Document:

EXHIBIT
4.32

 

 

TAL ADVANTAGE III LLC

Issuer

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

Indenture Trustee

 

 

SERIES 2009-1 SUPPLEMENT

 

Dated as of October 23, 2009

 

to

 

INDENTURE

 

Dated as of October 23, 2009

 

 

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

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 201.

  	
   

  	
  Designation and
  Principal Terms

  	
   

  	
  6

  
	
  Section 202.

  	
   

  	
  Authentication
  and Delivery

  	
   

  	
  8

  
	
  Section 203.

  	
   

  	
  Interest and
  Other Payments on the Series 2009-1 Notes

  	
   

  	
  8

  
	
  Section 204.

  	
   

  	
  Principal
  Payments on the Series 2009-1 Notes; Scheduled Amortization of
  Series 2009-1 Notes

  	
   

  	
  9

  
	
  Section 205.

  	
   

  	
  Amounts and
  Terms of Series 2009-1 Noteholder Commitments

  	
   

  	
  10

  
	
  Section 206.

  	
   

  	
  Taxes

  	
   

  	
  11

  
	
  Section 207.

  	
   

  	
  Increased Costs

  	
   

  	
  14

  
	
  Section 208.

  	
   

  	
  Capital
  Requirements

  	
   

  	
  16

  
	
  Section 209.

  	
   

  	
  Replacement of
  Series 2009-1 Noteholder

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  SERIES 2009-1
  SERIES ACCOUNT AND ALLOCATION AND APPLICATION OF AMOUNTS THEREIN

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 301.

  	
   

  	
  Series 2009-1
  Series Account

  	
   

  	
  17

  
	
  Section 302.

  	
   

  	
  Distributions
  from Series 2009-1 Series Account

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  ADDITIONAL
  COVENANTS; ADDITIONAL EVENTS OF DEFAULT

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 401.

  	
   

  	
  Increase in the
  Aggregate Series 2009-1 Note Existing Commitment

  	
   

  	
  20

  
	
  Section 402.

  	
   

  	
  Issuance of
  Additional Series of Notes

  	
   

  	
  20

  
	
  Section 403.

  	
   

  	
  Use of Proceeds

  	
   

  	
  20

  
	
  Section 404.

  	
   

  	
  Consent of the
  Majority of Holders

  	
   

  	
  20

  
	
  Section 405.

  	
   

  	
  United States
  Federal Income Tax Election

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  CONDITIONS OF
  CLOSING AND FUTURE LENDING

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 501.

  	
   

  	
  Conditions to
  Closing

  	
   

  	
  21

  
	
  Section 502.

  	
   

  	
  Advances on
  Series 2009-1 Notes

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 601.

  	
   

  	
  Existence

  	
   

  	
  23

  
	
  Section 602.

  	
   

  	
  Authorization

  	
   

  	
  23

  
	
  Section 603.

  	
   

  	
  No Conflict; Legal Compliance

  	
   

  	
  23

  
	
  Section 604.

  	
   

  	
  Validity and Binding Effect

  	
   

  	
  23

  

 

i

 

TABLE OF CONTENTS

 

(continued)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 605.

  	
   

  	
  Material Adverse
  Change

  	
   

  	
  24

  
	
  Section 606.

  	
   

  	
  Place of
  Business

  	
   

  	
  24

  
	
  Section 607.

  	
   

  	
  No Agreement or
  Contracts

  	
   

  	
  24

  
	
  Section 608.

  	
   

  	
  Consents and
  Approvals

  	
   

  	
  24

  
	
  Section 609.

  	
   

  	
  Margin
  Regulations

  	
   

  	
  24

  
	
  Section 610.

  	
   

  	
  Taxes

  	
   

  	
  24

  
	
  Section 611.

  	
   

  	
  Other
  Regulations

  	
   

  	
  25

  
	
  Section 612.

  	
   

  	
  Solvency and
  Separateness

  	
   

  	
  25

  
	
  Section 613.

  	
   

  	
  No Default

  	
   

  	
  26

  
	
  Section 614.

  	
   

  	
  Litigation and
  Contingent Liabilities

  	
   

  	
  26

  
	
  Section 615.

  	
   

  	
  Title; Liens

  	
   

  	
  26

  
	
  Section 616.

  	
   

  	
  Subsidiaries

  	
   

  	
  26

  
	
  Section 617.

  	
   

  	
  No Partnership

  	
   

  	
  26

  
	
  Section 618.

  	
   

  	
  Pension and
  Welfare Plans

  	
   

  	
  26

  
	
  Section 619.

  	
   

  	
  Ownership of the
  Issuer

  	
   

  	
  26

  
	
  Section 620.

  	
   

  	
  Security
  Interest Representations.

  	
   

  	
  26

  
	
  Section 621.

  	
   

  	
  Tax Election of
  the Issuer

  	
   

  	
  28

  
	
  Section 622.

  	
   

  	
  Survival of
  Representations and Warranties

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 701.

  	
   

  	
  Ratification of
  Indenture

  	
   

  	
  28

  
	
  Section 702.

  	
   

  	
  Counterparts

  	
   

  	
  28

  
	
  Section 703.

  	
   

  	
  Governing Law

  	
   

  	
  28

  
	
  Section 704.

  	
   

  	
  Amendments and
  Modifications.

  	
   

  	
  28

  
	
  Section 705.

  	
   

  	
  Consent to
  Jurisdiction

  	
   

  	
  29

  
	
  Section 706.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  29

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
  Form of
  Series 2009-1 Note

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE
  1

  	
  Percentage of Minimum
  Targeted Principal Balance Series 2009-1 Notes

  	
   

  	
   

  
	
  SCHEDULE 2

  	
  Commitments

  	
   

  	
   

  
						

 

ii

 

This SERIES 2009-1
SUPPLEMENT, dated as of October 23, 2009 (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”).

 

Each party agrees as follows for the benefit of the other party 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)            prior
to the Conversion Date, four and one quarter of one percent (4.25%); or

 

 

(ii)           on
or after the Conversion Date, five and three quarters of one percent (5.75%).

 

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 higher of (a) the
Prime Rate and (b) the Federal Funds Rate plus 0.50% per annum.

 

“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 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.

 

“Closing Date” means October 26, 2009.

 

“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.

 

2

 

“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, or (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 rate at which deposits of
Dollars are being offered to such lender in the London interbank market does
not accurately reflect the cost to such Series 2009-1 Noteholder (or any
of its assignees or participants) of making, funding or maintaining any Series 2009-1
Advance for such Interest Accrual Period, 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.

 

“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.

 

3

 

“Indenture” means the Indenture, dated
as of October 23, 2009 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 last 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 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.

 

“Majority of Holders” means, with respect to the Series 2009-1
Notes, either (A) if there are fewer than three Series 2009-1
Noteholders, one or more Series 2009-1 Noteholders holding Notes
constituting one hundred percent (100%) of the then Aggregate Series 2009-1
Principal Balance, or (B) at all times not covered by clause (A), one or
more Series 2009-1 Noteholders holding Notes constituting more than fifty
percent (50%) of the then Aggregate Series 2009-1 Principal Balance.

 

“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 (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.

 

4

 

“Prime Rate” means the rate announced
by Wachovia 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.

 

“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 the fourth (4th) anniversary of the Conversion Date.

 

“Series 2009-1 Interest Payment” means for each Payment Date,
an amount equal to the sum for each Series 2009-1 Advance outstanding for
each day during the Interest Accrual Period ending on the preceding day of  the product of (i) the principal amount of such Series 2009-1
Advance, (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 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 Related Group
Addition Notice (as such term is defined in the Series 2009-1 Note
Purchase Agreement), Assignment and Acceptance (as such term is defined in the Series 2009-1
Note Purchase Agreement)) or Increase Letter (as such term is defined in the Series 2009-1
Note Purchase Agreement).

 

“Series 2009-1 Note Purchase Agreement” means the Note
Purchase Agreement, dated as of October 23, 2009, among the Issuer, the
initial Series 2009-1 Noteholder and various financial institutions from
time to time, as such agreement may be amended or restated from time to time.

 

5

 

“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 all Series 2009-1
Advances made by such Series 2009-1 Noteholder on or subsequent to the
Closing Date, over (y) the cumulative amount of all principal payments
(including Prepayments) actually paid to such Series 2009-1 Noteholder
subsequent to the Closing 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 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.

 

(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.

 

“WBNA” means Wachovia Bank, N.A.

 

ARTICLE II

 

Creation
of the Series 2009-1 Notes; Modification of Indenture

 

Section 201.           Designation
and Principal Terms.(a) (a)  There
is hereby 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”.  The Series 2009-1 Notes will initially
be issued in the initial aggregate maximum principal

 

6

 

balance of up to Seventy-Five Million Dollars ($75,000,000).  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,
commencing January 20, 2010 or, if such day is not a Business Day, the
immediately following Business Day (each a “Payment Date”).

 

(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.

 

(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.
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.

 

7

 

Section 202.           Authentication and Delivery.

 

(a)           Execution
and Delivery.  On the Closing 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 (i) such Series 2009-1 Noteholder must obtain the Issuer’s prior
written consent authorizing such Series 2009-1 Noteholder to contact a
proposed purchaser, transferee or 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 a fully executed
Investment Letter from such Series 2009-1 Noteholder and the applicable
purchaser, transferee or assignee; (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) 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
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 

 

8

 

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 part I of Section 302 hereof, or (ii) if
an 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
purposes in accordance with the provisions of part (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 

 

9

 

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.

 

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 Closing 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 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, 

 

10

 

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 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 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, request that the aggregate Series 2009-1
Note Existing Commitments be increased by an aggregate amount not to exceed
Seventy Million Dollars ($70,000,000), by (a) increasing the commitment of
one or more then existing Series 2009-1 Noteholders that have agreed to
such increase and/or (b) by issuing additional Series 2009-1 Notes to
adding one or more commercial banks, finance companies or other Persons
acceptable to the Issuer (each an “Additional Series 2009-1 Noteholder”)
with a Series 2009-1 Note Existing Commitment in an amount agreed to by
any such Additional Series 2009-1 Noteholder.  Any such increase in the aggregate Series 2009-1
Note Existing Commitment made in accordance with this Section 205(d) shall
be effective three Business Days after the date on which Issuer has delivered
to the Administrative Agent and the Indenture Trustee the Increase Letter (as
such term is defined in the Series 2009-1 Note Purchase Agreement) (in the
case of an increase in the Commitments of an existing Series 2009-1
Noteholder) or Related Group Additional Notice (as such term is defined in the Series 2009-1
Note Purchase Agreement) (in the case of the addition of an Additional  Series 2009-1 Noteholders).  If the Issuer pays or agrees to pay to any Series 2009-1
Noteholder or Additional Series 2009-1 Noteholder, any increased
Commitment Fee and/or Applicable Margin, then the terms of this Supplement
shall automatically be amended with the effect that the amount of such
increased Commitment Fee and/or Applicable Margin shall be payable on a
prospective basis  to all then existing Series 2009-1
Noteholders.

 

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 

 

11

 

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, 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 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 (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”).

 

(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.

 

12

 

(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 Internal Revenue Code of 1986, as amended, 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 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 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),
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 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 

 

13

 

which has the effect of causing such Indemnified Party to become
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
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.

 

(i)            If an
Indemnified Party receives any refund or is entitled to a Tax credit with
respect to 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 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 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, 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 

 

14

 

requirements) after the Closing Date in or in
the interpretation of any law or regulation (including any law or regulation 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) or (ii) the
compliance by an Indemnified Party with any guideline or request promulgated or
made after the Closing Date from 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), 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 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 Series 2009-1
Noteholder’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.

 

15

 

Section 208.           Capital Requirements.

 

If any Indemnified Party shall determine that (i) any change after
the Closing Date in any law, rule, regulation or guideline adopted pursuant to
or arising out of the July 1988 report of the Basel Committee on Banking
Regulations and Supervisory Practices entitled “International Convergence of
Capital Measurement and Capital Standards”, or (ii) the adoption after the
date hereof of any other law or requirement of law 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 request or directive regarding capital adequacy of any Governmental
Authority, 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
such adoption, change or compliance (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
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 Series 2009-1
Noteholder’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.

 

16

 

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 or  Section 207 or Section 208 hereof, (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);

 

(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

 

17

 

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 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;

 

18

 

(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;

 

(g)       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;

 

(d)       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

 

(e)       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.

 

(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 

 

19

 

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 Series 2009-1
Supplement and related Series 2009-1 Transaction Documents remain in full
force and effect, the Issuer shall 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 and (iii) 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.

 

20

 

ARTICLE V

 

Conditions
of Closing and Future Lending

 

Section 501.           Conditions to Closing.  The
effectiveness of this Supplement is subject to the condition precedent that the
Indenture Trustee and the Administrative Agent (other than with respect to the
items listed in clause (a) below) shall have received all of the
following, each duly executed and dated on or as of the Closing Date, in form
and substance satisfactory to each of the Series 2009-1 Noteholders.

 

(a)           Series 2009-1
Note.  A separate Series 2009-1
Note executed by the Issuer in favor of each Series 2009-1 Noteholder in
the stated principal amount equal to the Series 2009-1 Note Initial
Commitment of each such Series 2009-1 Noteholder.

 

(b)           Certificate(s) of
Secretary or Assistant Secretary. 
Separate certificates executed by the corporate secretary or assistant
secretary of TAL and the Issuer, each dated the Closing Date, certifying (i) that
the respective company has the authority to execute and deliver, and perform
its respective obligations under each of the Series 2009-1 Transaction
Documents to which it is a party, and (ii) that attached are true, correct
and complete copies of the organizational documents, authorizations and
incumbency certificates in form and substance satisfactory to the Series 2009-1
Noteholders as to such matters as they shall require.

 

(c)           Security
Documents.  The Indenture, the
Contribution and Sale Agreement and the Management Agreement, each in form and
substance satisfactory to the Series 2009-1 Noteholders, shall have been
executed and delivered by the Issuer and all other parties thereto and filed in
the appropriate jurisdictions, together with all Uniform Commercial Code
financing statements and documents of similar import in other jurisdictions
specified in Section 2.03(a) of the Contribution and Sale Agreement.

 

(d)           Opinions
of Counsel.  Opinions of Counsel to
the Issuer, as to perfection of the Indenture Trustee’s security interest in
the Collateral and enforceability of the Transaction Documents and from counsel
to the Issuer, Seller and Manager, in form and in substance satisfactory to the
Administrative Agent, the Series 2009-1 Noteholders, as to such matters as
they shall require, including without limitation regarding true sale and
non-consolidation matters.

 

(e)           Certificate
as to Containers.  An Officer’s
Certificate from the Manager certifying that it is managing all of the
Containers in accordance with the Management Agreement.

 

(f)            Series 2009-1
Transaction Documents.  The Series 2009-1
Transaction Documents shall have been duly executed and delivered and all of
the conditions precedent therein have either been satisfied or waived by the
Administrative Agent.

 

(g)           Insurance.  The Issuer shall have delivered certificates
evidencing the insurance coverage described in Section 3.9 of the
Management 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 

 

21

 

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.

 

(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.

 

22

 

ARTICLE VI

 

Representations
and Warranties

 

The Issuer hereby represents and warrants (as of the Closing 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.

 

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.

 

23

 

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).

 

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 

 

24

 

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 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.

 

25

 

Section 613.           No Default. 
No Event of Default or Early Amortization Event has occurred and is
continuing.  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.

 

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.

 

26

 

(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 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 

 

27

 

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.

 

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 

 

28

 

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 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.

 

[Signature page follows.]

 

29

 

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:

  	
   

  

 

SERIES
2009-1 SUPPLEMENT

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL

  ASSOCIATION,

  not individually but solely as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

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
Indenture, dated as of October 23, 2009 (as amended, restated or otherwise
modified from time to time, the “Indenture”) and the Series 2009-1
Supplement, dated as of October 23, 2009 (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 Seventy-Five Million Dollars ($75,000,000)
or, under certain circumstances, up to One Hundred Seventy Million Dollars
($170,000,000), 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.

 

2

 

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.

 

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.

 

3

 

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.

 

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:

  	
   

  

 

 

SCHEDULE 1

 

Percentage of Minimum Targeted Principal Balance

Series 2009-1 Notes

 

 

	
  Period
  Following

  Conversion

  	
   

  	
  Target Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  0

  	
   

  	
  100.00

  	
  %

  
	
  1

  	
   

  	
  99.17

  	
  %

  
	
  2

  	
   

  	
  98.33

  	
  %

  
	
  3

  	
   

  	
  97.50

  	
  %

  
	
  4

  	
   

  	
  96.67

  	
  %

  
	
  5

  	
   

  	
  95.83

  	
  %

  
	
  6

  	
   

  	
  95.00

  	
  %

  
	
  7

  	
   

  	
  94.17

  	
  %

  
	
  8

  	
   

  	
  93.33

  	
  %

  
	
  9

  	
   

  	
  92.50

  	
  %

  
	
  10

  	
   

  	
  91.67

  	
  %

  
	
  11

  	
   

  	
  90.83

  	
  %

  
	
  12

  	
   

  	
  90.00

  	
  %

  
	
  13

  	
   

  	
  89.17

  	
  %

  
	
  14

  	
   

  	
  88.33

  	
  %

  
	
  15

  	
   

  	
  87.50

  	
  %

  
	
  16

  	
   

  	
  86.67

  	
  %

  
	
  17

  	
   

  	
  85.83

  	
  %

  
	
  18

  	
   

  	
  85.00

  	
  %

  
	
  19

  	
   

  	
  84.17

  	
  %

  
	
  20

  	
   

  	
  83.33

  	
  %

  
	
  21

  	
   

  	
  82.50

  	
  %

  
	
  22

  	
   

  	
  81.67

  	
  %

  
	
  23

  	
   

  	
  80.83

  	
  %

  
	
  24

  	
   

  	
  80.00

  	
  %

  
	
  25

  	
   

  	
  79.17

  	
  %

  
	
  26

  	
   

  	
  78.33

  	
  %

  
	
  27

  	
   

  	
  77.50

  	
  %

  
	
  28

  	
   

  	
  76.67

  	
  %

  
	
  29

  	
   

  	
  75.83

  	
  %

  
	
  30

  	
   

  	
  75.00

  	
  %

  
	
  31

  	
   

  	
  74.17

  	
  %

  
	
  32

  	
   

  	
  73.33

  	
  %

  
	
  33

  	
   

  	
  72.50

  	
  %

  
	
  34

  	
   

  	
  71.67

  	
  %

  
	
  35

  	
   

  	
  70.83

  	
  %

  
	
  36

  	
   

  	
  70.00

  	
  %

  
	
  37

  	
   

  	
  69.17

  	
  %

  
	
  38

  	
   

  	
  68.33

  	
  %

  

 

1

 

	
  Period
  Following

  Conversion

  	
   

  	
  Target Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  39

  	
   

  	
  67.50

  	
  %

  
	
  40

  	
   

  	
  66.67

  	
  %

  
	
  41

  	
   

  	
  65.83

  	
  %

  
	
  42

  	
   

  	
  65.00

  	
  %

  
	
  43

  	
   

  	
  64.17

  	
  %

  
	
  44

  	
   

  	
  63.33

  	
  %

  
	
  45

  	
   

  	
  62.50

  	
  %

  
	
  46

  	
   

  	
  61.67

  	
  %

  
	
  47

  	
   

  	
  60.83

  	
  %

  
	
  48

  	
   

  	
  60.00

  	
  %

  
	
  49

  	
   

  	
  0.00

  	
  %

  

 

2

 

SCHEDULE 2

 

	
  Series 2009-1

  Noteholder

  	
   

  	
  Commitment on

  Closing Date

  	
   

  	
  Percentage of

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Bank, N.A.

  	
   

  	
  $

  	
  75,000,000

  	
   

  	
  100

  	
  %

  
							

 

iEXHIBIT 4.33

 

MANAGEMENT AGREEMENT

 

 

between

 

TAL INTERNATIONAL CONTAINER CORPORATION

Manager

 

and

 

TAL ADVANTAGE III LLC

Owner

 

 

Dated as of

October 23, 2009

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Appointment
  of the Manager

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Appointment
  of Manager

  	
  1

  
	
   

  	
  2.2

  	
  Appointment
  of Subservicers

  	
  2

  
	
   

  	
  2.3

  	
  Retention
  of Title

  	
  2

  
	
   

  	
  2.4

  	
  Exclusive
  Representation of Owner

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Manager’s
  Services with Respect to the Managed Containers

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Non-Discrimination

  	
  2

  
	
   

  	
  3.2

  	
  Terms
  of Lease Agreements

  	
  3

  
	
   

  	
  3.3

  	
  Leasing

  	
  3

  
	
   

  	
  3.4

  	
  Maintenance
  and Repair

  	
  4

  
	
   

  	
  3.5

  	
  Compliance
  With Law

  	
  4

  
	
   

  	
  3.6

  	
  Markings

  	
  4

  
	
   

  	
  3.7

  	
  Casualty
  Losses; Sale of Managed Containers; Lost or Destroyed Containers

  	
  4

  
	
   

  	
  3.8

  	
  Sales
  of Managed Containers

  	
  5

  
	
   

  	
  3.9

  	
  Insurance

  	
  5

  
	
   

  	
  3.10

  	
  Books
  and Records; Inspection of Books and Records; Inspection of Managed
  Containers; Back-up Tape

  	
  6

  
	
   

  	
  3.11

  	
  Concentration
  Account and Payment Instructions

  	
  7

  
	
   

  	
  3.12

  	
  Identification
  of Funds in the Concentration Account

  	
  8

  
	
   

  	
  3.13

  	
  Transfer
  of Funds Received by the Manager

  	
  8

  
	
   

  	
  3.14

  	
  Time
  and Attention to Duties

  	
  8

  
	
   

  	
  3.15

  	
  OFAC

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Reporting
  Obligations of the Manager

  	
  9

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Reports
  Due from the Manager

  	
  9

  
	
   

  	
  4.2

  	
  Manager
  Advances

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Deposits
  to Trust Account; Payment of Management Fee

  	
  11

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Deposits

  	
  11

  
	
   

  	
  5.2

  	
  Compensation
  of Manager

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Term

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Reserved

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Representations
  and Warranties; Covenants

  	
  13

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Manager
  Representations

  	
  13

  
	
   

  	
  8.2

  	
  Owner
  Representations

  	
  15

  

 

i

 

TABLE
OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Covenants
  of the Manager

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Manager
  Default

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Manager
  Default

  	
  17

  
	
   

  	
  9.2

  	
  Remedies

  	
  20

  
	
   

  	
  9.3

  	
  Transfer
  of Managed Containers

  	
  20

  
	
   

  	
  9.4

  	
  Power
  of Attorney

  	
  21

  
	
   

  	
  9.5

  	
  Owner
  Power of Attorney

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  No
  Partnership

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  No
  Warranties

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Non-Exclusivity

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Assignment

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Indemnification

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  By
  the Owner

  	
  23

  
	
   

  	
  14.2

  	
  By
  the Manager

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  No
  Bankruptcy Petition Against the Owner

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Notices

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Governing
  Law; Consent to Jurisdiction

  	
  26

  
	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  Governing
  Law

  	
  26

  
	
   

  	
  17.2

  	
  Consent
  to Jurisdiction

  	
  26

  
	
   

  	
  17.3

  	
  Waiver
  of Jury Trial

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Successors
  and Assigns

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Severability

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  Entire
  Agreement; Amendments; Waiver

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Counterparts

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Intended Third Party Beneficiaries

  	
  27

  

 

ii

 

Table of Contents

(continued)

	
   

  	
   

  	
   

  
	
  EXHIBIT A – MANAGER REPORT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B – AFFILIATES OF MANAGER AND APPROVED SUBSERVICERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C – CREDIT AND COLLECTION POLICY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT D – AGREED UPON PROCEDURES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  E – DEPRECIATION POLICY

  	
   

  	
   

  

 

iii

 

This MANAGEMENT
AGREEMENT, dated as of October 23, 2009 (as amended, modified or
supplemented from time to time in accordance with the terms hereof, this
“Agreement”), between TAL ADVANTAGE III LLC, a limited liability company
organized and existing under the laws of the State of Delaware (together with
its successors and permitted assigns, the “Owner” or the “Issuer”) and TAL
INTERNATIONAL CONTAINER CORPORATION, a Delaware corporation (together with its
successors and permitted assigns, “Manager”).

 

W I T N E S S E T H

 

WHEREAS, the Owner is the
owner of the Managed Containers; and

 

WHEREAS, the Manager is
in the business of leasing Containers to shipping lines and other container
users, and is experienced in administration of a container leasing business;
and

 

WHEREAS, the Owner wishes
to contract with the Manager for the purposes of (i) managing the
operation and leasing of the Managed Containers, and (ii) performing other
administrative duties for the Owner; and

 

WHEREAS, the Manager has
agreed to manage the Owner’s business including the Managed Containers and to
operate and lease out the Managed Containers as part of the Manager’s Container
Fleet and to perform other administrative duties for the Owner; and

 

NOW, THEREFORE, in
consideration of the premises and the mutual representations, warranties,
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

 

Section 1.                                            Definitions. 
Terms capitalized but not defined herein shall have the meanings
ascribed thereto in Appendix A to that certain Indenture, dated as of
October 23, 2009, between the Issuer and Wells Fargo Bank, National
Association, as Indenture Trustee (as amended, restated or otherwise modified
from time to time in accordance with the terms thereof, 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.

 

Section 2.                                            Appointment of the Manager.

 

2.1                                 Appointment of Manager. 
The Owner hereby exclusively (i) appoints the Manager as its agent
to manage and administer its business, and to manage the Managed Containers,
including performance of all of the Owner’s duties and observance of all of the
Owner’s obligations under the Indenture and the other Transaction Documents to
which it is a party, and (ii) grants to the Manager the authority on
behalf of the Owner to enter into, administer, enforce and terminate Lease
Agreements relating to the Managed Containers, to sell, transfer or otherwise
dispose of and enforce the Owner’s rights with respect to the Managed
Containers, to collect monies and make disbursements on behalf of the Owner,
and to manage its finances, all such activities described in clauses
(i) and (ii) to be conducted on the terms and subject to the
conditions set forth herein.  The Manager
hereby agrees to so manage the Managed Containers and administer the Owner’s
business, including performance of all of the Owner’s duties and observance of
all of the Owner’s obligations under the Indenture and the other 

 

 

Transaction Documents to
which the Owner is a party, upon the terms and conditions herein; provided, however, that nothing contained
in this Agreement or any other Transaction Document shall be or shall be
construed to be either (x) an express or implied guaranty by the Manager
of the Notes or any other Outstanding Obligations incurred by the Owner or
(y) an express or implied agreement to make payments on the Notes or other
Outstanding Obligations.

 

2.2                                 Appointment of Subservicers. 
In performing its duties hereunder, the Manager may, subject to the
restrictions set forth herein, contract with any of its Affiliates listed on
Exhibit B hereto to provide the services required to be rendered by the
Manager hereunder (each resulting agreement, a “Subservicing Agreement,” and
each Affiliate that is a party to such Subservicing Agreement, a
“Subservicer”); provided, however,
that (i) the Manager shall be solely responsible for the receipt and
processing of all Container Revenues, Sales Proceeds, Casualty Proceeds and
other Collections, (ii) each Subservicing Agreement (but not other
agreements to which the Manager may be a party) must expressly provide that
such Subservicing Agreement may be terminated by the Requisite Global Majority
if a Manager Default has occurred and is then continuing, and (iii) the
Manager shall be solely responsible for the payment to each such Subservicer of
any and all compensation, expenses and indemnities to each such
Subservicer.    The Manager will not
contract with any other Person to provide any of the services to be rendered by
the Manager to the Owner hereunder without the prior written consent of the
Requisite Global Majority. 
Notwithstanding any provision of such services by its Subservicers, the
Manager shall remain obligated and liable to the Owner, the Indenture Trustee,
each Series Enhancer (so long as such Series Enhancer is the Control
Party for a Series of Outstanding Notes) and the Noteholders for the
management and the administration of the Managed Containers in accordance with
the provisions of this Agreement, without diminution of such obligation or
liability by virtue of such agreements or arrangements with its Subservicers,
to the same extent and under the same terms and conditions as if the Manager
alone were servicing and administering the Managed Containers.

 

2.3                                 Retention of Title. 
The Owner shall at all times retain full legal and equitable title to
the Managed Containers, notwithstanding the management thereof by Manager
hereunder.  Manager shall not make
reference to, or otherwise deal with or treat, the Managed Containers in any
manner except in conformity with this Agreement.

 

2.4                                 Exclusive Representation of Owner. 
Except as otherwise provided in this Agreement, during the term of this
Agreement, the Manager will be the exclusive agent of the Owner with respect to
the Owner’s business and with respect to the management of the Managed
Containers and the Owner agrees that it will not engage any other Person to
perform, or pay any consideration to any other Person for performing, the same
or similar services with respect to the owner’s business or with respect to the
Managed Containers.

 

Section 3.                                            Manager’s Services with Respect to the
Managed Containers.

 

3.1                                 Non-Discrimination. 
In performing its duties pursuant to this Agreement, the Manager shall
exercise substantially the same degree of skill and care with which it
services, leases and manages containers held for its own account and consistent
with the reasonable commercial practices of a prudent container lessor engaged
in the administration, leasing and servicing of shipping containers (such
standard of care, the “Servicing Standard”). 
Without 

 

2

 

limiting the foregoing,
the Manager shall not knowingly discriminate in favor of or against the Managed
Containers in connection with the management and operation of the Container
Fleet.

 

3.2                                 Terms of Lease Agreements. 
Without prejudice to the rights and title of the Owner with respect to
the Managed Containers, the Manager may arrange for the leasing of the Managed
Containers pursuant to Lease Agreements that are in its own name as principal,
and not as agent of the Owner; provided,
however, that it is understood and agreed that the Manager is acting
thereunder solely as agent of the Owner. The Manager shall have sole discretion
to determine to whom to lease, sell or otherwise dispose of the Managed
Containers, to determine the per diem rates and other charges to be paid and
all other terms and conditions of the Lease Agreements and to renegotiate,
amend and consent to waivers under such Lease Agreements.  The Manager shall invoice and collect from
lessees all rental payments and other amounts due under and pursuant to the
Lease Agreements relating to the Managed Containers.

 

3.3                                 Leasing.  The Manager
shall operate and lease the Managed Containers as part of its Container Fleet
and shall perform all managerial and administrative functions and provide or
arrange for the provision of all services and documentation of any nature which
it considers necessary or desirable for such operation and leasing.  The Manager shall, in compliance with the Servicing
Standard, take all actions the Manager deems appropriate to ensure compliance
by the Lessees with the terms of any Lease Agreement, including the exercise of
the rights of the lessor thereunder.

 

3.3.1                        With respect to the Managed Containers,
the Manager shall use reasonable efforts to include in the terms of lease
agreements with lessees a provision requiring lessees to comply with Applicable
Law affecting the Managed Containers and their use, operation and storage while
the Managed Containers are on-hire and the Manager shall use reasonable efforts
to include in the terms of depot agreements with third-party storage and repair
depots a provision requiring the depots to comply with Applicable Law affecting
the Managed Containers while the Managed Containers are off-hire and stored in
the depot.

 

3.3.2                        The Manager will monitor and record the
status of the Managed Containers in the same manner as for containers held for
its own account, i.e., for each Managed Container it will record the on-hire
location, the date of on-hire and the lessee to whom the Managed Container is
on-hire, the off-hire date of the Managed Container and the off-hire location,
and the depot where the Managed Container is located while off-hire.

 

3.3.3                        The Manager shall follow the Credit and
Collection Policy with respect to the leasing of the Managed Containers and,
subject to the terms of such Credit and Collection Policy, the Manager may, in
its sole discretion (a) determine and approve the creditworthiness of any
lessee (though the Manager makes no representation or warranty to the Owner as
to the solvency or financial stability of any lessee), (b) determine that
any amount due from any lessee is not collectible, (c) institute and
prosecute legal proceedings against a lessee as permitted by Applicable Law,
(d) terminate or cancel any Lease Agreement, (e) recover possession
of the Managed Containers from any lessee, (f) settle, compromise or
release any proceeding or claim against a lessee in the name of the Manager or,
if appropriate, in the name of the Owner, or (g) reinstate any Lease
Agreement.

 

3

 

3.3.4                        In performing its duties under this
Agreement, the Manager shall use reasonable efforts to comply with the
Concentration Limits when entering into new Lease Agreements and, in any event,
shall not, without the prior written consent of the Requisite Global Majority,
lease all, or substantially all, of the Managed Containers to an Affiliate of
the Manager or to a single lessee.

 

3.3.5                        The Manager hereby acknowledges that the
Manager and its Affiliates are holding the leases relating to the Managed
Containers (but only to the extent that such leases relate to the Managed
Containers), on behalf of, and for the benefit of, the Indenture Trustee.

 

3.4                                 Maintenance and Repair. 
The Manager shall keep, or, with respect to Managed Containers on lease,
cause the related lessee, to keep, each Managed Container (i) in good
repair and working order in a manner consistent with past practices, and
(ii) in accordance with its maintenance and repair standards for the
Container Fleet.  The Manager shall make,
or cause to be made, all necessary inspections, repairs, replacements,
additions and improvements to each Managed Container as are commercially reasonable
for the conduct of its business in accordance with the ordinary course of the
Manager’s business consistent with past practices; it being understood that it
may, in some cases, be commercially reasonable not to repair a Managed
Container.  The Manager shall institute
and prosecute claims against the manufacturers and sellers of the Managed
Containers as the Manager may consider advisable for breach of warranty, any
defect in condition, design, operation or fitness or any other nonconformity
with the terms of manufacture.  The
Manager shall have no liability to the Owner for any such breach of any
manufacturer’s or seller’s or any other Person’s warranty or for any such
defect in condition, design, operation or fitness or any other nonconformity
with the terms of manufacture.  The
Manager shall at all times use the Managed Containers, and require the related
lessee to use the Managed Containers, in accordance with good operating
practices.  The Manager shall not
knowingly use (or knowingly permit the lessees to use) the Containers for storage
or transportation of contraband in violation of applicable United States law.

 

3.5                                 Compliance With Law. 
The Manager will comply, in all material respects, with all acts, rules,
regulations, orders, decrees and directions of any governmental authority that
are applicable to the Lease Agreements and the Managed Containers or any part
thereof except for any noncompliance which would not reasonably be expected to
result in a Material Adverse Change; provided, however, that the Manager may contest any act, rule,
regulation, order, decree or direction in any reasonable manner which shall not
materially and adversely affect the Noteholders or any Series Enhancer;
and provided, further, that such contests shall be in
good faith by appropriate proceedings and as to which adequate reserves in
accordance with GAAP have been established, but only so long as such
proceedings shall not, individually or in the aggregate, subject any
Series Enhancer, any Noteholder or Indenture Trustee to any civil or
criminal liability.

 

3.6                                 Markings.  The Manager
shall ensure that each Managed Container shall carry its Container
Identification Number and other markings as may be required for its operation
in marine and intermodal shipping.

 

3.7                                 Casualty Losses; Sale of Managed
Containers;  Lost or Destroyed Containers. 
If any Managed Container shall suffer a Casualty Loss while it is
subject to the terms of this 

 

4

 

Agreement, the Manager shall remit to the Trust
Account, in accordance with the provisions of Section 5.1.1 hereof, the
Casualty Proceeds (net of any expenses, taxes and reserves in respect thereof),
if any, received as a consequence of such Casualty Loss.

 

3.8                                 Sales of Managed Containers. 
The Manager shall have the ability in its sole discretion to sell or
otherwise dispose of any of the Managed Containers, subject to compliance with
the applicable provisions of Sections 404 and 606 of the Indenture.  The Manager shall remit to the Trust Account,
in accordance with the provisions of Section 5.1.1 hereof, the Sales
Proceeds (net of any expenses, taxes or reserves in respect thereof) received
as a consequence of any such sale.

 

3.9                                 Insurance.  (a) The Manager will, in a
manner consistent with its normal procedures and the Servicing Standard,
(i) effect and maintain with financially sound and reputable companies
general liability insurance, insuring the Issuer and the Indenture Trustee (for
the benefit of the Noteholders) against liability for personal injury and
property damage liability, caused by, or relating to, the Managed Containers
then off-lease, with such levels of coverage and deductibles that are
consistent with the levels in effect as of the Closing Date, and (ii) have
a standard form of lease agreement that requires each lessee to maintain
(1) physical damage insurance in an amount not less than the stipulated
loss value agreed to by the lessee of the Managed Containers on lease to it,
and (2) comprehensive general liability insurance, including contractual liability,
against claims for bodily injury or death and property damage.  Each of the Indenture Trustee and the
Administrative Agent reserve the right (but shall not have the obligation) to
obtain, at the direction of the Requisite Global Majority and at the Manager’s
expense, insurance of the type described in clause (i) above if the
Manager shall fail to obtain such coverage in the specified amounts.  However, the Indenture Trustee or the
Administrative Agent (as applicable) will notify the Manager prior to obtaining
such insurance.

 

(b)                                 All insurance maintained by the Manager
for loss or damage of the Managed Containers shall provide that losses, if any,
shall be payable to the Issuer and the Indenture Trustee or its designee as an
additional loss payee and the Manager shall utilize its reasonable efforts to
have all checks relating to any such losses delivered promptly to the Indenture
Trustee.  The Issuer and the Indenture
Trustee shall be named as additional insureds with respect to all such
liability insurance maintained by the Manager (or on behalf of the Manager by a
direct or indirect parent company thereof). 
The Manager shall pay the premiums with respect to all such insurance
and deliver to Indenture Trustee evidence of such insurance coverage as
contemplated by Section 4.1.4.  The
Manager shall cause to be provided to each of the Indenture Trustee and the
Administrative Agent, not less than fifteen (15) days prior to the scheduled
expiration or lapse of such insurance coverage, evidence reasonably satisfactory
to the Administrative Agent of renewal or replacement coverage.  The Manager shall use its commercially
reasonable efforts to have each insurer agree, by endorsement upon the policy
or policies issued by it or by independent instrument furnished to the Indenture
Trustee, that (i) it will give each additional insured and the loss payee
thirty (30) days’ prior written notice of the effective date of any material
alteration, cancellation or non-renewal of such policy and (ii) in the
event that the cancellation of such coverage would result in a breach of this
Section 3.9 by the Manager, it will permit the Issuer, the Administrative
Agent and/or the Indenture Trustee to make payments to effect the continuation
of coverage upon notice of cancellation due to nonpayment of premium.  Such insurance may be effected by a policy
which covers the entire 

 

5

 

Container Fleet, which policy shall include an
additional insured and loss payee endorsement with respect to the Managed
Containers in favor of the Indenture Trustee, for the benefit of the
Noteholders.

 

3.10                           Books and Records; Inspection of Books
and Records; Inspection of Managed Containers; Back-up Tape.

 

3.10.1                  The Manager shall maintain at its offices (which, as of
the Closing Date, are located at 100 Manhattanville Road, Purchase, New York
10577-2135 USA), such books and records (including computer records) with
respect to the Managed Containers as it maintains for the Container Fleet and
the leasing thereof, including a computer database including the Managed
Containers (containing sufficient information to generate the List of
Containers and the reports required to be delivered pursuant to this
Agreement), any Lease Agreements relating thereto, their lessees (if on-hire)
or location (if off-hire) and their Net Book Value.

 

3.10.2                  The Manager shall make available to the Owner, the
Indenture Trustee, the Administrative Agent and each Series Enhancer, for
inspection and copying, its books, records and reports relating to the Managed
Containers and copies of all Lease Agreements or other documents relating
thereto, all in the format which the Manager uses for its own operations.  The Person(s) desiring to conduct any
such inspection of the books, records and reports shall provide the Manager
with not less than (i) five (5) Business Days’ notice if a Manager
Default is not then continuing or (ii) one (1) Business Day’s notice
if a Manager Default shall have occurred and is then continuing, and shall
specify in such notice the matters to be addressed in such inspection.  All such inspections shall be conducted
during normal business hours and shall not unreasonably disrupt the Manager’s
business, and, subject to the foregoing, the Owner, Indenture Trustee, the
Administrative Agent or Series Enhancer, as applicable will be permitted
to discuss, with any Authorized Officer, Managing Officer or the Manager’s
independent accountants, the affairs, finances and accounts of the Manager as
they relate to the Managed Containers and this Agreement.  So long as no Manager Default, Early
Amortization Event or Event of Default is continuing, the Manager shall pay the
reasonable and documented costs and expenses incurred by such Person(s) in
conducting not more than one such inspection in any calendar year; provided, however, that the Manager and
the Administrative Agent shall coordinate such that, so long as no Manager
Default, Early Amortization Event or Event of Default is continuing, the
Manager shall not be responsible for paying for more than one inspection in
total per calendar year pursuant to (x) this Section 3.10.2,
(y) Section 8.3.6 and (z) the Master Repurchase Agreement, dated
as of September 17, 2009, among Wachovia Bank, National Association, as
buyer, Wells Fargo Securities, LLC, as agent, TAL International Container
Corporation, as seller, and TAL International Group, Inc, as guarantor.  In addition, the Manager shall pay the
reasonable and documented costs and expenses incurred by such Person(s) in
conducting any such examinations during the continuation of any of a Manager
Default, Early Amortization Event or Event of Default.

 

The Manager shall,
subject to the terms of the related Lease Agreements and depot agreements, make
the Managed Containers available for inspection to the Indenture Trustee and
the Administrative Agent; provided, however,
that, so long as no Manager Default, Early Amortization Event or Event of
Default is continuing, not more than one such inspection shall occur in any
twelve month period.  So long as no
Manager Default, Early Amortization 

 

6

 

Event or Event of Default
is continuing, the Manager shall pay the reasonable and documented costs and
expenses of such Persons in conducting not more than one such inspection in any
calendar year.

 

The Owner acknowledges
that the Manager uses certain software under license from unrelated third
parties and that the Manager shall grant the Owner, the Indenture Trustee, the
Administrative Agent and each Series Enhancer access to the computer
systems and data contained therein, but not copies of the software itself.

 

3.10.3                  The Manager shall, in accordance with its then
existing disaster recovery plan, deliver periodically (but no less frequently
than weekly) to an independent data custodian (the “Data Custodian”) reasonably
satisfactory to the Administrative Agent and each Series Enhancer an
electronic copy (the “Tape”) of the following information, as of the most
recently available date, with respect to each of the Managed Containers:
(i) the Container Identification Number, (ii) if then on-lease, the
name of the lessee and the date of the related Lease Agreement, and
(iii) if then off-lease, the name and location of the depot in which
stored.  The Manager shall cause such
Data Custodian to make the most recent Tape available to the Owner, the
Indenture Trustee, the Administrative Agent and any Series Enhancer for
inspection upon reasonable notice to such Data Custodian and subject to the
Data Custodian’s customary security requirements; provided, however, that, so long as no Manager Default,
Early Amortization Event or Event of Default is continuing, not more than one
such inspection shall be made in any calendar year.  During the continuation of any of a Manager
Default, Early Amortization Event or Event of Default, the Manager shall pay
the reasonable and documented costs and expenses incurred by such
Person(s) in conducting all inspections made in accordance with the
provisions of this Section 3.10.3. 
Upon the termination of this Agreement pursuant to Section 9.2, the
Manager shall deliver or authorize the Data Custodian to deliver to each of the
Administrative Agent and the Indenture Trustee a copy of the Tape containing
information with respect to the Managed Containers as of such date.

 

3.10.4                  Liens.  The Manager
agrees not to create, incur, assume or grant, or suffer to exist, directly or
indirectly, any lien, security interest, pledge or hypothecation of any kind on
or concerning the Managed Containers, the related Lease (to the extent related
to a Managed Container), title thereto or any interest therein or in this
Agreement to any Person other than the Owner, except for Permitted
Encumbrances.  The Manager will promptly
take or cause to be taken such actions as may be necessary to discharge any
such lien that arises by, through or under the actions of the Manager in
violation of this Section 3.10.4.

 

3.11                           Concentration Account and Payment
Instructions.  The Manager shall maintain the Concentration
Account.  The Manager shall instruct all
lessees to submit all payments on the Leases directly to the Concentration
Account (or to a post office box, a lockbox or Collection Account (as defined
in the Intercreditor Agreement) from which the applicable payment items will be
removed and, within one week after receipt, deposited in the Concentration
Account).  The Manager shall not grant
any lien or encumbrance in the Concentration Account or any Collection Account
(as defined in the Intercreditor Agreement) to any Person other than the Lien
created pursuant to the Intercreditor Agreement.

 

7

 

3.12                           Identification of Funds in the
Concentration Account.  Weekly (or more frequently at
the Manager’s option) beginning with the first full calendar week following the
Closing Date, the Manager shall identify all Container Revenues, Sales Proceeds
or Casualty Proceeds received in the Concentration Account during the preceding
week as relating to either a Managed Container (including any advance payments
of rentals for future Collection Periods) or another container managed by the
Manager.  Any such Container Revenues,
Sales Proceeds or Casualty Proceeds that have been identified as relating to a
Managed Container shall be transferred by the Manager to the Trust Account in
accordance with the procedures outlined in Section 5.1 hereof.  Prior to such transfer to the Trust Account,
all Container Revenues, Sales Proceeds and Casualty Proceeds relating to a
Managed Container received, or held by, the Manager shall be deemed to be held
by the Manager in trust for the benefit of Indenture Trustee.

 

3.13                           Transfer of Funds Received by the Manager. 
If, notwithstanding the payment instructions given by the Manager to a
lessee in the monthly invoice, lease payments or other amounts in respect of
the Managed Containers are received directly by the Manager, the Manager agrees
to hold any such lease payments or other amounts in trust and, within two (2) Business
Days after receipt, transmit and deliver to the Concentration Account (or a
related post office box or lockbox), in the form received, all cash, checks and
other instruments or writings for the payment of money so received by the
Manager.

 

3.14                           Time and Attention to Duties. 
The Manager shall devote such time and attention to the performance of
its duties hereunder as is reasonably necessary, it being understood that the
Manager shall not be required to devote all of its time or attention to the
performance of such duties, it being further understood that the Manager
manages, and may in the future manage, containers other than the Managed
Containers, either for third parties or for its own account, and may, as well,
conduct business unrelated to managing containers.  Nothing in this Agreement shall be construed
to prohibit the Manager from performing its obligations to owners of other
containers or from engaging in such (or any other) business activity.

 

3.15                           OFAC.  The Manager
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 Managed 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.  The Manager will, immediately upon obtaining
knowledge thereof, notify the Administrative Agent of the leasing, or
subleasing, of a Managed Container to, or other use of a Managed Container by,
a Sanctioned Person.  The Manager will
allow each of the Indenture Trustee, the Deal Agent and each Noteholder to
conduct, at the expense of the Issuer, on not more than one occasion during any
twelve (12) month period and in conjunction with the examination referred to in
the first paragraph of Section 3.10.2, an audit of the screening and
monitoring process employed by the Manager to ensure compliance during the most
recently completed twelve (12) month period with the laws, rules and
regulations promulgated or imposed by OFAC. 
The Manager will, immediately upon obtaining knowledge thereof, notify
the Deal Agent of the leasing, or subleasing, of a Container to, or other use
of a Container by, a Sanctioned Person.

 

8

 

Section 4.                                            Reporting Obligations of the Manager.

 

4.1                                 Reports Due from the Manager.

 

4.1.1                        Financial Statements. 
The Manager will maintain the Owner’s financial books and records and
prepare the Owner’s financial statements. 
The Manager will deliver to the Indenture Trustee, the Rating Agencies,
the Administrative Agent and each Series Enhancer the financial statements
required to be delivered to the Indenture Trustee pursuant to Section 625
of the Indenture.  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
quarterly financial statements, the absence of year-end adjustments.

 

4.1.2                        Manager Reports. 
On or prior to each Determination Date, the Manager shall deliver to the
Owner, the Administrative Agent, the Indenture Trustee and each Hedge
Counterparty, a report as to deposits into and instructions for payments out of
the Trust Account, substantially in the form of Exhibit A hereto
(each such report, the “Manager Report”), which report shall be certified by
the chief financial officer, controller, treasurer or other financial officer
of the Manager with primary responsibility for matters arising under this
Agreement or another authorized signatory acceptable to the Administrative
Agent.  Each such Manager Report shall
also include (a) evidence of the Manager’s compliance with the financial
covenants set forth in Sections 9.1.9, 9.1.10 and 9.1.11 hereof, which
calculations shall be based on the most recently certified quarterly financial
information, (b) accounts receivable agings, (c) top-25 lessee
concentrations, (d) a listing of the number and type of Managed Containers
then owned by the Issuer, (e) the aggregate Net Book Value of the Managed
Containers, (f) the aggregate original cost of the Managed Containers, (g) utilization
rates for both the Managed Containers and the Container Fleet, (h) other
information regarding the Container Fleet upon the reasonable request of the
Administrative Agent or the Indenture Trustee, and (i) the calculations
required to demonstrate compliance by the Issuer with clauses (3), (4), (5) and
(6) of Section 1201 of the Indenture.

 

4.1.3                        Asset Base Certificates. 
On or prior to (i) each Determination Date, and (ii) each date
on which an advance of funds to the Issuer is to be made in accordance with the
terms of a Supplement, the Manager will deliver to the Owner, the Indenture
Trustee and the Administrative Agent, an Asset Base Certificate certified by
the chief financial officer, controller, treasurer or other financial officer
of the Manager with primary responsibility for matters arising under this
Agreement or another authorized signatory acceptable to the Administrative
Agent as of the end of the month most recently ended.

 

4.1.4                        Evidence of Insurance. 
The Manager will provide confirmation of the renewal of the insurance
required by Section 3.9 hereof annually before the expiration date of such
insurance each year, and will forward copies of all certificates evidencing
renewal, and all notices of termination or non-renewal of such insurance, to
the Indenture Trustee and the Administrative Agent promptly after receipt.

 

4.1.5                        Lessees in Container Fleet; Other Reports. 
Within one hundred twenty (120) days after the end of each fiscal year
of the Manager, the Manager shall send to the Administrative Agent a listing of
all Lessees in the Container Fleet.  The
Manager shall provide,

 

9

 

in the format which the Manager uses for its own
operations, any reports filed by the Manager with the Securities and Exchange
Commission and any other reports and information which are reasonably requested
by the Owner, the Indenture Trustee, any Series Enhancer, each Hedge
Counterparty, the Administrative Agent or the Rating Agencies provided that
such reports and information are reasonably available from the books and
records of the Owner and can be generated by the Manager’s then existing data
processing system.

 

4.1.6                        Independent Accountant’s Report. 
The Manager shall, at its sole cost and expense, deliver to the Issuer,
the Administrative Agent, the Indenture Trustee, and each Series Enhancer
a report from a firm of nationally recognized independent certified public
accountants, who may also render other services to TAL International Group or
any of its affiliates, on or before May 30th of each year (or 150 days after the end of the
Manager’s fiscal year, if other than December 31st of each year),
beginning on May 30, 2010, with respect to the twelve months ended on the
preceding December 31 (or other applicable fiscal year-end date) (or such
other period as shall have elapsed from the Closing Date to the date of such
statement), a report (the “Accountants’ Report”) addressed to the Board of
Directors of TAL International Group, to the effect that such firm of
accountants has audited the books and records of TAL International Group, and
issued its report thereon in connection with the audit report on the
consolidated financial statements of TAL International Group and (1) such
audit was made in accordance with generally accepted auditing standards, and
accordingly included such tests of the accounting records and such other
auditing procedures as such firm considered necessary in the circumstances; (2) the
firm is independent of TAL International Group within the meaning of the Code
of Professional Ethics of the American Institute of Certified Public
Accountants; and (3) specifies the results of the application of such
agreed upon procedures, as the Administrative Agent shall reasonably agree from
time to time, relating to (i) maintenance of the separateness of the Issuer
for bankruptcy remoteness purposes and (ii) three selected Manager Reports
and Asset Base Certificates delivered during the preceding year, to achieve the
objectives specified on Exhibit D hereto.

 

4.1.7                        Direction of Investments. 
The Manager in its sole discretion and in accordance with its normal
business practices shall direct the Indenture Trustee, in accordance with the
terms of the Indenture, as to which Eligible Investments it shall invest funds
on deposit in the Trust Account, the Restricted Cash Account and each Series Account.

 

4.1.8                        Interest Rate Hedge Agreements. 
When required by Section 628 of the Indenture, the Manager shall
arrange for the Owner to enter into Interest Rate Hedge Agreements (which
Interest Rate Hedge Agreements must be in form and substance reasonably
satisfactory to the Administrative Agent) that comply with the provisions of
that Section.

 

4.2                                 Manager Advances. 
The Manager may, at its option, if the funds then on deposit in the
Trust Account, any Series Account or the Restricted Cash Account are
insufficient to make any payments due on the next succeeding Payment Date
pursuant to Section 302 of the Indenture, remit to the Trust Account by
1:00 p.m. New York time on each Determination Date, any amount of funds (a
“Manager Advance”); provided,
that (A) the Manager deems such Manager Advance to be recoverable from
delinquent rental payments owing with respect to Leases of the Managed
Containers and (B) unless otherwise consented to in writing in each
instance by the Administrative Agent or the Indenture Trustee (acting at the
direction of the

 

10

 

Requisite Global
Majority); the aggregate amount of all Manager Advances outstanding at any time
shall not exceed fifty percent (50%) of the outstanding balance of all Lease
receivables which are less than ninety (90) days delinquent.  Under no circumstances shall this Section 4.2
be interpreted as obligating the Manager to make any Manager Advance.  The Manager shall be reimbursed for Manager
Advances on each Payment Date from amounts on deposit in the Trust Account,
subject to the priority of payments set forth in Sections 302 and 806 of the
Indenture.

 

Section 5.                                            Deposits to Trust Account; Payment of
Management Fee.

 

5.1                                 Deposits.

 

5.1.1                        Weekly Deposits to Trust Account. 
On or before the last Business Day in New York of each calendar week
beginning with the first full calendar week following the week of the Closing
Date, the Manager shall cause to be transferred from the Concentration Account
to the Trust Account an amount equal to the excess (if any) of (x) the sum
of (A) the Manager’s good faith estimate of the Container Revenues for the
Managed Containers received during the immediately preceding calendar week
(including any customer advance payments) and (B) subject to Section 311
of the Indenture, the Manager’s good faith estimate of the Sales Proceeds and
Casualty Proceeds received during the immediately preceding calendar week, over
(y) the Manager’s good faith estimate of Direct Operating Expenses for the
Managed Containers accrued during the immediately preceding calendar week (the
excess of (x) over (y), the “Estimated Net Operating Income”).  Prior to such transfer or deposit, all
Container Revenues, Sales Proceeds and Casualty Proceeds received, or held by,
the Manager with respect to the Managed Containers shall be deemed to be held
by the Manager in trust for the benefit of the Indenture Trustee.

 

On or before each
Determination Date, the Manager shall determine the excess (if any) of (x) the
aggregate amount of Container Revenues, Sales Proceeds and Casualty Proceeds
for the Managed Containers actually received during the immediately preceding
Collection Period over (y) the aggregate amount of Direct Operating
Expenses accrued during such Collection Period and to be paid in the current or
a subsequent Collection Period (the excess of (x) over (y), the “Actual
Net Operating Income”).  If the Actual
Net Operating Income for such Collection Period exceeds the Estimated Net
Operating Income for such Collection Period, then the Manager will cause to be
transferred from the Concentration Account to the Trust Account on such
Determination Date funds in an amount equal to such excess.  However, if the Estimated Net Operating
Income for such Collection Period exceeds the Actual Net Operating Income for
such Collection Period, then the Manager shall indicate so on that month’s
Manager Report and the amount of such excess (such excess, the “Excess
Deposit”) will be distributed to the Manager on the immediately succeeding
Payment Date.

 

5.2                                 Compensation of Manager.

 

5.2.1                        Management Fee. 
As compensation to the Manager for the performance of its services
hereunder, the Owner shall pay to the Manager the Management Fee for the
immediately preceding Collection Period in arrears on each Payment Date (or, in
the case of the first payment of the Management Fee, for the payment thereof,
commencing on the Closing Date).  Subject
to the terms and conditions of the Indenture, the Management Fee shall be

 

11

 

payable to the Manager (to the extent not previously
withheld in accordance with the terms hereof) from amounts on deposit in the
Trust Account to the extent monies are available for the payment thereof in
accordance with the provisions of Section 302(c) of the
Indenture;  provided, however, that, as long as no Manager Default shall
have occurred and been continuing, the Manager shall be entitled to withhold in
advance, at periodic intervals more frequent than each Payment Date, the pro rata portion of the Management Fee
owing to the Manager for such interval from the actual Container Revenues,
Sales Proceeds or Casualty Proceeds received by it from lessees or
sublessees.  For the sake of clarity, to
the extent the Manager has withheld amounts from the actual Container Revenues,
Sales Proceeds or Casualty Proceeds received by it from lessees or sublessees,
then such amounts shall be deducted from the Management Fee owing to the
Manager from the Owner hereunder.  On
each Payment Date, the Manager and the Owner shall determine whether the
amounts actually paid to or withheld by the Manager during the preceding
calendar month pursuant to the terms of this Section 5.2.1 accord with the
Management Fee owing under this Agreement for such month and shall arrange that
any excess or deficiency promptly be corrected (i.e., in the case of an
overpayment to the Manager, the Manager shall promptly repay such overpayment,
and in the case of an underpayment to the Manager such underpayment shall be
added to the Management Fee payable to the Manager on such Payment Date). Upon
any resignation or termination of the Manager in accordance with the terms of
this Agreement and the other Transaction Documents, such resigning or terminated
Manager shall not be entitled to receive any Management Fee accruing on or
after the effective date of such termination or resignation and such resigning
or terminated Manager shall immediately remit to the Trust Account any portion
of the Management Fee deducted in advance by such resigning or terminated
Manager which did not accrue as of the date following such termination or
resignation on which a replacement Manager has assumed the responsibilities of
the resigning or terminated Manager.

 

5.2.2                        Business Day. 
Notwithstanding anything to the contrary contained herein, if any date
on which a payment becomes due hereunder is not a Business Day, then such
payment may be made on the next succeeding Business Day with the same force and
effect as if made on such scheduled date.

 

5.2.3                        No Set-Off, Counterclaim, etc. 
The Manager’s obligation under this Agreement to transfer to or to
deposit any amount to the Trust Account shall (subject to the withholding of
the Management Fee as contemplated by Section 5.2.1 hereof) be absolute
and unconditional and all payments thereof shall be made free and clear of and
without any deduction for or on account of any set-off or counterclaim or any
circumstance, recoupment, defense or other right which the Manager may have
against the Owner or any other Person for any reason whatsoever (whether in
connection with the transactions contemplated hereby or any other
transactions), including without limitation, (i) any defect in title,
condition, design or fitness for use, of, or any damage to or loss or
destruction of, any Managed Container, (ii) any insolvency, bankruptcy,
moratorium, reorganization or similar proceeding by or against the Manager or
any other Person, or (iii) any other circumstance, happening or event
whatsoever, whether or not unforeseen or similar to any of the foregoing.

 

5.2.4                        Manner of Payment. 
All payments hereunder shall be made in United States Dollars by wire
transfer of immediately available funds prior to 2:00 P.M. prevailing
Eastern Time, on the date of payment.

 

12

 

Section 6.                                            Term.

 

6.1.1                        Term.  The Term of
this Agreement shall commence on the date hereof and shall end on the date on
which all Outstanding Obligations have been repaid, unless earlier terminated
in accordance with the provisions hereof.

 

6.1.2                        Resignation by Manager. 
The Manager may not resign from its obligations and duties as Manager
hereunder, except (i) with the prior written consent of Owner and the
Requisite Global Majority or (ii) upon a determination by the Manager that
the performance by Manager of its duties under this Agreement is no longer
permissible under Applicable Law, which determination shall be evidenced by an
Opinion of Counsel, in form and substance reasonably satisfactory to Owner and
the Requisite Global Majority, to such effect delivered to the Indenture
Trustee, the Administrative Agent and each Series Enhancer.  No such resignation shall, to the extent
consistent with Applicable Law, become effective until a replacement Manager
has assumed the responsibilities of the resigning Manager in accordance with
the terms of this Agreement, Section 405 of the Indenture and the other
Transaction Documents.

 

Section 7.                                            (a)                                  Intercreditor Agreement Amendment. 
The Manager hereby undertakes to use its reasonable efforts to obtain an
amendment to the Intercreditor Agreement in order to amend the definition of
“Equipment Lenders” in Appendix A thereto to include any lenders to TAL
Advantage III LLC in clause (iii) thereof and the definition of “Equipment
Loan Agreement” to include the Indenture and the Management Agreement.

 

(b)                                 Incremental Inspection Rights. 
To the extent that neither the Indenture nor this Agreement is
considered to be an “Equipment Loan Agreement” within the meaning of the
Intercreditor Agreement, the Manager hereby extends to the Owner, the Indenture
Trustee and the Administrative Agent the benefit of the same covenants and
rights set forth in Section 5 of the Intercreditor Agreement.

 

Section 8.                                            Representations and Warranties; Covenants.

 

8.1                                 Manager Representations. 
The Manager represents and warrants to the Owner, the Indenture Trustee,
the Administrative Agent and each Series Enhancer that:

 

8.1.1                        The Manager is a corporation duly
organized and validly existing under the laws of the State of Delaware and is
duly qualified and is authorized to do business and is in good standing (or its
equivalent) in all jurisdictions where it is required by Applicable Law to be
so qualified (or its equivalent) and has all licenses, permits, charters and
registrations necessary for the operation of its container management business,
except for any such jurisdiction where the failure to be so qualified or for
any licenses the failure to hold which, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

8.1.2                        The Manager has the requisite power and
authority to enter into and perform its obligations under this Agreement, and
all requisite corporate authorizations have been given for it to enter into
this Agreement and to perform all the matters envisaged hereby, this Agreement
has been duly executed and delivered and constitutes the valid, legally binding
and enforceable obligation of the Manager, subject to bankruptcy, insolvency,
moratorium,

 

13

 

reorganization and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.

 

8.1.3                        The Manager has not breached its
certificate of incorporation or by-laws or any other agreement to which it is a
party or by which it is bound in the course of conduct of its business and
corporate affairs and has not breached any applicable laws and regulations,
except for such breaches which would not have a materially adverse effect on
the Manager’s ability to perform its obligations under this Agreement.

 

8.1.4                        There are no Proceedings or
investigations to which the Manager or any of its Affiliates is a party pending
or, to the Manager’s knowledge, threatened, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality (A) asserting
the invalidity of this Agreement or any other Transaction Document, (B) seeking
to prevent the consummation of any of the transactions contemplated by this
Agreement or any other Transaction Document or (C) seeking any
determination or ruling that is reasonably likely to materially and adversely
affect the performance by the Manager of its obligations under, or the validity
or enforceability of, this Agreement or any other Transaction Document to which
it is a party.

 

8.1.5                        The execution, delivery and performance
of the transactions contemplated by and the fulfillment of the terms of this
Agreement and the other Transaction Documents will not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the organizational
documents of the Manager, or any material term of any indenture, agreement,
mortgage, deed of trust, or other instrument to which Manager is a party or by
which it is bound, or result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust, or other instrument, or violate any law or any order, rule, or
regulation applicable to Manager of any court or of any federal or state
regulatory body, administrative agency, or other Governmental Authority having
jurisdiction over Manager or any of its properties, in each case, other than
any conflict, breach, default, Lien, or violation that would not reasonably be
expected to result in a Material Adverse Change.

 

8.1.6                        The Manager shall take all actions as may
be necessary to perform the Issuer’s obligations under Section 604 of the
Indenture.

 

8.1.7                        The Manager will fulfill all of its
obligations as lessor under any Lease Agreement to which a Managed Container is
subject except where any such nonfulfillment would not reasonably be expected
to materially and adversely affect the rights of the Owner under such
Lease.  The Manager shall use
commercially reasonable efforts to perform all of the Owner’s duties and
obligations under the Transaction Documents to which the Owner is a party; provided, however, that nothing contained
herein shall be construed as an express or implied guaranty by the Manager of
the Notes or any other Outstanding Obligation incurred by the Owner.

 

8.1.8                        Promptly, but in any case within seven (7) Business
Days of an Authorized Officer becoming aware of a Manager Default, Early
Amortization Event or an Event of Default, and which, in each case, has not
been waived in writing by the Requisite Global

 

14

 

Majority, the Manager shall deliver to the Owner, the
Administrative Agent, the Indenture Trustee and each Series Enhancer a
written notice describing the nature of such event and period of existence and,
in the case of a Manager Default, the action the Manager is taking or proposed
to take with respect thereto.

 

8.1.9                        Since December 31, 2008, there has
been no Material Adverse Change in the financial condition of the Manager.

 

8.1.10                  The Manager will operate the Managed Containers so as
not knowingly  cause a violation of the
Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the
“Trading With the Enemy Act”) or any of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) (the “Foreign Assets Control Regulations”) or any enabling legislation
or executive order relating thereto (which for the avoidance of doubt shall
include, but shall not be limited to (a) Executive Order 13224 of September 21,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the
“Executive Order”) and (b) the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Public Law 107-56)).  Furthermore,
none of the Manager or its Affiliates (i) is or will become a “blocked
person” as described in the Executive Order, the Trading With the Enemy Act or
the Foreign Assets Control Regulations or (ii) engages or will engage in
any dealings or transactions, or be otherwise associated, with any such
“blocked person.”

 

8.1.11                  The credit and collection policy used by the Manager
as in effect on the Closing Date (which policy also addresses the criteria
under which a lessee is allowed to self-insure for property and liability
risks) is attached as Exhibit C hereto.  The credit and collection policy used by the
Manager is subject to modification from time to time at the discretion of the
Manager.  The “Credit and Collection
Policy” shall mean the credit and collection policy used by the Manager as
modified by the Manager from time to time.

 

8.1.12                  The depreciation policy as in effect on the Closing
Date used in the calculation of the Asset Base for the purposes of the
Transaction Documents is attached as Exhibit E hereto.

 

8.2                                 Owner Representations. 
The Owner represents and warrants to the Manager:

 

8.2.1                        The Owner is a limited liability company
duly organized and validly existing under the laws of Delaware;

 

8.2.2                        The Owner has the requisite power and
authority to enter into and perform its obligations under this Agreement and
all requisite limited liability company authorizations have been given for it
to enter into this Agreement and to perform all the matters envisaged hereby,
this Agreement has been duly executed and delivered by the Owner and
constitutes the valid, legally binding and enforceable obligation of the Owner,
subject to bankruptcy, insolvency, moratorium, reorganization and other laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles; and

 

15

 

8.2.3                        The Owner has not breached its limited
liability company agreement or any other agreement to which it is a party or by
which it is bound in the course of conduct of its business and corporate
affairs and has not breached any applicable laws and regulations of Delaware in
such manner as would in any case have a materially adverse effect on its
ability to perform its obligations under this Agreement.

 

8.2.4                        Since its formation, there has been no
Material Adverse Change in the financial condition of the Owner.

 

8.3                                 Covenants of the Manager.

 

8.3.1                        Location of Books and Records. 
The Manager shall not change the location at which the Owner’s books and
records are maintained unless (i) the Manager shall have given the
Indenture Trustee, the Administrative Agent and each Series Enhancer at
least thirty (30) days’ prior written notice thereof and (ii) the Manager
shall cause to be filed any necessary registration of charges or documents of
similar import necessary to continue the Indenture Trustee’s security interest
in the Collateral.

 

8.3.2                        Liens.  Except for
the Lien created pursuant to the Contribution and Sale Agreement and Permitted Encumbrances:
(a) Manager agrees not to create, incur, or grant, directly or indirectly,
any lien, security interest, pledge or hypothecation of any kind on or
concerning (i) its rights under this Agreement or (ii) the Managed
Containers or any interest therein; and (b) Manager shall promptly take,
or cause to be taken, such action as may be necessary to discharge any such
lien arising by, through or under the Manager.

 

8.3.3                        UNIDROIT Convention. 
The Manager will comply with the terms and provisions of the UNIDROIT
Convention on Intentional Interests in Mobile Equipment or any other
internationally recognized system for recording interests in or liens against
shipping containers at the time that such convention is adopted for containers.

 

8.3.4                        Identification of Gross Lease Revenues
and Direct Operating Expense; Transfer of Gross Lease Revenues.  The Manager will establish and maintain such
procedures as are necessary for determining and for identifying Container
Revenues and Direct Operating Expenses to a specific Managed Container.  Notwithstanding the foregoing, Manager shall
have the right to allocate various indirect overhead expenses among containers
in the Container Fleet (including the Managed Containers) in any way it deems
appropriate as long as such allocation is non-discriminatory, fair and
equitable, after giving due recognition to the cost, age and other factors
relevant to the Managed Containers as compared to other containers in the
Container Fleet.

 

8.3.5                        Compliance with Credit and Collection Policy. 
The Manager will comply in all material respects with the Credit and
Collection Policy in regard to the origination of, and amendments and
modifications to, Leases of Managed Containers. 
The Manager shall not amend the Credit and Collection Policy in any
respect which would materially and adversely affect the Noteholders without the
prior written consent of the Requisite Global Majority in each instance.  The Manager shall promptly provide the Owner,
the Administrative Agent and the Indenture Trustee with a copy of all
amendments to the Credit and Collection Policy.

 

16

 

8.3.6                        Inspections.  
The Manager shall, upon reasonable prior notice, allow the Indenture
Trustee, the Administrative Agent, each Hedge Counterparty and each Series Enhancer
to inspect, under guidance of officers of the Manager, the Manager’s facilities
during normal business hours.  So long as
no Manager Default, Early Amortization Event or Event of Default is continuing,
the Manager shall pay the reasonable and documented costs and expenses incurred
by such Person(s) in conducting not more than one such inspection in any
calendar year; provided, however,
that the Manager and the Administrative Agent shall coordinate such that, so
long as no Manager Default, Early Amortization Event or Event of Default is
continuing, the Manager shall not be responsible for paying for more than one
inspection in total per calendar year pursuant to (x) this Section 8.3.6,
(y) Section 3.10 herein and (z) the Master Repurchase Agreement,
dated as of September 17, 2009, among Wachovia Bank, National Association,
as buyer, Wells Fargo Securities, LLC, as agent, TAL International Container
Corporation, as seller, and TAL International Group, Inc, as guarantor.  In addition, the Manager shall pay the
reasonable and documented costs and expenses incurred by such Person(s) in
conducting any such examinations during the continuation of any of a Manager
Default, Early Amortization Event or Event of Default.

 

8.3.7                        Container Management System. 
Without the prior written consent of the Indenture Trustee, acting at
the direction of the Requisite Global Majority, the Manager agrees that it will
not grant to any Person, or permit any Person to obtain, a Lien (other than items
listed in clauses (i), (ii), (iii), (iv) or (v) of the definition of
“Permitted Encumbrances” (as determined as though the Container Management
System were deemed “Collateral” for the purposes of the definition of
“Permitted Encumbrance”)) over the Container Management System.

 

8.3.8                        Rating Agency Notices. 
Subject to the application of applicable law, the Manager shall promptly
deliver a copy of any written notice concerning the Owner’s credit rating
received by it from any Rating Agency to the Indenture Trustee, the
Administrative Agent and each Series Enhancer.

 

Section 9.                                            Manager Default.

 

9.1                                 Manager Default. 
Each of the following is a Manager Default:

 

9.1.1                        The Manager shall fail to make any
deposits of Container Revenues, Sales Proceeds, Casualty Proceeds or any other
amounts due and payable under this Agreement to the Trust Account within one (1) Business
Day after the date such deposit is due; provided,
that if such failure to make a deposit shall result from administrative failure
beyond the control of the Manager, the Manager shall have two (2) additional
Business Days to cure such failure before such failure shall constitute a
Manager Default.

 

9.1.2                        The Manager shall fail (A) to
deliver any report required to be delivered to the Indenture Trustee pursuant
to the terms of Sections 4.1.2 or 4.1.3 hereof such failure shall continue
unremedied for three (3) Business Days or (B) in any material respect
to perform the covenant of the Manager to deliver financial statements set
forth in the second sentence of Section 4.1.1 and such failure shall
continue unremedied for thirty (30) days after the earlier of the date (x) on
which there has been given to the Manager, by the Indenture Trustee, the
Administrative Agent, any Series Enhancer or any Noteholder, a written
notice specifying such

 

17

 

default or breach and
requiring it to be remedied and (y) on which any Authorized Officer of the
Manager shall have knowledge of such default or breach;

 

9.1.3                        The Manager
shall fail to (A) deliver any report required to be delivered to the
Indenture Trustee pursuant to the terms hereof or of any other Transaction
Document (which is not otherwise addressed in Section 9.1.2) and such
failure shall continue unremedied for thirty (30) days, or (B) perform or
observe, or cause to be performed or observed, in any material respect any
other covenant or agreement contained herein or in any other Transaction
Document (including in its capacity as Seller) (which is not otherwise
addressed in this Section 9.1) and such failure, if capable of remedy,
shall continue unremedied for a period of thirty (30) days after earlier of the
date (x) on which there has been given to the Manager, by the Indenture
Trustee, the Administrative Agent, 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 Manager shall have
knowledge of such default or breach.

 

9.1.4                        Any
representation or warranty made by the Manager in this Agreement or any other
Transaction Document (including in its capacity as Seller), or in any
certificate, report or financial statement delivered by it pursuant hereto or
thereto proves to have been untrue in any material respect when made, and such
breach, if capable of remedy, shall continue unremedied for a period of thirty
(30) days after the earlier of the date (x) on which there has been given
to the Manager, by the Indenture Trustee, the Administrative Agent, 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
Manager shall have knowledge of such default or breach.

 

9.1.5                        TAL ceases to
be engaged in the container leasing or management business.

 

9.1.6                        The Manager
shall commence a voluntary case concerning itself under the Bankruptcy Code; or
an involuntary case is commenced against the Manager or any of its Subsidiaries
and the petition is not controverted within 10 days, or is not dismissed within
60 days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the Manager; or the Manager commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Manager and such proceeding
remains undismissed for a period of 60 days; or the Manager is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Manager suffers any appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or the Manager makes
a general assignment for the benefit of creditors; or any action is taken by
the Manager for the purpose of effecting any of the foregoing;

 

9.1.7                        Except as
permitted by Sections 2 and 13 hereof, Manager assigns or attempts to assign
its interest under this Agreement.

 

9.1.8                        A Change of
Control shall have occurred with respect to the Manager.

 

18

 

9.1.9                        The Leverage
Ratio of TAL International Group as of the last day of any fiscal quarter shall
be in excess of 4.75 to 1.00.

 

9.1.10                  As of the last day of each
fiscal quarter beginning with the fiscal quarter ending September 30,
2009, the Consolidated EBIT to Consolidated Cash Interest Expense Ratio is less
than 1.10 to 1.00.

 

9.1.11                  As of the last day of each
fiscal quarter beginning with the fiscal quarter ending September 30,
2009, the Consolidated Tangible Net Worth of TAL International Group is less
than the sum of (i) $321,351,326; plus (ii) an amount equal to fifty
percent (50%) of the cumulative sum of the aggregate net income of TAL
International Group and its Consolidated Subsidiaries (as such term is defined
in the Credit Agreement) on a consolidated basis, determined in accordance with
GAAP for the period commencing on January 1, 2006 and terminating on such
date of determination.

 

9.1.12                  Any of the Manager, TAL
International Group, the Borrower (as such term is defined in the Credit
Agreement) or any Restricted Subsidiary (as such term is defined in the Credit
Agreement) fails to make any payment when due (beyond the applicable grace or
cure period with respect thereto, if any) or defaults in the observance or
performance (beyond the applicable grace or cure period with respect thereto,
if any) of any payment obligation, or any other agreement or covenant with
respect to the Indebtedness that, individually or in the aggregate for all such
Persons, exceeds Twenty Million Dollars ($20,000,000) and, such condition is
not remedied by a permanent and unconditional cure or waiver of such default
within thirty (30) days.

 

9.1.13                  One or more judgments or
decrees shall be entered against TAL International Group, the Borrower (as such
term is defined in the Credit Agreement) or any of its Restricted Subsidiaries
(as such term is defined in the Credit Agreement) (other than a Special Purpose
Vehicle (as such term is defined in the Credit Agreement)) involving a
liability (to the extent not paid when due or covered by a reputable and
solvent insurance company (with any portion of any judgment or decree not so
covered to be included in any determination hereunder)) equal to or in excess
of Twenty Million Dollars ($20,000,000) for all such judgments and decrees and
all such judgments or decrees shall either be final and non-appealable or shall
not have been vacated, discharged or stayed or bonded pending appeal for any
period of 30 consecutive days.

 

9.1.14                  This Agreement shall at any
time cease to be the legal, valid and binding obligation of the Manager,
enforceable in accordance with its terms.

 

Notwithstanding
the foregoing, if any of the covenants of the Manager or TAL International
Group in any other credit facility of the Manager or TAL International Group
(as applicable), which correspond to any of the Manager Defaults contained in Section 9.1.9,
9.1.10 and/or 9.1.11 hereof (as applicable), are amended in such a manner as to
make any such covenants more restrictive than prior to the amendment thereof,
such more restrictive covenants shall be automatically incorporated herein and
the Manager hereby agrees to amend the corresponding provision(s) in this
Agreement in order to document such inclusion.

 

19

 

The occurrence of a Manager Default shall constitute an “Actionable
Default” under the Intercreditor Agreement for so long as Manager Default is
continuing.  A Manager Default may be
waived in a written instrument executed by the Requisite Global Majority in
each such instance.  Any such waiver of a
Manager Default shall not be construed as a waiver of any subsequent Manager
Default.  No delay by the Requisite
Global Majority or any of its assigns, shall constitute any such waiver or
prejudice the Requisite Global Majority in exercising any right, power or
privilege arising out of such Manager Default.

 

9.2                                 Remedies.  If a Manager Default shall have occurred and
be continuing, and any Notes are then Outstanding, the Indenture Trustee,
acting at the direction of the Requisite Global Majority and in the Requisite
Global Majority’s discretion, shall have the right (upon written notice (a
“Manager Termination Notice”) to the Manager, the Issuer, the Administrative
Agent, each Interest Rate Hedge Counterparty and the Rating Agencies), in
addition to other rights or remedies that the Issuer or its assignee may have
under any Applicable Law or in equity to: (i) terminate this Agreement, (ii) appoint
a replacement Manager selected by the Requisite Global Majority to manage the
Managed Containers, (iii) take control of the Managed Containers wherever
located, subject to the rights of lessees under Lease Agreements to which any
of the Managed Containers shall at the time be subject or to appoint a
replacement Manager to manage the Managed Containers, (iv) appoint an
independent auditor of national reputation and mutually acceptable to the
Issuer and the Requisite Global Majority (the “Verification Auditor”) to verify
that all prior Manager Reports and Asset Base Certificates prepared by the
Manager are in accordance with this Agreement and/or (v) exercise any
other remedies specifically set forth in this Agreement, the Indenture and the
other Related Documents that are exercisable while a Manager Default is
continuing.  Notwithstanding such
termination, until the Manager is notified of the appointment of a replacement
manager and the replacement manager has assumed such responsibility, the
Manager shall (i) continue to manage the Managed Containers and the
Owner’s business, and deposit into the Trust Account all Container Revenues,
Sales Proceeds, Casualty Proceeds and other amounts, and submit all reports due
hereunder and perform all other services required hereunder, all in accordance
with this Agreement and (ii) not make any disbursement of funds from the
Concentration Accounts (whether to the Owner or any other Person) until the
Verification Auditor has verified the allocation of such amounts.

 

9.3                                 Transfer of
Managed Containers.  Upon any
termination of this Agreement pursuant to Section 9.2, the Manager shall
cooperate with the Owner, the Indenture Trustee, the Administrative Agent and
the Requisite Global Majority in transferring management of the Managed
Containers as provided in the Indenture, including, but not limited to making
available all books and records (including computer systems and data contained
therein) pertaining to the Manager’s activities hereunder, providing access to,
and cooperating in the transfer of, information from the Manager’s computer
system to the Owner’s or its designee’s system, promptly notifying lessees of
the termination of management of the Managed Containers by the Manager and
assumption of management by the Owner or its designee, depositing funds
belonging to the Owner but not yet in the Trust Account to such account as
designated by the Owner or its assignee, executing assignments of interests in
Lease Agreements pertaining to the Managed Containers and taking any other
action as may be reasonably requested by the Owner or its assignee to ensure
the orderly assumption of management of the Managed Containers by the Owner or
its designee.  During such transition
period, the outgoing Manager shall continue to

 

20

 

provide
notices pursuant to Section 8.1.8 and Section 6.19 of the Indenture
that relate to occurrences of which it is aware.

 

9.4                                 Power of
Attorney.  The Manager
hereby irrevocably constitutes and appoints the Indenture Trustee, with full
power of substitution (such appointment being coupled with an interest), as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of the Manager and in the name of the Manager or in its own
name, for the purpose of carrying out the terms of this Agreement, to take
(subject to the limitations set forth below) any and all appropriate action and
to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, the Manager hereby gives the Indenture Trustee
the power and right, on behalf of the Manager, without notice to or assent by
the Manager (subject to the limitation set forth below), to do any or all of
the following:

 

(i)                                     So long as a
Manager Default has occurred and is continuing and a Manager Termination Notice
has been delivered in accordance with the terms hereof, at any time, in the
name of the Manager or its own name, or otherwise, to take possession of and
endorse and collect any checks, drafts, notes, acceptances or other instrument,
general intangible or contract or any other Collateral and to file any claim or
to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Indenture Trustee, the Administrative Agent
or any Series Enhancer for the purpose of collecting any and all such
moneys due under any account, instrument, general intangible or contract with
respect to the Managed Containers and the other Collateral whenever payable;

 

(ii)                                  So long as a
Manager Default has occurred and is continuing and a Manager Termination Notice
has been delivered in accordance with the terms hereof, at any time, to enter
and use the premises of the Manager and make use of the Manager’s computer
database, software system and all other books and records relating to the Managed
Containers and the other Collateral.  The
Manager hereby grants, and agrees to grant from time to time, to the Indenture
Trustee a non-exclusive royalty-free license (such license not to be exercised
until, and only so long as, a Manager Default has occurred and is continuing
and a Manager Termination Notice has been delivered in accordance with the
terms hereof) of all its intellectual property rights arising in connection
with the software system used by the Manager in connection with the Managed Containers,
such license to be irrevocable until the later of (a) the last date on
which any Note was Outstanding or (b) the date on which all amounts owed
to the Indenture Trustee, the Noteholders and any Series Enhancer pursuant
to the terms of the Indenture and the related Enhancement Agreement shall have
been paid in full, subject, in the case of intellectual property rights held
under license by the Manager, to the prior consent of the relevant licensor, if
required, which consent the Manager undertakes to use its reasonable efforts
forthwith to obtain at its own expense on terms reasonably acceptable to the
Indenture Trustee and any Series Enhancer so long as a Manager Default has
occurred and is continuing and a Manager Termination Notice has been delivered
in accordance with the terms hereof; and

 

(iii)                               So long as an
Event of Default or Manager Default has not occurred, upon the failure of the
Manager to comply with the provisions of Section 8.1.6 (and so long as an Event of Default or Manager Default has
occurred, whether or not the Manager has complied with the provisions of
Section 8.1.6), to execute and deliver those agreements, instruments, 

 

21

 

documents and papers (including, without limitation, deeds of trust) as
the Manager may otherwise be required to file in accordance with the provisions
of Section 8.1.6 hereof.

 

The
Manager hereby ratifies and confirms and agrees to ratify and confirm whatever
any such attorney shall do or propose to do in the exercise or purported
exercise of all or any of the powers, authorities and discretion referred to in
this Section.

 

9.5                                 Owner Power of
Attorney.  The Owner
hereby irrevocably constitutes and appoints the Indenture Trustee, 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 Owner and in the
name of the Owner or in its own name, for the purpose of carrying out the terms
of this Agreement and the other Transaction Documents to which the Owner is a
party, to take (subject to the limitations set forth below) any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement,
and, without limiting the generality of the foregoing, the Owner hereby gives
the Indenture Trustee the power and right, on behalf of the Owner, without
notice to or assent by the Owner (subject to the limitation set forth below),
to do any or all of the following:

 

(i)                                     So long as a
Manager Default has occurred and is continuing and a Manager Termination Notice
has been delivered in accordance with the terms hereof, at any time, in the
name of the Owner or its own name, or otherwise, to take possession of and
indorse and collect any checks, drafts, notes, acceptances or other instrument,
general intangible or contract or any other Collateral and to file any claim or
to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Indenture Trustee or any Series Enhancer
for the purpose of collecting any and all such moneys due under any account,
instrument, general intangible or contract with respect to the Managed
Containers and the other Collateral whenever payable;

 

(ii)                                  So long as an
Event of Default or Manager Default has occurred and is continuing, at any
time, to enter and use the premises of the Owner and make use of the Owner’s
computer database, software system and all other books and records relating to the
Managed Containers and the other Collateral. 
The Owner hereby grants, and agrees to grant from time to time, to the
Indenture Trustee a non-exclusive royalty-free license (such license not to be
exercised until, and only so long as, a Manager Default has occurred and is
continuing and a Manager Termination Notice has been delivered in accordance
with the terms hereof) of all its intellectual property rights arising in
connection with the software system used by the Owner in connection with the
Managed Containers, such license to be irrevocable until the later of (a) the
last date on which any Note was Outstanding or (b) the date on which all
amounts owed to any Series Enhancer pursuant to the terms of the Indenture
and any related Enhancement Agreement shall have been paid in full, subject, in
the case of intellectual property rights held under license by the Owner, to
the prior consent of the relevant licensor, if required, which consent the
Owner undertakes to use its reasonable efforts forthwith to obtain at its own
expense on terms reasonably acceptable to the Indenture Trustee, the
Administrative Agent and any Series Enhancer; and

 

(iii)                               So long as an
Event of Default or Manager Default has not occurred, upon the failure of the
Manager to comply with the provisions of Section 8.1.6 (and so long as an

 

22

 

Event of Default or Manager
Default has occurred, whether or not the Manager has complied with the
provisions of Section 8.1.6), to execute and deliver those agreements,
instruments, documents and papers (including, without limitation, deeds of
trust) as the Owner (or the Manager, on behalf of the Owner) may otherwise be
required to file in accordance with the provisions of Section 8.1.6 hereof
or in accordance with Section 604 of the Indenture.

 

Section 10.                                      No Partnership.

 

Except
as otherwise provided herein, the Manager’s activities taken on behalf of the
Owner hereunder will be taken solely as manager of the Managed Containers.  The parties hereto expressly recognize and
acknowledge that this Agreement is not intended to create a partnership, joint
venture or other entity between the Manager and the Owner.

 

Section 11.                                      No Warranties.

 

THE
MANAGED CONTAINERS ARE BEING DELIVERED BY THE OWNER TO THE MANAGER “AS
IS”.  THE OWNER MAKES NO REPRESENTATIONS
OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE CONDITION,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE MANAGED
CONTAINERS, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE,
THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED.

 

Section 12.                                      Non-Exclusivity.

 

During
the term of this Agreement, the Manager may provide container, management, sales,
leasing or remarketing services directly or indirectly to any other Person or
on behalf of any other Person.

 

Section 13.                                      Assignment.

 

This
Agreement, and the rights and duties of the Manager hereunder, may not be
assigned by the Manager to any other Person without the prior written consent
of the Owner, the Indenture Trustee (acting at the direction of the Requisite
Global Majority) and the Administrative Agent. 
The Owner may charge, assign, pledge or hypothecate its rights (but not
its obligations) under this Agreement as provided herein.  The Manager hereby acknowledges that the
Owner shall pledge all of its rights, title and interest under this Agreement
to the Indenture Trustee (for the benefit of the Noteholders), and the Manager
hereby consents to such pledge.  The
Manager will give any Rating Agency prior notice of any assignment effected
pursuant to this Section 13.

 

Section 14.                                      Indemnification.

 

14.1                           By the Owner.  The Owner, at its own expense, shall defend,
indemnify and hold the Manager harmless from and against any and all claims,
actions, damages, losses, liabilities, costs and expenses (including reasonable
legal fees) (each, a “Claim”) incurred by or asserted against the Manager to
the extent resulting or arising from the Manager’s performance of its
obligations under this Agreement or from the Owner’s failure to comply with or
perform its

 

23

 

obligations under this
Agreement, except for Claims which arise out of the Manager’s willful misconduct,
or gross negligence, or failure to comply with or perform its obligations under
this Agreement.  Manager subordinates its
claims under this Section 14.1 to all claims which have priority in
payment pursuant to the provisions of Section 302 and Section 806 of
the Indenture.

 

14.2                           By the Manager.

 

14.2.1                  The Manager, in its capacity
as the Manager, agrees to, and hereby does, indemnify and hold harmless the
Owner, the Indenture Trustee (for the benefit of the Noteholders), any Series Enhancer,
any Hedge Counterparty, the Deal Agents (as such term is defined in the Note
Purchase Agreement), the Liquidity Agents (as such term is defined in the Note
Purchase Agreement), the Purchasers (as such term is defined in the Note
Purchase Agreement), the Administrative Agent and their respective officers,
directors, employees and agents (each of the foregoing, an “Indemnified Party”)
against any and all liabilities, losses, damages, penalties, costs and expenses
which may be incurred or suffered by such Indemnified Party (except to the
extent caused by the gross negligence or willful misconduct on the part of the
Indemnified Party) as a result of claims, actions, suits or judgments asserted
or imposed against an Indemnified Party and arising out of (i) an action
or inaction by the Manager that is contrary to the Servicing Standard or
otherwise in violation of the terms of this Agreement; or (ii) any breach
of or any inaccuracy in any representation or warranty made by the Manager in
this Agreement or in any certificate delivered by the Manager pursuant hereto;
or (iii) any breach of or failure by the Manager to perform any covenant
or obligation of the Manager set out or contemplated in this Agreement; (iv) personal
injury or property damage claim arising out of or in connection with the
negligence of the Manager; or (v) any defense, setoff or counterclaim
arising out of any negligence of the Manager or any acts or omissions of the
Manager related to the performance hereunder of its duties with respect to the
Managed Containers; provided however,
that the foregoing indemnity shall in no way be deemed to impose on the Manager
any obligation to reimburse an Indemnified Party for: (A) losses arising
from the financial inability of the related obligor on a Lease Agreement to
make the payments due thereunder or because the Leases otherwise are
uncollectible, or (B) losses arising from the failure of the remarketing
proceeds of the Managed Containers to achieve historical or projected levels
for reasons other than the Manager’s failure to comply with the terms of this
Agreement.  The provisions of this Section 14.2
shall run directly to and be enforceable by an injured party, subject to the
limitations hereof.  The obligations of
the Manager under this Section 14.2 shall survive the resignation or
removal of the Manager and each Indemnified Party, the payment of the Notes and
Outstanding Obligations and the termination of this Agreement or the Indenture;
it being understood and agreed that the Manager shall have no liability for the
actions or inactions of any replacement Manager.

 

14.2.2                  The Manager shall pay any
amounts owing by it pursuant to this Section 14 directly to the
Indemnified Party, and such amounts shall not be deposited in the Trust
Account.

 

14.2.3                  Indemnification payments
owing pursuant to the provisions of this Section 14 shall include, without
limitation, reasonable and documented fees and expenses of counsel and expenses
of litigation reasonably incurred.

 

24

 

Section 15.                                      No Bankruptcy
Petition Against the Owner.

 

The
Manager will not, prior to the date that is one year and one day after the
payment in full of all Outstanding Obligations under the Indenture or
obligations of the Issuer under any of the other Transaction Documents,
institute against the Owner, or join any other Person in instituting against
the Owner, an Insolvency Proceeding.  The
provision of this Section 15 shall survive the termination of this
Agreement.

 

Section 16.                                      Notices.

 

All
notices, demands or requests given pursuant to this Agreement shall be in
writing, sent by internationally recognized overnight courier service or by
telecopy or hand delivery, to the following addresses:

 

	
  To the Manager:

  	
   

  	
  TAL International Container Corporation

  
	
   

  	
   

  	
  100 Manhattanville Road

  
	
   

  	
   

  	
  Purchase,
  New York 10577-2135

  
	
   

  	
   

  	
  Attn:  Jeffrey Casucci, Vice President, Treasury
  and Credit

  
	
   

  	
   

  	
  Fax:
  (914) 697-2526

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TAL
  International Container Corporation

  
	
   

  	
   

  	
  100
  Manhattanville Road

  
	
   

  	
   

  	
  Purchase,
  New York 10577-2135

  
	
   

  	
   

  	
  Attn:  Marc A. Pearlin, Vice President, General
  Counsel & Secretary

  
	
   

  	
   

  	
  Fax:   (914) 697-2526

  
	
   

  	
   

  	
   

  
	
  To the Owner:

  	
   

  	
  TAL Advantage III LLC

  
	
   

  	
   

  	
  100
  Manhattanville Road

  
	
   

  	
   

  	
  Purchase,
  New York 10577-2135

  
	
   

  	
   

  	
  Attn:  Jeffrey Casucci

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TAL International Container Corporation

  
	
   

  	
   

  	
  100 Manhattanville Road

  
	
   

  	
   

  	
  Purchase, New York 10577-2135

  
	
   

  	
   

  	
  Attn:  Jeffrey Casucci, Vice President, Treasury
  and Credit

  
	
   

  	
   

  	
  Fax:   (914) 697-2526

  
	
   

  	
   

  	
   

  
	
  To
  the Indenture Trustee:

  	
   

  	
  Wells
  Fargo Bank, National Association

  
	
   

  	
   

  	
  MAC
  N9311-161

  
	
   

  	
   

  	
  Sixth
  Street and Marquette Avenue

  
	
   

  	
   

  	
  Minneapolis,
  MN 55479

  
	
   

  	
   

  	
  Attention:
  Corporate Trust Services - Asset-Backed Administration

  

 

25

 

	
   

  	
   

  	
  Tel:
  (612) 667-8058

  
	
   

  	
   

  	
  Fax:
  (612) 667-3469

  
	
   

  	
   

  	
   

  
	
  To the Administrative Agent:

  	
   

  	
  Wells Fargo Securities, LLC

  
	
   

  	
   

  	
  301
  S. College Street

  
	
   

  	
   

  	
  One
  Wachovia Center

  
	
   

  	
   

  	
  Charlotte,
  NC 28288

  
	
   

  	
   

  	
  Attention:
  Jerri Kallam

  
	
   

  	
   

  	
  Fax:
  (704) 374-3254

  
	
   

  	
   

  	
  Email:
  jerri.kallam@wellsfargo.com

  
	
   

  	
   

  	
   

  
	
  To
  any Series Enhancer:

  	
   

  	
  At
  the address set forth in the related Enhancement Agreement

  
	
   

  	
   

  	
   

  
	
  To
  any Hedge Counterparty:

  	
   

  	
  At
  the address set forth in the related Hedge Agreement

  

 

Notice
shall be effective and deemed received (a) two days after being delivered
to the courier service, if sent by courier, (b) upon receipt of
confirmation of transmission, if sent by telecopy or (c) when delivered,
if delivered by hand.

 

Section 17.                                      Governing Law;
Consent to Jurisdiction.

 

17.1                           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT WITHOUT GIVING
EFFECT TO ANY OTHER PRINCIPLES OF CONFLICTS OF LAW).

 

17.2                           Consent to
Jurisdiction.  Any legal
suit, action or proceeding against Owner or Manager arising out of or relating
to this Agreement, 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 of Owner and Manager 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 enforcing this Agreement, Owner and Manager
each hereby irrevocably submits to the jurisdiction of any such court in any
such suit, action or proceeding.

 

17.3                           Waiver of Jury
Trial.  EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, AS AGAINST EACH 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
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE
NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.

 

Section 18.                                      Successors and
Assigns.

 

The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties hereto.

 

26

 

Section 19.                                      Severability.

 

If
any term or provision of this Agreement or the performance thereof shall to any
extent be or become invalid or unenforceable, such invalidity or
unenforceability shall not affect or render invalid or unenforceable any other
provisions of this Agreement, and this Agreement shall continue to be valid and
enforceable to the fullest extent permitted by law.

 

Section 20.                                      Entire Agreement;
Amendments; Waiver.

 

This
Agreement represents the entire agreement between the parties with respect to
the subject matter hereof and may not be amended or modified except by an
instrument in writing signed by the parties hereto and approved by the
Administrative Agent and the Requisite Global Majority and, if such amendment
or modification would cause any of the events set forth in Section 1002(a)(i) through
(vii) of the Indenture to occur, the Persons specified in Section 1002(a) of
the Indenture are then the Control Party for such Series or shall have
made an unreimbursed payment; provided,
that, if any such amendment or modification would (i) reduce the amount
payable to such Series Enhancer, (ii) amend the relative priority of
any such payment pursuant to Sections 302 or 806 of the indenture (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 of the Indenture 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 Agreement and
the other Transaction Documents, or (v) modify provisions of any
Transaction Document relating to requirements that the consent of such Series Enhancer
be obtained, the approval of such Series Enhancer shall be required.  The Manager will send prior notice of any
amendment or modification to the Rating Agencies setting forth in general terms
the substance of such amendment or modification.  Waiver of any terms or conditions of this
Agreement (including any extension of time required for performance) shall be
effective only if in writing and shall not be construed as a waiver of any
subsequent breach or waiver of the same terms or conditions or a waiver of any
other term or condition of this Agreement. 
No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof.

 

Section 21.                                      Counterparts.

 

This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.  Delivery of an
executed counterpart of a signature page to this Agreement by facsimile or
PDF file shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

Section 22.                                      Intended Third Party
Beneficiaries.

 

Each
of the Administrative Agent, each Series Enhancer, the Requisite Global
Majority, each Hedge Counterparty and the Indenture Trustee are express third
party beneficiaries of this

 

27

 

Agreement;
and, as such, shall have full power and authority to enforce the provisions of
this Agreement against the parties hereto. 
Except as set forth in the immediately preceding sentence, this
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer on any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

 

28

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as
of the date first written above.

 

	
   

  	
  TAL INTERNATIONAL CONTAINER
  CORPORATION, as Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

MANAGEMENT AGREEMENT

 

 

	
   

  	
  TAL ADVANTAGE III LLC, as Owner,

  
	
   

  	
  By:

  	
  TAL
  International Container Corporation,

  
	
   

  	
   

  	
  its
  manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

MANAGEMENT AGREEMENT

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