receive from any Person any payments with respect to the Collateral (to the extent such Collateral has not been released from the Lien of this Indenture), the Issuer shall receive such payment in trust for the Indenture Trustee, as secured party hereunder, and subject to the Indenture Trustee’s security interest and shall deposit such payment in the Trust Account as required under this Indenture.

 

Section 619.                                Notices.  The Issuer shall notify the Indenture Trustee, each Hedge Counterparty and each Series Enhancer in writing of any of the following promptly, but in any event within seven (7) Business Days upon an Authorized Officer learning of the occurrence thereof, describing the same and, if applicable, the steps being taken by the Person(s) affected with respect thereto:

 

(a)                                  Default.  The occurrence of an Event of Default;

 

(b)                                 Litigation.  The institution of any litigation, arbitration proceeding or Proceeding before any Governmental Authority which reasonably will be expected to result in a Material Adverse Change;

 

(c)                                  Material Adverse Change.  The occurrence of a Material Adverse Change; or

 

(d)                                 Other Events.  The occurrence of an Early Amortization Event or such other events that would, with the giving of notice or the passage of time or both, constitute an Event of Default or an Early Amortization Event.

 

Section 620.                                Books and Records.  The Issuer shall maintain complete and accurate books and records in which full and correct entries in conformity with GAAP shall be made of all dealings and transactions in relation to its business and activities. In connection with each transfer of Transferred Assets to the Issuer, the Issuer shall report, or cause to be reported, on its financial records the transfer of the Transferred Assets as a purchase or capital contribution (if applicable) under GAAP. The Issuer will ensure that any consolidated financial statements of TAL and TAL International Group note that Issuer is a bankruptcy remote special purpose subsidiary established to obtain securitized financing.

 

Section 621.                                Subsidiaries.  The Issuer shall not create any Subsidiaries.

 

Section 622.                                Investments.  The Issuer shall not make or permit to exist any Investment in any Person except for Investments in Eligible Investments made in accordance with the terms of this Indenture.

 

Section 623.                                Use of Proceeds.  (a) The Issuer shall use the proceeds of the Notes only for (i) the purchase of Containers and Related Assets and (ii) other general company purposes including the distribution of dividends, repayment of debt and paying costs relating to the issuance of the Notes and any other purposes contemplated by Section 302.

 

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(b)                                 The Issuer shall not permit any proceeds of the Notes to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying any margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time, and shall furnish to each Noteholder, upon its request, a statement in conformity with the requirements of Regulation U.

 

Section 624.                                Asset Base Certificate.  The Issuer shall prepare and deliver to the Indenture Trustee on or before each Determination Date, an Asset Base Certificate as of the end of the immediately preceding fiscal month of the Issuer.

 

Section 625.                                Financial Statements.  The Issuer shall deliver to the Indenture Trustee the following financial statements prepared in accordance with GAAP (subject to the limitations set forth below):  (a) the quarterly financial statements of the Issuer within sixty (60) days after the end of each fiscal quarter ending on or after December 31, 2009; (b) annual unaudited financial statements of the Issuer within one hundred and twenty (120) days after the end of each fiscal year ending on or after December 31, 2009; (c) annual audited consolidated and unaudited consolidating financial statements of TAL International Group and its consolidated subsidiaries together with the report of its Independent Accountants, within (x) in the event that TAL International Group shall not then have at least one class of securities registered under the Exchange Act, one hundred fifty (150) days after the end of each fiscal year ending on or after December 31, 2009, or (y) in the event that TAL International Group shall then have at least one class of securities registered under the Exchange Act, the earlier of (A) one hundred fifty (150) days after the end of each fiscal year ending on or after December 31, 2009, or (B) ten (10) days following TAL International Group’s filing of such annual audited consolidated financial statements with the Securities and Exchange Commission; (d) beginning with the fiscal year ending December 31, 2009, within one hundred fifty (150) days after the end of each fiscal year of TAL International Group, a report addressed to the manager of the Issuer, to the effect that such firm of accountants has audited the books and records of TAL International Group, and issued its report in connection with the audit report on the consolidated financial statements of TAL International Group and specifying the results of the application of such agreed upon procedures, as the Administrative Agent shall reasonably agree from time to time, relating to the objectives specified on Exhibit D to the Management Agreement; and (e) within sixty (60) days after the close of the first three fiscal quarters in each fiscal year of TAL International Group, the consolidated balance sheet of TAL International Group and its consolidated subsidiaries as at the end of such fiscal quarter, the related consolidated statements of income for such fiscal quarter and cash flows for the elapsed portion of the fiscal year ended with the last day of such fiscal quarter.  All such financial statements shall be prepared in accordance with GAAP, subject to, in the case of unaudited financial statements, the absence of footnotes, and in the case of the quarterly financial statements, the absence of year-end adjustments. In addition to the foregoing, within one hundred fifty (150) days after the end of each fiscal year, the Issuer shall deliver to the Indenture Trustee, each Rating Agency and each Series Enhancer an Officer’s Certificate certifying that, as of the date of such certificate, there have been no changes in the name or jurisdiction of formation of the Issuer.  Delivery of such reports, information and documents to the Indenture Trustee is for informational purposes only and the Indenture Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Indenture Trustee is entitled to rely exclusively on Officer’s Certificates).  In the event such independent public

 

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accountants require the Indenture Trustee to agree to the procedures to be performed by such firm in any of the reports required to be prepared pursuant to this Section 625 the Issuer or the Administrative Agent shall direct the Indenture Trustee in writing to so agree; it being understood and agreed that the Indenture Trustee will deliver such letter of agreement in conclusive reliance upon the direction of the Issuer or the Administrative Agent, as the case may be, and the Indenture Trustee has not made any independent inquiry or investigation as to, and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures.

 

Section 626.                                UNIDROIT Convention.  The Issuer shall comply with the terms and provisions of the UNIDROIT Convention or any other internationally recognized system for recording interests in or liens against shipping containers at the time that such convention is adopted.

 

Section 627.                                Other Information.  For so long as any of the Notes are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and the Issuer is not subject to Section 13 or 15(d) of the Exchange Act, the Issuer will, provide or cause to be provided to any Noteholder and any prospective purchaser thereof designated by such a Noteholder, upon the request of such Noteholder or prospective purchaser, the information required to be provided to such Noteholder or prospective purchaser by Rule 144A(d)(4) under the Securities Act.

 

Section 628.                                Hedging Requirement.  (a)  On the Hedge Effective Date, the Issuer will enter into, and maintain for so long as any Notes or other obligations under the Transaction Documents remain unpaid, one or more Interest Rate Hedge Agreements with an aggregate notional balance (x) equal to or exceeding the product of (i) seventy-five percent (75%) and (ii) the  portion of the Asset Base that is attributable to those Eligible Containers that are, at such time, subject to an unexpired Lease (including a Finance Lease) that requires the lessee to maintain specific containers on-hire for the duration of such Lease (the amount described in this clause (x), the “Minimum Hedging Amount”) and (y) less than or equal to the product of (i) one hundred five percent (105%) and (ii) the  portion of the Asset Base that is attributable to those Eligible Containers that are contemplated in clause (x)(ii) above (the amount described in this clause (y), the “Maximum Hedging Amount”), all of which Interest Rate Hedge Agreements shall have a projected amortization schedule in accordance with Exhibit F hereto.

 

(b)                                 If the Issuer, or the Manager, on behalf of the Issuer, fails to comply with the Hedging Requirement, the Requisite Global Majority shall have the right, in its sole discretion and at the expense of the Issuer, upon thirty (30) days notice, if necessary (as determined in the sole discretion of the Requisite Global Majority), to direct the Indenture Trustee, to enter into, maintain or terminate (in whole or in part), one or more Interest Rate Hedge Agreements selected by the Requisite Global Majority (in its sole discretion) on behalf of the Issuer such that, after giving effect to such action, the Issuer will be in compliance with the Hedging Requirement. In the event the Requisite Global Majority determines to direct the Indenture Trustee to enter into, maintain or terminate (in whole or in part) an Interest Rate Hedge Agreement on the Issuer’s behalf, the Requisite Global Majority shall promptly send a copy of any such agreement to the Issuer and may provide the Indenture Trustee and Manager on behalf of the Issuer with a written direction to deposit in the Trust Account certain amounts to

 

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reimburse the Requisite Global Majority or a third party for the costs of such Interest Rate Hedge Agreement.

 

(c)                                  If at any time while the Notes are Outstanding an Interest Rate Hedge Counterparty ceases to be an Investment Grade Entity, the Issuer shall within sixty (60) days after it obtains knowledge of such event, either (i) replace the non-conforming Interest Rate Hedge Counterparty with an Eligible Interest Rate Hedge Counterparty or (ii) require the non-conforming Interest Rate Hedge Counterparty to deliver a letter of credit or provide alternative credit support in order to support its obligations under the Interest Rate Hedge Agreement, as the Issuer and such non-conforming Interest Rate Hedge Counterparty may agree, subject to the consent of the Requisite Global Majority and the prior written confirmation that the Rating Agency Condition has been satisfied.

 

(d)                                 All payments received from all such Interest Rate Hedge Agreements shall be deposited directly into the Trust Account.  Any amounts delivered by an Interest Rate Hedge Counterparty pursuant to a Credit Support Annex to the Interest Rate Hedge Agreement shall be held in a separate, segregated trust account subject to the terms of the Interest Rate Hedge Agreement.

 

Section 629.                                Ownership of Issuer.  All of the issued and outstanding membership interests in the Issuer shall be owned by TAL or any of its Subsidiaries.

 

Section 630.                                [Intentionally Omitted].

 

Section 631.                                Tax Election of the Issuer.  The Issuer will not elect or agree to elect to be treated as an association taxable as a corporation for United States federal income tax or any State income or franchise tax purposes.

 

Section 632.                                Rating Agency Notices.  Subject to the application of applicable law, the Issuer shall promptly deliver a copy of any written notice concerning the Issuer’s credit rating received by it from any Rating Agency to the Indenture Trustee, each Hedge Counterparty and each Series Enhancer.

 

Section 633.                                Compliance with Law.  The Issuer shall comply with any applicable statute, license, rule or regulation by which it or any of its properties may be bound if the failure to comply would reasonably be expected to result in a Material Adverse Effect.

 

Section 634.                                OFAC.  The Issuer shall not (i) in a manner which would violate the laws of the United States, other than pursuant to a license issued by OFAC, lease, or consent to any sublease of, any of the Containers to any Person that is a Sanctioned Person or (ii) derive any of its assets or operating income from investments in or transactions with any such Sanctioned Person.  If the Issuer obtains knowledge that a container is subleased to a Sanctioned Person or located or used in a Sanctioned Country in a manner which would violate the laws of the United States (other than pursuant to a license issued by OFAC), then the Issuer shall, within ten (10) Business Days after obtaining knowledge thereof, remove such Container from the Asset Base for so long as such condition continues.

 

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ARTICLE VII

 

DISCHARGE OF INDENTURE; PREPAYMENTS

 

Section 701.                                Full Discharge.  Upon payment in full of all Outstanding Obligations, the Indenture Trustee shall execute and deliver to the Issuer such deeds or other instruments as shall be requisite to evidence the satisfaction and discharge of this Indenture and the security hereby created with respect to each Series, and to release the Issuer from its covenants contained in this Indenture and the related Supplement with respect to each such Series.  In connection with the satisfaction and discharge of this Indenture, the Indenture Trustee shall be provided with, and shall be entitled to conclusively rely upon, an Opinion of Counsel stating that all conditions precedent specified in the Indenture to such satisfaction and discharge have been satisfied.

 

Section 702.                                Prepayment of Notes.

 

(a)                                  Mandatory Prepayments.  Unless otherwise specified in a Supplement, the Issuer shall be required to prepay the then unpaid principal balance of all, or a portion of, one or more Series of Notes then Outstanding and all amounts due under the related Hedge Agreements (including any termination payments) if, on any Payment Date, an Asset Base Deficiency exists, and has not otherwise been cured by such date through the acquisition of additional Eligible Containers or otherwise.  Such Prepayment (a “Supplemental Principal Payment”) shall be in the amount of such Asset Base Deficiency and shall be paid in accordance with the priority of payments set forth in Section 302 hereof. The calculations referred to herein shall be evidenced by the Asset Base Certificate received by the Indenture Trustee on any Determination Date.  On each Payment Date, any Supplemental Principal Payment Amount then due and owing shall be applied first to each Series of Warehouse Notes then Outstanding on a pro rata basis, in proportion to the then unpaid principal balance of such Warehouse Notes, until the principal balances of all Warehouse Notes have been paid in full, and then to all Series of Term Notes then Outstanding on a pro rata basis, in proportion to the then unpaid principal balance of each such Series of Term Notes.  Notwithstanding the foregoing, if sufficient funds are not available to allow the Issuer to prepay the principal balance of the Warehouse Notes in an amount equal to the Asset Base Deficiency on such Payment Date, then the amount of any Supplemental Principal Payment Amount to be actually paid on such Payment Date shall be allocated among all Series of Notes then Outstanding (including the Term Notes) on a pro rata basis, in proportion to the then unpaid principal balance of such Notes.

 

(b)                                 Voluntary Prepayments.  So long as no Early Amortization Event is then continuing, the Issuer may, from time to time, make an optional Prepayment of principal of the Notes of a Series at the times, in the amounts and subject to the conditions and limitations set forth in the Supplement for the Series of Notes to be prepaid, and all amounts due under the Hedge Agreements (including any termination payments).  If an Early Amortization Event is then continuing, all optional Prepayments made in accordance with the provisions of this Section 702(b) shall be applied in accordance with the applicable provisions of Section 302 hereof.  The Issuer shall promptly confirm any telephonic notice of prepayment in writing.  Any optional Prepayment of principal made by the Issuer pursuant to this Section 702(b) shall also include accrued interest to the date of the prepayment on the amount being prepaid.  Any optional Prepayment made pursuant to the provisions of this Section 702(b) shall be accomplished by a

 

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deposit of funds directly into the Trust Account and, unless otherwise specified in the Supplement for any Series of Notes then Outstanding, may be applied by the Issuer to reduce the unpaid principal balance of one or more Series of Notes then Outstanding, such Series to be selected in the sole discretion of the Issuer.  Notice of any voluntary prepayment of a Series of Term Notes to be made by the Issuer pursuant to the provisions of this Section 702(b) shall be given by the Issuer to the Indenture Trustee and, if applicable, the Noteholders of the Series of Notes to be prepaid, not later than the third (3rd) Business Day (or such longer period of time as specified in the related Supplement for a Series) prior to the date of such prepayment and not earlier than the Payment Date immediately preceding the date of such Prepayment.

 

(c)                                  Adjustment of Prospective Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts.  In the event that the Issuer makes a Prepayment of less than all of the aggregate unpaid principal balance of any Series of Term Notes in accordance with the provisions of Section 702(a) or Section 702(b), then the Issuer shall promptly (but in any event within five (5) Business Days after the date on which such Prepayment is made) thereafter recalculate (subject to verification by each Series Enhancer) the Minimum Principal Payment Amount and Scheduled Principal Payment Amount for each future Payment Date such that, after giving effect to such adjustment, the Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts for all subsequent Payment Dates for such Series of Term Notes shall be reduced by an amount equal to the quotient of (i) the aggregate amount of the Prepayment actually received by the Noteholders of such Series divided by (ii) the number of remaining Payment Dates to and including, (A) the Legal Final Maturity Date (with respect to the Minimum Principal Payment Amount) or (B) the Expected Final Maturity Date (with respect to the Scheduled Principal Payment Amount), for such Series of Notes.

 

Section 703.                                Unclaimed Funds.  In the event that any amount due to any Noteholder remains unclaimed, the Issuer shall, at its expense, cause to be published once, in the eastern edition of The Wall Street Journal, notice that such money remains unclaimed. Any such unclaimed amounts shall not be invested by the Indenture Trustee (notwithstanding the provisions of Section 303 hereof) and no additional interest shall accrue on the related Note subsequent to the date on which such funds were first available for distribution to such Noteholder. Any such unclaimed amounts shall be held by the Indenture Trustee in trust until the latest of (i) two (2) years after the date of the publication described in the second preceding sentence, (ii) the date all other Noteholders of such Series shall have received full payment of all principal, interest, premium, if any, and other sums payable to them on such Notes or the Indenture Trustee shall hold (and shall have notified the Noteholders that it holds) in trust for that purpose an amount sufficient to make full payment thereof when due and (iii) the date the Issuer shall have fully performed and observed all its covenants and obligations contained in this Indenture and the related Supplement with respect to such Series of Notes.  Thereafter, any such unclaimed amounts shall be paid to the Issuer by the Indenture Trustee on written demand; and thereupon each of the Indenture Trustee and the Issuer shall be released from all further liability with respect to such monies, and thereafter the Noteholders in respect of which such monies were so paid to the Issuer shall have no rights in respect thereof; provided, that if such money or any portion thereof that would be paid to the Issuer had been previously deposited by the Series Enhancer of such Series with the Indenture Trustee for the payment of principal or interest on the Notes of such Series, to the extent any amounts are owing to such Series Enhancer, such amounts shall be paid promptly to such Series Enhancer.

 

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ARTICLE VIII

 

DEFAULT PROVISIONS AND REMEDIES

 

Section 801.                                Event of Default.  “Event of Default”, wherever used herein with respect to any Series of Notes, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any Governmental Authority):

 

(1)                                  the occurrence of the events set forth in clause (A), clause (B) or clause (C) at the times set forth therein;

 

(A)                              default in (x) the payment on any Payment Date of any interest payment then due and payable on any Series of Notes , any scheduled payment due by the Issuer on any Interest Rate Hedge Agreement then in effect or any Minimum Principal Payment Amount for such Payment Date and the continuation of such default for more than three (3) Business Days, or (y) the payment on the Legal Final Maturity Date of any Series of Notes of the then unpaid principal balance of such Series of Notes;

 

(B)                                default in the payment of (x) any Indenture Trustee’s Fees then due and payable or (y) a Premium or other amounts due and owing to any Series Enhancer, and the continuation of such default contemplated by clause (x) or clause (y) of this clause (B) for more than five (5) Business Days after the amounts in such clause (x) or clause (y) shall have become due and payable in accordance with the terms of such Notes, this Indenture and/or the related Supplement;

 

(C)                                default in the payment of other amounts not dealt with in clauses (A) or (B) above owing to the Noteholders of any Series and the continuation of such default for more than thirty (30) days after the same shall have become due and payable in accordance with the terms of such Notes, this Indenture and the related Supplement;

 

(2)                                  default in the observation or performance of any covenant of the Issuer set forth in Sections 608, 612 or 621 hereof which breach materially and adversely affects the interest of any Noteholder or Series Enhancer (if such Series Enhancer is then the Control Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement);

 

(3)                                  the occurrence of the events set forth in clause (A) or (B) at the times set forth therein:

 

(A)                              default in the observation or performance of any covenant of the Issuer set forth in Sections 606, 607, 609, 610, 611, 613(a), 616 or 622 hereof which breach materially and adversely affects the interest of any Noteholder or Series Enhancer (if such Series Enhancer is then the Control

 

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Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement), and, if curable, continues unremedied for fifteen (15) days after the earlier of the date (x) on which there has been given to the Issuer, by the Indenture Trustee, any Series Enhancer or any Noteholder, a written notice specifying such default or breach and requiring it to be remedied and (y) any authorized officer of the Issuer or any Authorized Officer of the Manager shall have knowledge of such default or breach;

 

(B)                                default in any material respect in the observation or performance of any covenant of the Issuer set forth in Sections 619(a) or 619(d) and the continuation of such default for three (3) Business Days;

 

(4)                                  the occurrence of the events set forth in clause (A), (B) or (C) at the times set forth herein:

 

(A)                              default in the observation or performance of any covenant of the Issuer set forth in Sections 602, 614, 615 or 623(b) hereof, which breach if curable, continues for thirty (30) days after the earlier of the date (x) on which there has been given to the Issuer, by the Indenture Trustee, any Series Enhancer or any Noteholder, a written notice specifying such default or breach and requiring it to be remedied and (y) on which any authorized officer of the Issuer or any Authorized Officer of the Manager shall have knowledge of such default or breach;

 

(B)                                default in any material respect in the observation or performance of any covenant of the Issuer set forth in Sections 613(b), 624 or 632 and, if curable, which continues for fifteen (15) days after the earlier of the date (x) on which there has been given to the Issuer, by the Indenture Trustee, any Series Enhancer or any Noteholder, a written notice specifying such default or breach and requiring it to be remedied and (y) on which any authorized officer of the Issuer or any Authorized Officer of the Manager shall have knowledge of such default or breach;

 

(C)                                default in any material respect in the observation or performance of any covenant of the Issuer to deliver financial statements and reports set forth in the first sentence of Section 625 and the continuation of such default for fifteen (15) days after the earlier of the date (x) on which there has been given to the Issuer, by the Indenture Trustee, any Series Enhancer or any Noteholder, a written notice specifying such default or breach and requiring it to be remedied and (y) on which any authorized officer of the Issuer or any Authorized Officer of the Manager shall have knowledge of such default or breach; provided, however, that (w) if the reason for such default is primarily attributable to changes in accounting principles or interpretations or the application of the same, (x) such changes are not related to the assets of the Issuer, and (y) no Manager Default then exists under Sections 9.1.9 through 9.1.12 of the Management Agreement, and (z) if the Issuer is diligently attempting to

 

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effect such cure at the end of the thirty (30) day period, then the Issuer shall be entitled to an additional thirty (30) day period to complete such cure;

 

(5)                                  default in the performance, or breach, in any material respect, of (a) any covenant of the Issuer in this Indenture or any other Transaction Document (other than a covenant or agreement a breach of which or default in the performance of which is specifically dealt with elsewhere in this Section 801), which breach, if curable, continues for thirty (30) days after the earlier of the date (x) on which there has been given to the Issuer, by the Indenture Trustee, any Series Enhancer or any Noteholder, a written notice specifying such default or breach and requiring it to be remedied and (y) on which any authorized officer of the Issuer or any Authorized Officer of the Manager shall have knowledge of such default or breach, provided, however, that if the Issuer is diligently attempting to effect such cure at the end of such thirty (30) day period, the Issuer shall be entitled to an additional thirty (30) day period in which to complete such cure; or (b) any representation or warranty of the Issuer made in any of the Transaction Documents or in any certificate or other writing delivered pursuant hereto or thereto or in connection herewith with respect to or affecting any Outstanding Notes shall prove to be inaccurate in any respect which materially and adversely affects the interests of any Noteholder or any Series Enhancer (if such Series Enhancer is then the Control Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement) as of the time when the same shall have been made, and such inaccuracy, if curable, continues for thirty (30) days after the date on which there has been given to the Issuer by the Indenture Trustee, or to the Issuer and the Indenture Trustee by any Series Enhancer or any Noteholders, a written notice specifying such inaccuracy and requiring it to be remedied, provided, however, that if such inaccuracy is capable of cure and the Issuer is diligently attempting to effect such cure at the end of such thirty (30) day period, the Issuer shall be entitled to an additional thirty (30) day period in which to complete such cure;

 

(6)                                  an involuntary case is commenced under the Bankruptcy Code against the Issuer and the petition is not controverted within 10 days, or is not dismissed within sixty (60) days, after commencement of the case, or a decree or order for relief by a court having jurisdiction in respect of the Issuer is entered appointing a receiver, liquidator, assignee, custodian, trustee, or sequestrator (or other similar official) for the Issuer or for any substantial part of its properties, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days;

 

(7)                                  the commencement by the Issuer of a voluntary case under any applicable Insolvency Law, or other similar law now or hereafter in effect, or the consent by the Issuer to the appointment of or taking possession by a

 

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receiver, liquidator, assignee, custodian, trustee or sequestrator (or other similar official) of the Issuer, or any substantial part of its properties, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as they become due, or the taking of corporate action by the Issuer in furtherance of any such action;

 

(8)                                  the Aggregate Note Principal Balance shall exceed the Asset Base and such condition continues for thirty (30) days without being cured or waived by each Control Party;

 

(9)                                  the occurrence of a contribution failure with respect to a Plan maintained by Issuer or an ERISA Affiliate of the Issuer, which contribution failure is sufficient to give rise to a lien under Section 302(f) of ERISA; or

 

(10)                            the Indenture Trustee shall fail to have a first priority perfected security interest under the laws of the United States in any material portion of the Collateral (other than as a result of a Permitted Encumbrance) and such condition continues for fifteen (15) days without being cured or waived by each Control Party unless such failure to have a first priority perfected security interest is due to any act or omission of the Indenture Trustee or the Noteholders;

 

(11)                            the Issuer is required to register as an investment company under the Investment Company Act of 1940, as amended;

 

(12)                            the rendering against the Issuer of a final, non-appealable judgment, decree or order for the payment of money in excess of One Million Dollars ($1,000,000), (to the extent not paid when due or covered by a reputable and solvent insurance company, with any portion of such judgment, decree or order not so paid or not so covered, as applicable, to be included in the determination of the dollar amount specified in this clause (12)) which judgment, decree or order results in a claim that would entitle the claimholder to petition for the involuntary bankruptcy of the Issuer under the Bankruptcy Code, and the continuance of such judgment, decree or order for a period of 60 consecutive days;

 

(13)                            all of the following shall have occurred:  (A) a Manager Default shall have occurred and be continuing, (B) the Requisite Global Majority shall have delivered the Manager Termination Notice to the Manager in accordance with the terms of the Management Agreement, (C) the Indenture Trustee (at the direction of the Requisite Global Majority) shall have directed the Issuer to appoint a replacement Manager, and (D) a replacement Manager has not assumed the duties of the terminated Manager within ninety (90) days measured from the date of such Manager Termination Notice; or

 

(14)                            the occurrence of any event or condition specified as an Event of Default in a Supplement.

 

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The occurrence of an Event of Default with respect to one Series of Notes, except to the extent waived by the related Control Party for such Series of Notes, shall constitute an Event of Default with respect to all other Series of Notes then Outstanding unless the related Supplement with respect to each such Series of Notes shall specifically provide to the contrary.

 

Section 802.                                Acceleration of Stated Maturity; Rescission and Annulment.  (a)  Upon the occurrence of an Event of Default of the type described in paragraph (6) or (7) of Section 801, the unpaid principal balance of, and accrued interest on, all Series of Notes, together with all other amounts then due and owing to the Noteholders, each Series Enhancer and each Hedge Counterparty, shall become immediately due and payable without further action by any Person. Except as set forth in the immediately preceding sentence, if an Event of Default under Section 801 occurs and is continuing, then and in every such case the Indenture Trustee shall at the direction of the Requisite Global Majority declare the principal of and accrued interest on all Notes of all Series then Outstanding to be due and payable immediately, by a notice in writing to the Issuer and to the Indenture Trustee given by the Requisite Global Majority, and upon any such declaration such principal and accrued interest shall become immediately due and payable.

 

(b)                                 At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article provided, the Requisite Global Majority, in its sole discretion, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

 

(i)                                     the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

 

(A)                              all of the installments of interest and, if the Legal Final Maturity Date has occurred with respect to any Series, principal of all Notes of such Series, in each case to the extent such amounts were overdue prior to the date of such acceleration;

 

(B)                                to the extent that payment of such interest is lawful, interest at the Default Rate on the amounts set forth in clause (A) above;

 

(C)                                all unpaid Indenture Trustee’s Fees and sums paid or advanced by the Indenture Trustee hereunder or by the Manager and the reasonable and documented compensation, out-of-pocket expenses, disbursements and advances of the Indenture Trustee, its agents and counsel incurred in connection with the enforcement of this Indenture;

 

(D)                               all amounts due to each Series Enhancer; and

 

(E)                                 all payments due and payable under any Hedge Agreement, together with interest thereon in accordance with the terms thereof; and

 

(ii)                                  all Events of Default, other than the nonpayment of the principal of or interest on Notes which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 813 hereof.

 

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No such rescission with respect to any Event of Default shall affect any subsequent Event of Default or impair any right consequent thereon, nor shall any such rescission affect any Hedge Agreement which has been terminated in accordance with its terms.

 

Section 803.                                Collection of Indebtedness.  The Issuer covenants that, if an Event of Default occurs and is continuing and a declaration of acceleration has been made under Section 802 and not rescinded, the Issuer will, upon demand of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the Noteholders of all Series then Outstanding, all Hedge Counterparties and all Series Enhancers, an amount equal to the whole amount then due and payable on all Series of Notes for principal and interest, with interest upon the overdue principal and, to the extent that payment of such interest shall be legally enforceable, upon overdue installments of interest, at the Default Rate payable with respect to each such Note and, in addition thereto, such further amount as shall be sufficient to cover all other Outstanding Obligations, the costs and out-of-pocket expenses of collection, including the reasonable and documented compensation, expenses, disbursements and advances of the Indenture Trustee and the Requisite Global Majority, their respective agents and counsel incurred in connection with the enforcement of this Indenture.

 

Section 804.                                Remedies.  If an Event of Default occurs and is continuing, the Indenture Trustee, by such officer or agent as it may appoint, shall notify each Noteholder, each Hedge Counterparty, the Administrative Agent, each Series Enhancer and the applicable Rating Agencies, if any, of such Event of Default.  So long as an Event of Default is continuing or at any time after a declaration of acceleration has been made, the Indenture Trustee shall if instructed by the Requisite Global Majority:

 

(i)                                     institute any Proceedings, in its own name and as trustee of an express trust, for the collection of all amounts then due and payable on the Notes of all Series under this Indenture or the related Supplement with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Collateral and any other assets of the Issuer any monies adjudged due;

 

(ii)                                  subject to the quiet enjoyment rights of any lessee of a Managed Container, sell (including any sale made in accordance with Section 816 hereof), hold or lease the Collateral or any portion thereof or rights or interest therein, at one or more public or private transactions conducted in any manner permitted by law;

 

(iii)                               institute any Proceedings from time to time for the complete or partial foreclosure of the Lien created by this Indenture with respect to the Collateral;

 

(iv)                              institute such other appropriate Proceedings to protect and enforce any other rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy;

 

(v)                                 exercise any remedies of a secured party under the Uniform Commercial Code or any applicable law and take any other appropriate action to

 

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protect and enforce the rights and remedies of the Indenture Trustee or the Noteholders hereunder; and

 

(vi)                              appoint a receiver or a manager over the Issuer or its assets.

 

Section 805.                                Indenture Trustee May Enforce Claims Without Possession of Notes.

 

(a)                                  In all Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all of the Noteholders, and it shall not be necessary to make any Noteholder a party to any such Proceedings.

 

(b)                                 All rights of action and claims under this Indenture, the related Supplement or any of the Notes may be prosecuted and enforced by the Indenture Trustee without the possession of such Notes or the production thereof in any Proceeding relating thereto, and any such Proceeding instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery whether by judgment, settlement or otherwise shall, after provision for the payment of the reasonable compensation, expenses, and disbursements incurred and advances made, by the Indenture Trustee, its agents and counsel, be for the ratable benefit of the Noteholders of the Notes, subject to the subordination of payments among Classes of a particular Series as set forth in the related Supplement for such Series.

 

Section 806.                                Allocation of Money Collected.  If the Notes of all Series have been declared due and payable following an Event of Default and such declaration and its consequences have not been rescinded or annulled, any money collected by the Indenture Trustee pursuant to this Article or otherwise and any other monies that may be held or thereafter received by the Indenture Trustee as security for such Notes and the obligations secured hereby shall be applied, to the extent permitted by law, in the following order, at the date or dates fixed by the Indenture Trustee by wire transfer of immediately available funds:

 

(1)                                  To the Indenture Trustee, an amount equal to the sum of (A) all the Indenture Trustee’s Fees then due and payable for all Series then Outstanding (provided, that such amounts shall not exceed Seventy-Five Thousand Dollars ($75,000) per annum without the prior approval of the Requisite Global Majority (not to be unreasonably withheld)) and (B) any amounts payable to the Indenture Trustee in accordance with the provisions of Section 403(e) hereof;

 

(2)                                  To the Director Services Provider in the amount of any unpaid fees (to the extent not previously paid) owing pursuant to the Director Services Agreement (not to exceed $25,000 per annum)

 

(3)                                  To the Manager, an amount equal to the sum of: (i) the Management Fee then due and payable, (ii) the amount of any Management Fee Arrearage, and (iii) any Excess Deposit then due and payable, but in each case only to the extent not previously withheld by the Manager in accordance with the terms of the Transaction Documents;

 

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(4)                                  To the Manager, reimbursement for any Manager Advances;

 

(5)                                  To the Administrative Agent, the Administrative Agent Fees then due and payable;

 

(6)                                  To the Persons entitled thereto:  (i) any auditing, accounting and related fees then due and payable which are classified as an Issuer Expense and (ii) any other Issuer Expenses then due and payable, so long as the aggregate amount paid pursuant to this clause (6) in any calendar year would not exceed Five Hundred Thousand Dollars ($500,000);

 

(7)                                  To each Series Enhancer, pro rata based on the amount of Premiums then due and payable, the amount of any Premium then due and payable pursuant to the terms of each applicable Enhancement Agreement;

 

(8)                                  To each Hedge Counterparty, the amount of any scheduled payments (but excluding termination payments) then due and payable pursuant to the terms of any Hedge Agreement then in effect.

 

(9)                                  To each Series Account for each Series of Notes then Outstanding, an amount equal to the Priority Payments for each such Series; provided, that if sufficient funds do not exist to pay in full all such Priority Payments, such amounts shall be allocated among all Series of Notes in the same proportion as the ratio of (x) the Priority Payments of a particular Series of Notes then Outstanding on such Payment Date to (y) the sum of the Priority Payments for all Series of Notes then Outstanding on such Payment Date;

 

(10)                            To each of the following on a pro rata basis: (i) to each Hedge Counterparty, on a pro rata basis, the amount of any unpaid payments then due and payable (including termination payments but excluding (x) any payments made pursuant to clause (8) above and (y) termination payments resulting from an “Event of Default” or a “Termination Event” (other than “Illegality” and “Tax Event”) (each as defined in the related Hedge Agreement) where the related Hedge Counterparty is the “Defaulting Party” or sole “Affected Party” (each as defined in the related Hedge Agreement)) pursuant to the terms of any Hedge Agreement then in effect, and (ii) to each Series of Notes then Outstanding, pro rata based on unpaid principal amounts, until all Series of Notes have been paid in full;

 

(11)                            To the Noteholders and any Series Enhancer, interest payments on the Notes and Default Fees not paid pursuant to clause (9) above and any Indemnity Amounts or other amounts then due and payable;

 

(12)                            To the Administrative Agent, any Administrative Agent Fees then due and payable, after giving effect to the payment made pursuant to clause (5) above;

 

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(13)                            To the Indenture Trustee, any Indenture Trustee’s Fees then due and payable, after giving effect to the payment made pursuant to clause (1) above;

 

(14)                            To the Director Services Provider in the amount of any unpaid Indemnified Amounts (as defined in the Director Services Agreement) owing pursuant to the Director Services Agreement;

 

(15)                            To each Hedge Counterparty, on a pro rata basis, the amount of any unpaid payments then due and payable (including termination payments resulting from an “Event of Default” or a “Termination Event” (other than “Illegality” and “Tax Event”), each as defined in the related Hedge Agreement, where the related Hedge Counterparty is the “Defaulting Party” or sole “Affected Party” (each as defined in the related Hedge Agreement), but excluding any payments made pursuant to clause (8) or (10) above) pursuant to the terms of any Hedge Agreement then in effect;

 

(16)                            To each of the following on a pro rata basis: (i) to the Issuer, the amount of any indemnity payments payable to the officers, directors and/or managers of the Issuer required to be made by the Issuer, and (ii) to the Manager, the amount of any officer and director indemnity payments required to be made by the Manager;

 

(17)                            To the Issuer, any remaining monies which may, any provision in the Transaction Documents to the contrary notwithstanding, be used by the Issuer for any purpose, including, without limitation, general corporate purposes, the distribution of dividends, repayment of debt, paying fees and expenses or any other purpose in the sole discretion of the Issuer.

 

Section 807.                                Limitation on Suits.  Except to the extent provided in Section 808 hereof, no Noteholder shall have the right to institute any Proceeding, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(i)                                     such Noteholder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

 

(ii)                                  the Requisite Global Majority shall have made written request to the Indenture Trustee to institute Proceedings in respect of such Event of Default in its own name as Indenture Trustee hereunder;

 

(iii)                               such Noteholder or Noteholders have offered to the Indenture Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

 

(iv)                              the Indenture Trustee has, for thirty (30) days after its receipt by a Responsible Officer of such notice, request and offer of security or indemnity, failed to institute any such Proceeding; and

 

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(v)                                 no direction inconsistent with such written request has been given to the Indenture Trustee during such thirty (30) day period by the Requisite Global Majority;

 

it being understood and intended that no one or more Noteholders shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Noteholder, or to obtain or to seek to obtain priority or preference over any other Noteholder (except to the extent provided in the related Supplement) or to enforce any right under this Indenture, except in the manner herein provided and for the benefit of all Noteholders.  Notwithstanding anything to the contrary in this Section 807, if a Series Enhancer is the Control Party for a Series of Outstanding Notes, then the Noteholders of such Series may not institute any Proceeding with respect to this Indenture, or for the appointment of a receiver or trustee for the Issuer, or for any other reason hereunder without the prior written consent of such Series Enhancer.

 

Section 808.                                Unconditional Right of Noteholders to Receive Principal, Interest and Commitment Fees.  Notwithstanding any other provision of this Indenture, each Noteholder shall have the right, which is absolute and unconditional, to receive payment of the principal of, interest on and commitment fees in respect of such Note as such principal, interest and commitment fees become due and payable in accordance with the provisions of this Indenture and the related Supplement and to institute any Proceeding for the enforcement of such payment, and such rights shall not be impaired without the consent of such Noteholder.

 

Section 809.                                Restoration of Rights and Remedies.  If the Indenture Trustee, any Series Enhancer or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture or the related Supplement and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Indenture Trustee, such Series Enhancer or to such Noteholder, then and in every such case, subject to any determination in such Proceeding, the Issuer, the Indenture Trustee, such Series Enhancer and the Noteholders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Indenture Trustee, such Series Enhancer and the Noteholders shall continue as though no such Proceeding had been instituted.

 

Section 810.                                Rights and Remedies Cumulative.  No right or remedy conferred upon or reserved to the Indenture Trustee, any Series Enhancer, any Hedge Counterparty or to the Noteholders pursuant to this Indenture or any Supplement is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 811.                                Delay or Omission Not Waiver.  No delay or omission of the Indenture Trustee, of any Series Enhancer, of any Hedge Counterparty or of any Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Indenture Trustee, any Hedge Counterparty, any Series Enhancer or to the Noteholders may be exercised from time to time,

 

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and as often as may be deemed expedient, by the Indenture Trustee, by any Series Enhancer, by any Hedge Counterparty or by the Noteholders, as the case may be.

 

Section 812.                                Control by Requisite Global Majority.

 

(a)                                  Upon the occurrence of an Event of Default, the Requisite Global Majority shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee or exercising any trust or power conferred on the Indenture Trustee, provided that (i) such direction shall not be in conflict with any rule of law or with this Indenture, including, without limitation, Section 804 hereof and (ii) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee which is not inconsistent with such direction.

 

(b)                                 Notwithstanding the grant of a security interest to secure the Outstanding Obligations owing to the Indenture Trustee, for the benefit of the Noteholders, each Series Enhancer and each Hedge Counterparty, all rights to direct actions or to exercise rights or remedies under this Indenture or the UCC (including these set forth in Section 804 hereof) shall be vested solely in the Requisite Global Majority and, by accepting the benefits of this Indenture, each Noteholder and Hedge Counterparty acknowledges such statement; provided, however, that nothing contained in this paragraph shall constitute a modification of Section 808, Section 813(b) or Section 816(d) hereof.

 

Section 813.                                Waiver of Past Defaults.  (a)  The Requisite Global Majority may, on behalf of all Noteholders of all Series, waive any past Event of Default and its consequences, except an Event of Default:

 

(i)                                     in the payment of (x) the principal balance of any Note on the Legal Final Maturity Date of such Note, (y) interest on any Note of any Series on any Payment Date, or (z) commitment fees in respect of any Note of any Series on any Payment Date, all of which defaults can be waived solely by the affected Noteholders and affected Series Enhancers; or

 

(ii)                                  in respect of a covenant or provision hereof which cannot be modified or amended without the consent of all of the Noteholders and Series Enhancers, as applicable, affected thereby pursuant to Section 1002 of this Indenture.

 

(b)                                 Upon any such waiver, such Event of Default shall cease to exist and shall be deemed to have been cured and not to have occurred for every purpose of this Indenture; provided, however, that no such waiver shall extend to (i) any subsequent or other Event of Default or impair any right consequent thereon or (ii) affect any Hedge Agreement which has been terminated in accordance with its terms.

 

Section 814.                                Undertaking for Costs.  All parties to this Indenture agree, and each Noteholder by acceptance of a Note shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as the Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including

 

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reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section shall not apply to any suit instituted by the Indenture Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate more than ten percent (10%) of the aggregate principal balance of the Notes of all Series then Outstanding, or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of or interest on any Note on or after the Legal Final Maturity Date of such Note.

 

Section 815.                                Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 816.                                Sale of Collateral.

 

(a)                                  The power to effect any sale (a “Sale”) of any portion of the Collateral pursuant to Section 804 hereof shall not be exhausted by any one or more Sales as to any portion of the Collateral remaining unsold, but shall continue unimpaired until the entire Collateral shall have been sold or all Outstanding Obligations shall have been paid in full. The Indenture Trustee at the direction of the Requisite Global Majority may from time to time postpone any Sale by public announcement made at the time and place of such Sale.

 

(b)                                 Upon any Sale, whether made under the power of sale hereby given or under judgment, order or decree in any Proceeding for the foreclosure or involving the enforcement of this Indenture:  (i) the Indenture Trustee, at the written direction of the Requisite Global Majority, may bid for and purchase the property being sold, and upon compliance with the terms of such Sale may hold, retain and possess and dispose of such property in accordance with the terms of this Indenture; and (ii) the receipt of the Indenture Trustee or of any officer thereof making such Sale shall be a sufficient discharge to the purchaser or purchasers at such Sale for its or their purchase money, and such purchaser or purchasers, and its or their assigns or personal representatives, shall not, after paying such purchase money and receiving such receipt of the Indenture Trustee or of such officer therefor, be obliged to see to the application of such purchase money or be in any way answerable for any loss, misappropriation or non-application thereof.

 

(c)                                  The Indenture Trustee shall execute and deliver an appropriate instrument of conveyance provided to it transferring its interest in any portion of the Collateral in connection with a Sale thereof. In addition, the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer and convey its interest (subject to lessees’ rights of quiet enjoyment) in any portion of the Collateral in connection with a Sale thereof, and to take all action necessary to effect such Sale. No purchaser or transferee at such a Sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

 

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(d)                                 The Indenture Trustee acknowledges that its right to sell, transfer or otherwise convey any Hedge Agreement or any transaction outstanding thereunder, or to exercise foreclosure rights with respect thereto shall be subject to compliance with the provisions of the applicable Hedge Agreement.

 

Section 817.                                Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture or any Supplement shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture or any Supplement. Neither the Lien of this Indenture nor any rights or remedies of the Indenture Trustee, any Series Enhancer, any Hedge Counterparty or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Collateral or upon any of the assets of the Issuer.

 

ARTICLE IX

 

CONCERNING THE INDENTURE TRUSTEE

 

Section 901.                                Duties of the Indenture Trustee.  The Indenture Trustee, prior to the occurrence of an Event of Default or after the cure or waiver of any Event of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and any Supplement and no implied duties shall be inferred against it. If an Event of Default has occurred and is continuing, the Indenture Trustee, at the written direction of the Requisite Global Majority, shall exercise such of the rights and powers vested in it by this Indenture and the related Supplements, and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

 

The Indenture Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Indenture Trustee which are specifically required to be furnished pursuant to any provisions of this Indenture and any applicable Supplement, shall determine whether they are substantially in the form required by this Indenture and any applicable Supplement; provided, however, that the Indenture Trustee shall not be responsible for the accuracy or content (including mathematical calculations) of any such resolution, certificate, statement, opinion, report, document, order or other instrument furnished pursuant to this Indenture and any applicable Supplement.

 

No provision of this Indenture or any Supplement shall be construed to relieve the Indenture Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct; provided, however, that:

 

(i)                                     Prior to the occurrence of an Event of Default and after the cure or waiver of any Event of Default that may have occurred, the duties and obligations of the Indenture Trustee shall be determined solely by the express provisions of this Indenture and any Supplements. The Indenture Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and any Supplements, and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee and, in

 

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the absence of bad faith on the part of the Indenture Trustee, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates, statements, reports, documents, orders, opinions or other instruments (whether in their original or facsimile form) furnished to the Indenture Trustee and conforming to the requirements of this Indenture and any Supplements (and is entitled to rely on the accuracy of any mathematical calculation or other facts stated therein);

 

(ii)                                  The Indenture Trustee shall not be liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Indenture Trustee, unless it shall be proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

 

(iii)                               The Indenture Trustee shall not be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Requisite Global Majority relating to the time, method and place of conducting any proceeding for any remedy available to the Indenture Trustee, or exercising any trust or power conferred upon the Indenture Trustee, under this Indenture.

 

No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate security or indemnity against such risk or liability is not reasonably assured to it.

 

Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section 901.

 

Section 902.                                Certain Matters Affecting the Indenture Trustee.  Except as otherwise provided in Section 901 hereof:

 

(i)                                     The Indenture Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any Opinion of Counsel, certificate of an officer of the Issuer or the Manager, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document (whether in its original or facsimile form) reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(ii)                                  The Indenture Trustee may consult with counsel of its selection and any advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance in reliance therewith;

 

(iii)                               The Indenture Trustee shall be under no obligation to institute, conduct or defend any litigation or proceeding hereunder or in relation hereto at the request, order or direction of the Requisite Global Majority, pursuant to the

 

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provisions of this Indenture, unless the Indenture Trustee shall have security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby;

 

(iv)                              The Indenture Trustee shall not be liable for any action taken, suffered or omitted by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

(v)                                 The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Control Party for any Series; provided, however, that the Indenture Trustee may require reasonable security or indemnity satisfactory to it against any cost, expense or liability likely to be incurred in making such investigation as a condition to so proceeding (the unsecured indemnity of each Series Enhancer (so long as its claims paying ability is rated “AAA” or  “Aaa”, as applicable) upon such terms as may be reasonably acceptable to the Indenture Trustee being deemed satisfactory for such purpose). The reasonable expense of any such examination shall be paid, on a pro rata basis, by the Noteholders of the applicable Series requesting such examination or, if paid by the Indenture Trustee, shall be reimbursed by such Noteholders upon demand;

 

(vi)                              The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it with due care hereunder;

 

(vii)                           The Indenture Trustee shall not be charged with knowledge of any Default, Event of Default or Early Amortization Event unless either a Responsible Officer of the Indenture Trustee shall have actual knowledge thereof or written notice of such shall have been actually received by a Responsible Officer of the Indenture Trustee; and

 

(viii)                        The rights, privileges, protections, immunities and benefits given to the Indenture Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Indenture Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act on behalf of the Indenture Trustee hereunder.

 

The provisions of this Section 902 shall be applicable to the Indenture Trustee in its capacity as the Note Registrar under this Indenture.

 

Section 903.                                Indenture Trustee Not Liable.  (a)  The recitals contained herein (other than the representations and warranties contained in Section 911 hereof), in any Supplement and in the Notes (other than the certificate of authentication on the Notes) shall be

 

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taken as the statements of the Issuer, and the Indenture Trustee assumes no responsibility for their correctness. The Indenture Trustee makes no representations as to the validity or sufficiency of this Indenture, any Supplement, the Notes, the Collateral or of any related document; provided that this sentence shall not limit the representations and warranties made by the Indenture Trustee in Section 911. The Indenture Trustee shall not be accountable for the use or application by the Issuer of the proceeds of any Series or Class of Notes, or for the use or application of any funds paid to the Issuer or the Manager in respect of the Collateral.

 

(b)                                 The Indenture Trustee shall have no responsibility or liability for or with respect to the existence or validity of any Collateral, the perfection of any security interest (whether as of the date hereof or at any future time), the maintenance of or the taking of any action to maintain such perfection, the validity of the assignment of any portion of the Collateral to the Indenture Trustee or of any intervening assignment, the compliance by the Seller or the Manager with any covenant or the breach by the Seller or the Manager of any warranty or representation made hereunder, in any Supplement or in any related document or the accuracy of such warranty or representation, any investment of monies in the Trust Account, the Restricted Cash Account or any Series Account or any loss resulting therefrom (provided that such investments are made in accordance with the provisions of Section 303 hereof), or the acts or omissions of the Seller or the Manager taken in the name of the Indenture Trustee.

 

(c)                                  Except as expressly provided herein or in any Supplement, the Indenture Trustee shall not have any obligation or liability under any Contract by reason of or arising out of this Indenture or the granting of a security interest in such Contract hereunder or the receipt by the Indenture Trustee of any payment relating to any Contract pursuant hereto, nor shall the Indenture Trustee be required or obligated in any manner to perform or fulfill any of the obligations of the Issuer, the Seller or the Manager under or pursuant to any Contract, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment received by it, or the sufficiency of any performance by any party, under any Contract.

 

Section 904.                                Indenture Trustee May Own Notes.  Subject to compliance with subsection (a)(4)(i) of Rule 3a-7 under the Investment Company Act of 1940, the Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes with the same rights it would have if it were not the Indenture Trustee.

 

Section 905.                                Indenture Trustee’s Fees and Expenses.  The fees, expenses, disbursements and advances of the Indenture Trustee shall be paid only by the Issuer in accordance with Section 302 or 806 hereof. The Issuer shall indemnify the Indenture Trustee (and any predecessor Indenture Trustee) and each of its officers, directors and employees for, and hold them harmless against, any loss, liability, damage claim or expense incurred without negligence or willful misconduct on their part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself both individually and in its representative capacity against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder (together with the fees, expenses, disbursements and advances of the Indenture Trustee, “Indenture Trustee Fees”); provided however, that the Indenture Trustee’s Fees payable pursuant to clauses (c)(I)(1) and (c)(II)(1) in Section 302 hereof shall not exceed Forty Thousand Dollars ($40,000) per annum at any time Wells Fargo Bank, National Association is acting as Indenture Trustee.

 

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The obligations of the Issuer under this Section 905 to compensate the Indenture Trustee, and to indemnify and hold harmless, the Indenture Trustee shall constitute Outstanding Obligations hereunder and shall survive the resignation or removal of the Indenture Trustee and the satisfaction and discharge of this Indenture.

 

When the Indenture Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 801(4) or Section 801(5), the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy law.

 

Section 906.                                Eligibility Requirements for the Indenture Trustee.  The Indenture Trustee hereunder shall at all times be a national banking association or a corporation, organized and doing business under the laws of the United States of America or any State, and authorized under such laws to exercise corporate trust powers. In addition, the Indenture Trustee or its parent corporation shall at all times (i) have a combined capital and surplus of at least $50,000,000, (ii) be subject to supervision or examination by Federal or state authority, (iii) have (A) in the case of Wells Fargo Bank, National Association, a long-term unsecured debt rating of “A-2” or better by Moody’s and “A” or better by S&P or (B) in all other instances, a long-term unsecured senior debt rating of “A-2” or better by Moody’s and a long-term unsecured senior debt rating of “A” or better by S&P and short-term unsecured senior debt rating of “P-1” or better by Moody’s and a short-term unsecured senior debt rating of “A-2” or better by S&P; provided that with respect to a successor Indenture Trustee, clauses (i), (ii) and (iii) shall not apply if, as of the date on which the successor Indenture Trustee is appointed, such successor Indenture Trustee is acceptable to the Requisite Global Majority and each Hedge Counterparty. The Indenture Trustee shall at all times satisfy the requirements of subsection (a)(4)(i) of Rule 3a-7 of the Investment Company Act of 1940.  If the Indenture Trustee publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then, for the purposes of this Section 906, the combined capital and surplus of the Indenture Trustee shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section, the Indenture Trustee shall resign promptly in the manner and with the effect specified in Section 907 hereof.

 

Section 907.                                Resignation and Removal of the Indenture Trustee.  The Indenture Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Issuer, the Manager, the Administrative Agent, each Series Enhancer and the Noteholders. Upon receiving such notice of resignation, the Issuer, at the direction and subject to the consent of the Requisite Global Majority, shall promptly appoint a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Indenture Trustee, each Hedge Counterparty, the Administrative Agent, each Series Enhancer, and one copy to the successor Indenture Trustee. If no successor Indenture Trustee shall have been so appointed and have accepted appointment within thirty (30) days after the giving of such notice of resignation, the Requisite Global Majority may appoint a successor Indenture Trustee or, if it does not do so within thirty (30) days after the end of such thirty (30) day period, the resigning Indenture Trustee may petition at the expense of the Issuer any court of competent jurisdiction for the appointment of a successor Indenture Trustee, which successor trustee shall meet the eligibility standards set forth in Section 906.

 

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If at any time (i) the Indenture Trustee shall cease to be eligible in accordance with the provisions of Section 906 hereof and shall fail to resign after written request therefor by the Issuer, at the direction of the Requisite Global Majority, or (ii) if at any time the Indenture Trustee shall become incapable of acting, or (iii) shall be adjudged a bankrupt or insolvent, or a receiver of the Indenture Trustee, or of its property shall be appointed, or any public officer shall take charge or control of the Indenture Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or (iv) the Indenture Trustee shall have defaulted in the performance of its duties under this Indenture which default materially and adversely affects the interest of any Noteholder or Series Enhancer (if such Series Enhancer is then the Control Party for a Series of Outstanding Notes) and, if curable, continues unremedied for thirty (30) days after the date on which there has been given to the Indenture Trustee by the Issuer, any Series Enhancer or any Noteholder, a written notice specifying such default or breach and requiring it to be remedied, then the Issuer, at the direction of the Requisite Global Majority, shall remove the Indenture Trustee and appoint a successor Indenture Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the Indenture Trustee so removed and one copy to the successor Indenture Trustee.

 

Any resignation or removal of the Indenture Trustee and appointment of a successor Indenture Trustee pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor Indenture Trustee as provided in Section 908 hereof.

 

Section 908.                                Successor Indenture Trustee.  Any successor Indenture Trustee appointed as provided in Section 907 hereof shall execute, acknowledge and deliver to the Issuer and to its predecessor Indenture Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor Indenture Trustee shall become effective and such successor Indenture Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as the Indenture Trustee herein. The predecessor Indenture Trustee shall upon payment of all charges due it, its agents and counsel deliver to the successor Indenture Trustee all documents relating to the Collateral, if any, delivered to it, together with any amount remaining in the Trust Account, the Restricted Cash Account and any Series Accounts. In addition, the predecessor Indenture Trustee and, upon request of the successor Indenture Trustee, the Issuer shall execute and deliver such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor Indenture Trustee all such rights, powers, duties and obligations.

 

No successor Indenture Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Indenture Trustee shall be eligible under the provisions of Section 906 hereof.

 

Upon acceptance of appointment by a successor Indenture Trustee as provided in this Section, the Issuer shall mail notice of the succession of such Indenture Trustee hereunder to all Noteholders at their addresses as shown in the Note Register and to each Hedge Counterparty. If the Issuer fails to mail such notice within ten (10) days after acceptance of appointment by the successor Indenture Trustee, the successor Indenture Trustee shall cause such notice to be mailed at the expense of the Issuer.

 

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Section 909.                                Merger or Consolidation of the Indenture Trustee.  Any Person into which the Indenture Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Indenture Trustee shall be a party, or any Person succeeding to all or substantially all of the business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder, provided such Person shall be eligible under the provisions of Section 906 hereof, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 

Section 910.                                Separate Indenture Trustees, Co-Indenture Trustees and Custodians.  If the Indenture Trustee is not capable of acting outside the United States or exercising trust powers within the United States, it shall have the power from time to time to appoint (subject to satisfaction of the Rating Agency Condition, or, if no Series of Notes then has an outstanding rating, subject to the approval of the Administrative Agent) one or more Persons or corporations to act either as co-trustees jointly with the Indenture Trustee, or as separate trustees, or as custodians, for the purpose of holding title to, foreclosing or otherwise taking action with respect to any of the Collateral, when such separate trustee or co-trustee is necessary or advisable under any applicable laws or for the purpose of otherwise conforming to any legal requirement, restriction or condition in any applicable jurisdiction. The separate trustees, co-trustees, or custodians so appointed shall be trustees, co-trustees, or custodians for the benefit of all Noteholders, each Hedge Counterparty and each Series Enhancer and shall have such powers, rights and remedies as shall be specified in the instrument of appointment; provided, however, that no such appointment shall, or shall be deemed to, constitute the appointee an agent of the Indenture Trustee. The Issuer shall join in any such appointment, but such joining shall not be necessary for the effectiveness of such appointment.

 

Every separate trustee, co-trustee and custodian shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(i)                                     all powers, duties, obligations and rights conferred upon the Indenture Trustee in respect of the receipt, custody and payment of monies shall be exercised solely by the Indenture Trustee;

 

(ii)                                  all other rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee, co-trustee, or custodian jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Collateral or any portion thereof in any such jurisdiction) shall be exercised and performed by such separate trustee, co-trustee or custodian;

 

(iii)                               no trustee or custodian hereunder shall be personally liable by reason of any act or omission of any other trustee or custodian hereunder; and

 

(iv)                              the Issuer or the Indenture Trustee may at any time accept the resignation of or remove any separate trustee, co-trustee or custodian so appointed

 

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by it or them if such resignation or removal does not violate the other terms of this Indenture.

 

Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee, co-trustee, or custodian shall refer to this Indenture and the conditions of this Article. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be furnished to the Indenture Trustee, each Hedge Counterparty and each Series Enhancer.

 

Any separate trustee, co-trustees, or custodian may, at any time, constitute the Indenture Trustee, its agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee, co-trustee, or custodian shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee or custodian.

 

No separate trustee, co-trustee or custodian hereunder shall be required to meet the terms of eligibility as a successor Indenture Trustee under Section 906 hereof and no notice to Noteholders of the appointment thereof shall be required under Section 908 hereof.

 

The Indenture Trustee agrees to instruct the co-trustees, if any, to the extent necessary to fulfill the Indenture Trustee’s obligations hereunder.

 

Section 911.                                Representations and Warranties.  The Indenture Trustee hereby represents and warrants as of the Closing Date of each Series that:

 

(a)                                  Organization and Good Standing.  The Indenture Trustee is a national association duly organized, validly existing and in good standing under the laws of the United States of America, and has the power to own its assets and to transact the business in which it is presently engaged;

 

(b)                                 Authorization.  The Indenture Trustee has the power, authority and legal right to execute, deliver and perform this Indenture and each Supplement and to authenticate the Notes, and the execution, delivery and performance of this Indenture and each Supplement and the authentication of the Notes has been duly authorized by the Indenture Trustee by all necessary corporate action;

 

(c)                                  Binding Obligations.  Each of this Indenture and each Supplement, assuming due authorization, execution and delivery by the Issuer, constitutes the legal, valid and binding obligations of the Indenture Trustee, enforceable against the Indenture Trustee in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws (whether statutory, regulatory or decisional) now or hereafter in effect relating to creditors’ rights generally and the rights of trust

 

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companies in particular and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceeding therefor may be brought, whether in a proceeding at law or in equity;

 

(d)                                 No Violation.  The performance by the Indenture Trustee of its obligations under this Indenture and each Supplement will not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice, lapse of time or both) a default under, the charter documents or bylaws of the Indenture Trustee;

 

(e)                                  No Proceedings.  There are no proceedings or investigations to which the Indenture Trustee is a party pending, or, to the knowledge of the Indenture Trustee without independent investigation, threatened, before any court, regulatory body, administrative agency or other tribunal or Governmental Authority (A) asserting the invalidity of this Indenture or the Notes, (B) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Indenture or (C) seeking any determination or ruling that would materially and adversely affect the performance by the Indenture Trustee of its obligations under, or the validity or enforceability of, this Indenture or the Notes; and

 

(f)                                    Approvals.  Neither the execution or delivery by the Indenture Trustee of this Indenture nor the consummation of the transactions by the Indenture Trustee contemplated hereby requires the consent or approval of, the giving of notice to, the registration with or the taking of any other action with respect to any Governmental Authority under any existing federal or State law governing the banking or trust powers of the Indenture Trustee.

 

Section 912.                                Indenture Trustee Offices.  The Indenture Trustee shall maintain in the State of New York or Minneapolis, Minnesota an office or offices or agency or agencies where Notes may be surrendered for registration of transfer or exchange, which office currently is located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, and shall promptly notify the Issuer, the Manager, each Hedge Counterparty and the Noteholders of any change of such location.

 

Section 913.                                Notice of Event of Default.  If a Responsible Officer of the Indenture Trustee shall have actual knowledge that an Event of Default or Early Amortization Event with respect to any Series shall have occurred and be continuing, the Indenture Trustee shall promptly (but in any event within five (5) Business Days) give written notice thereof to each Noteholder, the Administrative Agent, any Rating Agency, each Hedge Counterparty and the Series Enhancer of such Series. For all purposes of this Indenture, in the absence of actual knowledge by a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall not be deemed to have actual knowledge of any Event of Default or Early Amortization Event unless notified in writing thereof by the Issuer, the Seller, the Manager, any Series Enhancer, the Administrative Agent or any Noteholder, and such notice references the applicable Series of Notes generally, the Issuer, this Indenture or the applicable Supplement.

 

Section 914.                                Notices.  The Indenture Trustee shall make reasonable efforts to forward, to the Deal Agents, within five (5) Business Days of receipt thereof, copies of all notices, reports and other written communications that it delivers or receives, at the address for

 

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notices provided in the Transaction Documents, pursuant to the terms of the Transaction Documents.

 

ARTICLE X

 

SUPPLEMENTAL INDENTURES

 

Section 1001.                          Supplemental Indentures Not Creating a New Series Without Consent of Noteholders.  (a)  Without the consent of any Noteholder and based on an Officer’s Certificate of the Issuer to the effect that such Supplement is for one of the purposes set forth in clauses (i) through (vii) below, the Issuer and the Indenture Trustee, at any time and from time to time, may, with the consent of each Series Enhancer if it is then the Control Party, and each affected Hedge Counterparty (provided that the consent of an Hedge Counterparty shall be required only if such proposed amendment would, in the reasonable opinion of the Issuer, materially and adversely affect the rights, duties or immunities of such Hedge Counterparty under this Indenture, the related Hedge Agreement or otherwise), enter into one or more Supplements to this Indenture for any of the following purposes:

 

(i)                                     to add to the covenants of the Issuer in this Indenture for the benefit of the Noteholders of all Series of Notes then Outstanding or of any Series Enhancer, or to surrender any right or power conferred upon the Issuer in this Indenture;

 

(ii)                                  to cure any ambiguity, to correct or supplement any provision in this Indenture that may be inconsistent with any other provision in this Indenture, or to make any other provisions with respect to matters or questions arising under this Indenture;

 

(iii)                               to correct or amplify the description of any property at any time subject to the Lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the Lien of this Indenture, or to subject additional property to the Lien of this Indenture;

 

(iv)                              to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes of issue, authentication and delivery of the Notes, as herein set forth, or additional conditions, limitations and restrictions thereafter to be observed by the Issuer;

 

(v)                                 to convey, transfer, assign, mortgage or pledge any additional property to or with the Indenture Trustee;

 

(vi)                              to evidence the succession of the Indenture Trustee pursuant to Article IX; or

 

(vii)                           to add any additional Events of Default or Early Amortization Events.

 

Prior to the execution of any Supplement issued pursuant to this Section 1001, the Issuer shall provide not less than ten (10) Business Days prior written notice to the Administrative Agent,

 

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each Rating Agency and each Hedge Counterparty setting forth in general terms the substance of any such Supplement.

 

(b)                                 Promptly after the execution by the Issuer and the Indenture Trustee of any Supplement pursuant to this Section, the Indenture Trustee shall mail to the Noteholders of all Series of Notes then Outstanding, each Rating Agency, the Administrative Agent, each Hedge Counterparty and Series Enhancer related to such Series, a copy of such Supplement.  Any failure of the Indenture Trustee to mail such Supplement, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplement.

 

Section 1002.                          Supplemental Indentures Not Creating a New Series with Consent of Noteholders.

 

(a)                                  If Section 1001 does not apply to a Supplement, then with the consent of the Requisite Global Majority and each Hedge Counterparty (provided that, in the case of each Hedge Counterparty, the consent of such Hedge Counterparty shall be required only if such proposed amendments would, in the reasonable opinion of the Issuer, materially and adversely affect the Hedge Counterparty’s rights, duties or immunities under this Indenture, the related Hedge Agreement or otherwise), the Issuer and the Indenture Trustee may enter into a Supplement hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Noteholders under this Indenture; provided, however, that no such Supplement shall, without the consent of the Noteholder of each Note adversely affected thereby and the Series Enhancer for a Series if such Series Enhancer is adversely affected thereby (but only if such Series Enhancer is then the Control Party for such Series or shall have made an unreimbursed payment on its Enhancement Agreement):

 

(i)                                     reduce the principal amount of any Note, the rate of interest thereon, amend the relative priority of any such payments pursuant to Sections 302 or 806 hereof (other than to increase the priority thereof) or increase the amount of any applicable dollar limitations on amounts having a higher payment priority to such payments pursuant to Sections 302 or 806 hereof or otherwise change such payments, in each case, if in a manner adverse to the Noteholder, or change the date on which or the amount of which, or the place of payment where, or the coin or currency in which, any Note or the interest thereon, or impair the right to institute suit for the enforcement of any such payment on or after the Legal Final Maturity Date thereof;

 

(ii)                                  reduce the percentage of Outstanding Notes or Existing Commitments required for (a) the consent of any Supplement to this Indenture, (b) the consent required for any waiver of compliance with certain provisions of this Indenture or certain Events of Default hereunder and their consequences as provided for in this Indenture or (c) the consent required to waive any payment default on the Notes;

 

(iii)                               modify any provision of this Indenture or any Supplement which specifies that such provision cannot be modified or waived without the consent of the Noteholder affected thereby;

 

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(iv)                              in a manner adverse to such Noteholder, modify or alter the definition of the terms “Outstanding,” “Requisite Global Majority”, “Asset Base”, “Existing Commitment”, “Initial Commitment”, “Advance Rate”, “Aggregate Net Book Value” in this Indenture or any of the terms used in or necessary to interpret such terms;

 

(v)                                 impair or adversely affect the Collateral in any material respect as a whole, except as otherwise permitted herein;

 

(vi)                              modify or alter Section 702(a) of this Indenture; or

 

(vii)                           permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Collateral or terminate the Lien of this Indenture on any property at any time subject hereto or deprive in any material respect the Noteholder of the security afforded by the Lien of this Indenture, except as otherwise permitted in this Indenture;

 

provided, further, that no such Supplement shall, without the consent of each Series Enhancer adversely affected thereby, (i) reduce the amount payable to such Series Enhancer, (ii) amend the relative priority of any such payment pursuant to Sections 302 or 806 hereof (other than to increase the priority thereof) or increase the amount of any applicable dollar limitations on amounts having a higher payment priority to such payments pursuant to Sections 302 or 806 hereof or otherwise change such payments in a manner adverse to such Series Enhancer, (iii) change the date on which or the amount of which, or the place or payment where, or the coin or currency in which, such amount is paid to such Series Enhancer, (iv) increase or accelerate such Series Enhancer’s payment obligations under its Enhancement Agreement or otherwise materially and adversely affect the rights, interests or obligations of such Series Enhancer under this Indenture or the other Transaction Documents, or (v) modify provisions of any Transaction Document relating to requirements that the consent of such Series Enhancer be obtained.

 

Prior to the execution of any Supplement pursuant to this Section 1002, the Issuer shall provide not less than  ten (10) Business Days prior written notice to each Rating Agency, the Administrative Agent and each Hedge Counterparty setting forth in general terms the substance of any such Supplement.

 

(b)                                 Promptly after the execution by the Issuer and the Indenture Trustee of any Supplement pursuant to this Section, the Indenture Trustee shall mail to the Noteholders of all Series of Notes then Outstanding, each Rating Agency, the Administrative Agent, each Hedge Counterparty and Series Enhancer related to such Series, a copy of such Supplement.  Any failure of the Indenture Trustee to mail such Supplement, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplement.

 

Section 1003.                          Execution of Supplemental Indentures.  In executing, or accepting the additional trusts created by, a Supplement permitted by this Article or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that all conditions precedent specified in this Indenture for the execution of such Supplement have been satisfied. The Indenture Trustee may, but shall not be obligated to, enter into any such Supplement which

 

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affects the Indenture Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Section 1004.                          Effect of Supplemental Indentures.  Upon the execution of any Supplement under this Article, this Indenture shall be modified in accordance therewith, and such Supplement shall form a part of this Indenture for all purposes, and every Noteholder of Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

Section 1005.                          Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any Supplement pursuant to this Article may, and shall if required by the Issuer, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such Supplement. If the Issuer shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee, may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

Section 1006.                          Issuance of Series of Notes.  (a)  The Issuer may from time to time direct the Indenture Trustee in writing to execute and authenticate one or more Series of Notes (each, a “Series”).

 

(b)                                 On or before the Series Issuance Date relating to any Series, the parties hereto will execute and deliver a Supplement which will specify the Principal Terms of such Series. The terms of such Supplement may modify or amend the terms of this Indenture solely as applied to such Series, and, with the consent of the Requisite Global Majority, may amend this Indenture as applicable to such other Series, in accordance with Section 1002 hereof. The obligation of the Indenture Trustee to authenticate, execute and deliver the Notes of such Series and to execute and deliver the related Supplement is subject to the satisfaction of the following conditions:

 

(i)                                     on or before the Series Issuance Date, the Issuer shall have given the Indenture Trustee, the Manager, the Administrative Agent, each Rating Agency (and, if such Series is to be registered pursuant to the Securities Act, all Rating Agencies that have rated any prior Series), each Hedge Counterparty and each Series Enhancer notice of the Series and the Series Issuance Date;

 

(ii)                                  the Issuer shall have delivered to the Indenture Trustee the related Supplement executed by the Issuer;

 

(iii)                               the Issuer shall have delivered to the Indenture Trustee any related Enhancement Agreement executed by each of the parties thereto and each Series Enhancer under such Enhancement Agreement shall have acknowledged in writing the terms of the Administration Agreement;

 

(iv)                              the Rating Agency Condition shall have been satisfied with respect to each Series of Notes then Outstanding for which a Rating Agency has assigned a rating;

 

(v)                                 the Issuer shall have delivered to the Indenture Trustee, each Rating Agency, each Hedge Counterparty, each Series Enhancer (provided that

 

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unless such Series Enhancer is then the Control Party for a Series, although the Issuer shall deliver a copy of such Opinion of Counsel to such Series Enhancer, such Series Enhancer shall not have any right to approve the contents thereof) and, if required, any Noteholder, any Opinions of Counsel required by the related Supplement, including without limitation with respect to enforceability and security interest perfection issues;

 

(vi)                              no Early Amortization Event or Event of Default has occurred and is then continuing (or would result from the issuance of such additional Series) and that the issuance of such additional Series would not result in an Early Amortization Event or Event of Default and the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate stating the same;

 

(vii)                           such other conditions as shall be specified in the related Supplement; and

 

(viii)                        the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate that all of the conditions specified in clauses (i) through (vii) have been satisfied.

 

Upon satisfaction of the above conditions, the Indenture Trustee shall execute the Supplement and authenticate, execute and deliver the Notes of such Series; provided, however, that, prior to the issuance of Notes of any Series (other than the Series 2009-1 Notes), the Issuer shall receive an Opinion of Counsel (a copy of which Opinion of Counsel shall be delivered by the Issuer to the Indenture Trustee) to the effect that, for U.S. federal income tax purposes, the issuance of the Notes of such Series will not (x) adversely affect the tax characterization as debt of any outstanding Notes of any Series for which an Opinion of Counsel was rendered in connection with the original issuance of such Notes to the effect that such Notes are treated as debt for federal tax purposes and (y) such issuance will not cause the Issuer to be treated as an association (or publicly traded partnership) taxable as a corporation; and provided further that, notwithstanding any other provision of this Article, clauses (i), (iii) and (iv) of this Section shall not apply to the issuance of the initial Series of Notes or the related Supplement.

 

(c)                                  Notwithstanding any other provision of this Indenture, no Subject Notes may be issued hereunder except in a transaction or transactions (i) that are not required to be registered under the Securities Act and (ii) to the extent such issuance is not required to be so registered by reason of Regulation S under the Securities Act, that would not be required to be so registered if the interests so offered or sold were offered and sold within the United States.  Any purported issuance of any Subject Notes in violation of the immediately preceding sentence shall be void to the greatest extent permitted under Applicable Law.

 

ARTICLE XI

 

NOTEHOLDERS LISTS

 

Section 1101.                          Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.  Unless otherwise provided in the related Supplement, the Issuer will furnish or cause to be furnished to the Indenture Trustee and each Series Enhancer (i) not more than ten

 

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(10) days after receipt of a request from the Indenture Trustee, a list, in such form as the Indenture Trustee may reasonable require, of the names and addresses and tax identification numbers of the Noteholders as of such date, and (ii) at such other times as the Indenture Trustee may request in writing, within 30 days after the receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee maintains the Note Register, no such lists shall be required to include the names and addresses received by the Indenture Trustee in such capacity; provided, further, that if the Indenture Trustee is the Note Registrar, all references in this Section to the Issuer shall be deemed to refer instead to the Indenture Trustee.

 

Section 1102.                          Preservation of Information; Communications to Noteholders.  The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Noteholders contained in the most recent list furnished to the Indenture Trustee as provided in Section 1101 and the names and addresses of Noteholders received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 1101 upon receipt of a new list so furnished.

 

ARTICLE XII

 

EARLY AMORTIZATION EVENTS

 

Section 1201.                          Early Amortization Events.  As of any date of determination, the existence of any one of the following events or conditions shall constitute an Early Amortization Event:

 

(1)                                  The occurrence of (i) an Event of Default, or (ii) a breach by the Seller of any of its obligations under the Contribution and Sale Agreement or any other Transaction Document to which it is a party, which breach materially and adversely affects the interests of any Noteholder or Series Enhancer (if such Series Enhancer is then the Control Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement) and which continues, if curable, for sixty (60) days after the occurrence of such breach;

 

(2)                                  a Manager Default shall have occurred and then be continuing;

 

(3)                                  if on any Payment Date an Asset Base Deficiency shall exist;

 

(4)                                  as of any Payment Date occurring after September 30, 2009, the Issuer EBIT to Issuer Cash Interest Expense Ratio shall be less than 1.3 to 1.0;

 

(5)                                  as of any Payment Date, the Weighted Average Age of the Eligible Containers shall be greater than eight and one-half (8.5) years; and

 

(6)                                  the occurrence of any other event or condition specified as an Early Amortization Event in a Supplement for any Series.

 

If the Early Amortization Event described in either of clauses (4) or (5) occurs prior to the Conversion Date, such condition shall be deemed cured if it does not exist on any subsequent

 

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Payment Date occurring prior to the Conversion Date.  Except as set forth in the immediately preceding sentence, if an Early Amortization Event exists on any Payment Date, then such Early Amortization Event shall, be deemed to continue until the Business Day on which the Requisite Global Majority waives, in writing, such Early Amortization Event. The Indenture Trustee shall promptly provide notice of any such waiver to each Hedge Counterparty and the Rating Agencies.

 

Section 1202.                          Remedies.  If an Early Amortization Event shall have occurred and then be continuing, the Indenture Trustee shall have in addition to the rights provided in the Transaction Documents, all rights and remedies provided under all applicable laws.

 

ARTICLE XIII

 

MISCELLANEOUS PROVISIONS

 

Section 1301.                          Compliance Certificates and Opinions.  (a)  Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture or any Supplement, the Issuer shall furnish to the Indenture Trustee a certificate stating that all conditions precedent, if any, provided for in this Indenture and any relevant Supplement relating to the proposed action have been complied with and, if required pursuant to the terms of this Indenture, an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

 

(b)                                 Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(i)                                     a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

(ii)                                  a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(iii)                               a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether such covenant or condition has been complied with; and

 

(iv)                              a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with; provided that in the case of an opinion delivered by a law firm, such opinion may, but need not, make such statements with regard to the individual signing such opinion.

 

Section 1302.                          Form of Documents Delivered to Indenture Trustee.  (a)  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the

 

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opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

(b)                                 Any certificate or opinion may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, another Person, unless the Person providing such certificate or opinion knows that the certificate or opinion or representations with respect to the matters upon which such Person’s certificate or opinion is based are erroneous.

 

(c)                                  Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 1303.                          Acts of Noteholders.  (a)  Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture or any Supplement to be given or taken by Noteholders may be (i) embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing, (ii) evidenced by the written consent or direction of Noteholders of the specified percentage of the principal amount of the Notes, or (iii) evidenced by a combination of such instrument or instruments; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments, or consent or direction, are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer. Proof of execution of any such instrument or of a writing appointing any such agent or of the execution of any written consent or direction shall be sufficient for any purpose of this Indenture and conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

 

(b)                                 The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Indenture Trustee deems sufficient.

 

(c)                                  The ownership of Notes shall be proved by the Note Register.

 

(d)                                 Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Noteholder shall bind every future Noteholder of the same Note and the Noteholder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

 

71

 

Section 1304.         Inspection.  (a)  Upon reasonable request, the Issuer agrees that it shall make available to any representative of the Indenture Trustee, the Administrative Agent, any Hedge Counterparty or any Series Enhancer and their duly authorized representatives, attorneys or accountants, for inspection and copying its books of account, records and reports relating to the Managed Containers and copies of all Leases or other documents relating thereto at the times and in accordance with the provisions of the Management Agreement. Each Noteholder, the Administrative Agent, each Series Enhancer, each Hedge Counterparty and the Indenture Trustee agrees that it and its Affiliates and their respective shareholders, directors, agents, representatives, accountants and attorneys shall keep confidential any matter of which any of them becomes aware through such inspections or discussions (unless readily available from public sources that did not receive such information from such Person or otherwise in its possession from a source not having any confidentiality agreement with the Issuer or the Manager with respect thereto), except as may be otherwise required by regulation, law or court order or required by appropriate governmental authorities or as necessary to preserve or exercise its rights or security under or to enforce the Transaction Documents, provided that the foregoing shall not limit the right of any Noteholder, any Series Enhancer or any Hedge Counterparty, as the case may be, to make such information available to its regulators, securities rating agencies, and to reinsurers and credit and liquidity providers whom such party reasonably believes will respect the confidential nature of such information and from whom such party has requested confidential treatment of such information.  Any expense incident to the reasonable exercise by the Indenture Trustee, the Administrative Agent, any Series Enhancer, any Hedge Counterparty or any Noteholder of any right under this Section (except for one annual inspection at the expense of the Issuer) shall be borne by the Person exercising such right unless an Early Amortization Event, Manager Default or Event of Default shall have occurred and then be continuing in which case such expenses shall be borne by the Issuer.

 

(b)           The Issuer also agrees to make available on a reasonable basis to the Indenture Trustee, Administrative Agent, each Series Enhancer and each Hedge Counterparty a Managing Officer for the purpose of answering reasonable questions respecting recent developments affecting the Issuer.

 

Section 1305.         Limitation of Right.  Except as expressly set forth in this Indenture, this Indenture shall be binding upon the Issuer, the Noteholders and their respective successors and permitted assigns and shall not inure to the benefit of any Person other than the parties hereto, the Noteholders and the Manager as provided herein. Notwithstanding the previous sentence, the parties hereto, the Seller and the Manager acknowledge that each Hedge Counterparty and any Series Enhancer for a Series of Notes is an express third party beneficiary hereof entitled to enforce its rights hereunder as if actually a party hereto.

 

Section 1306.         Severability.  If any provision of this Indenture is held to be in conflict with any applicable statute or rule of law or is otherwise held to be unenforceable for any reason whatsoever, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever.

 

The invalidity of any one or more phrases, sentences, clauses or Sections of this Indenture shall not affect the remaining portions of this Indenture, or any part thereof.

 

72

 

Section 1307.         Notices.  (a)  All demands, notices, instructions, directions and communications hereunder shall be in writing, personally delivered, or by facsimile (with subsequent telephone confirmation of receipt thereof), or sent by internationally recognized overnight courier service to:

 

	
Manager:
    	
 
    	
TAL   International Container Corporation

100   Manhattanville Road

Purchase,   New York 10577-2135

Attn:   Jeffrey M. Casucci, Vice President, Treasury and Credit

Fax:   914-697-2526
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
with   a copy to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TAL   International Group, Inc.

100   Manhattanville Road

Purchase,   New York 10577-2135
    
	
 
    	
 
    	
Attn:
    	
Marc   A. Pearlin, General Counsel & Secretary 
    
	
 
    	
 
    	
Fax:   914-697-2526
    
	
 
    	
 
    	
 
    
	
Issuer:
    	
 
    	
TAL   ADVANTAGE III LLC

100   Manhattanville Road

Purchase,   New York 10577-2135

Attn:   Jeffrey M. Casucci
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
with   a copy to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TAL   International Container Corporation

100   Manhattanville Road

Purchase,   New York 10577-2135

Attn:   Jeffrey M. Casucci, Vice President, Treasury and Credit

Fax:   914-697-2526
    
	
 
    	
 
    	
 
    
	
Indenture   Trustee:
    	
 
    	
Wells   Fargo Bank, National Association

MAC   N9311-161

Sixth   Street and Marquette Avenue

Minneapolis,   Minnesota 55479
    
	
 
    	
 
    	
Attn:   Corporate Trust Services - Asset-Backed

Administration
    
	
 
    	
 
    	
Fax:   (612) 667-3464
    
	
 
    	
 
    	
 
    
	
Administrative   Agent:
    	
 
    	
Wells   Fargo Securities, LLC

301   S. College Street

One   Wachovia Center

Charlotte,   North Carolina 28288

Attn: Jerri Kallam
    

 

73

 

	
 
    	
 
    	
Fax: (704) 374-3254

Email: jerri.kallam@wellsfargo.com
    
	
 
    	
 
    	
 
    
	
Series Enhancer:
    	
 
    	
at   the address set forth in the related Enhancement Agreement
    
	
 
    	
 
    	
 
    
	
Hedge   Counterparty:
    	
 
    	
To   its address as set forth in the applicable Hedge Agreement
    

 

or at such other address as shall be designated by such party in a written notice to the other parties. Any notice required or permitted to be given to a Noteholder shall be given by certified first class mail, postage prepaid (return receipt requested), or by courier, or by facsimile, with subsequent telephone confirmation of receipt thereof, in each case at the address of such Noteholder as shown in the Note Register or to the telephone and fax number furnished by such Noteholder. Notice shall be effective and deemed received (a) two (2) days after being delivered to the courier service, if sent by courier, (b) upon receipt of confirmation of transmission, if sent by fax, or (c) when delivered, if delivered by hand. Any rights to notices conveyed to a Rating Agency pursuant to the terms of this Indenture with respect to any Series or Class shall terminate immediately if such Rating Agency no longer has a rating outstanding with respect to such Series or Class.

 

Section 1308.         Consent to Jurisdiction.  ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, OR ANY TRANSACTION CONTEMPLATED HEREBY, MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND, SOLELY FOR THE PURPOSES OF THIS INDENTURE, EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

 

Section 1309.         Captions.  The captions or headings in this Indenture are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Indenture.

 

Section 1310.         Governing Law.  THE INDENTURE SHALL BE CONSTRUED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW, AND THE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 1311.         No Petition.  The Indenture Trustee, on its own behalf, hereby covenants and agrees, and each Noteholder by its acquisition of a Note shall be deemed to covenant and agree, that it will not institute (or cause or direct or solicit any Person to institute) against the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any federal or state bankruptcy or similar law, at any 

 

74

 

time other than on a date which is at least one (1) year and one (1) day after the later of (a) the last date on which any Note of any Series was Outstanding and (b) the date on which all amounts owing to the Series Enhancers pursuant to the terms of the Indenture and the Enhancement Agreements have been paid in full.

 

Section 1312.         WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTY HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS INDENTURE OR ANY OTHER TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.

 

Section 1313.         Waiver of Immunity.  To the extent that any party hereto or any of its property is or becomes entitled at any time to any immunity on the grounds of sovereignty or otherwise from any legal actions, suits or proceedings, from set-off or counterclaim, from the jurisdiction or judgment of any competent court, from service of process, from execution of a judgment, from attachment prior to judgment, from attachment in aid of execution, or from execution prior to judgment, or other legal process in any jurisdiction, such party, for itself and its successors and assigns and its property, does hereby irrevocably and unconditionally waive, and agrees not to plead or claim, any such immunity with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Indenture, the other Transaction Documents or the subject matter hereof or thereof, subject, in each case, to the provisions of the Transaction Documents and mandatory requirements of Applicable Law.

 

Section 1314.         Judgment Currency.  The parties hereto (A) acknowledge that the matters contemplated by this Indenture are part of an international financing transaction and (B) hereby agree that (i) specification and payment of Dollars is of the essence, (ii) Dollars shall be the currency of account in the case of all obligations under the Transaction Documents unless otherwise expressly provided herein or therein, (iii) the payment obligations of the parties under the Transaction Documents shall not be discharged by an amount paid in a currency or in a place other than that specified with respect to such obligations, whether pursuant to a judgment or otherwise, except to the extent actually received by the Person entitled thereto and converted into Dollars by such Person (it being understood and agreed that, if any party hereto shall so receive an amount in a currency other than Dollars, it shall (A) if it is not the Person entitled to receive payment, promptly return the same (in the currency in which received) to the Person from whom it was received or (B) if it is the Person entitled to receive payment, either, in its sole discretion, (x) promptly return the same (in the currency in which received) to the Person from whom it was received or (y) subject to reasonable commercial practices, promptly cause the conversion of the same into Dollars), (iv) to the extent that the amount so paid on prompt conversion to Dollars under normal commercial practices does not yield the requisite amount of Dollars, the obligee of such payment shall have a separate cause of action against the party obligated to make the relevant payment for the additional amount necessary to yield the amount due and owing under the Transaction Documents, (v) if, for the purpose of obtaining a judgment in any court with respect to any obligation under any of the Transaction Documents, it shall be necessary to convert to any other currency any amount in Dollars due thereunder and a change shall occur between the rate of exchange applied in making such conversion and the rate of exchange 

 

75

 

prevailing on the date of payment of such judgment, the obligor in respect of such obligation will pay such additional amounts (if any) as may be necessary to insure that the amount paid on the date of payment is the amount in such other currency which, when converted into Dollars and transferred to New York City, New York, in accordance with normal banking procedures, will result in realization of the amount then due in Dollars and (vi) any amount due under this paragraph shall be due as a separate debt and shall not be affected by or merged into any judgment being obtained for any other sum due under or in respect of the Transaction Documents.

 

Section 1315.         [Reserved].

 

Section 1316.         Consents and Approvals.  If a consent or approval from any Person (other than the Indenture Trustee, the Administrative Agent, the Issuer and other than any Noteholder) is required to be provided to the Issuer under this Indenture or any Supplement, such consent or approval shall be deemed to have been given if the Issuer does not receive a written objection from such Person within ten (10) Business Days after a written request by the Issuer for such consent or approval shall have been given.

 

Section 1317.         Counterparts.  This Indenture may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart of this Indenture by facsimile or by electronic means shall be equally effective as of the delivery of an originally executed counterpart.

 

Section 1318.         Transactions under Original Indenture.  The amendment and restatement of the Original Indenture shall become effective on the Restatement Effective Date.  This Indenture amends and restates the terms and conditions of the Original Indenture, and is not a novation of the Outstanding Obligations incurred by the Issuer pursuant to the terms of the Original Indenture.  Accordingly, all of the Outstanding Obligations of the Issuer incurred pursuant to the terms of the Original Indenture, and all of the Liens created thereby, are hereby ratified and affirmed by the Issuer and remain in full force and effect.  All references to the Original Indenture in any Transaction Document or other document or instrument delivered in connection therewith shall be deemed to refer to this Indenture and the provisions hereof.

 

76

 

IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly executed and delivered, all as of the day and year first above written.

 

	
 
    	
TAL   ADVANTAGE III LLC, 
    
	
 
    	
By:
    	
TAL   International Container Corporation,
   its manager
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

TAL III INDENTURE

 

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, 
    
	
 
    	
not   individually but solely as Indenture Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

TAL III INDENTURE

 

 

	
 
    	
Each   of the undersigned hereby consent to the terms of this Amended and Restated   Indenture, dated as of August     , 2011
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as a Series 2009-1 Noteholder
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ABN   AMRO BANK N.V., as a Series 2009-1 Noteholder
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
THREE   PILLARS FUNDING LLC, as a Series 2009-1 Noteholder
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

TAL III INDENTURE

 

 

	
 
    	
ROYAL   BANK OF CANADA, as a Series 2009-1 Noteholder
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
BANK   OF AMERICA, N.A., as a Series 2009-1 Noteholder
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NOMURA   CORPORATE FUNDING AMERICAS, LLC, as a Series 2009-1 Noteholder
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

TAL III INDENTURE

 

 

SCHEDULE I

 

Maximum Concentrations of Lessees

 

	
Lessee
    	
 
    	
Concentration Limit
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Maersk 
    	
 
    	
30
    	
%
    
	
APL
    	
 
    	
30
    	
%
    
	
COSCO
    	
 
    	
15
    	
%
    
	
China Shipping
    	
 
    	
15
    	
%
    
	
CMA CGM
    	
 
    	
25
    	
%
    
	
Evergreen
    	
 
    	
15
    	
%
    
	
Hamburg Sud
    	
 
    	
15
    	
%
    
	
Hanjin
    	
 
    	
20
    	
%
    
	
Hapag-Lloyd
    	
 
    	
20
    	
%
    
	
Horizon Lines
    	
 
    	
15
    	
%
    
	
K-Line
    	
 
    	
20
    	
%
    
	
Mediterranean Shipping
    	
 
    	
30
    	
%
    
	
Mitsui O.S.K.
    	
 
    	
20
    	
%
    
	
NYK
    	
 
    	
30
    	
%
    
	
OOCL
    	
 
    	
30
    	
%
    
	
Sinotrans
    	
 
    	
15
    	
%
    
	
United Arab Shipping
    	
 
    	
20
    	
%
    
	
All Other Top 25
    	
 
    	
15
    	
%
    
	
All Other Non Top 25
    	
 
    	
7
    	
%
    

 

Sch-I

 

EXHIBIT A

 

Form of Non-Recourse Release

 

Indenture Trustee’s Certificate
  pursuant to Section 404 of the Indenture

 

Wells Fargo Bank, National Association, as indenture trustee (the “Indenture Trustee”) pursuant to the Amended and Restated Indenture (as amended or supplemented from time to time as permitted thereby, the “Indenture”), dated as of August 12, 2011 between TAL ADVANTAGE III LLC (the “Issuer”) and the Indenture Trustee does hereby sell, transfer, assign, deliver and otherwise convey to                                      (the “Assignee”), without recourse, representation or warranty, (except that the Indenture Trustee has not created any liens, claims or encumbrances on any assets identified in the attached schedule and all income and proceeds thereof other than the Lien of the Indenture) all of the Indenture Trustee’s right, title and interest in and to all of the assets identified in the attached schedule and all income thereon and proceeds thereof and all security and documents relating thereto.

 

IN WITNESS WHEREOF, this document has been duly executed and delivered this        day of                                               .

 

	
 
    	
Wells   Fargo Bank National Association, as Indenture Trustee
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

A-1

 

EXHIBIT B

 

INVESTMENT LETTER

 

(Transfers pursuant to Rule 144A)

 

FOR VALUE RECEIVED the undersigned registered Noteholder (the “Seller”) hereby sell(s), assign(s) and transfer(s) unto (please print or type name and address including postal zip code of assignee):

 

 

                                                                                                                                                                                                                                                                                                                                                                                                                  (The “Purchaser”), Taxpayer Identification No.                                                 , [$                              of] [Series            Asset Backed Note bearing number                                      ] (the “Note”) and all rights thereunder, hereby irrevocably constituting and appointing                                         attorney to transfer the Note on the books of the Issuer with full power of substitution in the premises.

 

1.  In connection with such transfer and in accordance with Section 205 of the Amended and Restated Indenture (as amended or supplemented from time to time as permitted thereby, the “Indenture”), dated as of August 12, 2011 between TAL ADVANTAGE III LLC (the “Issuer”) and Wells Fargo Bank, National Association (the “Indenture Trustee”), the Seller hereby certifies the following facts to the Issuer and the Indenture Trustee:  Neither the Seller nor anyone acting on its behalf has (a) offered, transferred, pledged, sold or otherwise disposed of the Note, any interest in the Note or any other similar security to any Person in any manner, (b) solicited any offer to buy or accept a transfer, pledge or other disposition of the Note, any interest in the Note or any other similar security from, any Person in any manner, or (c) made any general solicitation by means of general advertising or in any other manner, or taken any other action, in each case which would constitute a distribution of the Note under the Securities Act of 1933, as amended (the “1933 Act”), or which would render the disposition of the Note a violation of Section 5 of the 1933 Act or require registration pursuant thereto.

 

Capitalized terms used herein but not otherwise defined shall have the meaning ascribed to such terms in the Indenture, or if not defined therein, as defined in the Series                  Supplement, dated as of                     , as amended or modified from time to time between the Issuer and the Indenture Trustee.

 

2.  The Purchaser warrants and represents to, and covenants with the Issuer and the Indenture Trustee pursuant to Section 205 of the Indenture as follows:

 

a.             The Purchaser understands that the Note has not been registered under the 1933 Act or the securities laws of any State.

 

b.             The Purchaser is acquiring the Note for investment for its own account only and not for any other Person.

 

B-1

 

c.             The Purchaser is a substantial, sophisticated institutional investor having such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of investment in the Note.

 

d.             The Purchaser is a “qualified institutional buyer” as that term is defined in Rule 144A under the 1933 Act (“Rule 144A”) and has completed either of the forms of certification to that effect attached hereto as Annex 1 or Annex 2.  The Purchaser is aware that the sale to it is being made in reliance on Rule 144A.  The Purchaser is acquiring the Note for its own account or for the account of another qualified institutional buyer, understands that such Note may be offered, resold, pledged or transferred only (i) to a qualified institutional, buyer, or to an offeree or purchaser that the Purchaser reasonably believes is a qualified institutional buyer, that purchases for its own account or for the account of another qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to another exemption from registration under the 1933 Act.

 

e.             The Purchaser is not a Competitor.

 

3.  The Purchaser of a Term Note represents and warrants to the Indenture Trustee that the following statement is true and correct: the Purchaser is not acquiring the Term Note with the plan assets of a Benefit Plan or any other plan that is subject to a law that is similar to Title I of ERISA or Section 4975 of the Code or (ii) the acquisition, holding and disposition of the Term Note will not give rise to a non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or any similar applicable law.  The Purchaser of a Warehouse Note represents and warrants to the Indenture Trustee that the following statement is true and correct: the Purchaser is not acquiring the Warehouse Note with the plan assets of a Benefit Plan Investor.

 

4.  This document may be executed in one or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same document.

 

 

IN WITNESS WHEREOF, each of the parties have caused this document to be executed by their duly authorized officers as of the date set forth below.

 

 

	
 
    	
 
    	
 
    
	
Seller
    	
 
    	
Purchaser
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
 
    	
 
    	
By:   
    	
 
    
	
 
    	
Name:   
    	
 
    	
 
    	
Name:   
    
	
 
    	
Title:   
    	
 
    	
 
    	
Title:   
    
	
 
    	
Taxpayer   Identification No.
    	
 
    	
 
    	
 
    	
Taxpayer   Identification No.
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Date:
    	
 
    
									

 

 

ANNEX 1 TO EXHIBIT B

 

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

 

[For Purchasers Other Than Registered Investment Companies]

 

The undersigned hereby certifies as follows to the parties identified in Section 2 of the attached Investment Letter:

 

1.             As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President or other senior executive officer of the Purchaser.

 

2.             The Purchaser is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933 (“Rule 144A”) because (i) the Purchaser owned and/or invested on a discretionary basis $                                      in securities (except for the excluded securities referred to in paragraph 3 below) as of the end of the Purchaser’s most recent fiscal year (such amount being calculated in accordance with Rule 144A) and (ii) the Purchaser satisfies the criteria in the category marked below.

 

o                                    Corporation. etc.  The Purchaser is a corporation (other than a bank, savings and loan association or similar institution), a Massachusetts or similar business trust, a partnership, or a charitable organization described in Section 501(c)(3) of the Internal Revenue Code.

o                                    Bank.  The Purchaser (a) is a national bank or banking institution organized under the laws of any State, territory or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial Statements, a copy of which is attached hereto.

o                                    Savings and Loan.  The Purchaser (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a state or federal authority having supervision over any such institutions, or is a foreign savings and loan association or equivalent institution and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial Statements, a copy of which is attached hereto.

o                                    Broker-dealer.  The Purchaser is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.

o                                    Insurance Company.  The Purchaser is organized as an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies, and which is subject to supervision by the insurance, commissioner or a similar official or agency of a State, territory or the District of Columbia.

o                                    State or Local Plan.  The Purchaser is a plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees.

o                                    ERISA Plan.  The Purchaser is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974.

o                                    Investment Advisor.  The Purchaser is an investment advisor registered under the Investment Advisers Act of 1940.

 

 

3.             The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Purchaser, (ii) securities that are part of an unsold allotment to or subscription by the Purchaser, if the Purchaser is a dealer, (iii) securities issued or guaranteed by the U.S.  or any instrumentality thereof, (iv) bank deposit notes and certificates of deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities owned but subject to a repurchase agreement and (viii) currency, interest rate and commodity swaps.

 

4.             For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Purchaser, the Purchaser used the cost of such securities to the Purchaser (except as provided in Rule 144A(a)(3)) and did not include any of the securities referred to in the preceding paragraph.  Further, in determining such aggregate amount, the Purchaser may have included securities owned by subsidiaries of the Purchaser, but only if such subsidiaries are consolidated with the Purchaser in its financial Statements prepared in accordance with generally accepted accounting principles and if the investments of such subsidiaries are managed under the Purchaser’s direction.  However, such securities were not included if the Purchaser is a majority-owned, consolidated subsidiary of another enterprise and the Purchaser is not itself a reporting company under the Securities Exchange Act of 1934.

 

5.             The Purchaser acknowledges that it is familiar with Rule 144A and understands that the seller to it and other parties related to the Notes are relying and will continue to rely on the Statements made herein because one or more sales to the Purchaser may be in reliance on Rule 144A.

 

	
o
    	
o
    	
 
    	
 
    
	
Yes
    	
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Will   the Purchaser be purchasing the Note only for Purchaser’s own account?
    

 

6.             If the answer to the foregoing question is “no”, the Purchaser agrees that, in connection with, any purchase of securities sold to the Purchaser for the account of a third party (including any separate account) in reliance on Rule 144A, the Purchaser will only purchase for the account of a third party that at the time is a “qualified institutional buyer” within the meaning of Rule 144A.  In addition, the Purchaser agrees that the Purchaser will not purchase securities for a third party unless the Purchaser has obtained a certificate from such third party substantially identical to this certification or taken other appropriate steps contemplated by Rule 144A to conclude that such third party independently meets the definition of “qualified institutional buyer” set forth in Rule 144A.

 

7.             The Purchaser will notify each of the parties to which this certification is made of any changes in the information and conclusions herein.  Until such notice is given, the Purchaser’s purchase of the Note will constitute a reaffirmation of this certification as of the date of such purchase.

 

 

	
 
    	
 
    
	
 
    	
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ANNEX 2 TO EXHIBIT B

 

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

 

[For Purchasers That Are Registered Investment Companies]

 

The undersigned hereby certifies as follows to the parties identified in Section 2 of the attached Investment Letter:

 

1.  As indicated below, the undersigned is the President, Chief Financial Officer or Senior Vice President or other senior executive officer of the Purchaser or, if the Purchaser is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933 (“Rule 144A”) because Purchaser is part of a Family of Investment Companies (as defined below), is such an officer of the Adviser.

 

2.  The Purchaser is a “qualified institutional buyer” as defined in SEC Rule 144A because (i) the Purchaser is an investment company registered under the Investment Company Act of 1940, and (ii) as marked below, the Purchaser alone, or the Purchaser’s Family of Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the Purchaser’s most recent fiscal year.  For purposes of determining the amount of securities owned by the Purchaser or the Purchaser’s Family of Investment Companies, the cost of such securities was used (except as provided in Rule 144(a)(3)).

 

o                                    The Purchaser owned $                               in securities (other than the excluded securities referred to below) as of the end of the Purchaser’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).

o                                    The Purchaser is part of a Family of Investment Companies which owned in the aggregate $                               in securities (other than the excluded securities referred to below) as of the end of the Purchaser’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).

 

3.             The term “Family of Investment Companies” as used herein means two or more registered investment companies (or series thereof), except for a unit investment trust whose assets consist solely of shares on one or more registered investment companies that have the same investment adviser or investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment adviser is a majority owned subsidiary of the other), or, in the case of unit investment trusts, the same depositor.

 

4.             The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Purchaser or are part of the Purchaser’s Family of Investment Companies, (ii) securities issued or guaranteed by the U.S.  or any instrumentality thereof, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps.

 

5.             The Purchaser acknowledges that it is familiar with Rule 144A and understands that the seller to it and the other parties related to the Note are relying and will 

 

 

continue to rely on the Statements made herein because one or more sales to the Purchaser will be in reliance on Rule 144A.

 

6.             The undersigned will notify the parties addressed the Purchaser Letter to which this certification relates of any changes in the information and conclusions herein.  Until such notice, the Purchaser’s purchase of the Note will constitute a reaffirmation of this certification by the undersigned as of the date of such purchase.

 

	
 
    	
 
    
	
 
    	
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IF   AN ADVISER;
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
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EXHIBIT C

 

FORM OF CONTROL AGREEMENT

 

C-1

 

EXHIBIT D

 

Depreciation  Policy for Managed Containers (Not Subject to Finance Lease)

 

Managed Containers (not subject to a Finance Lease) shall be recorded at their Original Equipment Cost.   All such Managed Containers (other than refrigerated Containers) will be depreciated on a straight-line basis  from the beginning of the month following the month in which such Container was accepted over 12 years to a 32% residual value.  All refrigerated Containers will be depreciated on a straight-line basis from the beginning of  the month following the month in which such Container was accepted  over 12 years to a 20% residual value.

 

The foregoing notwithstanding, any portion of the Original Equipment Cost of such Managed Container that is attributable to an improvement to such Managed Container pursuant to clause (iii) of the definition of “Original Equipment Cost”, shall be depreciated on a straight-line basis from the beginning of  the month following the month in which such  improvement was accepted   over the remaining depreciation period of such Managed Container to the applicable residual value mentioned above.

 

D-1

 

EXHIBIT E

 

Form of Asset Base Certificate

 

E-1

 

EXHIBIT F

 

Interest Rate Hedge Agreement Policy

 

The notional balance of any Hedge Agreements entered into with respect to Leases other than Finance Leases shall amortize at an annual rate reasonably consistent with the depreciation associated with the Containers then subject to such Leases

 

The notional balance of any Hedge Agreements entered into with respect to Finance Leases shall amortize in a manner consistent with the remaining rental payment on such Finance Leases.

 

F-1

 

APPENDIX A

 

MASTER INDEX OF DEFINED TERMS

 

Except as otherwise provided herein, all references to any agreement defined in this Appendix A shall be deemed to include such agreement as the same may from time to time be amended, supplemented or otherwise modified in accordance with its terms and, where applicable, the terms of the other Transaction Documents.  In the event of a conflict, the terms set forth in this Appendix A shall supersede and govern.  All references to statutes (including the UCC), rules and regulations shall be deemed to include such statutes, rules and regulations as the same may be from time to time amended, supplemented or otherwise modified, in each case unless otherwise specified herein. All definitions contained or referred to herein shall be equally applicable to both the singular and plural forms of the terms defined. All references to any Person shall include its successors and permitted assigns. All references to “including” are not intended to limit the generality of any description preceding such term and for purposes hereof and of each Transaction Document the rule of ejusdem generis shall not be applicable to limit a general statement following or referable to an enumeration of specific matters to matters similar to those specifically mentioned.  This Appendix A shall be considered to be a part of the Indenture, and may be amended from time to time in accordance with the provisions thereof.

 

Accountants Report:  This term shall have the meaning set forth in Section 4.1.6 of the Management Agreement.

 

Account Debtor:  Any “account debtor”, as such term is defined in the UCC.

 

Accounts:  Any “account,” as such term is defined in the UCC.

 

Actual Net Operating Income:  This term shall have the meaning set forth in Section 5.1.1 of the Management Agreement.

 

Adjusted Net Book Value:  With respect to any Managed Containers being sold, an amount equal to (x) the sum of the respective Net Book Values of such Managed Containers at the time of sale, minus (y) any insurance proceeds, amounts paid by lessees or other Collections received by the Issuer in respect of any damage to such Managed Container which was not repaired prior to sale or in respect of any failure of the lessee to make repairs which were not made prior to sale.

 

Administration Agreement:  The Administration Agreement, dated as of October 23, 2009, among the Issuer, TAL, the Administrative Agent and the Indenture Trustee, as such agreement shall be modified or supplemented from time to time in accordance with its terms.

 

Administrative Agent:  Wells Fargo Securities, LLC, a Delaware limited liability company, and its permitted successors and assigns.

 

Administrative Agent Fee:  This term shall have the meaning given thereto in the Administration Agreement.

 

App-A

 

Advance Rate:  As of any date of determination, the lesser of (i) eighty percent (80%) and (ii) the advance rate of the most recent rated asset-backed term deal issued by the Issuer or an Affiliate of the Issuer that has an initial rating of “A” or better by S&P.  For the avoidance of doubt, the advance rate in effect on the Restatement Effective Date is 76% based on the rating of the TAL Advantage IV 2011-2 transaction.

 

Affiliate:  With respect to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, control, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing.

 

Aggregate Net Book Value:  As of any date of determination, the sum of the Net Book Values (such Net Book Values to be measured as of the last day of the month immediately preceding such date of determination) of all Eligible Containers.

 

Aggregate Note Principal Balance:  As of any date of determination, an amount equal to the sum of the then unpaid principal balance of all Series of Notes then Outstanding.

 

Ancillary Fees:  All fees paid to and received by the Manager under Lease Agreements for drop-off, pick-up or repositioning charges, handling fees, repair payments and repair insurance fees which are attributable to the Managed Containers.

 

Applicable Law:  With respect to any Person or Managed Container, all existing laws, rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by any Governmental Authority and judgments, decrees, injunctions, writs, or orders of any court, arbitrator or other administrative, judicial, or quasi judicial tribunal or agency of competent jurisdiction applicable to such Person or Managed Container.

 

Asset Base:  As of any date of determination, an amount equal to the sum of (a) the product of (i) the Advance Rate times (ii) the sum of (A) the Aggregate Net Book Value, plus (B) up to the Receivables Threshold of receivables resulting from the sale or other disposition of one or more Eligible Containers that were either owned by the Issuer or subject to a Finance Lease for which the Issuer is the lessor, so long as such receivables were not outstanding for more than 60 days (measured from the issue date of such receivables), plus (b) the amount on deposit in the Restricted Cash Account, such amount to be determined after giving effect to all withdrawals from and deposits to the Restricted Cash Account on such date.

 

Asset Base Certificate:  A certificate with appropriate insertions setting forth the components of the Asset Base, as of the last day of the month for which such certificate is submitted, which certificate shall be substantially in the form attached as Exhibit E to the Indenture and shall be certified by an Authorized Signatory of the Manager.

 

Asset Base Deficiency:  As of any Payment Date, the condition that exists if the Aggregate Note Principal Balance (calculated after giving effect to all payments of Minimum Principal Payment Amounts and Scheduled Principal Payment Amounts to be paid on such 

 

 

Payment Date) exceeds the Asset Base.  If such term is used in a quantitative context, the amount of the Asset Base Deficiency shall be equal to the amount of such excess.

 

Authorized Officer:  Any of the chief executive officer, president, chief financial officer, treasurer, general counsel or other senior officer of the Manager.

 

Authorized Signatory:  Any Person designated in a certificate of a secretary or assistant secretary of a Person (or, in the case of a Person that is a limited liability company, any Person designated in a certificate of a secretary or assistant secretary of the manager of such limited liability company) or by written notice by such Person delivered to the Indenture Trustee and the related Series Enhancer, if any, as authorized to execute documents and instruments on behalf of such Person.

 

Available Distribution Amount:  This term shall have the meaning set forth in Section 302(c) of the Indenture.

 

Bankruptcy Code:  The Bankruptcy Reform Act of 1978, as amended.

 

Benefit Plan:  An “employee benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, a “plan” within the meaning of Section 4975(e)(1) of the Code or an entity whose underlying assets include “plan assets” of any of the foregoing by reason of an employee benefit plan’s or plan’s investment in such entity.

 

Benefit Plan Investor:  An “employee benefit plan” as defined in Section 3(3) of ERISA whether or not it is subject to Title I of ERISA, a “plan” within the meaning of Section 4975(e)(1) of the Code or an entity whose underlying assets include “plan assets” of any of the foregoing by reason of an employee benefit plan’s or plan’s investment in such entity.

 

Book-Entry Custodian:  The Person appointed pursuant to the terms of the Indenture to act in accordance with that certain agreement such Person has with the Depositary, in which the Depositary delegates its duties to maintain the Global Notes to such Person and authorizes such Person to perform such duties.

 

Breakage Costs:  With respect to any Series of Notes, this term shall have the meaning set forth in the relevant Supplement.

 

Business Day:  Any day other than a Saturday, a Sunday or a day on which banking institutions in New York City, London, England, the city in which the Corporate Trust Office of the Indenture Trustee is located, or the city in which the headquarters of the Administrative Agent is located, are authorized or are obligated by law, executive order or governmental decree to be closed.

 

Capital Improvements:  Any structural changes required to be made to the Containers so as to comply with applicable governmental or industry standards.

 

Casualty Loss:  With respect to any Managed Container as of any date of determination, any of the following events or conditions:

 

(i)                                     total loss or destruction thereof;

 

 

(ii)           theft or disappearance thereof without recovery within sixty (60) days after such theft or disappearance becomes known to the Issuer, the Manager or any of its Affiliates;

 

(iii)          damage rendering such Managed Container unfit for normal use and, in the judgment of the Issuer or the Manager, beyond repair at reasonable cost; or

 

(iv)          any condemnation, seizure, forced sale or other taking of title to or use of such Managed Container.

 

Casualty Proceeds:  Any payment to, or on behalf of, the Issuer in connection with a Casualty Loss.

 

CEU: The abbreviation used for cost equivalent unit.

 

Change of Control:  The occurrence of either of the following:

 

(1)           the Manager shall (A) consolidate or merge with or into any Person, unless (i) the Manager is the surviving entity, and (ii) at least seventy percent (70%) of the consolidated assets of the Seller and its Consolidated Subsidiaries following such consolidation or merger are held in connection with a Permitted Business (as defined in the Credit Agreement), or (B) enter into or permit any purchase, sale, assignment, transfer, conveyance or other acquisition or disposition of assets which would result in less than seventy percent (70%) of the consolidated assets of the Manager and its Consolidated Subsidiaries (measured after giving effect to such transaction) to be held in connection with a Permitted Business, or (C) cease to be a wholly-owned Subsidiary of TAL International Group; or

 

(2)           the TAL International Group shall (A) consolidate or merge with or into any Person, unless (i) the TAL International Group is the surviving entity, and (ii) at least seventy percent (70%) of the consolidated assets of the TAL International Group and its Consolidated Subsidiaries following such consolidation or merger are held in connection with a Permitted Business (as defined in the Credit Agreement), or (B) enter into or permit any purchase, sale, assignment, transfer, conveyance or other acquisition or disposition of assets which would result in less than seventy percent (70%) of the consolidated assets of the TAL International Group and its Consolidated Subsidiaries (measured after giving effect to such transaction) to be held in connection with a Permitted Business.

 

Chattel Paper:  Any lease or other chattel paper, as such term is defined in the UCC.

 

Claim:  This term shall have the meaning set forth in Section 14.1 of the Management Agreement.

 

Class:  All Notes having the same rights to payment under the Indenture and any Supplement.

 

Closing Date:  October 26, 2009.

 

Code:  The Internal Revenue Code of 1986, as amended, or any successor statute thereto.

 

 

Collateral:  This term shall have the meaning set forth in the Granting Clause of the Indenture.

 

Collection Period:  With respect to the first Payment Date, the period commencing on the Closing Date and ending on the last day of the next succeeding calendar month and, for any subsequent Payment Date, the period from and including the first day of the calendar month immediately preceding the calendar month in which such Payment Date occurs through and including the last day of such calendar month.

 

Collections:  With respect to any Collection Period, an amount equal to the sum of all payments of Estimated Net Operating Income (including any adjustment payments with respect thereto) received by the Issuer pursuant to the terms of Section 5.1.1 of the Management Agreement actually received by, or on behalf of, the Issuer with respect to the Managed Containers during such Collection Period, and, to the extent not included in the foregoing, all Casualty Proceeds, Sales Proceeds and Warranty Purchase Amounts actually received by the Issuer during such Collection Period. Collections for any Collection Period shall include any of the foregoing amounts which are received in any Collection Period but which are deposited in the Trust Account (within the time required by Section 302 of the Indenture) during the immediately succeeding Collection Period; provided, however, that with respect to any rental or other payments received from a lessee during a particular Collection Period which relate to a future Collection Period, such advance payments shall constitute “Collections” in the future Collection Period to which such amounts relate and shall not constitute “Collections” in the Collection Period in which such amounts are received.

 

Commercial Tort Claim:  Any commercial tort claim, as such term is defined in the UCC.

 

Commitment:  This term shall have the meaning given to such term, if applicable, in the related Supplement.

 

Commitment Fee:  This term shall have the meaning given to such term, if applicable, in the related Supplement.

 

Competitor:  Any Person engaged and competing with any of the Issuer or the Manager in the container or chassis leasing business; provided, however, that in no event shall any insurance company, bank, bank holding company, savings institution or trust company, fraternal benefit society, pension, retirement or profit sharing trust or fund, or any collateralized bond obligation fund or similar fund (or any trustee of any such fund) or any holder of any obligations of any such fund (solely as a result of being such a holder) be deemed to be a Competitor unless such Person or any of its Affiliates are directly and actively engaged in the operation of a container or chassis leasing business.

 

Concentration Account:  The bank account to which lessees are instructed to make payments in respect of Managed Containers.  As of the Closing Date, the Concentration Account is account number 3553-7713 at Citibank, N.A.

 

Concentration Finance Lease:  Any Lease for a container that was purchased directly from the manufacturer and whose initial Lease Agreement provides the lessee the right or option to purchase the Container at the expiration of the Lease and whose initial Lease Agreement

 

 

satisfies the criteria for classification as a capital lease pursuant to GAAP, including Statement of Financial Account Standards No. 13, as amended.

 

Concentration Limits:  The following limitations on the types of Containers eligible to be an Eligible Container (which limitations shall be applied on each Transfer Date and shall be calculated so as to give effect to the transfer under consideration), as modified from time to time with the consent of the Requisite Global Majority:

 

(a)           Maximum Concentration of Dry Freight Special Containers.  The sum of the Net Book Values of all Eligible Containers that are Specialized Containers (other than refrigerated Containers) shall not exceed twenty-five percent (25%) of the Aggregate Net Book Value;

 

(b)           Maximum Concentration of Concentration Finance Leases.

 

(i)            The sum of the Net Book Values of all Eligible Containers that are subject to a Concentration Finance Lease shall not exceed twenty percent (20%) of the Aggregate Net Book Value;

 

(ii)           The sum of the Net Book Values of all Eligible Containers then on Lease to any single lessee (other than MSC) that are subject to a Concentration Finance Lease shall not exceed five percent (5%) of the Aggregate Net Book Value; and

 

(iii)          The sum of the Net Book Values of all Eligible Containers that are subject to a Concentration Finance Lease for which MSC is the lessee shall not exceed fifteen percent (15%) of the Aggregate Net Book Value.

 

(c)           Maximum Concentration of Non-Monthly Rental Payments.  The sum of the Net Book Values of all Eligible Containers subject to Lease Agreements for which rentals are payable less frequently than monthly shall not exceed five percent (5%) of the Aggregate Net Book Value;

 

(d)           Maximum Concentration of Non-U.S. Currency Rentals.  The sum of the Net Book Values of all Eligible Containers subject to Lease Agreements for which rentals are payable in a currency other than Dollars and which are not the subject of a Currency Hedge Agreement shall not exceed two percent (2%) of the Aggregate Net Book Value;

 

(e)           Maximum Concentration of Non-Marine Cargo Users.  The sum of the Net Book Values of all Eligible Containers subject to Lease Agreements under which the lessee is a Person that is not a marine cargo user shall not exceed seven percent (7%) of the Aggregate Net Book Value;

 

(f)            Maximum Concentration of any Three Lessees.  The sum of the Net Book Values of all Eligible Containers then on lease to any three lessees shall not exceed sixty percent (60%) of the then Aggregate Net Book Value; provided, however, that if two or more lessees shall engage in any transaction (whether through merger, consolidation, stock sale, asset sale or otherwise) pursuant to which a lessee shall become the owner of, or interest holder in, any other lessee’s leasehold interests in one or more Containers and the effect of such transaction is to cause a breach of the foregoing threshold, then the foregoing threshold shall on the effective date

 

 

of such transaction be increased to an amount equal to the quotient, expressed as a percentage, (x) the numerator of which shall equal the sum of (A) the sum of the Net Book Values of all Managed Containers on lease to such transacting lessees immediately prior to such transaction, and (B) the sum of the Net Book Values of all Managed Containers then on lease to the two other lessees having the most Managed Containers then on lease with the Issuer (measured by Net Book Value) and (y) the denominator of which shall equal the then Aggregate Net Book Value); and provided further that, if the foregoing limitation has been increased above sixty percent (60%) by operation of the above proviso, then any additional Managed Containers subsequently leased to any of such three lessees shall not be considered Eligible Containers until such time as the sum of the Net Book Values of all Managed Containers then on lease to such three lessees does not exceed an amount equal to sixty percent (60%) of the then Aggregate Net Book Value;

 

(g)           Maximum Concentration for any Single Lessee.  The sum of the Net Book Values of all Eligible Containers then on Lease to any single lessee shall not exceed an amount equal to (A) with respect to any of the lessees set forth in Schedule I to the Indenture, the percentage of the Aggregate Net Book Value set opposite the name of such lessee on such schedule, and (B) with respect to any lessee not covered by clause (A), seven percent (7%)  of the then Aggregate Net Book Value; provided, however, that if two or more lessees shall engage in any transaction (whether through merger, consolidation, stock sale, asset sale or otherwise) pursuant to which a lessee shall become the owner of, or interest holder in, any other lessee’s leasehold interests in one or more Eligible Containers, the foregoing threshold set forth in clauses (A) and (B) shall on the effective date of such transaction be increased with respect to such acquiring or, in the case of a merger, surviving lessee to equal the greater of (i) the sum of the applicable percentage limitations for the transacting lessees as set forth in clauses (A) and (B) above, and (ii) a quotient, expressed as a percentage, (x) the numerator of which shall equal the sum of the Net Book Values of all Managed Containers on Lease to such transacting lessees immediately prior to such transaction and (y) the denominator of which shall equal the then Aggregate Net Book Value).

 

Consolidated Cash Interest Expense. For any period, the difference of (i) the aggregate Consolidated Interest Expense for such period, minus (ii) to the extent included in such aggregate Consolidated Interest Expense, and to the extent incurred by TAL International Group or any of its Consolidated Subsidiaries, (a) amortization or write off of debt or equity issuance costs and deferred financing costs, (b) interest expense to the extent not paid in cash attributable to dividends in respect of all Preferred Equity of TAL International Group and its Consolidated Subsidiaries that is not Disqualified Stock pursuant to Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity”, and

 

(c) any non-cash interest expense related to (1) any interest expense that has not been paid in cash, (2) accrued interest on Disqualified Stock to the extent not paid, and (3) any incremental non-cash interest expense incurred by TAL International Group or its Subsidiaries as the result of an accounting change in accordance with GAAP that occurs after the Effective Date, plus (iii) without duplication, cash interest payments made in such period (exclusive of any such cash payment funded with the proceeds of an equity offering or capital contribution) related to Consolidated Interest Expense that were deducted from Consolidated Cash Interest Expense in a prior period.

 

 

Consolidated EBIT. For any period, means the sum of Consolidated Net Income, plus the following, without duplication, to the extent deducted in calculating such Consolidated Net Income:

 

(1)   all income tax expense of TAL International Group and its Consolidated Subsidiaries, all taxes incurred by TAL International Group and its Consolidated Subsidiaries in respect of the repatriation of income from jurisdictions outside the United States and all amounts paid by TAL International Group and its Consolidated Subsidiaries pursuant to the terms of any tax sharing or similar agreement;

 

(2)   the Consolidated Interest Expense of TAL International Group and its Consolidated Subsidiaries;

 

(3)   depreciation and amortization charges of TAL International Group and its Consolidated Subsidiaries relating to any increased depreciation or amortization charges resulting from purchase accounting adjustments or inventory write-ups with respect to acquisitions or the amortization or write-off of deferred debt or equity issuance costs;

 

(4)   all other non-cash charges of TAL International Group and its Consolidated Subsidiaries (other than depreciation expense) minus, with respect to any such non-cash charge occurring on or after the Initial Closing Date that was previously added in a prior period to calculate Consolidated EBIT and that represents an accrual of or reserve for cash expenditures in any future period, any cash payments made during such period;

 

(5)   any non-capitalized costs incurred in connection with financings, the Acquisition, acquisitions of Containers or Chassis or dispositions (including financing and refinancing fees and any premium or penalty paid in connection with redeeming or retiring Indebtedness prior to the stated maturity thereof pursuant to the agreements governing such Indebtedness);

 

(6)   all non-cash expenses attributable to Incentive Arrangements; and

 

(7)   to the extent that any portion of the Management Fee payable during such period was accrued and not paid during such period, the aggregate amount of expenses attributable to all payments or accruals of Management Fee during such period;

 

in each case, for such period and as determined on a consolidated basis in accordance with GAAP.

 

Consolidated EBIT to Consolidated Cash Interest Expense Ratio:  As of any date of determination, means the ratio of (a) the aggregate amount of Consolidated EBIT for the period of the most recent four consecutive fiscal quarters ending on or prior to the date of such determination to (b) Consolidated Cash Interest Expense for such four fiscal quarters.

 

Consolidated Funded Debt:  As of any date of determination with respect to a Person, the total amount, without duplication, of: (1) the principal amount outstanding under all Indebtedness of such Person and such Person’s Consolidated Subsidiaries, (2) all Finance Lease obligations, as lessee, of such Person and such Person’s Consolidated Subsidiaries, and (3) the aggregate of the present values of future rental payments under any lease of any container which

 

 

such Person or any of such Person’s Consolidated Subsidiaries is the lessee (i) that is treated by the lessee as an operating lease rather than a capital lease in accordance with GAAP, and (ii) in respect of which the lessor retains or obtains ownership of the property so leased for federal income tax purposes, in the event, but only in the event, that the aggregate of such present values shall be in excess of Twenty-Five Million Dollars ($25,000,000).

 

Consolidated Interest Expense:  With respect to any Person for any period, the aggregate of the interest expense of such Person and its Consolidated Subsidiaries for such period, on a Consolidated basis, as determined in accordance with GAAP, and including, without duplication, (a) all amortization or accretion of original issue discount; (b) the interest component of payments on Capitalized Leases paid, accrued and/or scheduled to be paid or accrued by such Person and its Consolidated Subsidiaries during such period; and (c) net cash costs under all Interest Rate Hedge Agreements (including amortization of fees but excluding any termination payments under such Interest Rate Hedge Agreements).

 

Consolidated Net Income. For any period, the aggregate net income (or loss) of TAL International Group and its Consolidated Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP; provided, however, that there shall not be included in such Consolidated Net Income:

 

(1)   any gain (or loss) realized upon the sale or other disposition of assets (other than Containers, Chassis and Related Assets) of TAL International Group, any Consolidated Subsidiary or any other Person (including pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary course of business and any gain (or loss) realized upon the sale or other disposition of any Capital Stock of any Person;

 

(2)   extraordinary gains or losses, as determined in accordance with GAAP;

 

(3)   income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);

 

(4)   the cumulative effect of a change in accounting principles, as determined in accordance with GAAP;

 

(5)   any adjustments, restructuring costs, non-recurring expenses, non-recurring fees, non-operating expenses, charges or other expenses (including bonus and retention payments and non-cash compensation charges) (a) made or incurred in connection with the Acquisition or the financing thereof or (b) incurred in connection with acquisitions of Containers and/or Chassis;

 

(6)   Systems/Organizational Establishment Expenses; and

 

(7)   any net income (or loss) of any Person (other than TAL Group) if such Person is not a Restricted Subsidiary of TAL International Group; provided, that TAL International Group, or any of its Consolidated Subsidiary’s, equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to TAL International Group or such Consolidated Subsidiary as a dividend or other distribution, in each case for such period.

 

 

Consolidated Subsidiaries:  With respect to any Person, each Restricted Subsidiary of such Person that is required to be consolidated with such Person in accordance with GAAP.

 

Consolidated Tangible Net Worth: As of any date of determination with respect to a Person, the excess of: (a) the tangible assets of such Person and such Person’s Consolidated Subsidiaries calculated in accordance with GAAP plus the aggregate amount of Consolidated Funded Debt of the type specified in clause (3) of the definition of Consolidated Funded Debt, over (b) all Indebtedness of such Person and its Consolidated Subsidiaries; provided, however, that (i) in no event shall there be included in the above calculation any intangible assets such as patents, trademarks, trade names, copyrights, licenses, goodwill, organizational costs, amounts relating to covenants not to compete, or any impact from applications of FASB 133, and (ii) securities included as such intangible assets shall be taken into account at their current market price or cost, whichever is lower.

 

Container:  Any marine and maritime container (including dry cargo containers, refrigerated containers (including the associated refrigeration machine), generator sets, gps devices and Specialized Containers) to which any Person either (i) has good title and that is held for lease or sale or (ii) is lessor under any Finance Lease.

 

Container Fleet:  At any time, the fleet of Containers owned or managed by TAL.

 

Container Identification Number:  The unique alpha-numeric reference assigned to a Managed Container which is painted on or affixed to such Managed Container.

 

Container Management System:  The “TERMS 2000” equipment tracking and billing system used by the Manager and any upgrade of, successor to, or replacement for, such system.

 

Container Related Agreement:  Any agreement relating to the Managed Containers or agreements relating to the use or management of such Managed Containers whether in existence on the Closing Date or thereafter acquired, including, but not limited to, all Leases, the Management Agreement, the Contribution and Sale Agreement and the Chattel Paper to the extent it arises out of or in any way relates to the Managed Containers now owned or hereafter acquired by the Issuer.

 

Container Representations and Warranties:  With respect to each Container, the representations and warranties of the Seller as set forth in paragraphs (v) through (hh) inclusive of Section 3.01 of the Contribution and Sale Agreement.

 

Container Revenues:  For any Collection Period, all amounts paid to and received by the Manager which are attributable to the Managed Containers, including but not limited to (i) per diem rental charges (excluding any prepayments thereof), Ancillary Fees and all charges paid in respect of the Managed Containers pursuant to Lease Agreements (including, without duplication, payments on Finance Leases in respect of Managed Containers) but excluding Excluded Amounts, (ii) amounts received from the manufacturers or sellers of the Managed Containers for breach of sale warranties relating thereto or in settlement of any claims, losses, disputes or proceedings relating to the Managed Containers, (iii) amounts received from any other Person in settlement of any claims, losses, disputes or proceedings relating to the Managed Containers, including insurance proceeds relating thereto, and (iv) any insurance premiums

 

 

relating to the Managed Containers which have been refunded by the insurer. Notwithstanding the foregoing, Container Revenues shall not include Sales Proceeds or Casualty Proceeds.

 

Container Transfer Certificate:  A Container Transfer Certificate, substantially in the form of Exhibit B to the Contribution and Sale Agreement, executed and delivered by the Seller and the Issuer in accordance with the terms of the Contribution and Sale Agreement.

 

Contingent Obligation:  As to any Person, means any obligation of such Person as a result of such Person being a general partner of any other Person, unless the underlying obligation is expressly made non-recourse as to such general partner, and any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the lesser of (x) the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith and (y) the stated amount of such Contingent Obligation.

 

Contracts:  All contracts, undertakings, franchise agreements or other agreements (other than rights evidenced by Chattel Paper, Documents or Instruments) in or under which the Issuer may now or hereafter have any right, title or interest, including, without limitation, the Management Agreement, the Contribution and Sale Agreement, any Interest Rate Hedge Agreements, any Currency Hedge Agreements and any related agreements, security interests or UCC or other financing statements and, with respect to an Account, any agreement relating to the terms of payment or the terms of performance thereof.

 

Contribution and Sale Agreement:  The Contribution and Sale Agreement, dated as of October 23, 2009, between the Seller and the Issuer, as such agreement shall be amended, modified or supplemented from time to time in accordance with its terms.

 

Control Agreement:  This term shall have the meaning set forth in Section 303(b) of the Indenture.

 

Control Party:  This term shall have the meaning set forth in the Supplement for the related Series.

 

Conversion Date:  The date of the occurrence of a Conversion Event.

 

 

Conversion Events:  With respect to a Series of Warehouse Notes, the occurrence or existence of any of the following events or conditions: (i) the expiration of the stated period of time set forth in the definition of Conversion Date in the related Supplement, unless such period is extended in accordance with the terms of such Supplement, and (ii) the occurrence of an Early Amortization Event under any Series of Notes then Outstanding.

 

Corporate Trust Office:  The principal office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office shall initially be located at MAC N9311-161, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479.

 

Credit Agreement:  That certain Credit Agreement, dated as of August 15, 2007, as amended, restated, or otherwise modified in accordance with its terms, among TAL International Container Corporation, as borrower, the lenders from time to time party thereto and National City Bank, as administrative agent and collateral agent thereunder.

 

Credit and Collection Policy:  This term is defined in Section 8.1.11 of the Management Agreement.

 

Currency Hedge Agreement:  An agreement between the Issuer and the Currency Hedge Counterparty named therein, including any schedules and confirmations prepared and delivered in connection therewith, each in form and substance acceptable to the Requisite Global Majority and for which the Rating Agency Condition has been satisfied, with respect to one or more Lease(s) for which the related lessee is obligated to make payments denominated in a currency other than Dollars pursuant to which (i) the Issuer will receive payments from, or make payments to, the Currency Hedge Counterparty in such currency and (ii) recourse by the Currency Hedge Counterparty to the Issuer is limited to actual rental payments received under such Lease.

 

Currency Hedge Counterparty: Any Eligible Currency Hedge Counterparty or any counterparty to a currency hedging instrument permitted to be entered into pursuant to the Indenture.

 

Data Custodian:  This term shall have the meaning set forth in Section 3.10.3 of the Management Agreement.

 

Deal Agent:  The deal agent or agents identified, if applicable, in each Supplement.

 

Default Fee:  The incremental interest specified in the related Supplement payable by the Issuer resulting from the failure of the Issuer to pay in full any amount due under the Indenture on any Series of Notes Outstanding when such amount becomes due.

 

Default Rate:  The rate of interest specified in the related Supplement applicable to a Note then earning Default Fee, but in no event to exceed two percent (2%) over the interest rate per annum otherwise then applicable to such Note.

 

Deficiency Amount: With respect to each Series, this term shall have the meaning set forth in the related Supplement.

 

 

Definitive Note:  A Note issued in definitive form pursuant to the terms and conditions of Section 202 of the Indenture.

 

Deposit Accounts:  Any deposit accounts, as such term is defined in the UCC.

 

Depositary:  The Depository Trust Company until a successor depositary shall have become such pursuant to the applicable provisions of the Indenture and thereafter “Depositary” shall mean or include each Person who is then a Depositary thereunder. For purposes of the Indenture, unless otherwise specified pursuant to Section 202 of the Indenture, any successor Depositary shall, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Exchange Act.

 

Depositary Participant:  A broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book-entry transfers and pledges of securities deposited with the Depositary.

 

Determination Date:  The third (3rd) Business Day prior to any Payment Date.

 

Direct Operating Expenses:  All direct expenses and costs, calculated on an accrual basis in accordance with GAAP, incurred in connection with the ownership, use and/or operation of a Managed Container, including but not limited to: (i) agency costs and expenses; (ii) depot fees, handling, and storage costs and expenses; (iii) survey, maintenance and repair expenses (including the actual or estimated cost of repairs to be made pursuant to a damage protection plan); (iv) repositioning expense; (v) the cost of inspecting, marking and remarking such Managed Container; (vi) third-party fees for bankruptcy recovery; (vii) legal fees incurred in connection with enforcing rights under the leases of such Managed Container or repossessing such Managed Container; (viii) insurance expense; (ix) federal, state, local and foreign taxes, levies, duties, charges, assessments, fees, penalties, deductions or withholdings assessed, charged or imposed upon or against such Managed Container, including but not limited to ad valorem, gross receipts and/or other property taxes imposed against such Managed Container or against the revenues generated by such Managed Container (but not including income taxes imposed on the Manager or any of its Affiliates); (x) expenses, liabilities, claims and costs (including without limitation reasonable attorneys fees) incurred by the Issuer or the Manager (on behalf of the Issuer) by any third party arising directly or indirectly (whether wholly or in part) out of the state, condition, operation, use, storage, possession, repair, maintenance or transportation of such Managed Container; (xi) expenses and costs (including legal fees) of pursuing claims against manufacturers or sellers of such Managed Container; and (xii) non-recoverable sales and value-added taxes on such expenses and costs; provided, however, that in no event shall either of the following be considered a Direct Operating Expense: (a) any selling, general and administrative expenses of TAL International Group, the Issuer or any of their Subsidiaries, or (b) the Management Fee.

 

Director Services Agreement:  The Director Services Agreement, dated as of October 23, 2009, among the Manager, the Issuer and the Director Services Provider, and all amendments and supplements thereto.

 

Director Services Provider:  Lord Securities Corporation and its permitted successors and assigns.

 

 

Disposition Fees:  With respect to any Managed Container that (i) has been sold to a third party, or (ii) is the subject of a Casualty Loss, an amount equal to the product of (x) five percent (5%) and (ii) the Sales Proceeds or Casualty Proceeds, as the case may be, realized thereon.

 

Documents:  Any documents, as such term is defined in the UCC.

 

Dollars:  The lawful money of the United States of America. This definition will be equally applicable to the sign $.

 

Early Amortization Event:  The occurrence of any of the events or conditions set forth in Section 1201 of the Indenture.

 

Eligible Account:  Either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States or any of the states thereof, including the District of Columbia (or any domestic branch of a foreign bank), and acting as a trustee for funds deposited in such account, so long as the senior securities of such depository institution shall have a credit rating from each Rating Agency in one of its generic credit rating categories no lower than Aa2 or AA, as the case may be, or (c) any account held with the Indenture Trustee.

 

Eligible Assignee: Any of the following: (i) a Noteholder; (ii) an Affiliate of a Noteholder; (iii) any insurance company or commercial banking institution, in each case, that is not a Competitor; and (iv) any other Person (other than a natural person) approved by the Issuer (such approval not to be unreasonably withheld or delayed).

 

Eligible Container:  Any Managed Container which, individually or when considered with all Managed Containers then owned by the Issuer that are included in the Asset Base, as the case may be, shall comply with each of the following requirements:

 

(i)            No Liens. The Issuer either (A) has good and marketable title to such Managed Container, free and clear of all Liens other than (x) Permitted Encumbrances and (y) a manufacturer’s or vendor’s lien for the unpaid purchase price of such Managed Container so long as such unpaid purchase price is paid within two Business Days following the later of the acquisition of such Managed Container by the Issuer or the inclusion of such Managed Container in the Asset Base; or (B) is the lessor of such Managed Container under a Finance Lease for which the filing specified in Section 2.03(a)(iii) of the Contribution and Sale Agreement has been made and the Issuer has good title to such Finance Lease free and clear of all Liens other than Permitted Encumbrances; and

 

(ii)           Specifications. Such Managed Container substantially conforms to the standard specifications used by the Manager from time to time for that category of Managed Container and to any applicable standards promulgated by the International Organization for Standardization; and

 

(iii)          Container Representations and Warranties. Such Managed Container complies with the Container Representations and Warranties; and

 

(iv)          Casualty Losses. Such Container shall not have suffered a Casualty Loss; and

 

 

(v)           Concentration Limits. Such Container, when considered with all other Eligible Containers owned by the Issuer, satisfies the Concentration Limits; and

 

(vi)          Rights of Lessor Are Assignable.  The rights of the lessor under a Lease Agreement to which a Managed Container is subject (including the right to receive payments from end users) are assignable; and

 

(vii)         Marketable Title.  The Seller shall have had good and marketable title to such Managed Container other than (x) Permitted Encumbrances, (y) a manufacturer’s or vendor’s lien for the unpaid purchase price of such Managed Container so long as such unpaid purchase price is paid within two Business Days following the later of the acquisition of such Managed Container by the Issuer or the inclusion of such Managed Container in the Asset Base or (z) a Managed Container that is subject to a Finance Lease under which the Seller is the lessor and the Issuer has good title to such Finance Lease free and clear of all Liens other than Permitted Encumbrances; and

 

(viii)        Transfer of Title.  The Seller and the Issuer shall have taken all necessary actions to transfer title to such Managed Container (other than if such Managed Container is subject to a Finance Lease for which the Issuer is the lessor) and all related Leases from the Seller to the Issuer; and

 

(ix)           No Violation.  The contribution and conveyance of such Managed Container does not violate any agreement of the Seller; and

 

(x)            General Terms.  The Lease for such Managed Container shall contain terms that are not substantially different than the terms typically included in a Lease for a Container in the Container Fleet, it being understood that, as a matter of normal business practice, some lessees of Containers in the Container Fleet may negotiate Leases that include terms that are more favorable than terms in other leases;

 

(xi)           Adverse Selection.  Such Managed Container was not subject to any adverse selection procedures other than as contemplated by the Transaction Documents by either the Seller or the Manager, whichever may be applicable, in choosing Containers to be transferred to the Issuer;

 

(xii)          Original Equipment Cost.  The Original Equipment Cost of such Container shall be no greater than the cost of such Container that is recorded on the Seller’s books at the time of sale to the Issuer;

 

(xiii)         Lessee Insolvency.  As of the related Transfer Date, the Managed Container is not then under lease to a lessee which, to the best knowledge of Manager, is the subject of an insolvency proceeding; and

 

(xiv)        OFAC Compliance.  Such Container is then not on lease to a Sanctioned Person, or to the actual knowledge of the Issuer or the Manager, is not subleased to a Sanctioned Person or located, operated or used in a Sanctioned Country unless it is used by the government of the United States or one of its allies or pursuant to a license granted by OFAC.

 

Eligible Currency Hedge Counterparty:  Any of the following:

 

 

(A) any bank which has both (x) a long-term unsecured debt rating of at least “A-” or better from S&P (so long as any Outstanding Notes are rated by S&P) and “A3” or better from Moody’s (so long as any Outstanding Notes are rated by Moody’s) and (y) a short-term unsecured debt rating of “A-1” or better from S&P (so long as any Outstanding Notes are rated by S&P) and “P-1” or better from Moody’s (so long as any Outstanding Notes are rated by Moody’s); or

 

(B) any bank or other financial institution (i) which is otherwise acceptable to the Requisite Global Majority and each Series Enhancer which is a Control Party and (ii) for which the Rating Agency Condition (if applicable) has been satisfied.

 

Eligible Hedge Counterparty:  Any Eligible Interest Rate Hedge Counterparty or Eligible Currency Hedge Counterparty, as applicable.

 

Eligible Institution:  Any one or more of the following institutions: (i) the corporate trust department of the Indenture Trustee; provided the Indenture Trustee maintains a long-term unsecured senior debt rating of at least “A-” or better from S&P or “A3” or better from Moody’s, or (ii) a depositary institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), (a) which has both (x) a long-term unsecured senior debt rating of not less than “AA” by S&P and “Aa2” by Moody’s, and (y) a short-term unsecured senior debt rating rated in the highest rating category by each Rating Agency and (b) whose deposits are insured by the Federal Deposit Insurance Corporation.

 

Eligible Interest Rate Hedge Counterparty:  Any of the following:

 

(A) any bank which has both (x) a long-term unsecured debt rating of at least “A-” or better from S&P (so long as any Outstanding Notes are rated by S&P) and “A3” or better from Moody’s (so long as any Outstanding Notes are rated by Moody’s) and (y) a short-term unsecured debt rating of “A-1” or better from S&P (so long as any Outstanding Notes are rated by S&P) and “P-1” or better from Moody’s (so long as any Outstanding Notes are rated by Moody’s);

 

(B) any bank or other financial institution (i) which is otherwise acceptable to the Requisite Global Majority and each Series Enhancer which is a Control Party and (ii) for which the Rating Agency Condition (if applicable) has been satisfied; or

 

(C) any Noteholder or Affiliate of a Noteholder.

 

Eligible Investments:  One or more of the following:

 

(i)            direct obligations of, and obligations fully guaranteed as to the full and timely payment by, the United States of America;

 

(ii)           demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any State thereof and subject to supervision and examination by Federal or State banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured

 

 

debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof shall be rated “A-1+” by S&P and “Prime 1” by Moody’s;

 

(iii)          commercial paper that, at the time of the investment or contractual commitment to invest therein, is rated “A-1+” by S&P and “Prime 1” by Moody’s;

 

(iv)          bankers’ acceptances issued by any depository institution or trust company referred to in clause (ii) above;

 

(v)           repurchase obligations with respect to any security pursuant to a written agreement that is a direct obligation of, or fully guaranteed as to the full and timely payment by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with (x) a depository institution or trust company (acting as principal) described in clause (ii) or (y) a depository institution or trust company the deposits of which are insured by the Federal Deposit Insurance Corporation and whose commercial paper or other short-term unsecured debt obligations are rated “A-1+” by S&P and “Prime 1” by Moody’s and long-term unsecured debt obligations are rated “AAA” by S&P and “Aaa” by Moody’s; and

 

(vi)          money market mutual funds registered under the Investment Company Act of 1940, as amended (including funds for which an Affiliate of the Indenture Trustee is acting as investment advisor), having a rating, at the time of such investment, from each of the Rating Agencies in the highest investment category granted thereby.

 

Enhancement Agreement:  With respect to any Series of Notes, any agreement, instrument or document governing the terms of any Series Enhancement or pursuant to which any Series Enhancement is issued for the benefit of such Series of Notes.

 

Entitlement Order:  This term shall have the meaning set forth in the UCC.

 

Equipment:  This term shall have the meaning set forth in the UCC.

 

ERISA:  The Employee Retirement Income Security Act of 1974, as amended.

 

ERISA Affiliate:  With respect to any Person, any other Person with respect to which it is a member of a controlled group of corporations or a controlled group of trades or businesses, as described in Section 414(b) or (c) of the Code.

 

Estimated Net Operating Income:  This term shall have the meaning set forth in Section 5.1.1 of the Management Agreement.

 

Eurodollar Reserve Percentage:  As of any date of determination, the reserve percentage applicable on such day under regulations issued from time to time by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for any Noteholder (or any of its participants) with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (as defined in Regulation D of the Federal Reserve Board, as in effect from time to time) and having a term equal to the Interest Accrual Period.

 

 

Event of Default:  This term has the meaning set forth in Section 801 of the Indenture.

 

Excess Deposit:  This term has the meaning set forth in Section 5.1.1 of the Management Agreement.

 

Exchange Act:  The Securities Exchange Act of 1934, as amended.

 

Excluded Amounts:  Any payments received from the lessee under a Lease in connection with any taxes, fees or other charges imposed by any Governmental Authority, or indemnity payments for the benefit of the originator of such Lease in its individual capacity made pursuant to such Lease.

 

Existing Commitment:  With respect to any Series, either or both of the following: (A) before the Conversion Date for any Series of Warehouse Notes, with respect to each Series of Notes Outstanding the aggregate Initial Commitment with respect to such Series of Notes, consisting of one or more classes, expressed as a dollar amount, as set forth in the related Supplement and subject to reduction from time to time in accordance with the related Supplement, and/or (B) after the Conversion Date for any Series of Warehouse Notes, with respect to each Series of Notes Outstanding the then unpaid principal balance of the Notes of such Series.  For the avoidance of doubt, the Existing Commitment for any Series of Notes that does not provide for additional fundings by the Noteholders after its Issuance Date shall at all times equal its then unpaid principal balance.

 

Expected Final Maturity Date:  If applicable to any Series, the date on which the principal balance of the Outstanding Notes of such Series is expected to be paid in full. The Expected Final Maturity Date for a Series shall be set forth in the related Supplement.

 

FASB 133:  Statement of Financial Accounting Standards No. 133 — “Accounting for Derivative Instruments and Hedging Activities” issued by the Financial Accounting Standards Board.

 

Fair Market Value: With respect to any asset (including a Container), shall mean the price at which a willing buyer, not an Affiliate of the seller, and a willing seller who does not have to sell, would agree to purchase and sell such asset, which amount shall be determined in good faith by the board of directors or other governing body or, pursuant to a specific delegation of authority by such board of directors or governing body, a designated senior executive officer of the Issuer, the Manager or the Seller.

 

Federal Reserve Bank:  One of the twelve regional banks operated by the Federal Reserve System established by the Federal Reserve Act of 1913 to regulate the U. S. monetary and banking system.

 

Federal Reserve Board:  The Board of Governors of the Federal Reserve System or any successor thereto.

 

Finance Lease:  Any Lease for a container that is classified as a “financing lease” pursuant to GAAP, including Statement of Financial Accounting Standards No. 13, as amended.

 

 

Funding Notice:  With respect to each Series of Notes, this term, if applicable, shall have the meaning given to such term in the Note Purchase Agreement for such Series of Notes.

 

Financial Assets:  This term shall have the meaning set forth in the UCC.

 

General Intangibles:  Any “general intangibles”, as such term is defined in the UCC.

 

Generally Accepted Accounting Principles or GAAP:  Those generally accepted accounting principles and practices which are recognized as such by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof consistently applied as to the party in question.

 

Global Notes:  Collectively, the Rule 144A Global Notes, the Temporary Regulation S Global Notes and the Permanent Regulation S Global Notes.

 

Governmental Authority:  Any of the following:  (a) any federal, state, county, municipal or foreign government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body, (c) any court or administrative tribunal or (d) with respect to any Person, any arbitration tribunal to whose jurisdiction that Person has consented.

 

Grant:  To grant, bargain, sell, convey, assign, transfer, mortgage, pledge, create and perfect a security interest in and right of set-off against, deposit, set over and confirm.

 

Hedge Agreement:  Any Interest Rate Hedge Agreement or Currency Hedge Agreement, as applicable.

 

Hedge Counterparty:  Any Interest Rate Hedge Counterparty or Currency Hedge Counterparty, as applicable.

 

Hedge Effective Date:  The earliest to occur of (x) the date that is the nine-month anniversary of the later to occur of (i) August 12, 2011 or (ii) the date that the Issuer or an Affiliate thereof shall incur or issue additional debt or issue equity securities, to the extent at least eighty-five percent (85%) of the Outstanding Obligations hereunder are repaid with the proceeds of such debt or equity, (y) the first date after August 12, 2011 on which the 5-year swap rate (as set forth in the Wall Street Journal) shall equal or exceed three and one-half of one percent (3.50%), and (z) the date on which an Event of Default, Early Amortization Event or Manager Default has occurred.

 

Hedging Requirement:  This term shall have the meaning set forth in Section 628(a) of the Indenture.

 

Holder:  This term shall have the same meaning as Noteholder.

 

Incentive Arrangements. With respect to any Person, any (a) earn-out agreements, (b) stock appreciation rights, (c) “phantom” stock plans, (d) employment agreements, (e) non-competition agreements and (f) incentive and bonus plans entered into by such Person for the benefit of, and in order to retain, executives, officers or employees of Persons or businesses.

 

 

Increased Costs:  Any fee, expense or increased cost actually charged to or incurred by an Indemnified Party for which such Indemnified Party is entitled to compensation pursuant to the provisions of the related Supplement.

 

Indebtedness:  With respect to any Person without duplication, means (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money, (ii) all obligations of such Person in respect of letters of credit, bankers’ acceptances, and bank guaranties issued for the account of such Person, (iii) all indebtedness of the types described in clause (i), (ii), (iv), (v) or (vi) of this definition secured by any Lien on any property owned by such Person, whether or not such indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such indebtedness, such indebtedness shall be deemed to be in an amount equal to the lesser of (A) the outstanding amount of such Indebtedness and (B) the fair market value of the property to which such Lien relates as determined in good faith by such Person), (iv) the aggregate amount of all capitalized lease obligations of such Person, (v) all Contingent Obligations of such Person and (vi) all obligations of such Person issued or assumed as the deferred purchase price of property or services, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are either (x) not overdue by 90 days or more or (y) being contested in good faith by appropriate proceedings promptly instituted and diligently conducted).

 

Indemnified Party:  This term shall have the meaning set forth, if applicable, in the related Supplement.

 

Indemnity Amounts:  Indemnity payments to the Holders of the Notes (or their related creditor liquidity providers), or any Series Enhancer or any Interest Rate Hedge Counterparty or any Currency Hedge Counterparty for increased costs, funding costs, breakage costs, taxes, other taxes, expenses or other indemnity payment, including, without limitation, the amounts payable pursuant to the provisions of the related Supplement.

 

Indenture:  The Amended and Restated Indenture, dated as of August 12, 2011, between the Issuer and the Indenture Trustee, as amended, modified or supplemented from time to time in accordance with its terms.

 

Indenture Trustee:  The Person performing the duties of the Indenture Trustee under the Indenture, initially, Wells Fargo Bank, National Association and any successors and assigns thereof.

 

Indenture Trustee’s Fees:  This term shall have the meaning set forth in Section 905 of the Indenture.

 

Independent:  A natural person who at the date of his appointment as a manager, director or officer possesses the following qualifications: (a) has prior experience as an independent director or manager for a corporation or a limited liability company, the corporate instruments of which require the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of proceedings against it or could file a petition seeking relief under any applicable bankruptcy or insolvency law; and (b) has at least three years of employment experience with one or more entities that provide, in the ordinary

 

 

course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; provided always that such individual at the date of such individual’s appointment as such manager, director or officer, or at any time in the preceding five years, or during such person’s tenure shall not be:  (i) an employee, director, shareholder, manager, partner or officer of TAL or an affiliate thereof (other than such person’s service as an independent director or manager of TAL or an affiliate thereof); (ii) a customer or supplier of TAL or an affiliate thereof; (iii) a beneficial owner at the time of such individual’s appointment as an independent manager, or at any time thereafter while serving as an independent manager, of more than 2% of the voting securities of TAL or an affiliate thereof; (iv) affiliated with a significant customer, supplier or creditor of TAL or an affiliate thereof; (v) a party to any significant personal service contracts with TAL or an affiliate thereof; or (f) a member of the immediate family of a person described in (i) or (ii) above.

 

Independent Accountants:  Ernst & Young LLP or other independent certified public accountants of internationally recognized standing selected by the Issuer and acceptable to the Administrative Agent and the Requisite Global Majority.

 

Independent Director:  A director or manager of the Issuer who is Independent.

 

Initial Commitment:  This term shall have the meaning given to such term, if applicable, in the related Supplement.

 

Insolvency Law:  The Bankruptcy Code or similar applicable law in any other applicable jurisdiction.

 

Insolvency Proceeding:  Any Proceeding under any applicable Insolvency Law.

 

Instruments:  Any instrument, as such term is defined in the UCC, including, without limitation, all notes, certificated securities, and other evidences of indebtedness, other than instruments that constitute, or are a part of a group of writings that constitute, Chattel Paper.

 

Insurance Agreement:  This term shall have the meaning given to such term, if applicable, in the related Supplement.

 

Intercreditor Agreement:  That certain Intercreditor Agreement, dated as of April 12, 2006, as amended, modified or supplemented from time to time in accordance with its terms, among TAL International Container Corporation, TAL Advantage I LLC, U.S. Bank, National Association, Fortis Capital Corp., Wells Fargo Bank, National Association, as indenture trustee, and various other parties from time to time party thereto.

 

Interest Accrual Period:  With respect to each Payment Date, the period commencing on and including the immediately preceding Payment Date (or in the case of the initial Payment Date with respect to a Series, commencing on and including the Issuance Date for such Series) and ending on and including the day before the current Payment Date.

 

Interest Rate Hedge Agreement:  An ISDA interest rate swap or cap agreement, collar or other hedging instrument between the Issuer and the Interest Rate Hedge Counterparty named therein, each in form and substance reasonably acceptable to the Requisite Global Majority, that complies with the guidelines set forth in Section 628 of the Indenture and pursuant to which (i)

 

 

the Issuer will receive payments from, or make payments to, the Interest Rate Hedge Counterparty based on LIBOR and (ii) recourse by the Interest Rate Hedge Counterparty to the Issuer is limited to distributions in accordance with the priority of payments set forth in Section 302 and Section 806 of the Indenture, as applicable.

 

Interest Rate Hedge Counterparty:  Any Eligible Interest Rate Hedge Counterparty or any counterparty to a cap, collar or other hedging instrument permitted to be entered into pursuant to the Indenture.

 

Investment Grade Entity:  Any bank which has both (x) a long-term unsecured debt rating of at least “BBB-” or better from S&P (so long as any Outstanding Notes are rated by S&P) and “Baa3” or better from Moody’s (so long as any Outstanding Notes are rated by Moody’s) and (y) a short-term unsecured debt rating of “A-2” or better from S&P (so long as any Outstanding Notes are rated by S&P) and “P-2” or better from Moody’s (so long as any Outstanding Notes are rated by Moody’s).

 

Inventory:  Any inventory, as such term is defined in the UCC.

 

Investment:  When used in connection with any Person, any investment by or of that Person, whether by means of purchase or other acquisition of securities of any other Person or by means of loan, advance, capital contribution, guaranty or other debt or equity participation or interest in any other Person, including any partnership and joint venture interests of such Person in any other Person. The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property; provided, however, that the term “Investment” shall not include (i) any prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits made in the ordinary course of business, (ii) receivables owing to the Issuer, if created or acquired in the ordinary course of its business and payable or dischargeable in accordance with customary trade terms of the Issuer, or (iii) any investments (including debt obligations) received by the Issuer in connection with the bankruptcy or reorganization of lessees, suppliers, trade creditors, licensees, licensors and customers and in good faith settlement of delinquent obligations of, and other disputes with, lessees, suppliers, trade creditors, licensees, licensors and customers arising in the ordinary course of business.

 

Investment Letter:  A letter substantially in the form of Exhibit B to the Indenture.

 

Investment Property:  This term shall have the meaning set forth in the UCC.

 

ISDA:  International Swaps and Derivatives Association, Inc., and any successor thereto.

 

Issuance Date:  With respect to any Series, the date on which the Notes of such Series are to be originally issued in accordance with the Indenture and the related Supplement.

 

Issuer:  TAL Advantage III LLC, a limited liability company organized under the laws of Delaware, and its permitted successors and assigns.

 

 

Issuer Cash Interest Expense:  With respect to the Issuer for any period, an amount equal to the difference of (1) the Issuer Interest Expense for such period minus (2) to the extent included in clause (1), (i) amortization or write off of debt issuance or deferred financing costs, (ii) any non-cash interest expense related to any interest expense that has not been paid in cash, and (iii) any incremental non-cash interest expense incurred as the result of an accounting change that occurs after August 15, 2007, plus (3) without duplication of amounts included in clause (1), cash interest payments made in such period that were deducted from Issuer Cash Interest Expense in a prior period.

 

Issuer EBIT.  For any period, means the sum of Issuer Net Income, plus the following, without duplication, to the extent deducted in calculating such Issuer Net Income:

 

(1) all income tax expense in respect of any net income generated by the Issuer;

 

(2) Issuer Interest Expense;

 

(3) depreciation and amortization charges of the Issuer relating to any increased depreciation or amortization charges resulting from purchase accounting adjustments or inventory write-ups with respect to acquisitions or the amortization or write-off of deferred debt or equity issuance costs;

 

(4) all other non-cash charges of the Issuer (other than depreciation expense) minus, with respect to any such non-cash charge occurring on or after July 1, 2009 that was previously added in a prior period to calculate Issuer EBIT and that represents an accrual of or reserve for cash expenditures in any future period, any cash payments made during such period;

 

(5) any non-capitalized costs incurred in connection with financings, the acquisition of Containers or dispositions (including financing and refinancing fees and any premium or penalty paid in connection with redeeming or retiring Indebtedness prior to the stated maturity thereof pursuant to the agreements governing such Indebtedness);

 

(6) all non-cash expenses attributable to Incentive Arrangements;

 

(7) to the extent that any portion of the Management Fee payable during such period was accrued and not paid during such period, the aggregate amount of expenses attributable to all payments or accruals of Management Fee during such period; and

 

(8) any indemnity payments made (regardless of to whom such payments are made) pursuant to the Indenture;

 

in each case, for such period and as determined in accordance with GAAP.

 

Issuer EBIT to Issuer Cash Interest Expense Ratio:  As of the last day of the fiscal quarter preceding such date of determination commencing with the fiscal quarter ending September 30, 2009 the ratio of (a) the aggregate amount of Issuer EBIT for the period of the most recent four

 

 

consecutive fiscal quarters of the Issuer ending on or prior to the date of such determination, to (b) Issuer Cash Interest Expense for such four fiscal quarters; provided, however, that for each Determination Date occurring prior to the Determination Date in October 2010, such ratio shall be calculated based on the number of fiscal quarters that have elapsed since September 30, 2009.

 

Issuer Expenses:  For any Collection Period, direct out-of-pocket expenses that are necessary or advisable, in the opinion of the managers of the Issuer, to maintain the corporate existence of the Issuer, including: administration expenses; accounting and audit expenses of the Issuer; premiums for liability, casualty, fidelity, directors’ and officers’ and other insurance; legal fees and expenses; other professional fees; franchise taxes and other similar taxes (but excluding income taxes); and surveillance and other fees assessed by the Rating Agencies.

 

Issuer Interest Expense: With respect to the Issuer for any period, the aggregate of the interest expense of the Issuer for such period, as determined in accordance with GAAP, and including, without duplication, (a) all amortization or accretion of original issue discount; (b) net cash costs under all Hedge Agreements; and (c) amortization of fees under all Hedge Agreements.

 

Issuer Net Income:  For any period, the aggregate net income (or loss) of the Issuer for such period, determined in accordance with GAAP; provided, however, that there shall not be included in such Issuer Net Income:

 

(1)           any gain (or loss) realized upon the sale or other disposition of assets (other than Containers) of the Issuer (including pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary course of business;

 

(2)           extraordinary gains or losses, as determined in accordance with GAAP;

 

(3)           income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued);

 

(4)           the cumulative effect of a change in accounting principles, as determined in accordance with GAAP;

 

(5)           any adjustments, restructuring costs, non-recurring expenses, non-recurring fees, non-operating expenses, charges or other expenses (including bonus and retention payments and non-cash compensation charges) incurred in connection with acquisitions of Containers; and

 

(6)           Systems/Organizational Establishment Expenses;

 

in each case, for such period.

 

Last Lessee Damage Payment:  The last payments received from a lessee in respect of damages to or repair of a Managed Container that is designated for sale.

 

 

Lease or Lease Agreement:  Each and every item of Chattel Paper, installment sales agreement, equipment lease or rental agreement (including progress payment authorizations) to which a Container is subject from time to time and including any Lease entered into from time to time by TAL pursuant to which TAL leases one or more Containers from its Container Fleet. The term Lease includes (a) all payments to be made by the lessee thereunder, (b) all rights of the lessor thereunder, (c) any and all amendments, renewals or extensions thereof and (d) guaranties, or other credit support or Supporting Obligation provided by, or on behalf of, the lessee with respect thereof.

 

Legal Final Maturity Date: With respect to any Series, this term shall have the meaning set forth in the related Supplement.

 

Letter-of-Credit Rights:  This term shall have the meaning set forth in the UCC.

 

Leverage Ratio: For any Person, on a consolidated basis, as of a date of determination, the ratio of (a) Consolidated Funded Debt to (b) Consolidated Tangible Net Worth.

 

LIBOR:  An interest rate per annum equal to the average per annum rate of interest determined by the Indenture Trustee (and notified to each of the Issuer, the Manager and the Administrative Agent) on the basis of the offered rates for deposits in dollars for an amount equal to the requested advance of funds and for a term equal to the applicable Interest Accrual Period, and commencing on the first day of such Interest Accrual Period, appearing on the Reuters Screen LIBOR 01 Page) as of 11:00 A.M. (London time) on the Business Day which is the LIBOR Determination Date. If the Reuters Screen LIBOR 01 Page is not available, then LIBOR shall be the rate determined by the Administrative Agent (such determination, absent manifest error, to be conclusive and binding on all parties hereto and their assignees) as of the LIBOR Determination Date as the rate at which deposits in immediately available funds in U.S. dollars are being, have been, or would be offered or quoted by the Administrative Agent to major banks in the applicable interbank market for Eurodollar deposits at or about 11:00 A.M. (New York City time) on the Business Day which is the LIBOR Determination Date immediately preceding the date of such determination for delivery for a term equal to such Interest Accrual Period.

 

LIBOR  Determination Date:  The date that is the second (2nd) Business Day in London, England prior to the first day of any Interest Accrual Period.

 

Lien:  Any security interest, lien, charge, pledge, equity or encumbrance of any kind.

 

List of Containers:  A printed list of the Containers transferred by the Seller to the Issuer and hereby certified by an Authorized Signatory, which includes a true and complete list of all Containers to be conveyed on any Transfer Date. The List of Containers will include the following information for each such Container: (i) its Container Identification Numbers and (ii) the type of Container. Supplements to the List of Containers will be attached to the Container Transfer Certificate and will contain only unit Container Identification Numbers for each Container.

 

Majority of Holders:  With respect to a Series means, unless otherwise provided in the Supplement related to such Series, Holders of such Class evidencing more than fifty percent

 

 

(50%) of the then outstanding principal balance of such Series of Notes; or (ii) if such Series includes multiple Classes, the Persons specified in such Supplement.

 

Managed Containers:  All Containers owned by the Issuer at any time.

 

Management Agreement:  The Management Agreement, dated as of October 23, 2009, entered into by and between TAL and the Issuer, as such agreement shall be amended, supplemented or modified from time to time in accordance with its terms.

 

Management Fee:  For any Payment Date, an amount equal to the sum of (i) the product of (x) twelve percent (12%)  and (y) the Net Operating Income for the preceding Collection Period (other than Container Revenues on Finance Leases), (ii) the product of (x) five percent (5%) and (y) Container Revenues on Finance Leases for the preceding Collection Period and (iii) the sum of all Disposition Fees for the preceding Collection Period.

 

Management Fee Arrearage:  For any Payment Date, an amount equal to all unpaid Management Fees from all prior Collection Periods.

 

Manager:  The Person performing the duties of the Manager under the Management Agreement; initially, TAL including its Affiliates listed on Exhibit B of the Management Agreement.

 

Manager Advance:  This term shall have the meaning set forth in Section 4.2 of the Management Agreement.

 

Manager Default:  The occurrence of any of the events or conditions set forth in Section 9.1 of the Management Agreement.

 

Manager Report:  This term is defined in Section 4.1.2 of the Management Agreement.

 

Manager Termination Notice:  This term is defined in Section 9.2 of the Management Agreement.

 

Managing Officer:  Any representative of the Manager involved in, or responsible for, the management of the day-to-day operations of the Issuer and the administration and servicing of the Containers and the other Collateral whose name appears on a list of managing officers furnished to the Issuer, each Series Enhancer, if any, and the Indenture Trustee by the Manager, as such list may from time to time be amended.

 

Material Adverse Change:  Any set of circumstances or events which (a) pertains to the Issuer, the Seller or the Manager and has any material adverse effect whatsoever upon the validity or enforceability of any Transaction Document or the security for any of the related Notes or the ability of the Indenture Trustee or any Series Enhancer (if such Series Enhancer is then the Control Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement) to enforce any of its legal rights or remedies pursuant to the Transaction Documents or (b) materially impairs the ability of either the Issuer, the Seller or the Manager to fulfill its obligations under the Transaction Documents.

 

 

Minimum Principal Payment Amount:  Except as set forth in an applicable Supplement for any Series of Outstanding Notes for any Payment Date, the excess, if any, of (x) the then aggregate unpaid principal balance of such Series over (y) the Minimum Targeted Principal Balance for such Series for such Payment Date.

 

Minimum Targeted Principal Balance:  This term shall have the meaning set forth, if applicable, in the related Supplement.

 

Moody’s:  Moody’s Investors Service, Inc., and any successor thereto.

 

MSC:  MSC Mediterranean Shipping Company, S.A. and its Affiliates.

 

Net Book Value:  As of any date of determination, with respect to any Managed Container that is not subject to a Finance Lease, the Original Equipment Cost less accumulated depreciation based on (i) straight-line depreciation over twelve (12) years with a remaining residual value per the schedule set forth on Exhibit D to the Indenture or (ii) any other depreciation method used by the Manager which is more conservative (i.e., which provides for greater annual depreciation or a lower remaining residual value), and with respect to any Eligible Container subject to a Finance Lease, one hundred percent (100%) of the net book value of such Finance Lease, as determined in accordance with GAAP.

 

Net Operating Income:  For any Collection Period, an amount equal to the excess (if any) of (i) the Container Revenues actually received during such Collection Period, over (ii) the Direct Operating Expenses accrued during such Collection Period.

 

Note Owners:  With respect to a Global Note, the Person who is the owner of such Global Note, as reflected on the books of (i) the Depositary (a direct participant) or (ii) a Person maintaining an account with the Depositary (an indirect participant).

 

Note Purchase Agreement:  Any underwriting agreement or other purchase agreement for the Notes of any Class or Series as each such agreement may be amended, modified or supplemented from time to time in accordance with its terms.

 

Note Register:  This term shall have the meaning set forth in Section 205 of the Indenture.

 

Note Registrar:  This term shall have the meaning set forth in Section 205 of the Indenture.

 

Noteholder:  The Person in whose name a Note is registered in the Note Register.

 

Notes:  Any one of the promissory notes or other securities executed by the Issuer and authenticated by or on behalf of the Indenture Trustee, substantially in the form attached to the related Supplement.

 

OFAC:  The Office of Foreign Assets Control of the United States Department of the Treasury.

 

 

Officer’s Certificate:  A certificate signed by a duly authorized officer of the Person who is required to sign such certificate.

 

Opinion of Counsel:  A written opinion of counsel, who, unless otherwise specified, may be counsel employed by the Issuer, the Seller or the Manager, in each case reasonably acceptable to the Person or Persons to whom such Opinion of Counsel is to be delivered. The counsel rendering such opinion may rely (i) as to factual matters on a certificate of a Person whose duties relate to the matters being certified, and (ii) insofar as the opinion relates to local law matters, upon opinions of local counsel.

 

Original Equipment Cost:  With respect to any Container as of any date, an amount equal to the average, for all Managed Containers of the same equipment type and year of manufacture, of the sum of (i) the greater of (A) the vendor’s or manufacturer’s invoice price of such Container and (B) with respect to those Containers owned by TAL, and TOCC immediately prior to the Closing Date that were acquired by TAL or TOCC prior to November 4, 2004 through an asset purchase or other acquisition, the purchase price allocated to a Container by TAL or TOCC, as applicable in the acquisition of such Container, plus (ii) reasonable and customary inspection, transport and initial positioning costs necessary to put such Container in service not to exceed three percent (3%) of the amount described in clause (i) above, plus (iii) the cost of any Capital Improvements made to such Container, by, or on behalf of, the Issuer which expenditures are capitalized in accordance with GAAP, provided however, that the aggregate amount of Capital Improvements that may be included in the calculation of the Aggregate Net Book Value as of any date of determination may not exceed an amount equal to five percent (5%) of the Aggregate Net Book Value, plus (iv) reasonable acquisition fees and other fees allocated by the Seller not to exceed two and one half percent (2.5%) of the amount described in clause (i) above.

 

Outstanding:  When used with reference to the Notes and as of any particular date, any Note theretofore or thereupon being authenticated and delivered except:

 

(i)            any Note cancelled by the Indenture Trustee or proven to the satisfaction of the Indenture Trustee to have been duly cancelled by the Issuer at or before said date;

 

(ii)           any Note, or portion thereof, called for payment or redemption for which monies equal to the principal amount or redemption price thereof, as the case may be, with interest to the date of maturity or redemption, shall have theretofore been deposited with the Indenture Trustee (whether upon or prior to maturity or the redemption date of such Note);

 

(iii)          any Note in lieu of or in substitution for which another Note shall subsequently have been authenticated and delivered; and

 

(iv)          for purposes of determining which Notes are entitled to vote with respect to a particular matter, any Note held by the Issuer, the Seller or any Affiliate of either the Issuer or the Seller, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, or waiver, only Notes that a Responsible Officer of the Indenture Trustee actually has notice are so owned shall be so disregarded;

 

 

provided, however, that notwithstanding the foregoing, any Note on which any portion of principal or interest has been paid by any Series Enhancer pursuant to any Enhancement Agreement shall be considered to be Outstanding until such Series Enhancer has been reimbursed in full therefor in accordance with the terms of the related Insurance Agreement.

 

Outstanding Obligations:  As of any date of determination an amount equal to the sum of (i) the then outstanding principal balance of, and accrued interest payable on, all notes issued under the Indenture or any supplement thereto or any note purchase agreement, (ii) all other amounts owing to holders of Outstanding notes or to any person under the Indenture or any supplement thereof, including without limitation any amounts owed by the Issuer to any Series Enhancer, (iii) amounts owing by the Issuer under any Interest Rate Hedge Agreement, (iv) amounts owing by the Issuer under any Currency Hedge Agreement and (v) any other amounts owing to any Series Enhancer under any Transaction Document.

 

Owner:  This term has the same meaning as Issuer.

 

Ownership Interests:  An ownership interest in a Global Note.

 

Payment Date:  The 20th day of each month (or, if such 20th day is not a Business Day, the next succeeding Business Day), commencing on January 20, 2010.

 

Permanent Regulation S Global Notes:  The permanent book-entry notes in fully registered form without coupons that are exchangeable for Temporary Regulation S Global Notes after the expiration of the 40-day distribution compliance period and which will be registered with the Depositary.

 

Permitted Business: The marine container leasing business and any business that is the same as or similar, reasonably related, complementary, ancillary or incidental to the marine container leasing business, including, but not limited to, the leasing of chassis.  The container logistics business, the container purchase and resale business, and the static storage business, all as currently engaged in by TAL International Group, TAL or their respective Subsidiaries on the Closing Date are also deemed to be a Permitted Business.  For the avoidance of doubt, all activities contemplated by the Transaction Documents shall be deemed to be a “Permitted Business” hereunder.

 

Permitted Encumbrance:  Any of the following:

 

(i)            Liens for taxes, assessments or governmental charges or levies not yet delinquent or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate cash reserves have been established in accordance with GAAP;

 

(ii)           Liens in respect of property or assets of the Issuer or any of its Subsidiaries imposed by law which have not arisen to secure Indebtedness for borrowed money, such as carriers’, seamen’s, stevedores’, wharfinger’s, depot operators’, transporters’, warehousemens’, mechanics’, landlord’s, suppliers’, repairmen’s or other like Liens, and relating to amounts not yet due or which shall not have been overdue for a period of more than thirty (30) days or which are being contested in good faith by appropriate proceedings for which adequate cash reserves have been established in accordance with GAAP;

 

 

(iii)          Liens created pursuant to the terms of the Indenture and the other Transaction Documents;

 

(iv)          Liens arising from judgments, decrees or attachments in respect of which the Issuer shall in good faith be prosecuting an appeal or proceedings for review and in respect of which there shall have been secured a subsisting stay of execution pending such appeal or proceedings (including in connection with the deposit of cash or other property in connection with the issuance of stay and appeal bonds);

 

(v)           licenses, sublicenses, leases or subleases (including Leases) granted by, or on behalf of, the Issuer to third Persons in the ordinary course of business;

 

(vi)          Liens arising from or related to precautionary UCC or like personal property security financing statements regarding operating leases (if any) entered into by the Issuer as lessor in the ordinary course of business;

 

(vii)         Liens in favor of customs or revenue authorities arising as a matter of law to secure payment of customs duties not past due in connection with the importation of goods;

 

(viii)        Liens arising solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; and

 

(ix)           Liens of any lessee under any Finance Lease;

 

provided, however, that any proceedings of the type described in clauses (i), (iv) or (vii) above would not reasonably be expected to subject any Series Enhancer, the Indenture Trustee, any Hedge Counterparty or the Noteholders to any civil or criminal penalty or liability or involve any risk of loss, sale or forfeiture of any portion of the Collateral that would result in an Asset Base Deficiency.

 

Permitted Payment Date Withdrawals:  For any Payment Date, one of the following:

 

(1)           for any Payment Date other than the Legal Final Maturity Date, the aggregate amount of the interest and any arrearages thereof payable on such Payment Date; or

 

(2)           for (i) the Legal Final Maturity Date or (ii) any date on which an Event of Default has occurred and is then continuing and any Outstanding Notes have been accelerated in accordance with the provisions of the Indenture, an amount equal to the sum of (x) the aggregate amount of the interest and arrearages thereof payable on such Payment Date and (y) the then Aggregate Note Principal Balance.

 

Person:  An individual, a partnership, a limited liability company, a corporation, a joint venture, an unincorporated association, a joint-stock company, a trust, or other entity or a Governmental Authority.

 

Plan:  An “employee pension benefit plan”, as such term is defined in Section 3(2) of ERISA which is subject to Title IV of ERISA.

 

 

Predecessor Container:  This term shall have the meaning set forth in Section 3.04 of the Contribution and Sale Agreement.

 

Premium:  The fee or premium payable to any Series Enhancer for guaranteeing the Notes of any Series, as such amount is set forth in the Enhancement Agreement.

 

Prepayment:  Any mandatory or optional prepayment of principal of the Notes prior to the Expected Final Maturity Date of such Series of Notes made in accordance with the terms of the Indenture.

 

Prime Rate:  The rate announced by Wells Fargo Bank, National Association, from time to time, as its “prime rate” or “base rate” in the United States, such rate to change as and when such designated rate changes. The Prime Rate is not necessarily the lowest rate of interest charged by Wells Fargo Bank, National Association in connection with extensions of credit to debtors.

 

Principal Terms:  With respect to any Series, (i) the name or designation of such Series; (ii) the initial principal amount of the Notes to be issued for such Series (or method for calculating such amount); (iii) the interest rate to be paid with respect to each Class of Notes for such Series (or method for the determination thereof); (iv) the Payment Date and the date or dates from which interest shall accrue and on which principal is scheduled to be paid; (v) the designation of any Series Accounts and the terms governing the operation of any such Series Accounts; (vi) the terms of any form of Series Enhancement with respect thereto; (vii) the Expected Final Maturity Date (if any) and the Legal Final Maturity Date for the Series; (viii) the number of Classes of Notes of the Series and, if the Series consists of more than one Class, the rights and priorities of each such Class; (ix) the priority of such Series with respect to any other Series; (x) the Control Party with respect to such Series and the Rating Agencies, if any, for such Series; (xi) those items constituting Priority Payments; (xii) the designation of such Series as either a Term Note or a Warehouse Note; and (xiii) any other terms of such Series.

 

Priority Payments:  For each Series of Notes then Outstanding on any Payment Date, all amounts to be paid from the related Series Account on such Payment Date which represent payments of (i) interest (but not Default Fees or any other interest expressly excluded pursuant to the terms of the Supplement for such Series) on such Series of Notes, (ii) commitment fees payable to the Holders of such Series of Notes and (iii) if any of the amounts set forth in clauses (i) or (ii) are paid by a Series Enhancer, then any reimbursement obligations of the Issuer to such Series Enhancer in respect of such payments, including interest thereon, shall be a Priority Payment for such Series and paid to such Series Enhancer to the extent that such payment would not cause a shortfall in other Priority Payments for the Noteholders of such Series.

 

Proceeding:  Any suit in equity, action at law, or other judicial or administrative proceeding.

 

Proceeds:  “Proceeds”, as such term is defined in the UCC.

 

Prospective Owner:  This term shall have the meaning set forth in Section 205(j) of the Indenture.

 

 

Rating Agency or Rating Agencies:  With respect to any outstanding Series or Class, each statistical rating agency (if any) selected by the Issuer with the approval of any Series Enhancer for such Series to rate such Series or Class and that has an outstanding rating with respect to such Series or Class. Each such Rating Agency shall be identified in the related Supplement.

 

Rating Agency Condition:  With respect to any action to be taken or proposed to be taken, each Rating Agency having notified the Issuer, or the Manager, in writing that such action will not result in a reduction or withdrawal of its then-current rating of any Series of Notes then Outstanding including any underlying rating in respect of such Series of Notes issued to a Series Enhancer without giving effect to the related Series Enhancement.

 

Receivables Threshold:  As of any date of determination, means the lesser of (i) $5.5 million and (ii) 0.55% of the Aggregate Net Book Value as of such date of determination.

 

Record Date:  With respect to any Payment Date, unless otherwise specified in a Supplement, the last Business Day of the Interest Accrual Period ending on the day preceding such Payment Date.

 

Regulation S Global Notes: Collectively, the Permanent Regulation S Global Notes and the Temporary Regulation S Global Notes.

 

Reimbursement Amount:  All amounts owed by the Issuer to a Series Enhancer under the related Enhancement Agreement and the other Transaction Documents.

 

Related Assets:  With respect to any Transferred Container, all of the following:  (i) all Casualty Proceeds, Sales Proceeds and Container Revenues accrued as of the related Transfer Date, (ii) all right, title and interest in and to, but none of the obligations under, any agreement with the manufacturer of such Container or any third party with respect to such Container, and all amendments, additions and supplements made with respect to such Container, (iii) all right, title and interest in and to any Lease Agreement to which such Container is subject (to the extent, but only to the extent) that Lease Agreement relates to such Container), including, without limitation, the Seller’s interest under all amendments, additions and supplements thereto, (iv) all other security interests or liens and property subject thereto from time to time purporting to secure payment of a Lease Agreement (to the extent, but only to the extent, attributable to such Container), (v) all letters of credit, guarantees, Supporting Obligations and other agreements or arrangements of whatever character from time to time supporting or securing payment of any Lease Agreement (to the extent, but only to the extent, attributable to such Container), (vi) any insurance proceeds received with respect to such Container, (vii) all books and records relating to such Container, (viii) all payments, proceeds and income of the foregoing or related thereto; (ix) any agreement with the manufacturer of such Container, and all amendments, additions and supplements made with respect to such Container, to the extent, but only to the extent, relating to such Container; and (x) all rights under UCC financing statements or documents of similar import evidencing a security interest in favor of the Seller with respect to such Container (including any such financing statement filed pursuant to Section 2.03(a)(iii) of the Contribution and Sale Agreement).

 

 

Required Deposit Rating:  With regard to an institution, the short-term unsecured senior debt rating of such institution is in the highest category by each Rating Agency, or if no Series is rated, by each of S&P and Moody’s.

 

Requisite Global Majority:  As of any date of determination, the determination of whether a Requisite Global Majority exists with respect to a particular course of action shall be determined in accordance with Section 503 of the Indenture.

 

Responsible Officer:  When used with respect to the Indenture Trustee, any officer assigned to the Corporate Trust Office (or any successor thereto), including any Vice President, Assistant Vice President, Trust Officer, any Assistant Secretary, any trust officer or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and having direct responsibility for the administration of the Indenture.

 

Restatement Effective Date:  August 12, 2011.

 

Restricted Cash Account:  This term shall have the meaning set forth in Section 306 of the Indenture.

 

Restricted Cash Effective Date:  The Closing Date.

 

Restricted Cash Amount:  As of any Payment Date, the amount required to be deposited or maintained in the Restricted Cash Account, which shall be equal to the product of (a) on the Closing Date, zero (0); on the first Payment Date, one (1); on the second Payment Date, two (2); and thereafter, three (3), (b) one-twelfth (1/12), (c) the weighted average (based on unpaid principal balance) of the annual rates of interest payable by the Issuer on all Notes then Outstanding (or, to the extent that an Interest Rate Hedge Agreement is in effect with respect to all, or a portion of, such principal balances, the interest rate payable by the Issuer on such Interest Rate Hedge Agreement) and (d) the then Aggregate Note Principal Balance calculated after giving effect to all principal payments actually paid on such date.

 

Restricted Subsidiary:  With respect to any Person, any Subsidiary of such Person that is not an Unrestricted Subsidiary (as defined in the Credit Agreement) of such Person.

 

Rule 144A:  Rule 144A under the Securities Act, as such rule may be amended from time to time.

 

Rule 144A Global Notes: The permanent book-entry notes in fully registered form without coupons that represent the Notes sold in reliance on Rule 144A and which will be registered with the Depositary.

 

S&P:  Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

 

Sale:  This term shall have the meaning set forth in Section 816 of the Indenture.

 

Sales Proceeds:  With respect to any Managed Container that (i) has been sold to a third party, or (ii) is the subject of a Casualty Loss, an amount equal to the excess of (a) the gross

 

 

proceeds of the sale or other disposition (including any Last Lessee Damage Payment) of a Managed Container or Casualty Proceeds, if any, received by the Manager in respect of a Managed Container, over (b) commissions, administrative fees, handling charges, taxes, reserves or other similar amounts paid, or to be paid, to Persons other than the Manager in connection with the sale or other disposition as determined in the sole discretion of the Manager; provided, however, that to the extent that any such commission, administrative fees, handling charges or other similar amount is to be paid to an Affiliate of the Manager, the amount of such fee or other charge shall not exceed the amount that would have otherwise been payable to an independent third party in an arms-length transaction.

 

Sanctioned Country:  A country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time.

 

Sanctioned Person:  Any of the following currently or in the future: (i) a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the extent the agency, organization, or person is subject to a sanctions program administered by OFAC.

 

Scheduled Principal Payment Amount: Except as set forth in an applicable Supplement, for any Payment Date for any Series, the excess, if any, of (x) the then unpaid principal balance of such Series of Outstanding Notes (after giving effect to any payment of the Minimum Principal Payment Amount for such Series on such Payment Date) over (y) the Scheduled Targeted Principal Balance for such Series for such Payment Date.

 

Scheduled Targeted Principal Balance: This term shall have the meaning set forth, if applicable, in the related Supplement.

 

Securities Act:  The Securities Act of 1933, as amended from time to time.

 

Security Entitlements:  This term shall have the meaning set forth in the UCC.

 

Securities Intermediary:  The Person then acting as “securities intermediary” (as defined in Section 8-102(a)(14) of the UCC) for any of the Trust Account, the Restricted Cash Account, the Temporary Loss Account and any Series Accounts; initially, U. S. Bank National Association.

 

Seller:  TAL, and its successors and permitted assigns.

 

Series:  Any series of Notes established pursuant to a Supplement.

 

Series Account:  Any deposit, trust, escrow or similar account maintained for the benefit of the Noteholders and any related Series Enhancer of any Series or Class, if any, as specified in the related Supplement.

 

Series 2009-1 Supplement:  The Amended and Restated Series 2009-1 Supplement, dated August 12, 2011, issued pursuant to, and incorporating the terms of, the Indenture.

 

 

Series Enhancement:  The rights and benefits provided to the Noteholders of any Series or Class pursuant to any letter of credit, surety bond, financial guaranty, insurance policy, insurance agreement or other similar arrangement.  The subordination of any Class to another Class shall be deemed not to be Series Enhancement.

 

Series Enhancer:  A Person then providing any Series Enhancement.

 

Series Issuance Date:  With respect to any Series, the date on which the Notes of such Series are to be originally issued in accordance with Section 1006 of the Indenture and the related Supplement.

 

Servicing Standard:  This term shall have the meaning set forth in Section 3.1 of the Management Agreement.

 

Specialized Containers:  All refrigerated containers, tank containers, special purposes containers, open top containers, flat rack containers, bulk containers, high cube containers (other than 40’ high cube dry containers), cellular palletwide containers and all other types of containers other than standard dry cargo containers.

 

State:  Any state of the United States of America and, in addition, the District of Columbia.

 

Subject Note:  This term shall have the meaning set forth in Section 205(l) of the Indenture.

 

Subservicer: This term shall have the meaning set forth in Section 2.2 of the Management Agreement.

 

Subservicing Agreement: This term shall have the meaning set forth in Section 2.2 of the Management Agreement.

 

Subsidiary:  A subsidiary of a Person means any corporation, association, partnership, limited liability company, joint venture or other business entity of which more than fifty percent (50.0%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled directly or indirectly by such Person, or one or more of the Subsidiaries of such Person, or a combination thereof.

 

Substitute Container:  This term is defined in Section 3.04 of the Contribution and Sale Agreement.

 

Supplement:  Any supplement to the Indenture executed in accordance with Article X of the Indenture.

 

Supplemental Principal Payment:  This term shall have the meaning set forth in Section 702(a) of the Indenture.

 

Supplemental Principal Payment Amount:  On any Payment Date, the excess, if any, of (i) the Aggregate Note Principal Balance (calculated after giving effect to any payment of the Minimum Principal Payment Amount and the Scheduled Principal Payment Amount for all

 

 

Series of Notes then Outstanding on such Payment Date), over (ii) the Asset Base on such Payment Date.

 

Supporting Obligation:  This term shall have the meaning set forth in the UCC.

 

Systems/Organizational Establishment Expenses. The aggregate of all expenditures (whether paid in cash or accrued as liabilities) by the Issuer in establishing, implementing, integrating or replacing financial, information technology and other similar systems of the Issuer.

 

TAL:  TAL International Container Corporation, a Delaware corporation.

 

TAL International Group:  TAL International Group, Inc., a Delaware corporation.

 

TOCC:  Trans Ocean Container Corporation, a corporation organized under the laws of the State of Delaware, and its successors and permitted assigns.

 

TOL:  Trans Ocean Ltd., a corporation organized under the laws of the State of Delaware, and its successors and permitted assigns.

 

Tape:  This term shall have the meaning set forth in Section 3.10.3 of the Management Agreement.

 

Taxes:  This term shall have the meaning set forth in the related Supplement.

 

Temporary Regulation S Global Notes: The temporary book-entry notes in fully registered form without coupons that represent the Notes sold in offshore transactions within the meaning of and in compliance with Regulation S under the Securities Act and which will be registered with the Depositary.

 

Term:  This term shall have the meaning set forth in Section 6.1.1 of the Management Agreement.

 

Term Note:  Any Note that pays principal and interest on each Payment Date from and after its date of issuance.

 

Transaction Documents:  Any and all of the Indenture, each Supplement, each Enhancement Agreement, each Insurance Agreement, the Notes, the Management Agreement, the Contribution and Sale Agreement,  the Director Services Agreement, each Note Purchase Agreement, the Administration Agreement, the Interest Rate Hedge Agreements (upon execution thereof), the Currency Hedge Agreements (upon execution thereof), all other transaction documents and any and all other agreements, documents and instruments executed and delivered by or on behalf of support of Issuer with respect to the issuance and sale of the Notes, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.

 

Transfer Date:  The date on which a Container is contributed or sold by the Seller to the Issuer pursuant to the terms of the Contribution and Sale Agreement.

 

Transferee:  This term shall have the meaning set forth in Section 205(1) of the Indenture.

 

 

Transferred Assets:  Transferred Containers and Related Assets collectively.

 

Transferred Container:  A Container transferred by the Seller to the Issuer.

 

Transferred Note:  This term shall have the meaning set forth in Section 205(1) of the Indenture.

 

Trust Account:  The account or accounts established pursuant to Section 302 of the Indenture.

 

UCC:  The Uniform Commercial Code as in effect in the State of New York.  In the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of Indenture Trustee’s security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term UCC shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions relating to such attachment, perfection of priority and for purposes of definitions related to such provisions.

 

UNIDROIT Convention:  Any convention promulgated by the International Institute for the Unification of Private Law specifically dealing with interests in shipping containers.

 

Warehouse Notes:  Any Series of the Notes which contain (or the related Supplement for which contains or the related Note Purchase Agreement for which contains) provisions whereby (x) the Issuer may request additional fundings from the related Noteholders from time to time and (y) the unpaid principal balances of such Notes are not scheduled to amortize for some specified period of time.  If the Conversion Date of a Series of Warehouse Notes has occurred, such Series shall no longer be considered an Outstanding Series of Warehouse Notes but shall instead be considered an Outstanding Series of Term Notes.

 

Warranty Purchase Amount:  With respect to any Managed Container, an amount equal to the excess of (i) the Net Book Value of such Managed Container on the date which the Issuer acquired such Container from the Seller pursuant to the Contribution and Sale Agreement, less (ii) the aggregate amount of Net Operating Income received by the Issuer with respect to such Managed Container since the date on which the Issuer acquired such Managed Container.

 

Weighted Average Age:  For any date of determination, an amount that shall be determined to the following equation:

 

	
WAA   =
    	
S (Un x AAn x EUn)
    
	
S (Un x EUn)
    

 

where:

 

	
WAA
    	
=
    	
Weighted Average Age
    
	
N
    	
=
    	
Type   of unit (which shall be determined by reference to the list below)
    
	
Un
    	
=
    	
Number   of Managed Container units of type n
    
	
AAn
    	
=
    	
Average   age in years of Managed Container units of type n (as determined from the   date of the initial sale of such Managed Container units by the manufacturer   thereof)
    
	
EUn
    	
=
    	
“EU   Factor” for Managed Container units of type n (which shall be 
    

 

 

	
 
    	
 
    	
determined   by reference to the chart below)
    

 

For the purpose of the foregoing equation, the variable “n” shall be one of the following unit types:  (i) 20DC; (ii) 40DC; (iii) 40HC; (iv) 45MC; (v) 20RF; (vi) 40HR; (vii) 40RF; (viii) GENS; (ix) 20FR; (x) 40FR; (xi) 20OT; (xii) 40OT; (xiii) 45PW and (xiv) TK25.

 

The foregoing equation is intended to calculate the Weighted Average Age of the Managed Containers. The calculation considers the year of manufacture for each unit, and by type of unit.  In addition, the calculation treats each unit type by their EU Factor, as determined by the EU chart listed below.

 

For the purpose of the foregoing equation, the variable “EUn” with respect to a particular unit type “n” shall be equal to the value set forth in the chart below under the heading “EU Factor” opposite the appropriate unit type “n”:

 

	
Unit Type
    	
 
    	
EU Factor
    
	
20DC
    	
 
    	
1.00
    
	
40DC
    	
 
    	
1.60
    
	
40HC
    	
 
    	
1.68
    
	
45MC
    	
 
    	
2.02
    
	
20RF
    	
 
    	
8.00
    
	
40HR
    	
 
    	
10.00
    
	
40RF
    	
 
    	
10.00
    
	
GENS
    	
 
    	
5.00
    
	
20FR
    	
 
    	
1.90
    
	
40FR
    	
 
    	
3.00
    
	
20OT
    	
 
    	
1.30
    
	
40OT
    	
 
    	
2.20
    
	
45PW
    	
 
    	
2.02
    
	
TK25
    	
 
    	
16.00Exhibit 4.66

 

	
 
    
	
 
    
	
TAL ADVANTAGE III LLC
    
	
Issuer
    
	
 
    
	
and
    
	
WELLS FARGO BANK, NATIONAL ASSOCIATION
    
	
Indenture Trustee
    
	
 
    
	
 
    
	
AMENDED AND RESTATED SERIES 2009-1 SUPPLEMENT
    
	
 
    
	
Dated as of August 12, 2011
    
	
 
    
	
to
    
	
INDENTURE
    
	
 
    
	
Dated as of August 12, 2011
    
	
 
    
	    

    
	
 
    
	
SERIES 2009-1 FLOATING RATE SECURED NOTES
    
	
 
    
	
 
    

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Article I
    	
DEFINITIONS
    	
1
    
	
Section 101.
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
Article II
    	
CREATION   OF THE SERIES 2009-1 NOTES; MODIFICATION OF INDENTURE
    	
8
    
	
Section 201.
    	
Designation   and Principal Terms
    	
8
    
	
Section 202.
    	
Authentication   and Delivery
    	
9
    
	
Section 203.
    	
Interest   and Other Payments on the Series 2009-1 Notes
    	
10
    
	
Section 204.
    	
Principal   Payments on the Series 2009-1 Notes; Scheduled Amortization of   Series 2009-1 Notes
    	
10
    
	
Section 205.
    	
Amounts   and Terms of Series 2009-1 Noteholder Commitments
    	
11
    
	
Section 206.
    	
Taxes
    	
13
    
	
Section 207.
    	
Increased   Costs
    	
16
    
	
Section 208.
    	
Capital   Requirements
    	
17
    
	
Section 209.
    	
Replacement   of Series 2009-1 Noteholder
    	
18
    
	
 
    	
 
    	
 
    
	
Article III
    	
SERIES   2009-1 SERIES ACCOUNT AND ALLOCATION AND APPLICATION OF AMOUNTS THEREIN
    	
19
    
	
Section 301.
    	
Series 2009-1   Series Account
    	
19
    
	
Section 302.
    	
Distributions   from Series 2009-1 Series Account
    	
19
    
	
 
    	
 
    	
 
    
	
Article IV
    	
ADDITIONAL   COVENANTS; ADDITIONAL EVENTS OF DEFAULT
    	
21
    
	
Section 401.
    	
Increase   in the Aggregate Series 2009-1 Note Existing Commitment
    	
21
    
	
Section 402.
    	
Issuance   of Additional Series of Notes
    	
21
    
	
Section 403.
    	
Use   of Proceeds
    	
22
    
	
Section 404.
    	
Consent   of the Majority of Holders
    	
22
    
	
Section 405.
    	
United   States Federal Income Tax Election
    	
22
    
	
 
    	
 
    	
 
    
	
Article V
    	
CONDITIONS   OF RESTATEMENT OF SUPPLEMENT AND FUTURE LENDING
    	
22
    
	
Section 501.
    	
Conditions   to Restatement of Supplement
    	
22
    
	
Section 502.
    	
Advances   on Series 2009-1 Notes
    	
22
    
	
 
    	
 
    	
 
    
	
Article VI
    	
REPRESENTATIONS   AND WARRANTIES
    	
23
    
	
Section 601.
    	
Existence
    	
23
    
	
Section 602.
    	
Authorization
    	
24
    
	
Section 603.
    	
No   Conflict; Legal Compliance
    	
24
    
	
Section 604.
    	
Validity   and Binding Effect
    	
24
    
				

 

i

 

	
Section 605.
    	
Material   Adverse Change
    	
24
    
	
Section 606.
    	
Place   of Business
    	
24
    
	
Section 607.
    	
No   Agreement or Contracts
    	
24
    
	
Section 608.
    	
Consents   and Approvals
    	
25
    
	
Section 609.
    	
Margin   Regulations
    	
25
    
	
Section 610.
    	
Taxes
    	
25
    
	
Section 611.
    	
Other   Regulations
    	
25
    
	
Section 612.
    	
Solvency   and Separateness
    	
26
    
	
Section 613.
    	
No   Default
    	
26
    
	
Section 614.
    	
Litigation   and Contingent Liabilities
    	
26
    
	
Section 615.
    	
Title;   Liens
    	
26
    
	
Section 616.
    	
Subsidiaries
    	
27
    
	
Section 617.
    	
No   Partnership
    	
27
    
	
Section 618.
    	
Pension   and Welfare Plans
    	
27
    
	
Section 619.
    	
Ownership   of the Issuer
    	
27
    
	
Section 620.
    	
Security   Interest Representations
    	
27
    
	
Section 621.
    	
Tax   Election of the Issuer
    	
28
    
	
Section 622.
    	
Survival   of Representations and Warranties
    	
28
    
	
 
    	
 
    	
 
    
	
Article VII
    	
MISCELLANEOUS   PROVISIONS
    	
29
    
	
Section 701.
    	
Ratification   of Indenture
    	
29
    
	
Section 702.
    	
Counterparts
    	
29
    
	
Section 703.
    	
Governing   Law
    	
29
    
	
Section 704.
    	
Amendments   and Modifications
    	
29
    
	
Section 705.
    	
Consent   to Jurisdiction
    	
29
    
	
Section 706.
    	
Waiver   of Jury Trial
    	
30
    
	
Section 707.
    	
Ratification   of Original Supplement
    	
30
    
				

 

ii

 

This AMENDED AND RESTATED SERIES 2009-1 SUPPLEMENT, dated as of August 12, 2011 (as amended, modified or supplemented from time to time in accordance with the terms hereof, this “Supplement”), is between TAL ADVANTAGE III LLC, a limited liability company organized under the laws of Delaware (the “Issuer”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as indenture trustee (the “Indenture Trustee”).

 

WHEREAS, the Issuer and the Indenture Trustee have entered into that certain Indenture (as defined herein) and that certain Series 2009-1 Supplement, dated as of October 23, 2009 (as amended, the “Original Supplement”); and

 

WHEREAS, the Issuer and the Indenture Trustee (acting with the consent of the Existing Series 2009-1 Noteholders) wish to modify the terms of and restate the Original Supplement; and

 

WHEREAS, the Issuer and the Indenture Trustee (acting with the consent of the Existing Series 2009-1 Noteholders) wish to set forth the Principal Terms of Series 2009-1;

 

NOW THEREFORE, in consideration of the mutual agreements herein contained, each party agrees as follows for the benefit of the other parties and the Series 2009-1 Noteholders:

 

ARTICLE I

 

Definitions

 

Section 101.           Definitions.  (a)  Whenever used in this Supplement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

 

“Additional Series 2009-1 Noteholder” shall have the meaning set forth in Section 205(d).

 

“Adjusted Eurodollar Rate” means, for any Interest Accrual Period, an interest rate per annum equal to the quotient, expressed as a percentage and rounded upwards (if necessary) to the nearest 1/1000 of 1%, obtained by dividing (i) LIBOR on the second Business Day immediately preceding the first day of such Interest Accrual Period by (ii) the decimal equivalent of 100% minus the Eurodollar Reserve Percentage on the second Business Day immediately preceding the first day of such Interest Accrual Period.

 

“Aggregate Series 2009-1 Principal Balance” means, as of any date of determination, an amount equal to the sum of the Series 2009-1 Principal Balances of all Series 2009-1 Notes then Outstanding.

 

“Applicable Funding Basis” means, for any day during any Interest Accrual Period, one of the following:

 

 

(i)            if no Eurodollar Disruption Event is then continuing, the Adjusted Eurodollar Rate; or

 

(ii)           if a Eurodollar Disruption Event is then continuing, the Base Rate.

 

“Applicable Margin” means, for any Interest Accrual Period, one of the following amounts:

 

(i)            (i) prior to the Conversion Date, two and one quarter of one percent (2.25%); or

 

(ii)           on or after the Conversion Date, three and one-half of one percent (3.50%).

 

The amount of the Applicable Margin shall be increased from time to time in accordance with the provisions of Section 205(d).

 

“Availability” means, as of any date of determination for any Series 2009-1 Noteholder, the lesser of:

 

(A) the excess, if any, of (x) the Series 2009-1 Note Existing Commitment of such Series 2009-1 Noteholder on such date of determination over (y) the then Series 2009-1 Principal Balance of the Series 2009-1 Note owned by such Series 2009-1 Noteholder on such date of determination; and

 

(B) such Series 2009-1 Noteholder’s Percentage of an amount equal to the excess of (x) the Asset Base, over (y) the then Aggregate Note Principal Balance (calculated without giving effect to the requested Series 2009-1 Advance).

 

“Base Rate” means on any date, a fluctuating rate of interest per annum equal to the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% per annum, and (c) if a Market Disruption Pricing Event has occurred and is then continuing with respect to a Series 2009-1 Noteholder, an interest rate per annum solely with respect to such Series 2009-1 Noteholder equal to the lesser of (x) one and one half of one percent (1.50%) over the then Adjusted Eurodollar Rate (determined in accordance with the terms of this Supplement) and (y) the Actual Cost of Funds (as such term is set forth in the definition of Market Disruption Pricing Event).  Such Series 2009-1 Noteholder shall notify the Issuer in writing of its Actual Cost of Funds for each applicable Interest Accrual Period promptly after such Series 2009-1 Noteholder shall become aware that a Market Disruption Pricing Event shall have occurred with respect to such Series 2009-1 Noteholder, which notification shall be determinative absent manifest error.

 

“Benefit Plan Investor” means an “employee benefit plan” as defined in Section 3(3) of ERISA whether or not it is subject to Title I of ERISA, a “plan” within the meaning of Section 4975(e)(1) of the Code or an entity whose underlying assets include “plan assets” of any of the foregoing by reason of an employee benefit plan’s or plan’s investment in such entity.

 

“Breakage Costs” means, with respect to an Interest Accrual Period, any reasonable loss, cost or expense incurred by a Series 2009-1 Noteholder, including, without 

 

2

 

limitation, any loss (including loss of anticipated profits, net of anticipated profits in the reemployment of such funds), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Series 2009-1 Noteholder to fund or maintain a Series 2009-1 Advance, as the case may be, during such Interest Accrual Period.

 

“Commitment Fee” shall have the meaning set forth in Section 205(c) hereof.

 

“Commitment Fee Percentage” means one half of one percent (0.50%) per annum.

 

“Control Party” means, with respect to the Series 2009-1 Notes, the Majority of Holders of the Series 2009-1 Notes.

 

“Conversion Date” means, with respect to the Series 2009-1 Notes, the earlier to occur of (i) the date on which an Early Amortization Event occurs under any Series of Notes issued pursuant to the Indenture, and (ii) the Scheduled Commitment Expiration Date.

 

“Default Fee” means, for any Payment Date on which interest on overdue amounts is payable in accordance with the provisions of Section 203(b) hereof, the amount of interest payable on such Payment Date pursuant to the provisions of Section 203(b).

 

“Default Rate” means, for any date of determination, an interest rate per annum equal to the sum of (i) the interest rate then otherwise in effect, plus (ii) two percent (2%).

 

“Deficiency Amount” means (a) for each Payment Date other than the Series 2009-1 Legal Final Maturity Date, any shortfall in the aggregate amount available in the Series 2009-1 Series Account for the Series 2009-1 Notes or any other amounts available under the Indenture or this Supplement to pay the Series 2009-1 Interest Payment for such Payment Date, and (b) on the Series 2009-1 Legal Final Maturity Date, any shortfall in the aggregate amount available in the Series 2009-1 Series Account or any other amounts available under the Indenture or this Supplement to pay the then Aggregate Series 2009-1 Principal Balance, accrued but unpaid interest thereon and all other amounts owing to the Series 2009-1 Noteholders pursuant to the terms of the Series 2009-1 Transaction Documents.

 

“Dollars” and the sign “$” means lawful money of the United States of America.

 

“Early Amortization Event” shall have the meaning set forth in Appendix A to the Indenture.

 

“Eurodollar Disruption Event” means as of any date of determination, the existence of any of the following events or conditions: (a) a reasonable determination by a Series 2009-1 Noteholder that it would be contrary to law, or to the directive of any central bank or other governmental authority (whether or not having the force of law), to obtain Dollars in the London interbank market to make, fund or maintain its investment in any Series 2009-1 Note, (b) the inability of a Series 2009-1 Noteholder (due to no fault of its own) to obtain Dollars in the London interbank market to make, fund or maintain its investment in any Series 2009-1 Note, (c) a determination by a Series 2009-1 Noteholder (or any of its assignees or participants) or the related Deal Agent that the Adjusted Eurodollar Rate does not accurately reflect the rate at which 

 

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deposits of Dollars are being offered to such Series 2009-1 Noteholder in the London interbank market, or (d) any Series 2009-1 Noteholder (or any of its assignees or participants) shall have notified the Deal Agent of the inability, for any reason, of such Series 2009-1 Noteholder (or any of its assignees or participants) to determine the Adjusted Eurodollar Rate.

 

“Existing Series 2009-1 Noteholder” means any Person that was a Series 2009-1 Noteholder immediately prior to the Restatement Effective Date.

 

“Federal Funds Rate” means as of any date of determination, a fluctuating interest rate per annum equal to the weighted average of the federal funds rates and confirmed in Federal Reserve Board Statistical Release H.15 (519) or any successor or substitute publication selected by the Indenture Trustee (or, if such day is not a Business Day, for the next preceding Business Day), or, if, for any reason, such rate is not available on any day, the rate determined, in the sole opinion of the Indenture Trustee, to be the rate at which federal funds are being offered for sale in the national federal funds market at 9:00 a.m. (New York City time on such day).

 

“Indemnified Party” has the meaning given thereto in Section 206.

 

“Indenture” means the Amended and Restated Indenture, dated as of August 12, 2011 between the Issuer and the Indenture Trustee, as the same may be amended, amended and restated or otherwise modified from time to time.

 

“Interest Accrual Period” means with respect to each Series 2009-1 Advance, the period commencing on and including the immediately preceding Payment Date and ending on the day immediately preceding the next Payment Date.  In the case of a Series 2009-1 Advance made on a date other than the first day of an Interest Accrual Period, the initial Interest Accrual Period for such Series 2009-1 Advance shall begin on the day of such Series 2009-1 Advance and shall end on the day immediately preceding the Payment Date in the following month.  When switching from Adjusted Eurodollar Rate to Base Rate funding, the first Interest Accrual Period with respect to such Base Rate funding shall begin on the date of such switch and shall end on a date selected by the Issuer in its discretion.  Each Existing Series 2009-1 Noteholder shall be paid the accrued interest on its Series 2009-1 Note on the Restatement Effective Date. With respect to all Series 2009-1 Noteholders, their first Interest Accrual Period after the Restatement Effective Date shall be the period from the Restatement Effective Date to and including September 19, 2011.

 

“Majority of Holders” means, with respect to the Series 2009-1 Notes, one of the following:

 

(A)          if there are two or fewer Series 2009-1 Noteholders, Series 2009-1 Noteholders representing one hundred percent (100%) of the then Aggregate Series 2009-1 Principal Balance (or, if the then Aggregate Series 2009-1 Principal Balance equals zero, Series 2009-1 Noteholders representing one hundred percent (100%) of the sum of the then Series 2009-1 Note Existing Commitments);

 

(B)           if there are at least three Series 2009-1 Noteholders but not more than five Series 2009-1 Noteholders, Series 2009-1 Noteholders representing in aggregate more than sixty-six and two-thirds percent (66 2/3%) of the then Aggregate Series 2009-1 

 

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Principal Balance (or, if the then Aggregate Series 2009-1 Principal Balance equals zero, Series 2009-1 Noteholders representing in aggregate more than sixty-six and two-thirds percent (66 2/3%) of the sum of the then Series 2009-1 Note Existing Commitments); or

 

(C)           at all times not covered by clause (A) or clause (B), one or more Series 2009-1 Noteholders representing in aggregate more than fifty percent (50%) of the then Aggregate Series 2009-1 Principal Balance (or, if the then Aggregate Series 2009-1 Principal Balance equals zero, Series 2009-1 Noteholders representing fifty percent (50%) of the sum of the then Series 2009-1 Note Existing Commitments).

 

“Market Disruption Pricing Event” means, with respect to a Series 2009-1 Noteholder, the existence of all of the following events or conditions on the date on which the applicable interest rate for the immediately succeeding Interest Accrual Period is being determined:

 

(i)            a determination is made by such Series 2009-1 Noteholder (or any of its assignees or participants) or the related Deal Agent that the Adjusted Eurodollar Rate (as determined in accordance with the terms of this Supplement) does not accurately reflect the actual cost of funds (the “Actual Cost of Funds”) to such Series 2009-1 Noteholder (or assignee or participants) of making, funding or maintaining any Series 2009-1 Advance for such Interest Accrual Period;

 

(ii)           the Actual Cost of Funds for such Interest Accrual Period exceeds the Adjusted Eurodollar Rate by more than one percent (1.00%);

 

(iii)          a Market Disruption Pricing Event was not in effect for such Series 2009-1 Noteholder on more than six occasions during the immediately preceding fifteen (15) months;

 

(iv)          the Adjusted Eurodollar Rate is not determinable in accordance with the terms of this Supplement; and

 

(v)           such Series 2009-1 Noteholder does not typically use in its normal operation either the Prime Rate or the Federal Funds Rate as a means of measuring interest rates payable by borrowers or other obligors.

 

“Minimum Principal Payment Amount” means, for the Series 2009-1  Notes on any Payment Date, one of the following:

 

(1)           for any Payment Date prior to the Conversion Date, zero; or

 

(2)           for any Payment Date following Conversion Date, the excess, if any, of (x) the Aggregate Series 2009-1 Principal Balance, over (y) the Minimum Targeted Principal Balance for the Series 2009-1 Notes for such Payment Date.

 

“Minimum Targeted Principal Balance” means for the Series 2009-1 Notes for each Payment Date, an amount equal to the product of (x) the Aggregate Series 2009-1 Principal Balance on the Conversion Date and (y) the percentage set forth opposite such Payment Date 

 

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(based on the number of Payment Dates elapsed from the Closing Date) on Schedule 1 hereto under the column titled “Percentage (Minimum Targeted Principal Balance)”.

 

“Other Taxes” shall have the meaning set forth in Section 206(b).

 

“Payment Date” shall have the meaning set forth in Section 201.

 

“Percentage” means, with respect to any Series 2009-1 Noteholder as of any date of determination, a fraction (expressed as a percentage), the numerator of which is such Series 2009-1 Noteholder’s Series 2009-1 Note Existing Commitment and the denominator of which is equal to the sum of the Series 2009-1 Note Existing Commitments of all Series 2009-1 Noteholders.

 

“Plan” means any employee pension benefit plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA and that is established or maintained by the Issuer.

 

“Prime Rate” means the rate announced by Wells Fargo Bank, National Association, from time to time as its “prime rate” or “base rate” in the United States, such rate to change as and when such designated rate changes. The Prime Rate is not necessarily the lowest rate of interest charged by Citibank, N.A. in connection with extensions of credit to debtors.

 

“Restatement Effective Date” means August 12, 2011.

 

“Scheduled Commitment Expiration Date” shall have the meaning set forth in the Series 2009-1 Note Purchase Agreement.

 

“Series 2009-1” means the Series of Notes the terms of which are specified in this Supplement.

 

“Series 2009-1 Advance” means an advance of funds made by one or more of the Series 2009-1 Noteholders pursuant to the provisions of Section 205(b) of this Supplement.

 

“Series 2009-1 Expected Final Maturity Date” means the Payment Date occurring on the fourth (4th) anniversary of the Conversion Date.

 

“Series 2009-1 Interest Payment”  means, with respect to any Payment Date, an amount equal to the sum of, for each Series 2009-1 Advance outstanding for each day during the immediately preceding Interest Accrual Period, the product of (i) the principal amount of such Series 2009-1 Advance on such day, (ii) an amount equal to the sum of (x) the Applicable Funding Basis for such Series 2009-1 Advance and (y) the Applicable Margin, and (iii) 1/360, in the case of the Adjusted Eurodollar Rate, or 1/365 or 1/366, as applicable, in the case of the Base Rate.

 

“Series 2009-1 Legal Final Maturity Date” means the Payment Date occurring on the fourth (4th) anniversary of the Conversion Date.

 

“Series 2009-1 Note Existing Commitment” means, with respect to any Series 2009-1 Noteholder, the purchase limit or commitment set forth in the Series 2009-1 Note 

 

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Purchase Agreement, as such commitment may be (i) increased in accordance with the terms of the Series 2009-1 Note Purchase Agreement or (ii) reduced from time to time at the request of the Issuer, in each case in accordance with the terms of the Series 2009-1 Note Purchase Agreement.

 

“Series 2009-1 Note Initial Commitment” means, with respect to any Series 2009-1 Noteholder, the amount set forth opposite the name of such Series 2009-1 Noteholder on Schedule 2 hereto (as such Schedule 2 shall be deemed to be amended by a properly executed Assignment and Acceptance (as such term is defined in the Series 2009-1 Note Purchase Agreement) or Increase Notice (as such term is defined in the Series 2009-1 Note Purchase Agreement)).

 

“Series 2009-1 Note Purchase Agreement” means the Amended and Restated Series 2009-1 Note Purchase Agreement, dated as of August 12, 2011, among the Issuer, the Series 2009-1 Noteholders from time to time party thereto and various financial institutions from time to time party thereto, as such agreement may be amended or restated from time to time.

 

“Series 2009-1 Noteholder” shall mean the Person in whose name a Series 2009-1 Note is registered in the Note Register.

 

“Series 2009-1 Notes” shall mean any one of the notes, substantially in the form of Exhibit A to this Supplement, issued pursuant to the terms of this Supplement, and replacements therefor issued pursuant to the terms of the Indenture.

 

“Series 2009-1 Principal Balance” means, with respect to any Series 2009-1 Note as of any date of determination, an amount equal to the excess, if any, of (x) the sum of (A) the Series 2009-1 Principal Balance of such Series 2009-1 Note as of the close of business on the Restatement Effective Date and (B) without duplication of amounts referred to in clause (A), the sum of all Series 2009-1 Advances made with respect to such Series 2009-1 Note subsequent to the Restatement Effective Date, over (y) the cumulative amount of all principal payments (including Prepayments) actually paid to the Holders such Series 2009-1 Notes subsequent to the Restatement Effective Date.

 

“Series 2009-1 Series Account” means a Series Account for Series 2009-1 established by the Issuer in the name of the Issuer with the Indenture Trustee into which funds are deposited from the Trust Account pursuant to Section 302 of the Indenture.

 

“Series 2009-1 Transaction Documents” means this Supplement, the Series 2009-1 Notes, the Series 2009-1 Note Purchase Agreement, all other Transaction Documents, any Hedge Agreements, and any and all other agreements, documents and instruments executed and delivered by or on behalf or in support of the Issuer with respect to the issuance and sale of the Series 2009-1 Notes, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.

 

“Series 2009-1 Unused Commitment” means, with respect to any Series 2009-1 Noteholder as of any date of determination, the excess, if any, of (i) the Series 2009-1 Note Existing Commitment then in effect for such Series 2009-1 Noteholder over (ii) the Series 2009-1 Principal Balance of the Series 2009-1 Note owned by such Series 2009-1 Noteholder as of 

 

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such date of determination, such principal balance to be measured after giving effect to all Series 2009-1 Advances made and all principal payments to be received by such Series 2009-1 Noteholder on such date of determination.

 

“WFBNA” means Wells Fargo Bank, National Association.

 

(b)           All other capitalized terms used herein and not otherwise defined shall have the meaning set forth in Appendix A to the Indenture, as such Appendix A may be amended, supplemented or otherwise modified from time to time in accordance with the provisions of the Indenture.  The rules of usage set forth in such Appendix A shall apply to this supplement.

 

ARTICLE II

 

Creation of the Series 2009-1 Notes; Modification of Indenture

 

Section 201.           Designation and Principal Terms.  (a) There has been created a Series of Notes to be issued in one Class pursuant to the Indenture and this Supplement to be known respectively as “TAL Advantage III LLC Series 2009-1 Floating Rate Secured Notes”.  On the Restatement Effective Date, the Series 2009-1 Notes will have a maximum principal balance of Four Hundred Million Dollars ($400,000,000).  The Series 2009-1 Notes will not have priority over any Series, except to the extent set forth in the Indenture or in the Supplement for such other Series.  The Series 2009-1 Notes are designated as a Series of Warehouse Notes.

 

(b)           The Payment Date with respect to the Series 2009-1 Notes shall be the twentieth (20th) day of each month or if such day is not a Business Day, the immediately following Business Day (each a “Payment Date”).  The initial Payment Date following the Restatement Effective Date shall be September 20, 2011.

 

(c)           Payments of principal and interest on the Series 2009-1 Notes shall be payable from funds on deposit in the Series 2009-1 Series Account or otherwise at the times and in the amounts set forth in Article III of the Indenture and Article III hereof.

 

(d)           The Series 2009-1 Interest Payment and the Commitment Fee shall constitute “Priority Payments” for Series 2009-1 as such term is defined in the Indenture.

 

(e)           All of the Early Amortization Events set forth in Article XII of the Indenture are applicable to Series 2009-1.  All of the Events of Default set forth in Section 801 of the Indenture are applicable to Series 2009-1.

 

(f)            The “Initial Commitment” for Series 2009-1, as such term is referred to in the Indenture, shall mean the Series 2009-1 Note Initial Commitment.

 

(g)           The “Commitment” for Series 2009-1, as such term is referred to in the Indenture, shall mean the Series 2009-1 Note Existing Commitment.

 

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(h)           In the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture, the terms and provisions of this Supplement shall govern.

 

(i)            The “Expected Final Maturity Date” for Series 2009-1, as such term is referred to in the Indenture, shall mean the Series 2009-1 Expected Final Maturity Date.

 

(j)            The “Legal Final Maturity Date” for Series 2009-1, as such term is referred to in the Indenture, shall mean the Series 2009-1 Legal Final Maturity Date.

 

(k)           For purposes of the Indenture, only the Series 2009-1 Interest Payment and the Commitment Fee shall be a Priority Payment.  For purposes of Section 801(1)(A) of the Indenture, the Series 2009-1 Interest Payment will be due and payable on each Payment Date.

 

(l)            The Series 2009-1 Notes have not been rated by a Rating Agency as of the Closing Date or as of the Restatement Effective Date.  Accordingly, any provision of the Series 2009-1 Transaction Documents requiring notification of, or providing notices to, the Rating Agencies shall not be applicable to Series 2009-1 Notes until such time (if any) a Rating Agency has assigned a rating to the Series 2009-1 Notes.

 

Section 202.           Authentication and Delivery.

 

(a)           Execution and Delivery.  On the Closing Date and on the Restatement Effective Date, the Issuer shall sign, and shall direct the Indenture Trustee in writing pursuant to Section 201 of the Indenture to duly authenticate, and the Indenture Trustee, upon receiving such direction, (i) shall authenticate (by manual or facsimile signature), subject to compliance with the conditions precedent set forth in Section 501 hereof and the Series 2009-1 Note Purchase Agreement, the Series 2009-1 Notes in accordance with such written directions, and (ii) subject to compliance with the conditions precedent set forth in Section 501 hereof and the Series 2009-1 Note Purchase Agreement, shall deliver such Series 2009-1 Notes to the Noteholders in accordance with such written directions.

 

(b)           Definitive Notes.  In accordance with Section 202 of the Indenture, the Series 2009-1 Notes shall be represented by one or more Definitive Notes.

 

(c)           Original or Facsimile Signatures.  The Series 2009-1 Notes shall be executed by manual or facsimile signature on behalf of the Issuer by any authorized officer or manager of the Issuer and shall be substantially in the form of Exhibit A hereto.

 

(d)           Minimum Denominations.  The Series 2009-1 Notes shall be issued in minimum denominations of $100,000 and in integral multiples of $100,000 in excess thereof.

 

(e)           Restrictions on Transfer of Series 2009-1 Notes.  Notwithstanding the provisions of Section 205 of the Indenture (except for Section 205(l) thereof), each Series 2009-1 Noteholder may sell, transfer or assign its Series 2009-1 Note(s) provided that (1) it is in accordance with the provisions of Section 8.15 of the Series 2009-1 Note Purchase Agreement and (2) otherwise if (i) such Series 2009 1 Noteholder obtains the Issuer’s prior written consent authorizing such Series 2009 1 Noteholder to contact a proposed purchaser, transferee or

 

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assignee (unless such proposed purchaser, transferee or assignee is an Eligible Assignee; which consent shall not be unreasonably withheld or delayed; (ii) unless such proposed purchaser, transferee or assignee is an Eligible Assignee, such Series 2009 1 Noteholder must obtain the Issuer’s prior written consent to consummate such sale, transfer or assignment; (iii) the Issuer receives (1) either (A) a fully executed Investment Letter from such Series 2009 1 Noteholder and the applicable purchaser, transferee or assignee, or (B) the Opinion of Counsel referred to in Section 205(i) of the Indenture, and (2) the documentation required pursuant to the terms of the Series 2009-1 Note Purchase Agreement; (iv) such sale, transfer or assignment will not result in any increased costs to the Issuer without its written consent; and (v) such sale, transfer or assignment is not to a Competitor.  The provisions of this Section 205(e) (except as relating to the application of Section 205(l) of the Indenture) may be modified in a written agreement between the Issuer and the Indenture Trustee.

 

Section 203.           Interest and Other Payments on the Series 2009-1 Notes.

 

(a)           Interest on Series 2009-1 Notes.  Interest will be owing on the Series 2009-1 Notes in an amount equal to the Series 2009-1 Interest Payment, which shall be payable on each Payment Date from amounts on deposit in the Series 2009-1 Series Account in accordance with Section 302 hereof including the priority of payments set forth therein.

 

(b)           Interest on Overdue Amounts.  If the Issuer shall default in the payment of (i) the unpaid principal balance of any Series 2009-1 Notes on the Series 2009-1 Legal Final Maturity Date, (ii) the Series 2009-1 Interest Payment on any Series 2009-1 Note when due, or (iii) following the acceleration of the Series 2009-1 Notes in accordance with the terms of the Indenture or any other amount owing under the Indenture not covered in clauses (i) and (ii) which is not paid when due, the Issuer shall, from time to time, pay interest on such unpaid amounts, to the extent permitted by Applicable Law, to, but not including, the date of actual payment (after as well as before judgment), at a rate per annum equal to the Default Rate, for the period during which such principal, interest or other amount shall be unpaid from the due date of such payment to but not including the date of actual payment thereof.  All Default Fees shall be payable at the times and subject to the priorities set forth in Section 302 hereof.

 

(c)           Maximum Interest Rate.  In no event shall the interest charged with respect to a Series 2009-1 Note exceed the maximum amount permitted by Applicable Law.  If at any time the interest rate charged with respect to the Series 2009-1 Notes exceeds the maximum rate permitted by Applicable Law, the rate of interest to accrue pursuant to this Supplement and such Series 2009-1 Note shall be limited to the maximum rate permitted by Applicable Law.

 

Section 204.           Principal Payments on the Series 2009-1 Notes; Scheduled Amortization of Series 2009-1 Notes.

 

(a)           The principal balance of the Series 2009-1 Notes shall be payable on each Payment Date from amounts on deposit in the Series 2009-1 Series Account in an amount equal to (i) so long as no Early Amortization Event is continuing, the Minimum Principal Payment Amount and the allocable portion of the Supplemental Principal Payment Amount (if any) for such Series 2009-1 Note for such Payment Date, to the extent that funds are available for such purpose in accordance with the provisions of subsection I of Section 302 hereof, or (ii) if an

 

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Early Amortization Event is then continuing, the Minimum Principal Payment Amount and then unpaid Series 2009-1 Principal Balance of such Series 2009-1 Note shall be payable in full to the extent that funds are available for such purpose in accordance with the provisions of subsection II of Section 302 hereof.  Payment of the Supplemental Principal Payment Amount on each Payment Date is subordinated to payment in full on such Payment Date of the Minimum Principal Payment Amount for the Series 2009-1 Notes.  The unpaid principal amount of each Series 2009-1 Note, together with all unpaid interest (including all Default Fees), fees (including all Commitment Fees), expenses, costs and other amounts payable by the Issuer to the Series 2009-1 Noteholders and the Indenture Trustee pursuant to the terms of the Indenture and this Supplement, shall be due and payable in full on the earlier to occur of (x) the date on which an Event of Default shall occur and the Series 2009-1 Notes have been accelerated in accordance with Section 802 of the Indenture and (y) the Series 2009-1 Legal Final Maturity Date.

 

(b)           The Issuer may, on any Payment Date and upon four (4) Business Days’ prior notice to the Series 2009-1 Noteholders in accordance with the terms of Section 8.2 of the Series 2009-1 Note Purchase Agreement, voluntarily prepay all, or any part, of the Series 2009-1 Principal Balance by making a wire transfer to the Series 2009-1 Noteholders; provided, however, that the Issuer may not make such repayment from funds in the Trust Account, the Series 2009-1 Series Account or the Restricted Cash Account except to the extent that funds in any such account would otherwise be payable to the Issuer or available to prepay the Aggregate Series 2009-1 Principal Balance in accordance with the terms of this Supplement or the Indenture; provided, further, that any such prepayment shall be in a minimum amount of the lesser of (x) Two Hundred Fifty Thousand Dollars ($250,000) and (y) the then Aggregate Series 2009-1 Principal Balance.  In the event of any Prepayment of the Notes in accordance with this Section 204(b) or any other provision of the Indenture, the Issuer shall pay, if such Prepayment is made on a date other than a Payment Date, any Breakage Costs incurred by the Series 2009-1 Noteholders in connection with such prepayment.

 

(c)           Any Prepayment of less than the entire Aggregate Series 2009-1 Principal Balance made in accordance with the provisions of Section 204(a) or 204(b) hereof on or after the Conversion Date shall be applied as set forth in Section 702(c) of the Indenture to the same extent as if the Series 2009-1 Notes were a Series of Term Notes.

 

(d)           On the Restatement Effective Date, the Issuer may prepay in full the then unpaid principal balance of, and accrued interest on, any Series 2009-1 Note held by any Existing Series 2009-1 Noteholder that shall not continue to be a Series 2009-1 Noteholder subsequent to the Restatement Effective Date.

 

Section 205.           Amounts and Terms of Series 2009-1 Noteholder Commitments.

 

(a)           Commitments.  Subject to the terms and conditions of this Supplement and the Series 2009-1 Note Purchase Agreement, each Series 2009-1 Noteholder shall make its Percentage of the Series 2009-1 Note Initial Commitment available to the Issuer on the Restatement Effective Date.

 

(b)           Advances.  Prior to the Conversion Date, each Series 2009-1 Note shall be a revolving note with a maximum principal amount equal to the Series 2009-1 Note Existing

 

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Commitment then in effect for the related Series 2009-1 Noteholder.  The Administrative Agent and each Series 2009-1 Noteholder shall maintain a record of all Series 2009-1 Advances and repayments made on the Series 2009-1 Notes and absent manifest error such records shall be conclusive.  Each request for a Series 2009-1 Advance shall be submitted in writing to the Administrative Agent by not later than 1:00 p.m. (New York City time) on the third (3rd) Business Day prior to the date of the requested advance and shall be irrevocable when given.  Such notice shall include a calculation of the aggregate Series 2009-1 Advance to be funded by the Series 2009-1 Noteholders.  The Administrative Agent shall promptly forward any such Funding Notice, with the attached Asset Base Certificate, to each Series 2009-1 Noteholder or its designee.  On any Business Day requested by the Issuer, and presuming that the Issuer shall have satisfied all applicable conditions precedent set forth in Article V hereof, the Series 2009-1 Noteholders shall, subject to the terms and conditions of this Supplement and the Series 2009-1 Note Purchase Agreement, deposit into the account designated by the Issuer by wire transfer of same day funds not later than 1:00 p.m. (New York City time) an amount equal to its Percentage of the requested Series 2009-1 Advance; provided, however, that each Series 2009-1 Advance by each Series 2009-1 Noteholder shall be for: (I) a minimum amount of the lesser of (x) its then unused Series 2009-1 Note Existing Commitment and (y) such Series 2009-1 Noteholder’s Percentage of one million Dollars ($1,000,000) or an integral multiple of One Hundred Thousand Dollars ($100,000) in excess thereof; and (II) a maximum amount of the Availability of such Series 2009-1 Noteholder on such Business Day.  In the event that any Series 2009-1 Noteholder fails to make a Series 2009-1 Advance in accordance with its Series 2009-1 Note Existing Commitment, the other Series 2009-1 Noteholder(s) may but shall not be obligated to fund the Percentage of the defaulted Series 2009-1 Noteholder(s).

 

Each request for a Series 2009-1 Advance shall constitute a reaffirmation by the Issuer that (1) no Event of Default or Early Amortization Event has occurred and is continuing, (2) all of the conditions precedent set forth in Article V hereof have been satisfied and (3) except for any divergences previously disclosed in writing to the Indenture Trustee and consented to in writing by the Administrative Agent, the representations and warranties made by the Issuer to the Holders of Series 2009-1 Notes contained in the Series 2009-1 Transaction Documents are true, correct and complete in all material respects to the same extent as though made on and as of the date of the request, except to the extent such representations and warranties specifically relate to an earlier date, in which event they shall be true, correct and complete in all material respects as of such earlier date.

 

If (i) any Series 2009-1 Advance requested by the Issuer is not, for any reason whatsoever related to a default or nonperformance by the Issuer, made or effectuated on the date specified therefor or (ii) any optional prepayment of the Series 2009-1 Notes is not made when specified in the notice delivered pursuant to Section 204(b) hereof, then, in either such case, the Issuer shall indemnify each Series 2009-1 Noteholder against any Breakage Costs relating thereto.

 

(c)           Commitment Fee.  On each Payment Date, the Issuer shall pay a commitment fee (the “Commitment Fee”) to each Series 2009-1 Noteholder in an amount equal to the sum for each day during the immediately preceding Collection Period of the product of (x) the applicable Commitment Fee Percentage on such day, (y) a fraction (expressed as percentage) the numerator of which is one and the denominator of which is equal to 360 and (z) the Series

 

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2009-1 Unused Commitment of such Series 2009-1 Noteholder on such day.  Such Commitment Fee shall be payable from amounts then on deposit in the Series 2009-1 Series Account, or amounts otherwise available for such purpose, in accordance with Section 302 hereof.

 

(d)           Optional Increase in Series 2009-1 Note Existing Commitments.  The Issuer may, by means of a letter delivered to the Administrative Agent and the Indenture Trustee (with a copy to each Interest Rate Hedge Counterparty) on not more than five (5) occasions prior to the Conversion Date, without the consent of the existing Series 2009-1 Noteholders, increase the aggregate Series 2009-1 Note Existing Commitments by an aggregate amount not to exceed Two Hundred Million Dollars ($200,000,000) (such that, after giving effect thereto, the aggregate Series 2009-1 Note Existing Commitments shall equal an amount of up to Six Hundred Million Dollars ($600,000,000)), by issuing additional Series 2009-1 Notes to one or more commercial banks, finance companies or other Persons that shall become Series 2009-1 Noteholders on the date of such increase (each an “Additional Series 2009-1 Noteholder”).

 

Section 206.           Taxes.

 

(a)           Subject to clause (g) below, in addition to payments of principal and interest on the Series 2009-1 Notes when due, the Issuer shall pay, but only in accordance with the priorities for distributions set forth in Section 302 hereof, each Series 2009-1 Noteholder (an “Indemnified Party”) any and all present or future taxes, fees, duties, levies, imposts, or charges, or any other similar deduction or withholding, whatsoever imposed by any Governmental Authority on payments of principal and interest on the Series 2009-1 Notes and other amounts payable by the Issuer under the Transaction Documents, and all liabilities with respect thereto, excluding (i) franchise taxes, (ii) such taxes as are imposed on or measured by or determined (in whole or in part) by reference to each Indemnified Party’s net income by the jurisdiction under the laws of which such Indemnified Party, as the case may be (regardless of whether such tax is denominated as an “income tax” under applicable local law), is organized or maintains an office or any political subdivision thereof, (iii) any other taxes, fees, duties, levies, imports, or charges, whether payable directly by the Series 2009-1 Noteholder or by deduction or withholding from any payment made in respect of a Series 2009-1 Note, on account of a connection, whether present or former, between the Series 2009-1 Noteholder and the relevant taxing jurisdiction including without limitation branch profits taxes and (iv) withholding taxes imposed on any payment in respect of a Series 2009-1 Note other than on account of a change in law or regulation occurring after the Person in respect of which such tax is imposed acquired a beneficial interest in a Series 2009-1 Note, and (v) withholding taxes imposed under section 1471 through section 1474 of the Code (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”).

 

(b)           In addition, subject to clause (g) below, the Issuer shall pay, but only in accordance with the priorities for distribution set forth in Section 302 hereof, any present or future stamp or documentary taxes or any other similar excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Supplement or any other Series 2009-1 Transaction Document (hereinafter referred to as “Other Taxes”).

 

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(c)           Subject to clause (g) below, if any Taxes or Other Taxes are directly asserted or imposed against any Indemnified Party, the Issuer shall indemnify and hold harmless such Indemnified Party, but only in accordance with the priorities for distribution set forth in Section 302 hereof, for the full amount of the Taxes or Other Taxes (including any Taxes or Other Taxes asserted or imposed by any jurisdiction on amounts payable under this Section 206) paid by the Indemnified Party and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted or imposed. If the Issuer fails to pay any Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the Indemnified Party the required receipts or other required documentary evidence, the Issuer shall indemnify the Indemnified Party for any incremental Taxes or Other Taxes, interest or penalties that may become payable by the Indemnified Party as a result of any such failure. Payment under this indemnification shall be made in accordance with the payment priorities set forth in Section 302 hereof after the Indemnified Party makes written demand therefor.  Each Indemnified Party shall give prompt notice to the Issuer of any assertion of Taxes or Other Taxes so that the Issuer may, at its option, contest such assertion.

 

(d)           Within thirty (30) days after the date of any payment by the Issuer of Taxes or Other Taxes, the Issuer shall furnish to the affected Indemnified Party the original (or a certified copy) of a receipt evidencing payment thereof, or other evidence of payment thereof satisfactory to such Indemnified Party.

 

(e)           Taxes, Other Taxes and other indemnification payments owing pursuant to the provisions of this Section 206 shall not constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against the Issuer in the event there are insufficient funds available to make such payments in accordance with the payment priority set forth in Section 302 hereof.

 

(f)            If an Indemnified Party is not a “United States person” as defined in section 7701(a)(30) of the Code, such Indemnified Party shall deliver to the Issuer, with a copy to the Administrative Agent and the Manager, within 15 days after the Closing Date, or, if such Indemnified Party becomes an Indemnified Party after the Closing Date, the date on which such Indemnified Party becomes an Indemnified Party hereunder:  (i) two (or such other number as may from time to time be prescribed by Applicable Laws) duly completed copies of (A) IRS Form W-8BEN claiming eligibility of the Indemnified Party for benefits of an income tax treaty to which the United States is a party or (B) IRS Form W-8ECI (or any successor forms or other certificates or statements that may be required from time to time by the relevant United States taxing authorities or Applicable Laws) or (ii) in the case of an Indemnified Party that is not legally entitled to deliver either form listed in clause (f)(i), (A) a certificate of a duly authorized officer of such Indemnified Party to the effect that such Indemnified Party is not (x) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (y) a “10 percent shareholder” of the Issuer or TAL within the meaning of Section 881(c)(3)(B) of the Code, or (z) a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code (such certificate, an “Exemption Certificate”) and (B) two duly completed copies of IRS Form W-8BEN or applicable successor form certifying the foreign status of such Indemnified Party, as appropriate, to permit the Issuer to make payments hereunder for the account of such Indemnified Party, without deduction or withholding of United States federal income or similar Taxes.  Each other Indemnified Party agrees to deliver to the

 

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Issuer, with a copy to the Administrative Agent and the Manager, within 15 days after the Closing Date, or, if such Indemnified Party becomes an Indemnified Party after the Closing Date, the date on which such Indemnified Party becomes an Indemnified Party hereunder, one or more accurate and complete original signed copies (as the Issuer, Administrative Agent or Manager may reasonably request) of IRS Form W-9 or successor applicable form (if required by law), as the case may be, providing the employer identification number for such Indemnified Party.  Additionally, upon the obsolescence of, or after the occurrence of any event requiring a change in, any form or certificate previously delivered by an Indemnified Party pursuant to this Section 206(f), and from time to time as may be reasonably requested by the Issuer, such Indemnified Party shall deliver such forms, amended or successor forms, certificates or statements as may be required under Applicable Laws to permit the Issuer to make payments hereunder for the account of such Indemnified Party, without deduction or withholding of United States federal income or similar Taxes.

 

(g)           The Issuer shall not be obligated to pay any additional amounts to any Indemnified Party pursuant to clause (a), or to indemnify any Indemnified Party pursuant to clause (c), in respect of United States federal withholding taxes (including backup withholding) to the extent imposed as a result of (i) the failure of such Indemnified Party to deliver to the Issuer any form and/or Exemption Certificate pursuant to clause (f), (ii) such form not establishing a complete exemption from U.S. federal withholding tax or the information or certifications made therein by the Indemnified Party being untrue or inaccurate on the date delivered in any material respect, or (iii) the Indemnified Party designating a successor office at which it maintains the Series 2009-1 Notes which has the effect of causing such Indemnified Party to become subject to or obligated for tax payments in excess of those in effect immediately prior to such designation; provided, however, that the Issuer shall be obligated to pay additional amounts to any such Indemnified Party pursuant to clause (a), and to indemnify any such Indemnified Party pursuant to clause (c), in respect of United States federal withholding taxes if (i) any such failure to deliver a form and/or Exemption Certificate or the failure of such form to establish a complete exemption from U.S. federal withholding tax or inaccuracy or untruth contained therein resulted from a change in any applicable law or regulation (other than any withholding taxes imposed under section 1471 through section 1474 of the Code) occurring after the date the Person in respect of which such tax is imposed acquired a beneficial interest in a Series 2009-1 Note, which change rendered such Indemnified Party no longer legally entitled to deliver any such form or otherwise ineligible for a complete exemption from U.S. federal withholding tax, or rendered the information or certifications made in such form untrue or inaccurate in a material respect or (ii) the redesignation of the Indemnified Party’s office for maintenance of the Series 2009-1 Notes was made at the request of the Issuer.

 

(h)           Any Indemnified Party that becomes entitled to the payment of additional amounts pursuant to Section 206(a) shall use reasonable efforts (consistent with applicable law) to file any document reasonably requested by the Issuer or to transfer its interest in the Series 2009-1 Note to an Affiliate in another jurisdiction if the making of such a filing or transfer to an Affiliate, as the case may be, would avoid the need for or reduce the amount of any payment of such additional amounts that may thereafter accrue and would not, in the good faith determination of such Indemnified Party, be disadvantageous to it.

 

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(i)            If an Indemnified Party receives any refund or is entitled to a tax credit with respect to Taxes or Other Taxes for which the Issuer has paid any additional amounts pursuant to Section 206(a) or Section 206(b) or made an indemnity payment pursuant to Section 206(c), then such Indemnified Party shall promptly pay the Issuer the portion of such refund or credit and any interest received with respect thereto as it determines, in its reasonable, good faith judgment will leave it after such payment, in no better or worse financial position than it would have been absent the imposition of such Taxes or Other Taxes and the payment by the Issuer of such indemnity or additional amounts pursuant to this Section 206; provided, however, that (i) the Issuer agrees to promptly return any amount paid to the Issuer pursuant to this Section 206(i) upon notice from such Indemnified Party that such refund or any portion thereof is required to be repaid to the relevant taxing authority, (ii) nothing in this Section 206(i) shall require an Indemnified Party to disclose any confidential information to the Issuer (including, without limitation, its tax returns), and (iii) no Indemnified Party shall be required to pay any amounts pursuant to this Section 206(i) at any time which an Event of Default exists and is continuing.

 

(j)            If the Issuer determines in good faith that a reasonable basis exists for contesting any Taxes or Other Taxes for which additional amounts have been paid pursuant to Section 206(a) or Section 206(b) or an indemnity payment has been made pursuant to Section 206(c), the Indemnified Party (to the extent such Person reasonably determines in good faith that it will not suffer a material adverse effect as a result thereof) shall cooperate with the Issuer in challenging such Taxes or Other Taxes, at the Issuer’s expense, if so requested by the Issuer in writing.

 

Section 207.           Increased Costs.  If either (i) the introduction of or any change (including, without limitation, any change by way of imposition or increase of reserve requirements) after the Closing Date in or in the interpretation of any law, rule, regulation or guideline (including any law, rule, regulation or guideline of any accounting board or authority (whether or not a part of the government) which is responsible for the establishment or interpretation of national or international accounting principles, in each case foreign or domestic, and any foreign or domestic central bank or other Governmental Authority), or any request or directive of any Governmental Authority or (ii) the compliance by an Indemnified Party with any of preceding clause (i) or any law, rule, regulation, guideline or request promulgated or made by any central bank or other Governmental Authority (whether or not having the force of law), shall (A) impose, modify or deem applicable any reserve requirement (including, without limitation, any reserve requirement imposed by the Federal Reserve Board, but excluding any reserve requirement, if any, included in the determination of the Adjusted Eurodollar Rate provided the Adjusted Eurodollar Rate is the applicable interest rate at the time the increased costs are incurred and interest amounts accruing with respect thereto are paid to the Indemnified Party), special deposit or similar requirement against assets of, deposits with or for the amount of, or credit extended by, any Indemnified Party, or (B) impose any other condition affecting the commitments or rights of an Indemnified Party under any Series 2009-1 Transaction Document, the result of which is to increase the cost to such Indemnified Party or to reduce the amount of any sum received or receivable by an Indemnified Party under any Series 2009-1 Transaction Document, then, within ten (10) days after demand by such Indemnified Party (which demand shall be accompanied by a statement setting forth the basis for such demand), the Issuer shall pay directly to such affected Indemnified Party such additional amount or amounts as will compensate such Indemnified Party for such additional or increased cost incurred or such

 

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reduction suffered but only in accordance with the payment priority set forth in Section 302 hereof. In determining any amount provided for in this Section 207, the Indemnified Party may use any reasonable averaging and attribution methods. Any Indemnified Party making a claim under this section shall submit to the Issuer and the Manager a written description as to such additional or increased cost or reduction and the calculation thereof, which written description shall be conclusive absent demonstrable error. Prior to making any claim pursuant to the provisions of this Section 207, the affected Indemnified Party will use reasonable efforts to mitigate or eliminate the amount of such Increased Cost or reduced amount if such mitigation effects are not, in the judgment of the affected Indemnified Party, illegal or otherwise disadvantageous to such Indemnified Party.  Payments owing pursuant to the provisions of this Section 207 shall be made only in accordance with the priorities for distributions set forth in Section 302 hereof. Increased Costs and other amounts owed pursuant to this Section 207 shall not constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against the Issuer in the event that there are insufficient funds available to meet such payments in accordance with Section 302 hereof. The failure or delay on the part of any Indemnified Party to demand compensation for any Increased Costs shall not constitute a waiver of such Indemnified Party’s right to demand such compensation; provided, that the Issuer shall not be under any obligation to compensate any Indemnified Party under this Section 207 for any Increased Costs and other amounts owed pursuant to this Section 207 with respect to any period prior to the date that is 120 days prior to such request if such Indemnified Party knew of the circumstances giving rise to such Increased Costs and other amounts owed pursuant to this Section 207 and of the fact that such circumstances would result in a claim for increased compensation by reason of such Increased Costs and other amounts owed pursuant to this Section 207.

 

Section 208.           Capital Requirements.  If any Indemnified Party shall determine that (i) any introduction or change after the Closing Date in or in the interpretation of any law, rule, regulation or guideline (including any law, rule, regulation or guideline adopted by the Basel Committee on Banking Regulations and Supervisory Practices or other foreign or domestic bank regulatory or monetary authorities), or (ii) the adoption after the date hereof of any other law or requirement of law, or any request, guidance or other directive regarding capital adequacy , including the proposed “The New Basel Capital Accord”, or (iii) any change after the Closing Date in any of the foregoing or in the enforcement or interpretation or administration of any of the foregoing by any Governmental Authority charged with the enforcement or interpretation or administration thereof, or (iv) compliance by any Indemnified Party (or any business office of the Indemnified Party) or the Indemnified Party’s holding company with any of the preceding clauses (i), (ii) or (iii) or any existing or future law, rule, regulation, guideline, request or directive of any Governmental Authority regarding capital adequacy, has or would have the effect of reducing the rate of return on the Indemnified Party’s capital or on the capital of the Indemnified Party’s holding company, to a level below that which the Indemnified Party or the Indemnified Party’s holding company could have achieved, in each case but for any of the occurrences set forth in any of the preceding clauses (taking into consideration the Indemnified Party’s policies and the policies of the Indemnified Party’s holding company with respect to capital adequacy) by an amount reasonably deemed by the Indemnified Party to be material, then, within (10) ten days after written demand for the payment thereof, then the Issuer will pay to the affected Indemnified Party such additional amount or amounts as will compensate the Indemnified Party or the Indemnified Party’s holding company for any such reduction suffered.  Payment under this indemnification shall be made only in accordance with the priorities for

 

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distributions set forth in Section 302 hereof after the Indemnified Party makes written demand therefor. Indemnification amounts contemplated by this Section shall not constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against the Issuer in the event there are insufficient funds available to make such payments on a Payment Date under Section 302 hereof. Without affecting its rights under this Section 208 or any other provision of this Supplement, each Indemnified Party agrees that if there is a reduction in a rate of return with respect to which the Issuer would be obligated to compensate the Indemnified Party pursuant to this Section 208, the Indemnified Party shall use reasonable efforts to select an alternative business office which would not result in any reduction in rate of return contemplated by this Section; provided, however, that the Indemnified Party shall not be obligated to select an alternative business office if the Indemnified Party determines that (i) as a result of such selection the Indemnified Party would be in violation of any Applicable Law, or would incur additional costs or expenses, or (ii) such selection would be unavailable for regulatory reasons or (iii) such selection would otherwise be illegal or disadvantageous to such Indemnified Party. The failure or delay on the part of any Indemnified Party to demand compensation for any reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of such Indemnified Party’s right to demand such compensation; provided, that the Issuer shall not be under any obligation to compensate any Indemnified Party under this Section 208 for any reductions with respect to any period prior to the date that is 120 days prior to such request if such Indemnified Party knew of the circumstances giving rise to such reductions and of the fact that such circumstances would result in a claim for increased compensation by reason of such reductions.

 

Section 209.           Replacement of Series 2009-1 Noteholder.

 

In the event (i) any Series 2009-1 Noteholder (or any Indemnified Party with respect to any Series 2009-1 Noteholder) delivers a certificate requesting compensation pursuant to Section 206, Section 207 or Section 208 hereof or a notice as to the occurrence or cessation of a Market Disruption Pricing Event, (ii) the Issuer is required to pay any additional amount to any Series 2009-1 Noteholder (or any Indemnified Party with respect to any Series 2009-1 Noteholder) or any Governmental Authority on account of any Series 2009-1 Noteholder (or any Indemnified Party with respect to any Series 2009-1 Noteholder) pursuant to Section 206 or (iii) any Series 2009-1 Noteholder does not consent (or fails to respond) to a proposed amendment, modification or waiver to any provision of this Supplement or any other Transaction Document requested by the Issuer (and the Issuer has satisfied all other conditions precedent to such amendment or waiver but for receiving the consent of such Series 2009-1 Noteholder), the Issuer may, at its sole expense and effort, upon notice to such Series 2009-1 Noteholder, require such Series 2009-1 Noteholder to transfer and assign, without recourse (in accordance with and subject to the restrictions contained in the Indenture), all of its interests, rights and obligations under this Supplement and the other Transaction Documents to an assignee that shall assume such assigned obligations (which assignee may be another Series 2009-1 Noteholder, if a Series 2009-1 Noteholder accepts such assignment); provided that:

 

(i)            such Series 2009-1 Noteholder shall have received payment of an amount equal to the outstanding principal of its Series 2009-1 Note, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Transaction Documents from the Issuer or the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Issuer (in the case of all other amounts);

 

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(ii)           in the case of any such assignment resulting from a claim for compensation under Section 207 or 208 or payments required to be made pursuant to Section 206, such assignment will result in a reduction in such compensation or payments thereafter; and

 

(iii)          such assignment does not conflict with Applicable Law.

 

ARTICLE III

 

Series 2009-1 Series Account and
 Allocation and Application of Amounts Therein

 

Section 301.           Series 2009-1 Series Account.  The Issuer shall establish on the Closing Date and maintain, so long as any Series 2009-1 Note is Outstanding, an Eligible Account in the name of the Issuer with the Indenture Trustee which shall be designated as the Series 2009-1 Series Account, which account shall be pledged to the Indenture Trustee pursuant to the Indenture for the benefit of the Series 2009-1 Noteholders and any Hedge Counterparty.  The Series 2009-1 Series Account shall only be relocated to another financial institution in accordance with the express provisions of Section 303(d) of the Indenture.  All deposits of funds by, or for the benefit of, the Series 2009-1 Noteholders from the Trust Account and the Restricted Cash Account, shall be accumulated in, and withdrawn from, the Series 2009-1 Series Account in accordance with the provisions of the Indenture and this Supplement.

 

Section 302.           Distributions from Series 2009-1 Series Account.  On each Payment Date, the Indenture Trustee shall distribute funds then on deposit in the Series 2009-1 Series Account in accordance with the provisions of one of subsection (I), (II) and (III) of this Section 302 pursuant to the instructions set forth in each Manager Report.

 

(I)            If no Early Amortization Event nor an Event of Default shall have occurred and be continuing:

 

(a)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2009-1 Interest Payment for such Payment Date;

 

(b)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Commitment Fee for such Payment Date;

 

(c)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion (if any) of the Minimum Principal Payment Amount then due and payable to Series 2009-1 Noteholders on such Payment Date;

 

(d)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion (if any) of the Supplemental Principal Payment Amount then due and payable to Series 2009-1 Noteholders on

 

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such Payment Date, until the Aggregate Series 2009-1 Note Principal Balance has been reduced to zero;

 

(e)           To each Series 2009-1 Noteholder on the immediately preceding Record Date and each other Indemnified Party, pro rata, an amount equal to any Indemnity Amounts, Default Fees and any other amounts then due and payable to such Series 2009-1 Noteholders and each other Indemnified Party pursuant to the Series 2009-1 Transaction Documents; and

 

(f)            After application of the amounts required to be paid pursuant to Section 302 of the Indenture, to the Issuer or its assigns, any remaining amounts then on deposit in the Series 2009-1 Series Account.

 

(II)           If an Early Amortization Event shall have occurred and then be continuing with respect to any Series but no Event of Default shall have occurred and be continuing with respect to any Series (or an Event of Default has occurred but the Notes have not been accelerated in accordance with Section 802 of the Indenture):

 

(a)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2009-1 Interest Payment for such Payment Date;

 

(b)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Commitment Fee for such Payment Date;

 

(c)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion (if any) of the Minimum Principal Payment Amount then due and payable to Series 2009-1 Noteholders on such Payment Date;

 

(d)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the then Aggregate Series 2009-1 Principal Balance until the Aggregate Series 2009-1 Principal Balance has been reduced to zero;

 

(e)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, pro rata (based on respective amounts due), an amount equal to any Indemnity Amounts and Default Fees and any other amounts then due and payable by the Issuer to the Series 2009-1 Noteholders pursuant to the Series 2009-1 Transaction Documents; and

 

(f)            After application of the amounts required to be paid pursuant to Section 302 of the Indenture, to the Issuer or its assigns, any remaining amounts then on deposit in the Series 2009-1 Series Account.

 

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(III)         If an Event of Default shall then be continuing with respect to any Series and the Notes of any Series have been declared due and payable and such declaration and its consequences have not been rescinded or annulled:

 

(a)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2009-1 Interest Payment for such Payment Date;

 

(b)           To each Series 2009-1 Noteholder on the immediately preceding Record Date on a pro rata basis, an amount equal to the then Aggregate Series 2009-1 Principal Balance until the Series 2009-1 Notes are paid in full;

 

(c)           To each Series 2009-1 Noteholder on the immediately preceding Record Date, pro rata (based on respective amounts due), an amount equal to any Indemnity Amounts and Default Fees and any other amounts then due and payable by the Issuer to the Series 2009-1 Noteholders pursuant to the Series 2009-1 Transaction Documents; and 

 

(d)           After application of the amounts required to be paid pursuant to Section 302 of the Indenture, to the Issuer or its assigns, any remaining amounts then on deposit in the Series 2009-1 Series Account.

 

Any amounts payable to a Series 2009-1 Noteholder pursuant to this Section 302 shall be made by wire transfer of immediately available funds to the account that such Series 2009-1 Noteholder has designated to the Indenture Trustee in writing at least five Business Days prior to the applicable Payment Date.

 

ARTICLE IV

 

Additional Covenants; Additional Events of Default

 

In addition to the covenants set forth in Article VI of the Indenture, the Issuer hereby makes the following additional covenants for the benefit of the Series 2009-1 Noteholders:

 

Section 401.           Increase in the Aggregate Series 2009-1 Note Existing Commitment.  The Issuer shall not issue on or after the Closing Date any additional Series 2009-1 Notes pursuant to this Supplement or increase the aggregate Series 2009-1 Note Existing Commitment (except for any such increase in the Series 2009-1 Note Existing Commitment made in accordance with Section 205(d) hereof or Section 2.3 of the Series 2009-1 Note Purchase Agreement) without the prior written consent of the Control Party for the Series 2009-1.  Nothing contained in this Section 401 shall prohibit the assignment by any Series 2009-1 Noteholder of all or a portion of its Series 2009-1 Note Existing Commitment if, after giving effect to such assignment, the aggregate Series 2009-1 Note Existing Commitment shall not have increased.

 

Section 402.           Issuance of Additional Series of Notes.  So long as the Supplement and related Series 2009-1 Transaction Documents remain in full force and effect, the Issuer shall

 

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not issue any additional Series of Notes without the prior written consent of the Control Party for Series 2009-1.  This Section 402 shall constitute one of the “other conditions as shall be specified in the related Supplement” which are referred to in paragraph (vii) of Section 1006(b) of the Indenture.

 

Section 403.           Use of Proceeds.  The proceeds from the issuance of the Series 2009-1 Notes shall be used as follows: (i) to acquire Containers and Related Assets, (ii) to pay the costs of issuance of the Series 2009-1 Notes, (iii) to repay in full the Series 2011-1 Notes and (iv) for general corporate purposes (including distributions to the members of the Issuer and any other activities and transactions permitted under the Issuer’s Operating Agreement).  For avoidance of doubt, the Issuer may use the proceeds of any Series 2009 1 Advance to make payments on, or in respect of, any other Series of Notes.

 

Section 404.           Consent of the Majority of Holders.  So long as no Rating Agency maintains an effective rating with respect to the Series 2009-1 Notes, the Issuer shall not take, and will cause others acting on behalf of the Issuer to not take, any action that requires satisfaction of the Rating Agency Condition or the consent of the Rating Agencies (or any analogous concept) as a condition precedent unless such action shall have also been approved by the Majority of Holders of the Series 2009-1 Notes.

 

Section 405.           United States Federal Income Tax Election.  The Issuer shall not elect to be classified as an association taxable as a corporation under Section 301.7701-3 of the Treasury Regulations.

 

ARTICLE V

 

Conditions of Restatement of Supplement and Future Lending

 

Section 501.           Conditions to Restatement of Supplement.  The amendment and restatement of the Original Supplement shall become effective on the date on which (i) all conditions precedent set forth in Section 3.1 of the Series 2009-1 Note Purchase Agreement shall have been satisfied or waived in accordance therewith, and (ii) the Issuer shall have delivered a certificate to the Indenture Trustee to the effect that all conditions precedent set forth in Section 3.1 of the Series 2009-1 Note Purchase Agreement have been satisfied (other than clause (y) of paragraph (13) of Schedule 1 to the Series 2009-1 Note Purchase Agreement).  Notwithstanding the foregoing conditions precedent, upon the making of any advance by a Noteholder, all of the Indenture Trustee’s and Noteholders’ rights under the Indenture and this Supplement shall vest in such Persons, whether or not the conditions precedent were in fact satisfied.

 

Section 502.           Advances on Series 2009-1 Notes.  The obligation of each of the Series 2009-1 Noteholders to make a Series 2009-1 Advance pursuant to its commitment under the Series 2009-1 Transaction Documents is subject to the following further conditions precedent being fulfilled with respect to each such Series 2009-1 Advance:

 

(a)           Default.  Before and after giving effect to such Series 2009-1 Advance, no Event of Default shall have occurred and be continuing unless such Series 2009-1 Advance has been approved by each Series 2009-1 Noteholder.

 

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(b)           Early Amortization Event.  Before and after giving effect to such Series 2009-1 Advance, no Early Amortization Event shall have occurred and be continuing unless such Series 2009-1 Advance has been approved by each Series 2009-1 Noteholder.

 

(c)           Asset Base Imbalance.  Before and after giving effect to such Series 2009-1 Advance, the Aggregate Note Principal Balance (calculated after giving effect to such Series 2009-1 Advance) does not exceed the Asset Base (calculated to give effect to the Eligible Containers to be acquired with the proceeds of such Series 2009-1 Advance).

 

(d)           Asset Base Certificate and Funding Notice.  The Issuer shall have delivered to the Administrative Agent (with a copy to the Indenture Trustee) (i) a duly completed and executed Funding Notice and (ii) simultaneously with the delivery of such Funding Notice, a duly completed and executed Asset Base Certificate (which shall give effect to any Eligible Containers to be acquired with the proceeds of such Series 2009-1 Advance).

 

(e)           Conversion Date.  The Conversion Date shall not have occurred.

 

(f)            Note Purchase Agreement.  All conditions precedent to such Series 2009-1 Advance set forth in the Series 2009-1 Note Purchase Agreement have been met.

 

(g)           Discharge of Existing Indebtedness.  If the Issuer requests that the proceeds of such Series 2009-1 Advance be used in whole or in part to discharge in full any undischarged Liens on the Containers to be acquired on such date, the Funding Notice (as defined in the Series 2009-1 Note Purchase Agreement) shall include the name of the related lienholders and their related wiring instructions.

 

(h)           Matters regarding the Collateral.  The Administrative Agent and the Series 2009-1 Noteholders shall have received from the Issuer satisfactory evidence of (i) the existence or validity of the Collateral, (ii) the perfection of the Indenture Trustee’s security interest in the Collateral, and (iii) compliance by the Issuer, the Seller and the Manager with all of their respective covenants, and the accuracy of all of their respective warranties or representations, in each case to the extent such covenants, warranties or representations relate to the Collateral.

 

ARTICLE VI

 

Representations and Warranties

 

The Issuer hereby represents and warrants (as of the Closing Date, the Restatement Effective Date and each date on which a Series 2009-1 Advance is made) to the Series 2009-1 Noteholders and the Indenture Trustee that:

 

Section 601.           Existence.  The Issuer is a limited liability company duly organized, validly existing and in compliance under the laws of Delaware.  The Issuer is in good standing and is duly qualified to do business in each jurisdiction where the failure to do so would reasonably be expected to have a material adverse effect upon the Issuer, and has all licenses, permits, charters and registrations the failure to hold which would reasonably be expected to have a material adverse effect on the Issuer.

 

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Section 602.           Authorization.  The Issuer has the power and is duly authorized to execute and deliver this Supplement, the Indenture and the other Series 2009-1 Transaction Documents to which it is a party; the Issuer is and will continue to be duly authorized to borrow monies under this Supplement, the Indenture and the other Series 2009-1 Transaction Documents; and the Issuer is and will continue to be authorized to perform its obligations under this Supplement, the Indenture and the other Series 2009-1 Transaction Documents.  The execution, delivery and performance by the Issuer of this Supplement, the Indenture and the other Series 2009-1 Transaction Documents to which it is a party and the borrowings hereunder do not and will not require any consent or approval of any Governmental Authority, stockholder or any other Person which has not already been obtained.

 

Section 603.           No Conflict; Legal Compliance.  The execution, delivery and performance of this Supplement, the Indenture and each of the other Series 2009-1 Transaction Documents and the execution, delivery and payment of the Series 2009-1 Notes will not: (a) contravene any provision of Issuer’s charter documents or by-laws or other organizational documents; (b) contravene, conflict with or violate any applicable law or regulation, or any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority; or (c) violate or result in the breach of, or constitute a default under this Supplement, the Indenture, the other Series 2009-1 Transaction Documents, any other indenture or other loan or credit agreement, or other agreement or instrument to which the Issuer is a party or by which Issuer, or its property and assets may be bound or affected.  The Issuer is not in violation or breach of or default under any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or any contract, agreement, lease, license, indenture or other instrument to which it is a party, in each case, in a manner that would reasonably be expected to result in a Material Adverse Change.

 

Section 604.           Validity and Binding Effect.  This Supplement is, and each other Series 2009-1 Transaction Document to which the Issuer is a party, when duly executed and delivered, will be, legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies.

 

Section 605.           Material Adverse Change.  Since its date of formation, there has been no Material Adverse Change in the financial condition of the Issuer.

 

Section 606.           Place of Business.  The legal name of the Issuer as reflected on its certificate of formation is “TAL Advantage III LLC”.  The current location of the Issuer’s chief executive office and principal “place of business” (within the meaning of Section 9-307 of the UCC) is 100 Manhattanville Road, Purchase, New York 10577-2135.  The Issuer is organized under the laws of the State of Delaware and has not been previously and is not now organized under the laws of any other jurisdiction.

 

Section 607.           No Agreement or Contracts.  The Issuer is not now and has not been a party to any contract or agreement (whether written or oral) other than the Series 2009-1 Transaction Documents and the Transaction Documents (as defined in the Indenture).

 

24

 

Section 608.           Consents and Approvals.  No approval, authorization or consent of any trustee or holder of any Indebtedness or obligation of the Issuer or of any other Person under any agreement, contract, lease or license or similar document or instrument to which the Issuer is a party or by which Issuer is bound, is required to be obtained by the Issuer in order to make or consummate the transactions contemplated under the Series 2009-1 Transaction Documents, except for those approvals, authorizations and consents that have been obtained on or prior to the Closing Date or which the failure to obtain would not reasonably be expected to result in a Material Adverse Change.  All consents and approvals of, filings and registrations with, and other actions in respect of, all Governmental Authorities required to be obtained by Issuer in order to make or consummate the transactions contemplated under the Series 2009-1 Transaction Documents have been, or prior to the time when required will have been, obtained, given, filed or taken and are or will be in full force and effect other than any such consents, approvals, filings or registrations the failure to so obtain or make would not reasonably be expected to result in a Material Adverse Change.

 

Section 609.           Margin Regulations.  The Issuer does not own any “margin security”, as that term is defined in Regulation U of the Federal Reserve Board, and the proceeds of the Series 2009-1 Notes issued hereunder will be used only for the purposes contemplated hereunder.  None of such proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Series 2009-1 Advances under this Supplement to be considered a “purpose credit” within the meaning of Regulations T, U and X.  The Issuer will not take or permit any agent acting on its behalf to take any action which might cause the Indenture or this Supplement or any document or instrument delivered by the Issuer pursuant hereto to violate any regulation of the Federal Reserve Board.

 

Section 610.           Taxes.  All federal, state, local and foreign tax returns, reports and statements required to be filed by the Issuer have been filed with the appropriate Governmental Authorities, and all Taxes, Other Taxes and other impositions shown thereon to be due and payable by the Issuer have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof, or any such fine, penalty, interest, late charge or loss has been paid, or the Issuer is contesting its liability therefor in good faith and has fully reserved all such amounts according to GAAP in the financial statements provided pursuant to Section 626 of the Indenture.  The Issuer has paid when due and payable all charges upon the books of the Issuer and no Government Authority has asserted any Lien against the Issuer with respect to unpaid Taxes or Other Taxes.  Proper and accurate amounts have been withheld by the Issuer from its employees for all periods in full and complete compliance with the tax, social security and unemployment withholding provisions of applicable federal, state, local and foreign law and such withholdings have been timely paid to the respective Governmental Authorities.

 

Section 611.           Other Regulations.  The Issuer is not an “investment company,” or an “affiliated person” of, or a “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.  The issuance of the Series 2009-1 Notes hereunder and the application of the proceeds and repayment thereof by the Issuer and the performance of the transactions contemplated by this Supplement and the other Series 2009-1 Transaction Documents will not violate any provision of the

 

25

 

Investment Company Act or the Public Utility Holding Company Act, or any rule, regulation or order issued by the Securities and Exchange Commission thereunder.

 

Section 612.           Solvency and Separateness.

 

(a)           The capital of the Issuer is adequate for the business and undertakings of the Issuer.

 

(b)           Other than with respect to the transactions contemplated by the Transaction Documents, the Issuer is not engaged in any business transactions with the Manager except as permitted by the Management Agreement or with the Seller except as permitted by the Contribution and Sale Agreement.

 

(c)           At all times, at least one (1) member of the board of directors of the Issuer shall qualify as an Independent Manager (as defined in the Issuer’s limited liability company agreement).

 

(d)           The Issuer’s funds and assets are not, and will not be, commingled with those of the Manager, except as permitted by the Management Agreement.

 

(e)           The Issuer shall maintain (A) correct and complete books and records of account, and (B) minutes of the meetings and other proceedings of its board of managers.

 

(f)            The Issuer is not insolvent under the Insolvency Law and will not be rendered insolvent by the transactions contemplated by the Series 2009-1 Transaction Documents and after giving effect to such transactions, the Issuer will not be left with an unreasonably small amount of capital with which to engage in its business nor will the Issuer have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature.  The Issuer does not contemplate the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, trustee or similar official in respect of the Issuer or any of its assets.

 

Section 613.           No Default.  No Event of Default or Early Amortization Event has occurred and is continuing hereunder or under the Original Indenture or the Original Supplement.  No event or condition that with notice or the passage of time (or both) could reasonably be expected to constitute an Event of Default or Early Amortization Event has occurred or is continuing.

 

Section 614.           Litigation and Contingent Liabilities.  No claims, litigation, arbitration proceedings or governmental proceedings by any Governmental Authority are pending or threatened against or are affecting Issuer the results of which will materially and adversely interfere with the consummation of any of the transactions contemplated by the Indenture, this Supplement or any document issued or delivered in connection therewith or herewith.

 

Section 615.           Title; Liens.  The Issuer has good, legal and marketable title to each of its respective assets, and none of such assets is subject to any Lien, except for Permitted Encumbrances and the Liens created or permitted pursuant to the Indenture.

 

26

 

Section 616.           Subsidiaries.  The Issuer has no subsidiaries.

 

Section 617.           No Partnership.  The Issuer is not a partner or joint venturer in any partnership or joint venture.

 

Section 618.           Pension and Welfare Plans.  During the twelve-consecutive-month period prior to the date of the execution and delivery of this Supplement, no steps have been taken to terminate any Plan, and no contribution failure has occurred with respect to any Plan, sufficient to give rise to a lien under section 302(f) of ERISA.  No condition exists or event or transaction, has occurred with respect to any Plan which could result in the Issuer or any ERISA Affiliate of the Issuer incurring any material liability, fine or penalty.  As of the Closing Date, the Issuer is not a Benefit Plan Investor.

 

Section 619.           Ownership of the Issuer.  All of the issued and outstanding membership interests of the Issuer are owned by TAL.

 

Section 620.           Security Interest Representations.

 

(a)           The Indenture creates a valid and continuing security interest (as defined in the UCC) in the Collateral in favor of the Indenture Trustee, for the benefit of the Noteholders and each Hedge Counterparty, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from the Issuer.

 

(b)           The Containers constitute “goods” within the meaning of the applicable UCC.  The Leases constitute “tangible chattel paper” within the meaning of the UCC.  The lease receivables constitute “accounts” or “proceeds” of the Leases with the meaning of the UCC.  The Trust Account, the Restricted Cash Account (if such account has been opened) and the Series 2009-1 Series Account constitute “securities accounts” within the meaning of the UCC.  The Issuer’s contractual rights under any Hedge Agreements, the Contribution and Sale Agreement and the Management Agreement constitute “general intangibles” within the meaning of the UCC.

 

(c)           The Issuer owns and has good and marketable title to the Collateral, free and clear of any Lien (whether senior, junior or pari passu), claim or encumbrance of any Person, except for Permitted Encumbrances.

 

(d)           The Issuer has caused the filing of all appropriate financing statements or documents of similar import in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the security interest in the Collateral granted to the Indenture Trustee in the Indenture.

 

(e)           Other than the security interest granted to the Indenture Trustee pursuant to the Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral, except as permitted pursuant to the Indenture.  The Issuer has not authorized the filing of, and is not aware of, any financing statements against the Issuer that include a description of collateral covering the Collateral other than any financing statement or document of similar import (i) relating to the security interest granted to the

 

27

 

Indenture Trustee in the Indenture or (ii) that has been terminated.  The Issuer has no actual knowledge of any judgment or tax lien filings against the Issuer.

 

(f)            Pursuant to Section 3.3.5 of the Management Agreement, the Manager has acknowledged that it is holding the Leases, to the extent they relate to the Managed Containers on behalf of, and for the benefit of, the Indenture Trustee.  None of the Leases that constitute or evidence the Collateral has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person.  The Seller has caused the filing of all appropriate financing statements or documents of similar import in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the ownership interest of the Issuer (and the Indenture Trustee as its assignee) in the Leases (to the extent that such Leases relate to the Managed Containers) arising under the Contribution and Sale Agreement.

 

(g)           The Issuer has received all necessary consents and approvals required by the terms of the Collateral to the pledge to the Indenture Trustee of its interest and rights in such Collateral hereunder or under the Indenture.

 

(h)           Wells Fargo Bank, National Association (in its capacity as securities intermediary) has identified in its records the Indenture Trustee as the Person having a Security Entitlement in each of the Trust Account and the Series 2009-1 Series Account (and will do so with respect to the Restricted Cash Account, if and when such account is opened).

 

(i)            The Trust Account and the Series 2009-1 Series Account are not in the name of any Person other than the Issuer.  The Issuer has not consented for Wells Fargo Bank, National Association (as the securities intermediary of the Trust Account and the Series 2009-1 Series Account) to comply with Entitlement Orders of any Person other than the Indenture Trustee.

 

(j)            No creditor of the Issuer (other than (x) with respect to the Managed Containers, the related lessee and (y) the Manager in its capacity as Manager under the Management Agreement) has in its possession any goods that constitute or evidence the Collateral, other than for purposes of repair, refurbishment, painting, positioning, storage and other similar matters with respect to Managed Containers.

 

The representations and warranties set forth in this Section 620 shall survive until this Supplement is terminated in accordance with its terms and the terms of the Indenture.  Any breaches of the representations and warranties set forth in this Section 620 may be waived by the Indenture Trustee, only with the prior written consent of the Control Party.

 

Section 621.           Tax Election of the Issuer.  None of the Issuer, any of its members or any other Person has elected, or agreed to elect, to treat the Issuer as an association taxable as a corporation for United States federal income tax purposes.

 

Section 622.           Survival of Representations and Warranties.  So long as any of the Series 2009-1 Notes shall be Outstanding and until payment and performance in full of the Outstanding Obligations, the representations and warranties contained herein shall have a continuing effect as having been true when made.

 

28

 

ARTICLE VII

 

Miscellaneous Provisions

 

Section 701.           Ratification of Indenture.  As supplemented by this Supplement, the Indenture is in all respects ratified and confirmed and the Indenture as so supplemented by this Supplement shall be read, taken and construed as one and the same instrument.

 

Section 702.           Counterparts.  This Supplement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart of this Supplement by facsimile or by electronic means shall be equally effective as of the delivery of an originally executed counterpart.

 

Section 703.           Governing Law.  THIS SUPPLEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW, AND THE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF  NEW YORK.

 

Section 704.           Amendments and Modifications.  (a) The terms of this Supplement may be waived, modified or amended only in a written instrument signed by (A) each of the Issuer, the Control Party and the Indenture Trustee and (B) (i) except with respect to the matters set forth in Section 1002(a) of the Indenture, the prior written consent of the Majority of Holders and (ii) if required pursuant to Section 1001 or 1002(a) of the Indenture, each affected Series 2009-1 Noteholder.  For the purposes of clause (B) of the preceding sentence, any amendment to or modification or waiver of this Supplement shall be deemed a Supplemental Indenture subject to Sections 1001 or 1002 of the Indenture.  The Series 2009-1 Note Existing Commitment of an individual Series 2009-1 Noteholder may only be increased, and the Conversion Date of an individual Series 2009-1 Noteholder may only be extended, in accordance with the provisions of Section 8.1(a) of the Note Purchase Agreement.

 

(b)           Promptly after the execution by the Issuer and the Indenture Trustee of any written instrument pursuant to this Section, the Indenture Trustee shall mail to each Rating Agency, if any, then having a rating in effect with respect to the Series 2009-1 Notes, the Noteholders, the Administrative Agent and each Hedge Counterparty a copy of the text of such Supplement. Any failure of the Indenture Trustee to mail such copy, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplement.

 

Section 705.           Consent to Jurisdiction.  ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ANY PARTY HERETO ARISING OUT OF OR RELATING TO THIS SUPPLEMENT, OR ANY TRANSACTION CONTEMPLATED HEREBY, MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND EACH PARTY HERETO HEREBY WAIVES ANY 

 

29

 

OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND, SOLELY FOR THE PURPOSES OF ENFORCING THIS SUPPLEMENT, EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

 

Section 706.           Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTIES HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS SUPPLEMENT OR ANY OTHER TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.

 

Section 707.           Ratification of Original Supplement. (a) The amendment and restatement of the Original Supplement shall become effective on the Restatement Effective Date.  This Supplement amends and restates the terms and conditions of the Original Supplement, and is not a novation of the Outstanding Obligations incurred by the Issuer pursuant to the terms of the Original Supplement.  Accordingly, all of the Outstanding Obligations of the Issuer incurred pursuant to the terms of the Original Supplement, and all of the Liens created thereby, are hereby ratified and affirmed by the Issuer and remain in full force and effect.  In furtherance of the foregoing, all Series 2009-1 Notes issued and unpaid Advances pursuant to the terms of the Original Supplement that remain unpaid on the Restatement Effective Date shall remain in full force and effect and all references to the Original Supplement contained in the Series 2009-1 Notes are amended to refer to this Supplement.  All references to the Original Supplement in any Series 2009-1 Transaction Document or other document or instrument delivered in connection therewith shall be deemed to refer to this Supplement and the provisions hereof.

 

[Signature page follows.]

 

30

 

IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Supplement to be duly executed and delivered as of the day and year first above written.

 

	
 
    	
TAL   ADVANTAGE III LLC,
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
TAL International Container Corporation,
    
	
 
    	
 
    	
its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

A&R SERIES 2009-1 SUPPLEMENT

 

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
not   individually but solely as Indenture Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

A&R SERIES 2009-1 SUPPLEMENT

 

 

EXHIBIT A

 

FORM OF SERIES 2009-1 NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION.  THIS NOTE MAY NOT BE OFFERED FOR SALE, TRANSFER OR ASSIGNMENT UNLESS (1) SO REGISTERED OR THE TRANSACTION RELATING THERETO SHALL BE EXEMPT WITHIN THE MEANING OF SUCH ACT AND THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION ADOPTED THEREUNDER AND (2) SUCH TRANSACTION COMPLIES WITH THE PROVISIONS SET FORTH IN SECTION 205 OF THE INDENTURE.  BECAUSE OF THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  ANYONE PURCHASING THIS NOTE MAY ASCERTAIN THE OUTSTANDING PRINCIPAL AMOUNT HEREOF BY INQUIRY TO THE INDENTURE TRUSTEE.

 

EACH PURCHASER OF A SERIES 2009-1 NOTE SHALL BE DEEMED TO REPRESENT AND WARRANT TO THE ISSUER, THE INDENTURE TRUSTEE AND THE MANAGER THAT IT IS NOT ACQUIRING SUCH NOTE WITH THE ASSETS OF AN “EMPLOYEE BENEFIT PLAN” AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), WHETHER OR NOT IT IS SUBJECT TO TITLE I OF ERISA, A “PLAN” WITHIN THE MEANING OF SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” OF ANY OF THE FOREGOING BY REASON OF AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY.

 

TAL ADVANTAGE III LLC
 FLOATING RATE SECURED NOTES
 SERIES 2009-1

 

	
Up   to $
    	
No. [      ]
    
	
 
    	
,        
    

 

KNOW ALL PERSONS BY THESE PRESENTS that TAL ADVANTAGE III LLC, a limited liability company organized and existing under the laws of Delaware (the “Issuer”), for value received, hereby promises to pay to                        or their registered assigns, at the principal corporate trust office of the Indenture Trustee named below, (i) the principal sum of up to                      , which sum shall be payable on the dates and in the amounts set forth in the Amended and Restated Indenture, dated as of August 12, 2011 (as amended, restated or otherwise modified from time to time, the “Indenture”) and the Amended and Restated Series 2009-1 Supplement, dated as of August 12, 2011 (as amended, restated or otherwise modified from time to time, the “Series 2009-1 Supplement”), each 

 

 

between the Issuer and Wells Fargo Bank, National Association as indenture trustee (the “Indenture Trustee”), (ii) interest on the outstanding principal amount of this Series 2009-1 Note on the dates and in the amounts set forth in the Indenture and the Series 2009-1 Supplement, and (iii) certain other amounts as provided in the Indenture and the Series 2009-1 Supplement.  A record of each Series 2009-1 Advance, Prepayment and repayment shall be made by the Administrative Agent and absent manifest error such record shall be conclusive.  Capitalized terms not otherwise defined herein will have the meaning set forth in Appendix A to the Indenture and the Series 2009-1 Supplement.

 

Payment of the principal of and interest on this Note shall be made in lawful money of the United States of America which at the time of payment is legal tender for payment of public and private debts.  The principal balance of, and interest on this Series 2009-1 Note is payable at the times and in the amounts set forth in the Indenture and the Series 2009-1 Supplement by wire transfer of immediately available funds to the account designated by the Holder of record on the immediately preceding Record Date.  This Series 2009-1 Note is a Warehouse Note.

 

This Series 2009-1 Note is one of the authorized notes identified in the title hereto and issued in the aggregate principal amount of up to Four Hundred Million Dollars ($400,000,000) or, under certain circumstances, up to Six Hundred Million Dollars ($600,000,000), pursuant to the Indenture and the Series 2009-1 Supplement.

 

This Series 2009-1 Note shall be an obligation of the Issuer and shall be secured by the Collateral, all as defined in, and subject to limitations set forth in, the Indenture and the Series 2009-1 Supplement.

 

This Series 2009-1 Note is transferable as provided in the Indenture and the Series 2009-1 Supplement, subject to certain limitations therein contained, only upon the books for registration and transfer kept by the Indenture Trustee, and only upon surrender of this Series 2009-1 Note for transfer to the Indenture Trustee duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Indenture Trustee duly executed by, the registered Holder hereof or his attorney duly authorized in writing.  The Indenture Trustee or the Issuer may require payment by the Holder of a sum sufficient to cover any tax expense or other governmental charge payable in connection with any transfer or exchange of the Series 2009-1 Note.

 

The Issuer, the Indenture Trustee and any other agent of the Issuer shall treat the person in whose name this Series 2009-1 Note is registered as the absolute owner hereof for all purposes, and neither the Issuer, the Indenture Trustee, nor any other such agent shall be affected by notice to the contrary.

 

This Series 2009-1 Note is subject to Prepayment, at the times and subject to the conditions set forth in the Indenture and the Series 2009-1 Supplement.

 

If an Event of Default shall occur and be continuing, the principal of and accrued interest on this Series 2009-1 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series 2009-1 Supplement.

 

2

 

The Indenture permits, with certain exceptions as therein provided, the issuance of supplemental indentures in certain specifically described instances.  Any supplemental indenture made in accordance with the terms of this Supplement and the Indenture shall be conclusive and binding upon the Holder of this Series 2009-1 Note and on all future holders of this Series 2009-1 Note and of any Series 2009-1 Note issued in lieu hereof.  Supplements and amendments to the Indenture and the Series 2009-1 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series 2009-1 Supplement.

 

The Holder of this Series 2009-1 Note shall have no right to enforce the provisions of the Indenture and the Series 2009-1 Supplement or to institute action to enforce the covenants, or to take any action with respect to a default under the Indenture and the Series 2009-1 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain circumstances described in the Indenture and the Series 2009-1 Supplement; provided, however, that nothing contained in the Indenture and the Series 2009-1 Supplement shall affect or impair any right of enforcement conferred on the Holder hereof to enforce any payment of the principal of and interest on this Series 2009-1 Note on or after the due date thereof; provided further, however, that by acceptance hereof the Holder is deemed to have covenanted and agreed that it will not institute against the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any applicable bankruptcy or similar law, at any time other than at such time as permitted by the Indenture and the Series 2009-1 Supplement.

 

Each Holder of a Series 2009-1 Note shall be deemed to represent and warrant to the Initial Purchaser, the Issuer, the Indenture Trustee and the Manager that it is not acquiring such Series 2009-1 Note with the assets of an “employee benefit plan” as defined in Section 3(3) of ERISA, whether or not it is subject to Title I of ERISA, a “plan” within the meaning of Section 4975(e)(1) of the Code or an entity whose underlying assets include “plan assets” of any of the foregoing by reason of an employee benefit plan’s or plan’s investment in such entity.

 

Each Holder of a Series 2009-1 Note (i) agrees to treat this Series 2009-1 Note for United States federal, state and local income, single business and franchise tax purposes as indebtedness, (ii) agrees that the duties of the Administrative Agent are not to be construed as a replacement Manager, (iii) agrees that the Series 2009-1 Note shall not have any interest in any Series Account of any other Series or Class and (iv) ratifies and confirms the terms of the Indenture and the other Series 2009-1 Transaction Documents.

 

All terms and provisions of the Indenture and the Series 2009-1 Supplement are herein incorporated by reference as if set forth herein in their entirety.  In the event of any conflict between this Series 2009-1 Note, on the one hand, and the Indenture or the Series 2009-1 Supplement, on the other hand, the Indenture or the Series 2009-1 Supplement, as applicable, shall control.

 

IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series 2009-1 Supplement and the issuance of this Series 2009-1 Note and the issue of which it is a part, do exist, have happened and have been timely performed in regular form and manner as required by law.

 

3

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee by manual signature of one of its authorized officers, this Series 2009-1 Note shall not be entitled to any benefit under the Indenture and the Series 2009-1 Supplement, or be valid or obligatory for any purpose.

 

[Remainder of Page Intentionally Left Blank]

 

4

 

IN WITNESS WHEREOF, TAL Advantage III LLC has caused this Series 2009-1 Note to be duly executed by its duly authorized representative, on this            day of              ,       .

 

	
 
    	
TAL   ADVANTAGE III LLC,
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
TAL   International Container Corporation,
    
	
 
    	
its   manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    

 

 

This Note is one of the Series 2009-1 Notes described in the within-mentioned Indenture and the Series 2009-1 Supplement.

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   indenture trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    

 

A&R SERIES 2009-1 SUPPLEMENT

 

 

SCHEDULE 1

 

Percentage of Minimum Targeted Principal Balance

Series 2009-1 Notes

 

	
Period Following
   Conversion
    	
 
    	
Target
   Percentage
    	
 
    	
Period Following
   Conversion
    	
 
    	
Target 
   Percentage
    	
 
    
	
0
    	
 
    	
100.00%
    	
 
    	
25
    	
 
    	
79.17%
    	
 
    
	
1
    	
 
    	
99.17%
    	
 
    	
26
    	
 
    	
78.33%
    	
 
    
	
2
    	
 
    	
98.33%
    	
 
    	
27
    	
 
    	
77.50%
    	
 
    
	
3
    	
 
    	
97.50%
    	
 
    	
28
    	
 
    	
76.67%
    	
 
    
	
4
    	
 
    	
96.67%
    	
 
    	
29
    	
 
    	
75.83%
    	
 
    
	
5
    	
 
    	
95.83%
    	
 
    	
30
    	
 
    	
75.00%
    	
 
    
	
6
    	
 
    	
95.00%
    	
 
    	
31
    	
 
    	
74.17%
    	
 
    
	
7
    	
 
    	
94.17%
    	
 
    	
32
    	
 
    	
73.33%
    	
 
    
	
8
    	
 
    	
93.33%
    	
 
    	
33
    	
 
    	
72.50%
    	
 
    
	
9
    	
 
    	
92.50%
    	
 
    	
34
    	
 
    	
71.67%
    	
 
    
	
10
    	
 
    	
91.67%
    	
 
    	
35
    	
 
    	
70.83%
    	
 
    
	
11
    	
 
    	
90.83%
    	
 
    	
36
    	
 
    	
70.00%
    	
 
    
	
12
    	
 
    	
90.00%
    	
 
    	
37
    	
 
    	
69.17%
    	
 
    
	
13
    	
 
    	
89.17%
    	
 
    	
38
    	
 
    	
68.33%
    	
 
    
	
14
    	
 
    	
88.33%
    	
 
    	
39
    	
 
    	
67.50%
    	
 
    
	
15
    	
 
    	
87.50%
    	
 
    	
40
    	
 
    	
66.67%
    	
 
    
	
16
    	
 
    	
86.67%
    	
 
    	
41
    	
 
    	
65.83%
    	
 
    
	
17
    	
 
    	
85.83%
    	
 
    	
42
    	
 
    	
65.00%
    	
 
    
	
18
    	
 
    	
85.00%
    	
 
    	
43
    	
 
    	
64.17%
    	
 
    
	
19
    	
 
    	
84.17%
    	
 
    	
44
    	
 
    	
63.33%
    	
 
    
	
20
    	
 
    	
83.33%
    	
 
    	
45
    	
 
    	
62.50%
    	
 
    
	
21
    	
 
    	
82.50%
    	
 
    	
46
    	
 
    	
61.67%
    	
 
    
	
22
    	
 
    	
81.67%
    	
 
    	
47
    	
 
    	
60.83%
    	
 
    
	
23
    	
 
    	
80.83%
    	
 
    	
48
    	
 
    	
60.00%
    	
 
    
	
24
    	
 
    	
80.00%
    	
 
    	
49
    	
 
    	
0.00%
    	
 
    

 

 

SCHEDULE 2

 

	
Series 2009-1
   Noteholder
    	
 
    	
Commitment on
   Restatement Effective
   Date
    	
 
    	
Percentage of
   Commitment
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Wells Fargo Bank, National Association
    	
 
    	
$
    	
135,000,000
    	
 
    	
33.75000
    	
%
    
	
Three Pillars Funding LLC
    	
 
    	
$
    	
85,000,000
    	
 
    	
21.25000
    	
%
    
	
ABN AMRO Bank N.V.
    	
 
    	
$
    	
45,000,000
    	
 
    	
11.25000
    	
%
    
	
Royal Bank of Canada
    	
 
    	
$
    	
45,000,000
    	
 
    	
11.25000
    	
%
    
	
Bank of America, N.A.
    	
 
    	
$
    	
45,000,000
    	
 
    	
11.25000
    	
%
    
	
Nomura Corporate Funding Americas, LLC
    	
 
    	
$
    	
45,000,000
    	
 
    	
11.25000
    	
%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00195-of-00352.parquet"}]]