Document:

Exhibit 4.61

 

 

TAL ADVANTAGE III LLC

 

Issuer

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

Indenture Trustee

 

 

SERIES 2011-1 SUPPLEMENT

 

Dated as of April 1, 2011

 

to

 

INDENTURE

 

Dated as of October 23, 2009

 

 

SERIES 2011-1 FLOATING RATE SECURED NOTES

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
Section 101.
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II Creation of the   Series 2011-1 Notes; Modification of Indenture
    	
6
    
	
 
    	
 
    	
 
    
	
Section 201.
    	
Designation and Principal Terms
    	
6
    
	
Section 202.
    	
Authentication and Delivery
    	
7
    
	
Section 203.
    	
Interest and Other Payments on the Series 2011-1 Notes
    	
8
    
	
Section 204.
    	
Principal Payments on the Series 2011-1 Notes;   Scheduled Amortization of Series 2011-1 Notes
    	
8
    
	
Section 205.
    	
Amounts and Terms of Series 2011-1 Noteholder Commitments
    	
9
    
	
Section 206.
    	
Taxes
    	
10
    
	
Section 207.
    	
Increased Costs
    	
13
    
	
Section 208.
    	
Capital Requirements
    	
14
    
	
Section 209.
    	
Replacement of Series 2011-1 Noteholder
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE III   Series 2011-1 Series Account and Allocation and Application of   Amounts Therein
    	
15
    
	
 
    	
 
    	
 
    
	
Section 301.
    	
Series 2011-1 Series Account
    	
15
    
	
Section 302.
    	
Distributions from Series 2011-1 Series Account
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE IV Additional   Covenants; Additional Events of Default
    	
18
    
	
 
    	
 
    	
 
    
	
Section 401.
    	
Increase in the Aggregate Series 2011-1 Note Existing   Commitment
    	
18
    
	
Section 402.
    	
Issuance of Additional Series of Notes
    	
18
    
	
Section 403.
    	
Use of Proceeds
    	
18
    
	
Section 404.
    	
Consent of the Majority of Holders
    	
18
    
	
Section 405.
    	
United States Federal Income Tax Election
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE V Conditions of   Closing and Future Lending
    	
19
    
	
 
    	
 
    	
 
    
	
Section 501.
    	
Conditions to Closing
    	
19
    
	
Section 502.
    	
Advances on Series 2011-1 Notes
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE VI Representations   and Warranties
    	
21
    
	
 
    	
 
    	
 
    
	
Section 601.
    	
Existence
    	
21
    
	
Section 602.
    	
Authorization
    	
21
    
	
Section 603.
    	
No Conflict; Legal Compliance
    	
21
    
	
Section 604.
    	
Validity and Binding Effect
    	
21
    
	
Section 605.
    	
Material Adverse Change
    	
21
    
	
Section 606.
    	
Place of Business
    	
21
    
	
Section 607.
    	
No Agreement or Contracts
    	
22
    
	
Section 608.
    	
Consents and Approvals
    	
22
    
	
Section 609.
    	
Margin Regulations
    	
22
    
	
Section 610.
    	
Taxes
    	
22
    
	
Section 611.
    	
Other Regulations
    	
23
    
	
Section 612.
    	
Solvency and Separateness
    	
23
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 613.
    	
No Default
    	
23
    
	
Section 614.
    	
Litigation and Contingent Liabilities
    	
23
    
	
Section 615.
    	
Title; Liens
    	
23
    
	
Section 616.
    	
Subsidiaries
    	
24
    
	
Section 617.
    	
No Partnership
    	
24
    
	
Section 618.
    	
Pension and Welfare Plans
    	
24
    
	
Section 619.
    	
Ownership of the Issuer
    	
24
    
	
Section 620.
    	
Security Interest Representations
    	
24
    
	
Section 621.
    	
Tax Election of the Issuer
    	
25
    
	
Section 622.
    	
Survival of Representations and Warranties
    	
25
    
	
 
    	
 
    	
 
    
	
ARTICLE VII Miscellaneous   Provisions
    	
25
    
	
 
    	
 
    	
 
    
	
Section 701.
    	
Ratification of Indenture
    	
25
    
	
Section 702.
    	
Counterparts
    	
26
    
	
Section 703.
    	
Governing Law
    	
26
    
	
Section 704.
    	
Amendments and Modifications
    	
26
    
	
Section 705.
    	
Consent to Jurisdiction
    	
26
    
	
Section 706.
    	
Waiver of Jury Trial
    	
26
    

 

EXHIBITS

 

EXHIBIT A                                  Form of Series 2011-1 Note

 

SCHEDULES

 

SCHEDULE 1                        Percentage of Minimum Targeted Principal Balance Series 2011-1 Notes

SCHEDULE 2                        Commitments

 

ii

 

This SERIES 2011-1 SUPPLEMENT, dated as of April 1, 2011 (as amended, modified or supplemented from time to time in accordance with the terms hereof, this “Supplement”),  is between  TAL ADVANTAGE III LLC, a limited liability company organized under the laws of Delaware (the “Issuer”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as indenture trustee (the “Indenture Trustee”).

 

Each party agrees as follows for the benefit of the other party and the Series 2011-1 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.

 

“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 LIBOR Determination Date for such Interest Accrual Period by (ii) the decimal equivalent of 100% minus the Eurodollar Reserve Percentage on such LIBOR Determination Date.

 

“Aggregate Series 2011-1 Principal Balance” means, as of any date of determination, an amount equal to the sum of the Series 2011-1 Principal Balances of all Series 2011-1 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 with respect to each Series 2011-1 Advance, four and one quarter of one percent (4.25%); or

 

(ii)                                  on or after the Conversion Date with respect to each Series 2011-1 Advance, five and three quarters of one percent (5.75%).

 

“Availability” means, as of any date of determination for any Series 2011-1 Noteholder, the lesser of:

 

(A) the excess, if any, of (x) the Series 2011-1 Note Existing Commitment of such Series 2011-1 Noteholder on such date of determination over (y) the then Series 2011-1

 

 

Principal Balance of the Series 2011-1 Note owned by such Series 2011-1 Noteholder on such date of determination; and

 

(B) such Series 2011-1 Noteholder’s Percentage of an amount equal to the excess, if any, of (x) the Asset Base, over (y) the then Aggregate Note Principal Balance (calculated without giving effect to the requested Series 2011-1 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 sum of 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 2011-1 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 2011-1 Noteholder to fund or maintain a Series 2011-1 Advance, as the case may be, during such Interest Accrual Period.

 

“Closing Date” means April 1, 2011.

 

“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 2011-1 Notes, the Majority of Holders of the Series 2011-1 Notes.

 

“Conversion Date” means, with respect to the Series 2011-1 Notes, the earlier to occur of (i) the date on which an Early Amortization Event occurs under any Series of Notes issued pursuant to the Indenture, and (ii) the Scheduled Commitment Expiration Date.

 

“Default Fee” means, for any Payment Date on which interest on overdue amounts is payable in accordance with the provisions of Section 203(b) hereof, the amount of interest payable on such Payment Date pursuant to the provisions of Section 203(b).

 

“Default Rate” means, for any date of determination, an interest rate per annum equal to the sum of (i) the interest rate then otherwise in effect on the Series 2011-1 Notes, plus (ii) two percent (2%).

 

“Deficiency Amount” means (a) for each Payment Date other than the Series 2011-1 Legal Final Maturity Date, any shortfall in the aggregate amount available in the Series 2011-1 Series Account for the Series 2011-1 Notes or any other amounts available under the Indenture or this Supplement to pay the Series 2011-1 Interest Payment for such Payment Date, and (b) on the Series 2011-1 Legal Final Maturity Date, any shortfall in the aggregate amount available in the Series 2011-1 Series Account or any other amounts available under the Indenture or this Supplement to pay the then Aggregate Series 2011-1 Principal Balance, accrued but unpaid interest thereon and all other amounts owing to the Series 2011-1 Noteholders pursuant to the terms of the Series 2011-1 Transaction Documents.

 

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“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 2011-1 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 2011-1 Note, or (b) the inability of a Series 2011-1 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 2011-1 Note, (c) a determination by a Series 2011-1 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 2011-1 Noteholder (or any of its assignees or participants) of making, funding or maintaining any Series 2011-1 Advance for such Interest Accrual Period, or (d) any Series 2011-1 Noteholder (or any of its assignees or participants) shall have notified the Deal Agent of the inability, for any reason, of such Series 2011-1 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.

 

“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 2011-1 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 2011-1 Advance made on a date other than the first day of an Interest Accrual Period, the initial Interest Accrual Period for such Series 2011-1 Advance shall begin on the day of such Series 2011-1 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 2011-1 Notes, either (A) if there are fewer than three Series 2011-1 Noteholders, one or more Series 2011-1 Noteholders holding Notes constituting one hundred percent (100%) of the then Aggregate Series 2011-1 Principal Balance, or (B) at all times not covered by clause (A), one or more Series 2011-1 Noteholders holding Notes constituting more than fifty percent (50%) of the then Aggregate Series 2011-1 Principal Balance.

 

“Minimum Principal Payment Amount” means, for the Series 2011-1  Notes on any Payment Date, one of the following:

 

3

 

(1)                                  for any Payment Date on or prior to the Conversion Date, zero; or

 

(2)                                  for any Payment Date following the Conversion Date, the excess, if any, of (x) the Aggregate Series 2011-1 Principal Balance, over (y) the Minimum Targeted Principal Balance for the Series 2011-1 Notes for such Payment Date.

 

“Minimum Targeted Principal Balance” means for the Series 2011-1 Notes for each Payment Date, an amount equal to the product of (x) the Aggregate Series 2011-1 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 “Targeted Percentage”.

 

“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 2011-1 Noteholder as of any date of determination, a fraction (expressed as a percentage), the numerator of which is such Series 2011-1 Noteholder’s Series 2011-1 Note Existing Commitment and the denominator of which is equal to the sum of the Series 2011-1 Note Existing Commitments of all Series 2011-1 Noteholders.

 

“Plan” means any employee pension benefit plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA and that is established or maintained by the Issuer.

 

“Prime Rate” means the rate announced by Wells Fargo Bank, National Association, from time to time as its “prime rate” or “base rate” in the United States, such rate to change as and when such designated rate changes. The Prime Rate is not necessarily the lowest rate of interest charged by Wells Fargo Bank, National Association in connection with extensions of credit to debtors.

 

“Scheduled Commitment Expiration Date” shall have the meaning set forth in the Series 2011-1 Note Purchase Agreement.

 

“Series 2011-1” means the Series of Notes the terms of which are specified in this Supplement.

 

“Series 2011-1 Advance” means an advance of funds made by one or more of the Series 2011-1 Noteholders pursuant to the provisions of Section 205(b) of this Supplement.

 

“Series 2011-1 Expected Final Maturity Date” means the Payment Date occurring on the fourth (4th) anniversary of the Conversion Date.

 

“Series 2011-1 Interest Payment”  means, for each Payment Date, an amount equal to the sum, for each Series 2011-1 Advance outstanding for each day during the immediately preceding Interest Accrual Period, of  the product of (i) the principal amount of such Series 2011-1 Advance on such day, (ii) an amount equal to the sum of (x) the Applicable Funding Basis for such Series 2011-1 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 2011-1  Legal Final Maturity Date” means the Payment Date occurring on the fourth (4th) anniversary of the Conversion Date.

 

4

 

“Series 2011-1 Note Existing Commitment” means, with respect to any Series 2011-1 Noteholder, the purchase limit or commitment set forth in the Series 2011-1 Note Purchase Agreement, as such commitment may be reduced from time to time in accordance with the terms of the Series 2011-1 Note Purchase Agreement.

 

“Series 2011-1 Note Initial Commitment” means, with respect to any Series 2011-1 Noteholder, the amount set forth opposite the name of such Series 2011-1 Noteholder on Schedule 2 hereto (as such Schedule 2 shall be deemed to be amended by a properly executed Addition Notice (as such term is defined in the Series 2011-1 Note Purchase Agreement) or Assignment and Acceptance (as such term is defined in the Series 2011-1 Note Purchase Agreement)).

 

“Series 2011-1 Note Purchase Agreement” means the Note Purchase Agreement, dated as of April 1, 2011, among the Issuer, the initial Series 2011-1 Noteholder and various financial institutions from time to time, as such agreement may be amended or restated from time to time.

 

“Series 2011-1 Noteholder” shall mean the Person in whose name a Series 2011-1 Note is registered in the Note Register.

 

“Series 2011-1 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 2011-1 Principal Balance” means, with respect to any Series 2011-1 Note as of any date of determination, an amount equal to the excess, if any, of (x) the sum of all Series 2011-1 Advances made by such Series 2011-1 Noteholder on or subsequent to the Closing Date, over (y) the cumulative amount of all principal payments (including Prepayments) actually paid to such Series 2011-1 Noteholder subsequent to the Closing Date.

 

“Series 2011-1 Series Account” means a Series Account for Series 2011-1 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 2011-1 Transaction Documents” means this Supplement, the Series 2011-1 Notes, the Series 2011-1 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 2011-1 Notes, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.

 

“Series 2011-1 Unused Commitment” means, with respect to any Series 2011-1 Noteholder as of any date of determination, the excess, if any, of (i) the Series 2011-1 Note Existing Commitment then in effect for such Series 2011-1 Noteholder over (ii) the Series 2011-1 Principal Balance of the Series 2011-1 Note owned by such Series 2011-1 Noteholder as of such date of determination, such principal balance to be measured after giving effect to all Series 2011-1 Advances made and all principal payments to be received by such Series 2011-1 Noteholder on such date of determination.

 

“Step Up Warehouse Interest” means, for the Series 2011-1 Notes for each Payment Date, an amount equal to the sum, for each Series 2011-1 Advance outstanding for each day during the related Interest Accrual Period, of the product of (A) the principal balance of such Series 2011-1 Advance, (B) the Step Up Warehouse Interest Percentage, and (C) 1/360.

 

5

 

“Step Up Warehouse Interest Percentage” means, with respect to the Series 2011-1 Notes, an amount equal to either (A) during the period from the Closing Date to (but excluding) March 31, 2012, zero percent (0.00%) per annum, or (B) on and following March 31, 2012, four percent (4.00%) per annum.

 

“WFBNA” means Wells Fargo Bank, National Association

 

(b)                                 All other capitalized terms used herein and not otherwise defined shall have the meaning set forth in Appendix A to the Indenture, as such Appendix A may be amended, supplemented or otherwise modified from time to time in accordance with the provisions of the Indenture.  The rules of usage set forth in such Appendix A shall apply to this supplement.

 

ARTICLE II

 

Creation of the Series 2011-1 Notes; Modification of Indenture

 

Section 201.                                Designation and Principal Terms.  (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 2011-1 Floating Rate Secured Notes”.  The Series 2011-1 Notes will initially be issued in the initial aggregate maximum principal balance of up to Fifty Million Dollars ($50,000,000).  The Series 2011-1 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 2011-1 Notes are designated as a Series of Warehouse Notes.

 

(b)                                 The Payment Date with respect to the Series 2011-1 Notes shall be the twentieth (20th) day of each month, commencing April 20, 2011 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 2011-1 Notes shall be payable from funds on deposit in the Series 2011-1 Series Account or otherwise at the times and in the amounts set forth in Article III or Article VIII of the Indenture and Article III hereof.

 

(d)                                 The Series 2011-1 Interest Payment and the Commitment Fee shall constitute “Priority Payments” for Series 2011-1 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 2011-1.  All of the Events of Default set forth in Section 801 of the Indenture are applicable to Series 2011-1.

 

(f)                                    The “Initial Commitment” for Series 2011-1, as such term is referred to in the Indenture, shall mean the Series 2011-1 Note Initial Commitment.

 

(g)                                 The “Commitment” for Series 2011-1, as such term is referred to in the Indenture, shall mean the Series 2011-1 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.

 

6

 

(i)                                     The “Expected Final Maturity Date” for Series 2011-1, as such term is referred to in the Indenture, shall mean the Series 2011-1 Expected Final Maturity Date.

 

(j)                                     The “Legal Final Maturity Date” for Series 2011-1, as such term is referred to in the Indenture, shall mean the Series 2011-1 Legal Final Maturity Date.

 

(k)                                  For purposes of the Indenture, only the Series 2011-1 Interest Payment and the Commitment Fee shall be a Priority Payment.  For purposes of Section 801(1)(A) of the Indenture, the Series 2011-1 Interest Payment will be due and payable on each Payment Date.

 

(l)                                     The Series 2011-1 Notes have not been rated by a Rating Agency as of the Closing Date. Accordingly, any provision of the Series 2011-1 Transaction Documents requiring notification of, or providing notices to, the Rating Agencies shall not be applicable to Series 2011-1 Notes until such time (if any) a Rating Agency has assigned a rating to the Series 2011-1 Notes.

 

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 2011-1 Note Purchase Agreement, the Series 2011-1 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 2011-1 Note Purchase Agreement, shall deliver such Series 2011-1 Notes to the Noteholders in accordance with such written directions.

 

(b)                                 Definitive Notes.  In accordance with Section 202 of the Indenture, the Series 2011-1 Notes shall be represented by one or more Definitive Notes.

 

(c)                                  Original or Facsimile Signatures.  The Series 2011-1 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 2011-1 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 2011-1 Notes.  Notwithstanding the provisions of Section 205 of the Indenture (except for Section 205(l) thereof), each Series 2011-1 Noteholder may sell, transfer or assign its Series 2011-1 Note(s) provided that (i) such Series 2011-1 Noteholder must obtain the Issuer’s prior written consent authorizing such Series 2011-1 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 2011-1 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 2011-1 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 202(e) (except as relating to the application of Section 205(l) of the Indenture) may be modified in a written agreement between the Issuer and the Indenture Trustee.

 

7

 

Section 203.                                Interest and Other Payments on the Series 2011-1 Notes.

 

(a)                                  Interest on Series 2011-1 Notes.  Interest will be owing on the Series 2011-1 Notes in an amount equal to the Series 2011-1 Interest Payment, which shall be payable on each Payment Date from amounts on deposit in the Series 2011-1 Series Account in accordance with Section 302 hereof including the priority of payments set forth therein.  In addition, under certain circumstances described in the definitions of “Step Up Warehouse Interest” and “Step Up Warehouse Interest Percentage”, Step Up Warehouse Interest will be payable on the Series 2011-1 Notes.  Such Step Up Warehouse Interest shall be payable on each Payment Date from amounts on deposit in the Series 2011-1 Series Account in accordance with Section 302 of this Supplement.  To the extent that any Step Up Warehouse Interest payable on any Payment Date and is not paid in full on such date, the shortfall in the payment of such Step Up Warehouse Interest, together with interest thereon at the non-default interest rate applicable to the Series 2011-1 Notes, shall be payable on the immediately succeeding Payment Date to the extent permitted by Applicable Law.

 

(b)                                 Interest on Overdue Amounts.  If the Issuer shall default in the payment of (i) the unpaid principal balance of any Series 2011-1 Notes on the Series 2011-1 Legal Final Maturity Date, (ii) the Series 2011-1 Interest Payment on any Series 2011-1 Note when due, or (iii) following the acceleration of the Series 2011-1 Notes in accordance with the terms of the Indenture or any other amount owing under the Indenture not covered in clauses (i) and (ii) which is not paid when due, the Issuer shall, from time to time, pay interest on such unpaid amounts, to the extent permitted by Applicable Law, to, but not including, the date of actual payment (after as well as before judgment), at a rate per annum equal to the Default Rate, for the period during which such principal, interest or other amount shall be unpaid from the due date of such payment to but not including the date of actual payment thereof.  All Default Fees shall be payable at the times and subject to the priorities set forth in Section 302 hereof.

 

(c)                                  Maximum Interest Rate.  In no event shall the interest charged with respect to a Series 2011-1 Note exceed the maximum amount permitted by Applicable Law.  If at any time the interest rate charged with respect to the Series 2011-1 Notes exceeds the maximum rate permitted by Applicable Law, the rate of interest to accrue pursuant to this Supplement and such Series 2011-1 Note shall be limited to the maximum rate permitted by Applicable Law.

 

Section 204.                                Principal Payments on the Series 2011-1 Notes; Scheduled Amortization of Series 2011-1 Notes.

 

(a)                                  The principal balance of the Series 2011-1 Notes shall be payable on each Payment Date from amounts on deposit in the Series 2011-1 Series Account in an amount equal to (i) so long as no Early Amortization Event or Event of Default is continuing, the Minimum Principal Payment Amount and the allocable portion of the Supplemental Principal Payment Amount (if any) for such Series 2011-1 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 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), the Minimum Principal Payment Amount and then unpaid Series 2011-1 Principal Balance of such Series 2011-1 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 for Series 2011-1 on each Payment Date is subordinated to payment in full on such Payment Date of the Minimum Principal Payment Amount for the Series 2011-1 Notes.  The unpaid principal amount of each Series 2011-1 Note, together with all unpaid

 

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interest (including all Default Fees), fees (including all Commitment Fees), expenses, costs and other amounts payable by the Issuer to the Series 2011-1 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 2011-1 Notes have been accelerated in accordance with Section 802 of the Indenture and (y) the Series 2011-1 Legal Final Maturity Date.

 

(b)                                 The Issuer may, on any Payment Date and upon four (4) Business Days’ prior notice to the Series 2011-1 Noteholders in accordance with the terms of Section 8.2 of the Series 2011-1 Note Purchase Agreement, voluntarily prepay all, or any part, of the Series 2011-1 Principal Balance by making a wire transfer to the Series 2011-1 Noteholders; provided, however, that the Issuer may not make such repayment from funds in the Trust Account, the Series 2011-1 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 2011-1 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 2011-1 Principal Balance.  In the event of any Prepayment of the Notes in accordance with this Section 204(b) or any other provision of the Indenture, the Issuer shall pay, if such Prepayment is made on a date other than a Payment Date, any Breakage Costs incurred by the Series 2011-1 Noteholders in connection with such prepayment.

 

(c)                                  Any Prepayment of less than the entire Aggregate Series 2011-1 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 2011-1 Notes were a Series of Term Notes.

 

Section 205.                                Amounts and Terms of Series 2011-1 Noteholder Commitments.

 

(a)                                  Commitments.  Subject to the terms and conditions of this Supplement and the Series 2011-1 Note Purchase Agreement, each Series 2011-1 Noteholder shall make its Percentage of the Series 2011-1 Note Initial Commitment available to the Issuer on the Closing Date.

 

(b)                                 Advances.  Prior to the Conversion Date, each Series 2011-1 Note shall be a revolving note with a maximum principal amount equal to the Series 2011-1 Note Existing Commitment then in effect for the related Series 2011-1 Noteholder.  The Administrative Agent and each Series 2011-1 Noteholder shall maintain a record of all Series 2011-1 Advances and repayments made on the Series 2011-1 Notes and absent manifest error such records shall be conclusive.  Each request for a Series 2011-1 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 2011-1 Advance to be funded by the Series 2011-1 Noteholders.  The Administrative Agent shall promptly forward any such Funding Notice (as defined in Section 2.1(b) of the Series 2011-1 Note Purchase Agreement), with the attached Asset Base Certificate, to each Series 2011-1 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 2011-1 Noteholders shall, subject to the terms and conditions of this Supplement and the Series 2011-1 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 2011-1 Advance; provided, however, that each Series 2011-1 Advance by each Series 2011-1 Noteholder shall be for: (I) a minimum amount of the lesser of (x) its then unused Series 2011-1 Note Existing Commitment and (y) such Series 2011-1

 

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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 2011-1 Noteholder on such Business Day.  In the event that any Series 2011-1 Noteholder fails to make a Series 2011-1 Advance in accordance with its Series 2011-1 Note Existing Commitment, the other Series 2011-1 Noteholder(s) may but shall not be obligated to fund the Percentage of the defaulted Series 2011-1 Noteholder(s).

 

Each request for a Series 2011-1 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 2011-1 Notes contained in the Series 2011-1 Transaction Documents are true, correct and complete in all material respects to the same extent as though made on and as of the date of the request, except to the extent such representations and warranties specifically relate to an earlier date, in which event they shall be true, correct and complete in all material respects as of such earlier date.

 

If (i) any Series 2011-1 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 2011-1 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 2011-1 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 2011-1 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 2011-1 Unused Commitment of such Series 2011-1 Noteholder on such day.  The Commitment Fee shall also include any additional fee which is designated as such in any side letter between the Issuer and any Series 2011-1 Noteholder.  Such Commitment Fee shall be payable from amounts then on deposit in the Series 2011-1 Series Account, or amounts otherwise available for such purpose, in accordance with Section 302 hereof.

 

Section 206.                                Taxes.

 

(a)                                  Subject to clause (g) below, in addition to payments of principal and interest on the Series  2011-1 Notes when due, the Issuer shall pay, but only in accordance with the priorities for distributions set forth in Section 302 hereof, each Series 2011-1 Noteholder (an “Indemnified Party”) any and all present or future taxes, fees, duties, levies, imposts, or charges, or any other similar deduction or withholding, whatsoever imposed by any Governmental Authority on an Indemnified Party, 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 2011-1 Noteholder or by deduction or withholding from any payment made in respect of a Series 2011-1 Note, on account of a connection, whether present or former, between the Series 2011-1 Noteholder and the relevant taxing jurisdiction, (iv) withholding taxes imposed on any payment in respect of a Series 2011-1 Note other than on account of a change in law or

 

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regulation occurring after the Person in respect of which such tax is imposed acquired a beneficial interest in a Series 2011-1 Note, and (v) any withholding taxes imposed under section 1471 through section 1474 of the Code (all such non-excluded taxes, fees, duties, 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 2011-1 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.

 

(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

 

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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 clause (b), 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 2011-1 Notes 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 (other than any withholding taxes imposed under section 1471 through section 1474 of the Code) occurring after the date the Person in respect of which such tax is imposed acquired a beneficial interest in a Series 2011-1 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 2011-1 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 2011-1 Note to an Affiliate in another jurisdiction if the making of such a filing or transfer to an Affiliate, as the case may be, would avoid the need for or reduce the amount of any payment of such additional amounts that may thereafter accrue and would not, in the good faith determination of such Indemnified Party, be disadvantageous to it.

 

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(i)                                     If an Indemnified Party receives any refund or is entitled to a Tax credit with respect to Taxes 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 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 2011-1 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 2011-1 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.

 

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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 2011-1 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 demand if such Indemnified Party knew of the circumstances giving rise to such Increased Costs and other amounts owed pursuant to this Section 207 and of the fact that such circumstances would result in a claim for increased compensation by reason of such Increased Costs and other amounts owed pursuant to this Section 207.

 

Section 208.                                Capital Requirements.

 

If any Indemnified Party shall determine that (i) any 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 ten (10) days after written demand for the payment thereof, 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.

 

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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 2011-1 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 demand if such Indemnified Party knew of the circumstances giving rise to such reductions and of the fact that such circumstances would result in a claim for increased compensation by reason of such reductions.

 

Section 209.                                Replacement of Series 2011-1 Noteholder.

 

In the event (i) any Series 2011-1 Noteholder (or any Indemnified Party with respect to any Series 2011-1 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 2011-1 Noteholder (or any Indemnified Party with respect to any Series 2011-1 Noteholder) or any Governmental Authority on account of any Series 2011-1 Noteholder (or any Indemnified Party with respect to any Series 2011-1 Noteholder) pursuant to Section 206 or Section 207 or Section 208 or (iii) any Series 2011-1 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 2011-1 Noteholder), the Issuer may, at its sole expense and effort, upon notice to such Series 2011-1 Noteholder, require such Series 2011-1 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 2011-1 Noteholder, if a Series 2011-1 Noteholder accepts such assignment); provided that:

 

(i)                                     such Series 2011-1 Noteholder shall have received payment of an amount equal to the outstanding principal of its Series 2011-1 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 2011-1 Series Account and
 Allocation and Application of Amounts Therein

 

Section 301.                                Series 2011-1 Series Account.  The Issuer shall establish on the Closing Date and maintain, so long as any Series 2011-1 Note is Outstanding, an Eligible Account in the name of the Issuer with the Indenture Trustee which shall be designated as the Series 2011-1 Series Account, which account shall be pledged to the Indenture Trustee pursuant to the Indenture for the benefit of the Series 2011-1 Noteholders and any Hedge Counterparty.  The Series 2011-1 Series Account shall only be relocated to another financial institution in accordance with the express provisions of Section 303(d) of

 

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the Indenture.  All deposits of funds in the Series 2011-1 Series Account by, or for the benefit of, the Series 2011-1 Noteholders from the Trust Account and the Restricted Cash Account, shall be accumulated in, and withdrawn from, the Series 2011-1 Series Account in accordance with the provisions of the Indenture and this Supplement.

 

Section 302.                                Distributions from Series 2011-1 Series Account.  On each Payment Date, the Indenture Trustee shall distribute funds then on deposit in the Series 2011-1 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 2011-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2011-1 Interest Payment for such Payment Date;

 

(b)                                 To each Series 2011-1 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 2011-1 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 2011-1 Noteholders on such Payment Date;

 

(d)                                 To each Series 2011-1 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 2011-1 Noteholders on such Payment Date, until the Aggregate Series 2011-1 Principal Balance has been reduced to zero;

 

(e)                                  To each Series 2011-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Step Up Warehouse Interest then due and payable to the Series 2011-1 Noteholders on such Payment Date;

 

(f)                                    To each Series 2011-1 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 2011-1 Noteholders and each other Indemnified Party pursuant to the Series 2011-1 Transaction Documents; and

 

(g)                                 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 2011-1 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):

 

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(a)                                  To each Series 2011-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2011-1 Interest Payment for such Payment Date;

 

(b)                                 To each Series 2011-1 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 2011-1 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 2011-1 Noteholders on such Payment Date;

 

(d)                                 To each Series 2011-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the then Aggregate Series 2011-1 Principal Balance until the Aggregate Series 2011-1 Principal Balance has been reduced to zero;

 

(e)                                  To each Series 2011-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Step Up Warehouse Interest then due and payable to the Series 2011-1 Noteholders on such Payment Date;

 

(f)                                    To each Series 2011-1 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 2011-1 Noteholders pursuant to the Series 2011-1 Transaction Documents; and

 

(g)                                 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 2011-1 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 2011-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2011-1 Interest Payment for such Payment Date;

 

(b)                                 To each Series 2011-1 Noteholder on the immediately preceding Record Date on a pro rata basis, an amount equal to the then Aggregate Series 2011-1 Principal Balance until the Aggregate Series 2011-1 Principal Balance has been reduced to zero;

 

(c)                                  To each Series 2011-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Step Up Warehouse Interest then due and payable to the Series 2011-1 Noteholders on such Payment Date;

 

(d)                                 To each Series 2011-1 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

 

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the Series 2011-1 Noteholders pursuant to the Series 2011-1 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 2011-1 Series Account.

 

Any amounts payable to a Series 2011-1 Noteholder pursuant to this Section 302 shall be made by wire transfer of immediately available funds to the account that such Series 2011-1 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 2011-1 Noteholders:

 

Section 401.                                Increase in the Aggregate Series 2011-1 Note Existing Commitment.  The Issuer shall not issue on or after the Closing Date any additional Series 2011-1 Notes pursuant to this Supplement or increase the aggregate Series 2011-1 Note Existing Commitment without the prior written consent of the Control Party for the Series 2011-1.  Nothing contained in this Section 401 shall prohibit the assignment by any Series 2011-1 Noteholder of all or a portion of its Series 2011-1 Note Existing Commitment if, after giving effect to such assignment, the aggregate Series 2011-1 Note Existing Commitment shall not have increased.

 

Section 402.                                Issuance of Additional Series of Notes.  So long as the Series 2011-1 Supplement and related Series 2011-1 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 2011-1.  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 2011-1 Notes shall be used as follows: (i) to acquire Containers and Related Assets, (ii) to pay the costs of issuance of the Series 2011-1 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 Limited Liability Company Agreement).  For avoidance of doubt, the Issuer may use the proceeds of any Series 2011-1 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 2011-1 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 2011-1 Notes.

 

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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 regulations of the United States Department of the Treasury.

 

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 2011-1 Noteholders.

 

(a)                                  Series 2011-1 Note.  A separate Series 2011-1 Note executed by the Issuer in favor of each Series 2011-1 Noteholder in the stated principal amount equal to the Series 2011-1 Note Initial Commitment of each such Series 2011-1 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 2011-1 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 2011-1 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 2011-1 Noteholders, shall have been executed and delivered by the Issuer and all other parties thereto, together with all Uniform Commercial Code financing statements and documents of similar import filed in the appropriate 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 2011-1 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 2011-1 Transaction Documents.  The Series 2011-1 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.

 

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Notwithstanding the foregoing conditions precedent, upon the making of any advance by a Noteholder, all of the Indenture Trustee’s and Noteholders’ rights under the Indenture and this Supplement shall vest in such Persons, whether or not the conditions precedent were in fact satisfied.

 

Section 502.                                Advances on Series 2011-1 Notes.  The obligation of each of the Series 2011-1 Noteholders to make a Series 2011-1 Advance pursuant to its commitment under the Series 2011-1 Transaction Documents is subject to the following further conditions precedent being fulfilled with respect to each such Series 2011-1 Advance:

 

(a)                                  Default.  Before and after giving effect to such Series 2011-1 Advance, no Event of Default shall have occurred and be continuing unless such Series 2011-1 Advance has been approved by each Series 2011-1 Noteholder.

 

(b)                                 Early Amortization Event.  Before and after giving effect to such Series 2011-1 Advance, no Early Amortization Event shall have occurred and be continuing unless such Series 2011-1 Advance has been approved by each Series 2011-1 Noteholder.

 

(c)                                  Asset Base Imbalance.  Before and after giving effect to such Series 2011-1 Advance, the Aggregate Note Principal Balance (calculated after giving effect to such Series 2011-1 Advance) does not exceed the Asset Base (calculated to give effect to the Eligible Containers to be acquired with the proceeds of such Series 2011-1 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 2011-1 Advance).

 

(e)                                  Conversion Date.  The Conversion Date shall not have occurred.

 

(f)                                    Note Purchase Agreement.  All conditions precedent to such Series 2011-1 Advance set forth in the Series 2011-1 Note Purchase Agreement have been met.

 

(g)                                 Discharge of Existing Indebtedness.  If the Issuer requests that the proceeds of such Series 2011-1 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 2011-1 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 2011-1 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.

 

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ARTICLE VI

 

Representations and Warranties

 

The Issuer hereby represents and warrants (as of the Closing Date and each date on which a Series 2011-1 Advance is made) to the Series 2011-1 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 2011-1 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 2011-1 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 2011-1 Transaction Documents.  The execution, delivery and performance by the Issuer of this Supplement, the Indenture and the other Series 2011-1 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 2011-1 Transaction Documents and the execution, delivery and payment of the Series 2011-1 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 2011-1 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 2011-1 Transaction Document to which the Issuer is a party, when duly executed and delivered, will be, legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by general principles of equity limiting the availability of equitable remedies.

 

Section 605.                                Material Adverse Change.  Since its date of formation, there has been no Material Adverse Change in the financial condition of the Issuer.

 

Section 606.                                Place of Business.  The legal name of the Issuer as reflected on its certificate of formation is “TAL Advantage III LLC”.  The current location of the Issuer’s chief executive

 

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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 2011-1 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 2011-1 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 2011-1 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 2011-1 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 2011-1 Advances under this Supplement to be considered a “purpose credit” within the meaning of Regulations T, U and X of the Federal Reserve Board.  The Issuer will not take or permit any agent acting on its behalf to take any action which might cause the Indenture or this Supplement or any document or instrument delivered by the Issuer pursuant hereto to violate any regulation of the Federal Reserve Board.

 

Section 610.                                Taxes.  All federal, state, local and foreign tax returns, reports and statements required to be filed by the Issuer have been filed with the appropriate Governmental Authorities, and all Taxes, Other Taxes and other impositions shown thereon to be due and payable by the Issuer have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof, or any such fine, penalty, interest, late charge or loss has been paid, or the Issuer is contesting its liability therefor in good faith and has fully reserved all such amounts according to GAAP in the financial statements provided pursuant to Section 625 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.

 

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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 2011-1 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 2011-1 Transaction Documents will not violate any provision of the Investment Company Act of 1940, as amended, 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 2011-1 Transaction Documents and after giving effect to such transactions, the Issuer will not be left with an unreasonably small amount of capital with which to engage in its business nor will the Issuer have intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they mature.  The Issuer does not contemplate the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, trustee or similar official in respect of the Issuer or any of its assets.

 

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

 

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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 2011-1 Series Account constitute “securities accounts” within the meaning of the UCC.  The Issuer’s contractual rights under any Hedge Agreements, the Contribution and Sale Agreement and the Management Agreement constitute “general intangibles” within the meaning of the UCC.

 

(c)                                  The Issuer owns and has good and marketable title to the Collateral, free and clear of any Lien (whether senior, junior or pari passu), claim or encumbrance of any Person, except for Permitted Encumbrances.

 

(d)                                 The Issuer has caused the filing of all appropriate financing statements or documents of similar import in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the security interest in the Collateral granted to the Indenture Trustee in the Indenture.

 

(e)                                  Other than the security interest granted to the Indenture Trustee pursuant to the Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral, except as permitted pursuant to the Indenture.  The Issuer has not authorized the filing of, and is not aware of, any financing statements against the Issuer that include a description of collateral covering the Collateral other than any financing statement or document of similar import (i) relating to the security interest granted to the 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

 

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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 2011-1 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 2011-1 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 2011-1 Series Account) to comply with Entitlement Orders of any Person other than the Indenture Trustee.

 

(j)                                     No creditor of the Issuer (other than (x) with respect to the Managed Containers, the related lessee and (y) the Manager in its capacity as Manager under the Management Agreement) has in its possession any goods that constitute or evidence the Collateral, other than for purposes of repair, refurbishment, painting, positioning, storage and other similar matters with respect to Managed Containers.

 

The representations and warranties set forth in this Section 620 shall survive until this Supplement is terminated in accordance with its terms and the terms of the Indenture.  Any breaches of the representations and warranties set forth in this Section 620 may be waived by the Indenture Trustee, only with the prior written consent of the Control Party.

 

Section 621.                                Tax Election of the Issuer.  None of the Issuer, any of its members or any other Person has elected, or agreed to elect, to treat the Issuer as an association taxable as a corporation for United States federal income tax purposes.

 

Section 622.                                Survival of Representations and Warranties.  So long as any of the Series 2011-1 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.

 

25

 

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, ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS SUPPLEMENT, AND THE RELATIONSHIP OF THE PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES WITH RESPECT TO 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 2011-1 Noteholder.  For the purposes of clause (B) of the preceding sentence, any amendment to or modification or waiver of this Supplement shall be deemed a Supplemental Indenture subject to Sections 1001 or 1002 of the Indenture.  The Series 2011-1 Note Existing Commitment of an individual Series 2011-1 Noteholder may only be increased, and the Conversion Date of an individual Series 2011-1 Noteholder may only be extended, in accordance with the provisions of Section 8.1(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 2011-1 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.

 

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[Signature page follows.]

 

27

 

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 2011-1 SUPPLEMENT

 

 

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

 

 

SERIES 2011-1 SUPPLEMENT

 

 

EXHIBIT A

 

FORM OF SERIES 2011-1 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 2011-1 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 2011-1

 

	
 
    	
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 2011-1 Supplement, dated as of April 1, 2011 (as amended, restated or otherwise modified from time to time, the “Series 2011-1 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 2011-1 Note on the dates and in the amounts set forth in the Indenture and the Series 2011-1 Supplement, and (iii) certain other amounts as provided in the Indenture and the Series 2011-1 Supplement.  A record of each Series 2011-1 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 2011-1 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 2011-1 Note is payable at the times and in the amounts set forth in the Indenture and the Series 2011-1 Supplement by wire transfer of immediately available funds to the account designated in writing to the Indenture Trustee at least five Business Days prior to the applicable Payment Date by the Holder of record on the immediately preceding Record Date .  This Series 2011-1 Note is a Warehouse Note.

 

This Series 2011-1 Note is one of the authorized notes identified in the title hereto and issued in the aggregate principal amount of up to Fifty Million Dollars ($50,000,000) pursuant to the Indenture and the Series 2011-1 Supplement.

 

This Series 2011-1 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 2011-1 Supplement.

 

This Series 2011-1 Note is transferable as provided in the Indenture and the Series 2011-1 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 2011-1 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 2011-1 Note.

 

The Issuer, the Indenture Trustee and any other agent of the Issuer shall treat the person in whose name this Series 2011-1 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 2011-1 Note is subject to Prepayment, at the times and subject to the conditions set forth in the Indenture and the Series 2011-1 Supplement.

 

If an Event of Default shall occur and be continuing, the principal of and accrued interest on this Series 2011-1 Note may be declared to be due and payable in the manner and with the effect provided in the Indenture and the Series 2011-1 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 2011-1 Note and on all future holders of this Series 2011-1 Note and of any Series 2011-1 Note issued in lieu hereof.  Supplements and amendments to the Indenture and the Series 2011-1 Supplement may be made only to the extent and in circumstances permitted by the Indenture and the Series 2011-1 Supplement.

 

The Holder of this Series 2011-1 Note shall have no right to enforce the provisions of the Indenture and the Series 2011-1 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 2011-1 Supplement, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided under certain

 

2

 

circumstances described in the Indenture and the Series 2011-1 Supplement; provided, however, that nothing contained in the Indenture and the Series 2011-1 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 2011-1 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 2011-1 Supplement.

 

Each Holder of a Series 2011-1 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 2011-1 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 2011-1 Note (i) agrees to treat this Series 2011-1 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 2011-1 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 2011-1 Transaction Documents.

 

All terms and provisions of the Indenture and the Series 2011-1 Supplement are herein incorporated by reference as if set forth herein in their entirety.  In the event of any conflict between this Series 2011-1 Note, on the one hand, and the Indenture or the Series 2011-1 Supplement, on the other hand, the Indenture or the Series 2011-1 Supplement, as applicable, shall control.

 

IT IS HEREBY CERTIFIED, RECITED AND DECLARED, that all acts, conditions and things required to exist, happen and be performed precedent to the execution and delivery of the Indenture and the Series 2011-1 Supplement and the issuance of this Series 2011-1 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 2011-1 Note shall not be entitled to any benefit under the Indenture and the Series 2011-1 Supplement, or be valid or obligatory for any purpose.

 

[Remainder of Page Intentionally Left Blank]

 

3

 

IN WITNESS WHEREOF, TAL Advantage III LLC has caused this Series 2011-1 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 2011-1 Notes described in the within-mentioned Indenture and the Series 2011-1 Supplement.

 

	
 
    	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
 
    	
as   indenture trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    

 

 

SCHEDULE 1

 

Percentage of Minimum Targeted Principal Balance

Series 2011-1 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
    	
%
    
	
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
    	
%
    

 

Sch. 1 - 1

 

SCHEDULE 2

 

	
Series 2011-1
   Noteholder
    	
 
    	
Commitment on
   Closing Date
    	
 
    	
Percentage of
   Commitment
    	
 
    
	
Wells Fargo Bank, National Association
    	
 
    	
$
    	
50,000,000
    	
 
    	
100
    	
%
    
							

 

Sch. 1 - 2Exhibit 4.62

 

 

SERIES 2011-1 NOTE PURCHASE AGREEMENT

 

Dated as of April 1, 2011

 

between

 

TAL Advantage III LLC,

 

as Issuer,

 

the noteholders from time to time party hereto

 

and

 

the other financial institutions from time to time party hereto

 

 

TAL ADVANTAGE III LLC Series 2011-1, Floating Rate Secured Notes

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
Page No.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1.1
    	
 
    	
Certain Defined Terms
    	
 
    	
1
    
	
 
    	
Section 1.2
    	
 
    	
Other Terms
    	
 
    	
3
    
	
 
    	
Section 1.3
    	
 
    	
Computation of Time Periods
    	
 
    	
3
    
	
 
    	
Section 1.4
    	
 
    	
Statutory References
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE II PURCHASE OF THE   NOTES
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 2.1
    	
 
    	
Sale and Delivery of the Notes
    	
 
    	
3
    
	
 
    	
Section 2.2
    	
 
    	
Acceptance and Custody of Notes
    	
 
    	
4
    
	
 
    	
Section 2.3
    	
 
    	
Reduction of the Series 2011-1 Note Existing   Commitment
    	
 
    	
4
    
	
 
    	
Section 2.4
    	
 
    	
Payments, Computations, Etc.
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE III CONDITIONS OF   PURCHASE
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 3.1
    	
 
    	
Conditions Precedent to Initial Purchase
    	
 
    	
5
    
	
 
    	
Section 3.2
    	
 
    	
Conditions Precedent to Each Series 2011-1 Advance
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV REPRESENTATIONS   AND WARRANTIES
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 4.1
    	
 
    	
Representations and Warranties of the Issuer
    	
 
    	
5
    
	
 
    	
Section 4.2
    	
 
    	
Representations, Warranties and Agreements of the   Purchasers
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V GENERAL COVENANTS
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 5.1
    	
 
    	
General Covenants of the Issuer
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI INDEMNIFICATION
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.1
    	
 
    	
Indemnities by the Issuer
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII THE DEAL AGENT
    	
 
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 7.1
    	
 
    	
Authorization and Securities Action
    	
 
    	
9
    
	
 
    	
Section 7.2
    	
 
    	
Delegation of Duties
    	
 
    	
9
    
	
 
    	
Section 7.3
    	
 
    	
Exculpatory Provisions
    	
 
    	
9
    
	
 
    	
Section 7.4
    	
 
    	
Reliance
    	
 
    	
9
    
	
 
    	
Section 7.5
    	
 
    	
Non-Reliance on Deal Agents and Other Purchasers
    	
 
    	
10
    
	
 
    	
Section 7.6
    	
 
    	
Deal Agent in its Individual Capacity
    	
 
    	
10
    
	
 
    	
Section 7.7
    	
 
    	
Successor Deal Agent
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII MISCELLANEOUS
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 8.1
    	
 
    	
Amendments and Waivers
    	
 
    	
11
    
	
 
    	
Section 8.2
    	
 
    	
Notices, Etc.
    	
 
    	
11
    
	
 
    	
Section 8.3
    	
 
    	
No Waiver; Remedies
    	
 
    	
11
    
	
 
    	
Section 8.4
    	
 
    	
Binding Effect
    	
 
    	
12
    
	
 
    	
Section 8.5
    	
 
    	
Term of this Agreement
    	
 
    	
12
    

 

i

 

	
 
    	
Section 8.6
    	
 
    	
GOVERNING LAW
    	
 
    	
12
    
	
 
    	
Section 8.7
    	
 
    	
WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION
    	
 
    	
12
    
	
 
    	
Section 8.8
    	
 
    	
Inspection Rights, Costs, Expenses and Taxes
    	
 
    	
13
    
	
 
    	
Section 8.9
    	
 
    	
No Proceedings
    	
 
    	
13
    
	
 
    	
Section 8.10
    	
 
    	
Recourse Against Certain Parties
    	
 
    	
14
    
	
 
    	
Section 8.11
    	
 
    	
Ratable Payments
    	
 
    	
15
    
	
 
    	
Section 8.12
    	
 
    	
Confidentiality
    	
 
    	
15
    
	
 
    	
Section 8.13
    	
 
    	
Execution in Counterparts; Severability; Integration
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCHEDULE 1
    	
 
    	
 
    	
CONDITIONS   PRECEDENT TO INITIAL PURCHASE
    	
 
    	
 
    
	
SCHEDULE 2
    	
 
    	
 
    	
PURCHASE   LIMITS
    	
 
    	
 
    
	
EXHIBIT A
    	
 
    	
 
    	
FORM OF   COMPLIANCE CERTIFICATE AND FUNDING NOTICE
    	
 
    	
 
    
	
EXHIBIT B
    	
 
    	
 
    	
FORM OF   ADDITION NOTICE
    	
 
    	
 
    
	
EXHIBIT C
    	
 
    	
 
    	
FORM OF   ASSIGNMENT AND ACCEPTANCE
    	
 
    	
 
    

 

ii

 

This SERIES 2011-1  NOTE PURCHASE AGREEMENT (as amended, modified and supplemented from time to time in accordance with its terms, this “Agreement”), dated as of April 1, 2011, is entered into by and among:

 

1.                                       TAL ADVANTAGE III LLC, a limited liability company organized under the laws of the State of Delaware (together with its successors and assigns, the “Issuer”);

 

2.                                       The PURCHASERS from time to time party hereto; and

 

3.                                       The financial institutions made party to this Agreement from time to time pursuant to an Addition Notice and listed under the heading “The Deal Agents” together with their respective successors and assigns (the “Deal Agents”), provided that Wells Fargo Securities, LLC shall be the Deal Agent for the initial Purchaser by signing this Agreement.

 

In consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1             Certain Defined Terms.

 

(1)           Certain capitalized terms used throughout this Agreement are defined above or in this Section 1.1.  In addition, capitalized terms used but not defined herein have the meanings given to such terms in the Appendix A to the Indenture, dated as of October 23, 2009 (as amended, restated or supplemented from time to time, the “Indenture”), by and between the Issuer and Wells Fargo Bank, National Association, as indenture trustee (the “Indenture Trustee”) or, if such terms are not defined therein, such terms shall have the meanings given to such terms in the Series 2011-1 Supplement, dated as of April 1, 2011 (as amended, restated or supplemented from time to time, the “Supplement”), by and between the Issuer and the Indenture Trustee or the Series 2009-1 Supplement, dated as of October 23, 2009 (as amended, restated or supplemented from time to time, the “2009-1 Supplement”), by and between the Issuer and the Indenture Trustee (as applicable).

 

(2)           As used in this Agreement and its exhibits, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“Addition Notice”:  Any properly completed notice given to the other parties hereto substantially in the form of Exhibit B hereto.

 

“Assignment and Acceptance”:  Any properly completed agreement substantially in the form of Exhibit C hereto.

 

“Closing Date”:  April 1, 2011.

 

“Collection Date”:  The date on which the last to occur of the following events occurs:  (i) the Aggregate Series 2011-1 Principal Balance has been reduced to zero and the commitments to fund of the Purchasers have been terminated, (ii) the Purchasers have received all amounts of interest due in

 

 

respect of the Notes and other amounts due to the Purchasers in connection with this Agreement, the Indenture and the Supplement and (iii) the Deal Agents have received all amounts due to them in connection with this Agreement.

 

“Conversion Date”:  This term shall have the meaning set forth in the Supplement.

 

“Deal Agent”:  This term shall have the meaning set forth in the preamble hereto.

 

“Indemnified Amounts”:  This term shall have the meaning set forth in Section 6.1 hereof.

 

“Indemnified Party”:  This term shall have the meaning set forth in Section 6.1 hereof.

 

“Mandatory Series 2011-1 Note Existing Commitment Reduction Amount”:  Any of the following occurs : (i) with respect to the issuance on or after June 1, 2011 of any Series of Notes under the Indenture or by any Affiliate of the Issuer pursuant to a similar securitization facility, the aggregate initial principal amount of such Series of Term Notes, (ii) with respect to the initial establishment of a Series 2009-1 Note Existing Commitment for any Series 2009-1 Noteholder (other than Wells Fargo Bank, National Association) or a Series 2011-1 Note Existing Commitment of any Series 2011-1 Noteholder (other than Wells Fargo Bank, National Association), the amount of such Series 2009-1 Note Existing Commitment or Series 2011-1 Note Existing Commitment, as applicable, and (iii) with respect to any increase in the Series 2009-1 Note Existing Commitment of any Series 2009-1 Noteholder (other than Wells Fargo Bank, National Association and, solely with respect to the increase in the Series 2009-1 Note Existing Commitment on March 30, 2011, SunTrust Bank, N.A.) or the Series 2011-1 Note Existing Commitment of any Series 2011-1 Noteholder (other than Wells Fargo Bank, National Association), the amount of such increase.

 

“Mandatory Series 2011-1 Note Existing Commitment Reduction Date”:  The date of the occurrence of any of the following events: (i) the issuance on or after June 1, 2011 of any Series of Notes under the Indenture or by any Affiliate of the Issuer pursuant to a similar securitization facility, and (ii) the initial establishment of a (or any increase in the) Series 2009-1 Note Existing Commitment of any Series 2009-1 Noteholder (other than Wells Fargo Bank, National Association and, solely with respect to the increase in the Series 2009-1 Note Existing Commitment of SunTrust Bank, N.A. on March 30, 2011, SunTrust Bank, N.A.) or a Series 2011-1 Note Existing Commitment of any Series 2011-1 Noteholder (other than Wells Fargo Bank, National Association).

 

“Note”:  Any Series 2011-1 Note.

 

“Percentage”:  With respect to any Purchaser as of any date of determination, the percentage equivalent of a fraction, the numerator of which is equal to the Purchaser’s Purchase Limit and the denominator of which is equal to the aggregate Purchase Limit for all Purchasers.

 

“Purchase”:  The initial purchase by a Purchaser of the Notes from the Issuer and the payment of any additional Series 2011-1 Advance by a Purchaser.

 

“Purchase Limit”:  The maximum amount of Series 2011-1 Advances that a Purchaser shall be required to fund to the Issuer hereunder, as set forth on Schedule 2 hereto (as such Schedule 2 shall be deemed to be amended by a properly executed Assignment and Acceptance or Increase Notice).

 

“Purchaser”:  Any other Person that may agree from time to time pursuant to the terms of this Agreement or the pertinent Assignment and Acceptance or Addition Notice, to fund a Series 2011-1

 

2

 

Advance hereunder and their successors and assigns.  The initial Purchaser hereunder shall be Wells Fargo Bank, National Association.

 

“Scheduled Commitment Expiration Date”:  October 25, 2011, as such date may be extended from time to time in accordance with Section 2.1(c) hereof.

 

Section 1.2             Other Terms.

 

All accounting terms not defined herein shall have the respective meanings given to them under GAAP consistently applied.  To the extent that the definitions of accounting terms in this Agreement are inconsistent with the meanings of such terms under GAAP or regulatory principles, the definitions contained in this Agreement or in any certificate or other document shall control.

 

Section 1.3             Computation of Time Periods.

 

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding.”

 

Section 1.4             Statutory References.

 

References in this Agreement to any section of the UCC shall mean, on or after the effective date of adoption of any revision to the UCC in the applicable jurisdiction, such revised or successor section thereto.

 

ARTICLE II

 

PURCHASE OF THE NOTES

 

Section 2.1             Sale and Delivery of the Notes.

 

(a)           On the basis of the representations and warranties and subject to the terms and conditions set forth herein and in the other Transaction Documents, the Issuer agrees to deliver on the Closing Date, to each of the Persons set forth on Schedule 2, a Note with a maximum aggregate principal amount of up to the amount set forth opposite such Person’s name on Schedule 2.  The Notes shall be duly executed by the Issuer, duly authenticated by the Indenture Trustee and registered in the name of each of the Persons set forth on Schedule 2 or its nominee.  In connection with any transfer of a Note made in accordance with Section 202 of the Supplement (including the related Series 2011-1 Note Existing Commitment), the Issuer agrees to deliver a Note in the name of such transferee or its nominee on behalf of such transferee in the maximum aggregate principal amount determined pursuant to the related Assignment and Acceptance.  Any such assignment of a Series 2011-1 Note and all or a portion of the Series 2011-1 Note Existing Commitment of a Series 2011-1 Noteholder may be effected by the execution and delivery to the Issuer and the Indenture Trustee of an Assignment and Acceptance.  The actual unpaid principal balance of the Notes will be increased and decreased from time to time in accordance with the terms hereof, the Supplement and the Indenture.

 

(b)           The Issuer may request (each such request to be substantially in the form of Exhibit A hereto, a “Funding Notice”), by delivery of a Funding Notice to the Administrative Agent that the Purchasers make a Series 2011-1 Advance, each such Funding Notice to be irrevocable when given and shall be on the terms and conditions set forth herein and in Section 205(b) of the Supplement.

 

3

 

(c)           The Issuer may, within 60 days, but no later than 45 days (or such shorter period as may be approved by the parties hereto), prior to the then current Scheduled Commitment Expiration Date, by written notice to each Deal Agent, with a copy to the Indenture Trustee and the Series Enhancer, if any, for Series 2011-1, request the Purchasers to extend the Scheduled Commitment Expiration Date for an additional period of up to 364 days from the then current Scheduled Commitment Expiration Date.  Each of the Purchasers shall make a determination, in its sole discretion and after a full credit review, within 30 days of its receipt of the Issuer’s request, as to whether or not it will agree to extend the Scheduled Commitment Expiration Date; provided, however, that the failure of any Purchaser to make a timely response to the Issuer’s request for extension of the Scheduled Commitment Expiration Date shall be deemed to constitute a refusal by such Purchaser to extend the Scheduled Commitment Expiration Date.  Any such renewal shall become effective only upon written confirmation to the Issuer by each Deal Agent on behalf of the consenting Purchaser of its agreement to so renew, upon receipt by each Deal Agent of any fees required to be paid in connection with such renewal, and receipt by the Issuer and such Deal Agent of the written consent of the Series Enhancer for Series 2011-1, if any, to such extension of the Scheduled Commitment Expiration Date.

 

Section 2.2             Acceptance and Custody of Notes.

 

On the Closing Date, each Deal Agent shall take delivery of the applicable Note and maintain custody thereof on behalf of its related Purchaser.

 

Section 2.3             Reduction of the Series 2011-1 Note Existing Commitment.

 

(a)           The Issuer may, upon at least 30 days’ written notice to each Purchaser and the Administrative Agent, with a copy to the Indenture Trustee, terminate in whole, or reduce in part, the then unused Series 2011-1 Note Existing Commitment of each Series 2011-1 Noteholder; provided, however, that each partial reduction of the Series 2011-1 Note Existing Commitment shall be in amounts equal to $10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall be allocated pro rata among the Notes (based on the then current Series 2011-1 Note Existing Commitment of each Series 2011-1 Noteholder of each such Note).  Each notice of reduction or termination pursuant to this Section 2.3 shall be irrevocable.  Notwithstanding the foregoing, the Issuer may on any Business Day reduce to zero and terminate the Series 2011-1 Note Existing Commitment in connection with a refinancing of the Notes upon (a) at least five (5) Business Days prior written notice to the Administrative Agent, with a copy to the Indenture Trustee, specifying the proposed Payment Date of such termination, and (b) payment in full of (i) the principal of, and interest on, the Notes and (ii) Breakage Costs, if any, and all other Outstanding Obligations of the Issuer under the Supplement and this Agreement.

 

(b)           The then unused Series 2011-1 Note Existing Commitment of Wells Fargo Bank, National Association shall be reduced on each Mandatory Series 2011-1 Note Existing Commitment Reduction Date occurring after the Closing Date by the Mandatory Series 2011-1 Note Existing Commitment Reduction Amount for such Mandatory Series 2011-1 Note Existing Commitment Reduction Date; provided, that in no event shall the Series 2011-1 Note Existing Commitment of Wells Fargo Bank, National Association be less than zero.

 

Section 2.4             Payments, Computations, Etc.

 

(a)           Unless otherwise expressly provided herein, in the Indenture or the Supplement, all amounts to be paid or deposited by the Issuer hereunder shall be paid or deposited in accordance with the terms hereof no later than 11:00 a.m. (New York time) on the day when due in lawful money of the

 

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United States in immediately available funds to the applicable Deal Agent’s account.  The Issuer shall, to the extent permitted by law, pay to the Series 2011-1 Noteholders interest on all amounts not paid or deposited when due on the Notes at the Default Rate, payable on demand, but only to the extent provided in Sections 203(b) and 203(c) of the Supplement.  Such interest shall be retained by the Deal Agents except, in each case, to the extent that such failure to make a timely payment or deposit has continued beyond the date for distribution by the Deal Agents of such overdue amount to the related Series 2011-1 Noteholders, in which case such interest accruing after such date shall be for the account of, and distributed by the Deal Agents to, such related Series 2011-1 Noteholders.  All computations of interest and other fees hereunder shall be made on the basis of a year of 360 days (or, in the case of interest calculated at the Base Rate, 365 or 366 days, as applicable) for the actual number of days (including the first but excluding the last day) elapsed.

 

(b)           Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next Business Day, and such extension of time shall in such case be included in the computation of payment of any interest or any fee payable hereunder, as the case may be.

 

ARTICLE III

 

CONDITIONS OF PURCHASE

 

Section 3.1             Conditions Precedent to Initial Purchase.

 

The initial Purchase hereunder is subject to the satisfaction, on or before the date of such purchase, as determined by the initial Purchaser, of each condition precedent listed in Schedule 1 hereto and Section 501 of the Supplement.

 

Section 3.2             Conditions Precedent to Each Series 2011-1 Advance.

 

Each Series 2011-1 Advance (including the initial Series 2011-1 Advance) from the Issuer shall be subject to the satisfaction of the conditions precedent listed in Section 502 of the Supplement.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.1             Representations and Warranties of the Issuer.

 

The Issuer represents and warrants to the Deal Agents and the Purchasers as follows:

 

(1)           Information.  No information, exhibit, financial statement, document, book, record or report furnished or to be furnished by it to a Deal Agent or a Purchaser in writing (i) is or will be inaccurate in any material respect as of the date it is or shall be dated or (except as otherwise disclosed to the recipient thereof at the time of delivery or thereafter) as of the date so furnished and (ii) no such document contains or will contain any material misstatement of fact or omits or shall omit to state a material fact necessary to make the statements contained therein not misleading in light of the statements made therein, in each case as of the date it is or shall be dated or (except as otherwise disclosed to the recipient thereof at the time of delivery or thereafter) as of the date so furnished.

 

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(2)           Accuracy of Representations and Warranties.  Each representation and warranty made by it contained herein or in any certificate or other document furnished by it pursuant hereto or to any Series 2011-1 Transaction Document or in connection herewith or therewith is true and correct in all material respects as of the date made by it.

 

(3)           Offer and Sale.  Neither the Issuer nor any Person acting on its behalf has offered to sell the Notes by any form of general solicitation or general advertising.  The Issuer has not offered or sold the Notes or other similar security in any manner that would render the issuance and sale of the Notes a violation of the Securities Act or require registration pursuant thereto, nor has it authorized nor will it authorize any person to act in such manner.

 

(4)           OFAC.  The Issuer (i) is a “U.S. Person” within the meaning of laws, rules and regulations promulgated, imposed or monitored by OFAC, and (ii) does not derive any of its assets or revenues from investments in, or transactions with, Sanctioned Persons.

 

Section 4.2             Representations, Warranties and Agreements of the Purchasers.

 

Each Purchaser hereby represents and warrants to, and agrees with, the Issuer that:

 

(1)           The Purchaser understands that the Note purchased by it has not been registered under the Securities Act or the securities laws of any State and, if the Note is not then registered under applicable federal and State securities law (which registration the Issuer is not obligated to effect), it will not offer to sell, transfer or otherwise dispose of the Note or any portion thereof except in a transaction which is exempt from such registration.

 

(2)           The Purchaser is acquiring the Note for its own account, and not as a nominee for any other Person, and the Purchaser is not acquiring the Note with a view to or for sale or transfer in connection with any distribution of the Note under the Securities Act, but subject, nevertheless, to the condition that all dispositions of its property shall at all times be within its control.

 

(3)           The Purchaser is an institutional “accredited investor” of the type described in clause (1) of Section 501(a) of Regulation D under the Securities Act.

 

(4)           The Purchaser is not acquiring the Note with the assets of a Benefit Plan Investor.

 

(5)           Neither the Purchaser nor any Person acting on its behalf has offered to sell the Note by any form of general solicitation or general advertising.  The Purchaser has not offered the Note in any manner that would render the issuance and sale of the Note a violation of the Securities Act, or require registration pursuant thereto, nor has it authorized nor will it authorize any person to act in such manner.

 

ARTICLE V

 

GENERAL COVENANTS

 

Section 5.1             General Covenants of the Issuer.

 

The Issuer hereby covenants with each Deal Agent and the Purchasers as follows:

 

(1)           The Issuer hereby agrees to notify the Deal Agents and the Series Enhancer, if any, for Series 2011-1 as soon as possible, and in any event within five (5) days after the earlier to occur of (i)

 

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actual knowledge and (ii) notice to the Issuer, of (a) the occurrence of any Event of Default, (b) the occurrence of any Early Amortization Event, (c) any fact, condition or event which, with the giving of notice or the passage of time or both, could become an Event of Default, (d) any fact, condition or event which, with the giving of notice or the passage of time or both, could become an Early Amortization Event, (e) the failure of the Issuer to observe any of its material undertakings under the Series 2011-1 Transaction Documents or (f) any change in the status or condition of the Issuer or the Manager that would reasonably be expected to adversely affect the Issuer’s or the Manager’s ability to perform its obligations under the Series 2011-1 Transaction Documents.

 

(2)           The Issuer agrees not to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) that would be integrated with the sale of the Note in a manner that would require the registration under the Securities Act of the sale to any Purchaser of any Note.

 

(3)           Any notice of any voluntary Prepayment of the Notes made in accordance with the provisions of Section 204(b) of the Supplement shall be irrevocable when given.

 

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ARTICLE VI

 

INDEMNIFICATION

 

Section 6.1             Indemnities by the Issuer.

 

Without limiting any other rights which the Deal Agents, the Purchasers or any of their respective Affiliates, officers, directors, employees and/or agents thereof or their respective successors and assigns may have hereunder or under applicable law, the Issuer hereby agrees to indemnify each of the Deal Agents, the Purchasers and each of their respective officers, directors, employees, counsel and agents thereof (each, an “Indemnified Party”) from and against any and all liabilities, losses, damages, costs and expenses (including reasonable and documented, out-of-pocket costs of defense and legal fees and expenses) which may be incurred or suffered by such Indemnified Party, except to the extent caused by the gross negligence or willful misconduct of the Indemnified Party (all of the foregoing being collectively referred to as “Indemnified Amounts”) as a result of claims, actions, suits or judgments asserted or imposed against an Indemnified Party and arising out of this Agreement and the Transaction Documents or the transactions contemplated thereby or the ownership or security interest in any Transferred Assets as contemplated herein including, without limitation, as a result of (i) an action or inaction by the Issuer that is contrary to the terms of this Agreement or any other Transaction Document to which it is a party, (ii) a breach by the Issuer of any of its covenants and agreements set forth in this Agreement or any other Transaction Document to which it is a party, (iii) any information provided by the Issuer in writing being untrue in any material respect as of the date provided, and (iv) any representation or warranty of the Issuer proven to have been false or misleading in any material respect when made or deemed made in this Agreement or in any Transaction Document.

 

Promptly after receipt by an Indemnified Party of notice of the assertion of a claim or the commencement of a proceeding by a third party with respect to any matter referred to in this Section 6.1 which could be the subject of an indemnification claim against the Issuer hereunder, such Indemnified Party shall give written notice thereof to the Issuer and thereafter shall keep the Issuer reasonably informed with respect thereto; provided, however, that failure of an Indemnified Party to give the Issuer written notice as provided herein shall not relieve the Issuer of its obligations hereunder unless the Issuer is materially and adversely prejudiced thereby and, in any such instance, the indemnification obligation of the Issuer to such Indemnified Party shall only be reduced by the amount of incremental costs or losses to the Issuer related to the failure to deliver such notice in a timely manner.  If any such proceeding (including any litigation, arbitration or similar proceeding) shall be brought against any Indemnified Party, the Issuer or the Manager shall be entitled to assume the defense thereof at the Issuer’s or the Manager’s expense with counsel chosen by the Issuer or the Manager and reasonably satisfactory to the Indemnified Party; provided, however, that any Indemnified Party may at its own expense retain separate counsel to participate in such defense.  The Issuer and the Manager shall not be liable under this Article VI for any amount paid in settlement of such claims or proceedings without the consent of the Issuer or the Manager unless such consent is unreasonably withheld.  All Indemnified Amounts shall be paid to the appropriate Indemnified Party within 30 days after such Indemnified Party’s written demand for such amount.

 

Notwithstanding anything to the contrary, the Issuer’s obligations to make payments under this Section 6.1 shall be limited solely to funds available from time to time for such purpose pursuant to Section 302 or Section 806 of the Indenture and to the extent they are not so paid, such obligations shall not constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against the Issuer.

 

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ARTICLE VII

 

THE DEAL AGENT

 

Section 7.1             Authorization and Securities Action.

 

Each Purchaser hereby designates and appoints its related Deal Agent as a Deal Agent hereunder, and authorizes its related Deal Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to the Deal Agents by the terms of this Agreement together with such powers as are reasonably incidental thereto.  Each Purchaser and each Deal Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Purchaser or any other Deal Agent, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of a Purchaser or a Deal Agent shall be read into this Agreement or otherwise exist for any Purchaser or any Deal Agent.  In performing its functions and duties hereunder, each Deal Agent shall act solely as agent for its related Purchaser and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for the Issuer or any of its successors or assigns.  The Deal Agents shall not be required to take any action which exposes the Deal Agents to personal liability or which is contrary to this Agreement, any other Series 2011-1 Transaction Document or applicable law.  The appointment and authority of the Deal Agents hereunder shall terminate on the Collection Date.

 

Section 7.2             Delegation of Duties.

 

Each Deal Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  Each Deal Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

 

Section 7.3             Exculpatory Provisions.

 

The Deal Agents and any of their respective directors, officers, agents or employees shall not be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement (except for its, their or such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Purchasers for any recitals, statements, representations or warranties made by the Issuer contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other document furnished in connection herewith, or for any failure of the Issuer to perform its obligations hereunder, or for the satisfaction of any condition specified in Article III hereof.  The Deal Agents shall not be under any obligation to any Purchaser to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Issuer.  No Deal Agent shall be deemed to have knowledge of any Event of Default or Early Amortization Event unless such Deal Agent has received written notice to such effect from the Issuer, the Indenture Trustee or a Purchaser.

 

Section 7.4             Reliance.

 

The Deal Agents shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by them to be genuine and correct and to have been signed, sent

 

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or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Issuer), independent accountants and other experts selected by the Deal Agents.  The Deal Agents shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other document furnished in connection herewith unless it shall first receive such advice or concurrence of the related Purchasers, as it deems appropriate or it shall first be indemnified to its satisfaction by the Purchasers, provided that unless and until the Deal Agents shall have received such advice, the Deal Agents may take or refrain from taking any action as such Deal Agents shall deem advisable and in the best interests of the related Purchasers.  The Deal Agents shall in all cases be fully protected in acting, or refraining from acting, in accordance with a request of the related Purchasers, and such request and any action taken or failure to act pursuant thereto shall be binding upon all Purchasers.

 

Section 7.5             Non-Reliance on Deal Agents and Other Purchasers.

 

Each Purchaser expressly acknowledges that none of the Deal Agents or any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Deal Agents hereafter taken, including, without limitation, any review of the affairs of the Issuer, shall be deemed to constitute any representation or warranty by the Deal Agents.  Each Purchaser represents and warrants to the Deal Agents that it has made and will make, independently and without reliance upon the Deal Agents or any other Purchaser and based on such documents and information as it has deemed appropriate, its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of the Issuer and the Manager and made its own decision to enter into this Agreement.

 

Section 7.6             Deal Agent in its Individual Capacity.

 

Any of the Deal Agents and their Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Issuer or any Affiliate of the Issuer as though the Deal Agents were not the Deal Agents hereunder.  With respect to the acquisition of the Notes pursuant to this Agreement, each of the Deal Agents and their Affiliates shall have the same rights and powers under this Agreement as any Purchaser and may exercise the same as though it were not a Deal Agent and the terms “Purchaser” and “Purchasers” shall include the Deal Agents in their individual capacity, if any such Deal Agent shall become a Purchaser hereunder.

 

Section 7.7             Successor Deal Agent.

 

Each Deal Agent may, upon 5 days’ notice to the Issuer, the related Purchasers and the Series Enhancer, if any, and each Deal Agent will, upon the direction of all of its related Purchasers, resign as Deal Agent. If such Deal Agent shall resign, then the Purchasers related to such Deal Agent during such 5-day period shall appoint from among the applicable Purchasers a successor agent.  If for any reason no successor Deal Agent is appointed during such 5-day period, then effective upon the termination of such 5-day period, the Purchasers related to such Deal Agent shall perform all of the duties of a Deal Agent hereunder and the Issuer shall for all purposes deal directly with such Purchasers.  After any retiring Deal Agent’s resignation hereunder as Deal Agent, the provisions of Article VI and Article VII hereof shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Deal Agent under this Agreement.  Any retiring Deal Agent shall provide prompt written notice of its resignation hereunder to each Rating Agency.

 

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ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.1             Amendments and Waivers.

 

(1)           No amendment, waiver or modification of any provision of this Agreement shall be effective without the written agreement of the Issuer, Purchasers representing in aggregate more than fifty percent (50%) of the then aggregate Series 2011-1 Note Existing Commitment (or, if the Conversion Date has occurred, the then Aggregate Series 2011-1 Principal Balance), the Deal Agents and, unless such amendment or modification deals solely with the matters set forth in Article VII hereof, the Control Party for Series 2011-1; provided, however, that no such amendment, modification or waiver shall:

 

(a)           without consent of each affected Purchaser and Deal Agent, (A) reduce the amount of any fee payable to the Purchasers or the Deal Agents for the benefit of the Purchasers, (B) consent to, or permit the assignment or transfer by the Issuer of any of its rights and obligations under this Agreement, (C) amend this Agreement in any way that would require the consent of each Noteholder under Section 1002(a) of the Indenture, (D) extend the Scheduled Commitment Expiration Date or increase its Series 2011-1 Note Existing Commitment or (E) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (D) above in a manner which would circumvent the intention of the restrictions set forth in such clauses; or

 

(b)           without the written consent of each affected Deal Agent, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of each such Deal Agent.

 

Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  Any modification or waiver shall apply to each of the Purchasers equally and shall be binding upon the Issuer, the Purchasers and the Deal Agents.

 

(2)           The Deal Agents shall provide prompt written notice of the nature of each amendment to this Agreement, and shall, simultaneously therewith, deliver a copy of such amendment to each Rating Agency.

 

Section 8.2             Notices, Etc.

 

All demands, notices and communications hereunder shall be in writing, personally delivered, by facsimile or PDF file (with subsequent telephone confirmation of receipt thereof), or sent by internationally recognized overnight courier service, to the addresses set forth on the signature pages hereto (and for the Administrative Agent, to the address set forth in the Indenture) or at other such address as shall be designated by such party in a written notice to the other parties hereto.  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 8.3             No Waiver; Remedies.

 

No failure on the part of a Deal Agent or a Purchaser to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

 

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Section 8.4             Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of the Issuer, the Deal Agents, the Purchasers and their respective successors and permitted assigns.

 

Section 8.5             Term of this Agreement.

 

This Agreement, including, without limitation, the Issuer’s obligations to observe its covenants and agreements set forth herein, shall remain in full force and effect until the Collection Date; provided, however, that the obligations of the Issuer under the indemnification and payment provisions of Article VI and the provisions of Section 8.9 and Section 8.10 and the agreements of the parties contained in Sections 8.6, 8.7, 8.8 and 8.12 shall be continuing and shall survive any termination of this Agreement.

 

Section 8.6             GOVERNING LAW.

 

THIS AGREEMENT, ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AGREEMENT, AND THE RELATIONSHIP OF THE PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES WITH RESPECT TO 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 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 8.7             WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION.

 

(1)           TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

 

(2)           THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT LOCATED IN THE COUNTY OF NEW YORK, SOLELY FOR THE PURPOSES OF ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN CONNECTION WITH THIS AGREEMENT ANY OF THE SERIES 2011-1 TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREUNDER OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD OR DETERMINED IN ANY SUCH COURT.  IN THE EVENT THAT ANY SUCH ACTION, SUIT OR PROCEEDING IS BROUGHT IN A STATE COURT, THE PARTIES WILL SEEK ASSIGNMENT TO THE COMMERCIAL PART OF SAID COURT.  THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND AGREE NOT TO

 

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ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THE SERIES 2011-1 TRANSACTION DOCUMENTS OR THE SUBJECT MATTER THEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURTS.

 

(3)           TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO SHALL NOT SEEK AND HEREBY WAIVE THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT.

 

Section 8.8             Inspection Rights, Costs, Expenses and Taxes.

 

In addition to the rights of indemnification granted to the Deal Agents, the Purchasers and their respective Affiliates under Article VI hereof, the Issuer agrees to pay on demand all costs and expenses incurred by a Purchaser, a Deal Agent and their respective Affiliates, successors or assigns, with respect to enforcing their respective rights and remedies as against the Issuer under this Agreement, the Indenture, any Note, any other Series 2011-1 Transaction Document and the other documents to be delivered hereunder or in connection herewith; provided, however, that none of the Deal Agents, any Purchaser or any Affiliate thereof shall be entitled to any such payment (and shall reimburse the Issuer for any such payments previously received) if such person has been determined by a court of competent jurisdiction to not be entitled to receive indemnification pursuant to Article VI hereof in connection with such enforcement.  The Issuer also agrees to pay on demand all costs and expenses of the Purchasers and the Deal Agents, and their respective Affiliates, successors or assigns, if any (including reasonable and documented counsel fees and expenses), incurred in connection with the negotiation, execution, and delivery of this Agreement and the transactions contemplated hereby, any removal of the Manager or the enforcement, administration (including periodic auditing), amendment or modification of, or any waiver or consent issued in connection with, this Agreement, the Series 2011-1 Transaction Documents and the other documents to be delivered hereunder, including, without limitation, the reasonable and documented fees and out-of-pocket expenses of counsel for the Purchasers and the Deal Agents with respect thereto and with respect to advising the Purchasers and the Deal Agents as to their rights and remedies under this Agreement, the Series 2011-1 Transaction Documents and the other agreements executed pursuant hereto; provided, however, that the Issuer’s obligation to pay any such costs or expenses incurred in connection with the ongoing inspection of the books and records of the Issuer will be subject to such limitations and conditions as are set forth in Section 1304 of the Indenture.  Any amounts subject to the provisions of this Section 8.8 shall be paid by the Issuer to the applicable Deal Agent on the Payment Date immediately following such Deal Agent’s demand therefor.  Notwithstanding anything to the contrary, the Issuer’s obligations to make payments under this Section 8.8 shall be limited solely to funds available from time to time for such purpose pursuant to Section 302 or Section 806 of the Indenture and to the extent they are not so paid, such obligations shall not constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against the Issuer.

 

Section 8.9             No Proceedings.

 

Notwithstanding any prior termination of this Agreement, each Deal Agent and Purchaser agrees that it shall not, with respect to the Issuer, institute or join any other Person in instituting any proceeding of the type referred to in the definition of “Bankruptcy Event” against or with respect to the Issuer or so long as any Outstanding Obligation shall be unpaid and there shall not have elapsed one year plus one

 

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day since the last day on which any such Outstanding Obligation shall have been unpaid.  The foregoing shall not limit the right of any such Person to file any claim in or otherwise take any action with respect to any such proceeding that was instituted against Issuer by any Person other than any Deal Agent and the Purchaser.  In addition, each Deal Agent and the Purchaser agrees that all amounts owed to it by Issuer shall be payable solely from amounts that become available for such payment pursuant to the Series 2011-1 Transaction Documents, and no such amounts shall constitute a claim (as defined in Section 101(5) of the Bankruptcy Code) against Issuer to the extent that they are in excess of the amounts available for their payment.

 

“Bankruptcy Event” means, for any Person, any of the following events:

 

(a)           a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or any substantial part of its assets, or any similar action with respect to such Person under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 days; or any order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect, or

 

(b)           such Person shall commence a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or the like, for such Person or any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due.

 

Section 8.10           Recourse Against Certain Parties.

 

No recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees or any other obligations) of any of the Issuer, any Purchaser or any Deal Agent as contained in this Agreement or any other agreement, instrument or document entered into by it pursuant hereto or in connection herewith shall be had against any administrator of such party or any incorporator, affiliate, stockholder, member, manager, officer, employee or director of such party or of any such administrator, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that the agreements of such party contained in this Agreement and all of the other agreements, instruments and documents entered into by it pursuant hereto or in connection herewith are, in each case, solely the corporate obligations of such party, and that no personal liability whatsoever shall attach to or be incurred by any administrator of such party or any incorporator, stockholder, member, manager, affiliate, officer, employee or director of such party or of any such administrator, as such, or any of them, under or by reason of any of the obligations, covenants or agreements of such party contained in this Agreement or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of every such administrator of such party and each incorporator, stockholder, member, manager, affiliate, officer, employee or director of such party or of any such administrator, or any of them, for breaches by such party of any such obligations, covenants or agreements which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement.

 

14

 

Section 8.11           Ratable Payments.

 

If any Purchaser, whether by setoff or otherwise, has payment made to it with respect to any portion of any amount of the principal amount of any Note or other amount owing to such Purchaser (other than payments received pursuant to Article VI and principal repayments received by Wells Fargo Bank, National Association, as Purchaser, pursuant to the last sentence of Section 2.3(b) hereof) in a greater proportion than that received by any other Purchaser, such Purchaser agrees, promptly upon demand, to pay to the Deal Agent, for distribution ratably to all other Purchasers, the amount of such excess such that all Purchasers shall receive their ratable portion of such payment.

 

Section 8.12           Confidentiality.

 

(1)           Each of the Deal Agents, the Purchasers and the Issuer shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential proprietary information with respect to the other parties hereto and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that each such party and its officers and employees may (i) disclose such information to any prospective assignees or participants and to its external accountants and attorneys and as required by law, applicable accounting requirements or order of any judicial or administrative proceeding and (ii) disclose the existence of this Agreement, but not the financial terms thereof.

 

(2)           Anything herein to the contrary notwithstanding, the Issuer hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Deal Agents or a Purchaser by each other,  or (ii) by a Deal Agent or the Purchasers to any prospective or actual assignee or participant of any of them, provided each such Person is informed of the confidential nature of such information and agrees to keep such information confidential pursuant to the terms of this Section 8.12.  In addition, the Purchasers and the Deal Agents may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).

 

Section 8.13           Execution in Counterparts; Severability; Integration.

 

This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  Execution and delivery of this Agreement by facsimile signature shall constitute execution and delivery of this Agreement for all purposes hereof with the same force and effect as execution and delivery of a manually signed copy hereof.  In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.  This Agreement contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

 

[Signature pages follow.]

 

15

 

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

 

	
THE ISSUER:
    	
 
    	
TAL ADVANTAGE III LLC
    
	
 
    	
 
    	
 
    	
By:   TAL International Container Corporation, its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
100   Manhattanville Road
    
	
 
    	
 
    	
Purchase,   New York 10577-2135
    
	
 
    	
 
    	
Attn:   Jeffrey Casucci
    
	
 
    	
 
    	
Email:   jeffrey.casucci@talinternational.com
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
With   a copy to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TAL   International Container Corporation
    
	
 
    	
 
    	
100   Manhattanville Road
    
	
 
    	
 
    	
Purchase,   New York 10577-2135
    
	
 
    	
 
    	
Attn:   Jeffrey Casucci, Vice President and Treasurer
    
	
 
    	
 
    	
Fax:   914 697 2526
    
					

 

 

SERIES 2011-1 NOTE PURCHASE AGREEMENT

 

 

	
THE PURCHASER:
    	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Purchaser
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Wells   Fargo Bank, National Association
    
	
 
    	
 
    	
301   S. College Street
    
	
 
    	
 
    	
One   Wells Fargo Center
    
	
 
    	
 
    	
Charlotte,   North Carolina 28288
    
	
 
    	
 
    	
Attention:   Dan Miller
    
	
 
    	
 
    	
Facsimile   Number: (704) 374-3254
    
	
 
    	
 
    	
Telephone   Number: (704) 715-1169
    
						

 

 

SERIES 2011-1 NOTE PURCHASE AGREEMENT

 

 

	
THE   DEAL AGENT:
    	
 
    	
WELLS FARGO SECURITIES, LLC, as Wells Deal Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Wells   Fargo Securities, LLC
    
	
 
    	
 
    	
301   S. College Street
    
	
 
    	
 
    	
One   Wells Fargo Center
    
	
 
    	
 
    	
Charlotte,   North Carolina 28288
    
	
 
    	
 
    	
Attention:   Jerri Kallam
    
	
 
    	
 
    	
Facsimile   Number: (704) 383-4012
    
	
 
    	
 
    	
Telephone   Number: (704) 383-6950
    
						

 

 

SERIES 2011-1 NOTE PURCHASE AGREEMENT

 

 

SCHEDULE 1

CONDITIONS PRECEDENT TO INITIAL PURCHASE

 

As required by Section 3.1 of this Agreement, each of the following items must be delivered to the initial Purchaser prior to the date of the initial Purchase:

 

(1)           The Notes shall have been duly authorized, executed and delivered by the Issuer and authenticated by the Indenture Trustee.

 

(2)           A copy of this Agreement, duly executed by the Issuer and all other parties thereto.

 

(3)           A certificate of the Secretary or Assistant Secretary of the Issuer dated the Closing Date, certifying (i) the names and true signatures of its respective incumbent officers authorized to sign this Agreement and the other documents to be delivered by it hereunder (on which certificate and the initial Purchaser may conclusively rely until such time as the initial Purchaser shall receive from the Issuer a revised certificate meeting the requirements of this paragraph (3)), (ii) that copies of its charter documents attached thereto are complete and correct copies and that such charter documents have not been amended, modified or supplemented and are in full force and effect, (iii) that the copy of its limited liability company agreement attached thereto is a complete and correct copy and that such limited liability company agreement has not been amended, modified or supplemented and are in full force and effect and (iv) the resolutions of its board of directors approving and authorizing the execution, delivery and performance by it of this Agreement and the documents related hereto and thereto.

 

(4)           Good standing certificate for the Issuer from the Secretary of State of Delaware.

 

(5)           Copies of the Indenture, and all other Series 2011-1 Transaction Documents (other than this Agreement), in form and substance satisfactory to the initial Purchaser, each duly executed and delivered by each party thereto.

 

(6)           Copies of all certificates and opinions of counsel delivered pursuant to or in connection with the execution and delivery of the other Series 2011-1 Transaction Documents, which shall be in form and content satisfactory to and each addressed to the initial Purchaser.

 

(7)           An officer’s certificate of a responsible officer of the Issuer to the effect that each of the conditions to the initial Purchase hereunder has been satisfied.

 

(8)           An opinion of counsel to the Indenture Trustee as to the due organization of the Indenture Trustee, the enforceability of the Indenture and as to such other matters as the initial Purchaser may reasonably request.

 

(9)           All fees and expenses required by this Agreement and the other documents to be delivered hereunder or in connection herewith to be paid on or before the Closing Date.

 

(10)         Each of the other conditions precedent, documents, certifications and opinions required to be satisfied or provided pursuant to the Indenture.

 

 

SCHEDULE 2

 

PURCHASE LIMITS

 

	
Purchaser
    	
 
    	
Purchase Limit
    	
 
    
	
Wells Fargo Bank, National Association
    	
 
    	
$
    	
50,000,000
    	
 
    
					

 

2-1

 

EXHIBIT A

 

FORM OF COMPLIANCE CERTIFICATE AND FUNDING NOTICE

 

I,                                                               ,                                of TAL ADVANTAGE III LLC (the “Issuer”), hereby certify that, with respect to that certain Series 2011-1 Note Purchase Agreement, dated as of April 1, 2011 (the “Note Purchase Agreement”; all defined terms in the Note Purchase Agreement and the Supplement are incorporated herein by reference):

 

(i)            The Issuer hereby requests that a Series 2011-1 Advance be made in accordance with the following terms:

 

(a)           The Series 2011-1 Advance shall be in an amount equal to                               .(1)

 

(b)           The date of such Series 2011-1 Advance shall be                                     .(2)

 

(ii)           The representations and warranties contained in Section 4.1 of the Note Purchase Agreement and Article VI of the Supplement are true and correct as though made on the date hereof.

 

(iii)          Except as described below, no event has occurred and is continuing, or would result from any Series 2011-1 Advance occurring on the date hereof, which constitutes an Event of Default or an Early Amortization Event.

 

(iv)          As of the date hereof, the Aggregate Series 2011-1 Principal Balance (after giving effect to the Series 2011-1 Advance requested hereby) does not exceed the Purchase Limit of the Series 2011-1 Noteholders.  For purposes hereof, the Aggregate Series 2011-1 Principal Balance and the Purchase Limit have been re-calculated by the Issuer based upon amounts and percentages as of the date hereof (after giving effect to the Series 2011-1 Advance requested hereby).

 

(v)           On and as of such day, the Issuer has each performed in all material respects all of the agreements (including those set forth in Article V of the Supplement) contained in the Note Purchase Agreement and the other Series 2011-1 Transaction Documents to which it is a party to be performed by the Issuer at or prior to such day.

 

(vi)          The Conversion Date has not occurred.

 

(1)           Each Series 2011-1 Advance shall be in an amount equal to $1,000,000 or an integral multiple of $100,000 in excess thereof.

 

(2)           At least two (2) Business Days’ notice is required from the Issuer.

 

A-1

 

This certificate has been signed as of the date first above written.

 

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

 

A-2

 

EXHIBIT B

 

FORM OF ADDITION NOTICE

 

Each of the undersigned hereby agrees to be bound by the terms of the Note Purchase Agreement referred to below as fully as if it were a signatory thereto.

 

	
 
    	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
THE   DEAL AGENTS:
    	
 
    	
[                    ]
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
[Address]
    
	
 
    	
 
    	
 
    	
Attention:
    	
 
    
	
 
    	
 
    	
 
    	
Facsimile   Number:
    	
 
    
	
 
    	
 
    	
 
    	
Telephone   Number:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
:
    	
[                    ]
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
[Address]
    
	
 
    	
 
    	
 
    	
Attention:
    	
 
    
	
 
    	
 
    	
 
    	
Facsimile   Number:
    	
 
    
	
 
    	
 
    	
 
    	
Telephone   Number:
    	
 
    
														

 

B-1

 

SCHEDULE I TO ADDITION NOTICE

 

1.  Purchase Limit: $               

 

2.  Percent Interest:      %

 

B-2

 

EXHIBIT C

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Series 2011-1 Note Purchase Agreement, dated as of April 1, 2011 (as such agreement may be amended, restated, replaced or otherwise modified from time to time, the “Agreement”), by and among TAL ADVANTAGE III LLC, as Issuer, Noteholders and other financial institutions signatory to the Agreement, the financial institutions made party thereto from time to time pursuant to an Assignment and Acceptance or an Addition Notice and listed under the heading “Purchasers” together with their respective successors and assigns (each, as designated, a “Purchaser” and collectively the “Purchasers”) and the financial institutions made party to the Agreement from time to time pursuant to an Addition Notice and listed under the heading “Deal Agents” together with their respective successors and assigns (each a “Deal Agent” and collectively the “Deal Agents”).  Terms defined in the Agreement or the Indenture referred to therein are used herein with the same meaning.

 

                                                                                             (the “Assignor”) and                                                     (the “Assignee”) agree as follows:

 

1.             The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to all of the Assignor’s rights and obligations under the Agreement as of the date hereof which represents the percentage interest specified in Section 1 of Annex 1 of all outstanding rights and obligations of the Assignor under the Agreement, including, without limitations, such interest in the Assignor’s Purchase Limit. After giving effect to such sale and assignment, the Assignee’s and the Assignor’s Purchase Limits will be as set forth in Section 2 of Annex 1.

 

2.             The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; and (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representation made in or in connection with the Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement or any other instrument or document furnished pursuant thereto.

 

3.             The Assignee (i) confirms that it has received a copy of the Agreement, together with copies of such financial statements and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Assignor or any other party to the Agreement and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking action under the Agreement; (iii) appoints and authorizes the [                            ] Deal Agent each to take such action as agent on its behalf and to exercise such powers under the Agreement as are delegated to such Deal Agent, respectively, by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Agreement are required to be performed by it as a Purchaser; and (v) as of the Transfer Date described below, makes each of the representations and warranties contained in Section 4.2 of the Agreement. The Assignee also covenants with each of [its related Deal Agent,] the Issuer and the Manager that the Assignee will not make a public offering of the interest being assigned to and accepted by it hereby, and will not reoffer or resell such interest, in a manner that would render the issuance and sale of such interest, whether considered together with the resale or otherwise, a violation of the Securities Act of 1933, as amended, or any state securities or “Blue Sky” laws or require registration pursuant thereto.

 

4.             Following the execution of this Assignment and Acceptance by the Assignor and the Assignee, it will be delivered to the Indenture Trustee for acceptance and for recording by the

 

C-1

 

Indenture Trustee. The effective date of this Assignment and Acceptance (the “Transfer Date”) shall be the later of the date of acceptance thereof by the Indenture Trustee unless a later date is specified in Section 3 of Annex 1.

 

5.             Upon such acceptance by the Indenture Trustee and upon such recording by the Indenture Trustee, as of the Transfer Date, (i) the Assignee shall be a party to the Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligation of a Purchaser thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligation under the Agreement.

 

6.             Upon such acceptance by the Indenture Trustee and upon such recording by the Indenture Trustee, from and after the Transfer Date, the Indenture Trustee shall make, or cause to be made, all payments under the Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and commitment fee with respect thereto) to the Assignee as follows: [payment instructions] [to the Deal Agent’s Account at                         ]. The Assignor and the Assignee shall make all appropriate adjustments in payment under the Agreement for periods prior to the Transfer Date directly between themselves.

 

7.             THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

(signatures to commence on the following page)

 

C-2

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

	
 
    	
 
    	
[ASSIGNOR]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address   for notices
    
	
 
    	
 
    	
[Address]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[ASSIGNEE]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address   for notices
    
	
 
    	
 
    	
[Address]
    

 

 

Acknowledged and accepted

 

this          day of           ,         

 

	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    	
 
    	
 
    
	
as   Indenture Trustee and Note Registrar
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

C-3

 

Annex 1 to Assignment and Acceptance

Dated                                    ,       

 

	
Section 1.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Percent   Interest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 2.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Assignee’s   Purchase Limit:
    	
$                             
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Assignor’s   Purchase Limit
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(after   giving effect to assignment):
    	
$                             
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 3.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Transfer   Date:
    	
 
    	
 
    

 

C-4

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