Document:

TAL ADVANTAGE II LLC

Issuer

and

U.S. BANK NATIONAL ASSOCIATION

Indenture Trustee

 

SERIES 2008-1 SUPPLEMENT

Dated as of March 27, 2008

to

INDENTURE

Dated as of March 27, 2008

 

SERIES 2008-1 FLOATING RATE SECURED NOTES

 

 

 

TABLE OF CONTENTS

 

	

      ARTICLE I
      
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        DEFINITIONS
                       
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Section 101.
 	
                         
 	
                        Definitions
 	
                         
 	
                        1
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        ARTICLE II
                   
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        CREATION OF THE SERIES 2008-1 NOTES; MODIFICATION OF INDENTURE
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Section 201.
 	
                         
 	
                        Designation and Principal Terms
 	
                         
 	
                        7
 
	
                        Section 202.
 	
                         
 	
                        Authentication and Delivery
 	
                         
 	
                        8
 
	
                        Section 203.
 	
                         
 	
                        Interest and Other Payments on the Series 2008-1 Notes
 	
                         
 	
                        9
 
	
                        Section 204.
 	
                         
 	
                        Principal Payments on the Series 2008-1 Notes; Scheduled Amortization of Series 2008-1 Notes
 	
                         
 	
                        9
 
	
                        Section 205.
 	
                         
 	
                        Amounts and Terms of Series 2008-1 Noteholder Commitments
 	
                         
 	
                        10
 
	
                        Section 206.
 	
                         
 	
                        Taxes
 	
                         
 	
                        12
 
	
                        Section 207.
 	
                         
 	
                        Increased Costs
 	
                         
 	
                        15
 
	
                        Section 208.
 	
                         
 	
                        Capital Requirements
 	
                         
 	
                        16
 
	
                        Section 209.
 	
                         
 	
                        Replacement of Series 2008-1 Noteholder
 	
                         
 	
                        17
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        ARTICLE III
                       
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        SERIES 2008-1 SERIES ACCOUNT AND ALLOCATION AND APPLICATION OF
 AMOUNTS THEREIN
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Section 301.
 	
                         
 	
                        Series 2008-1 Series Account
 	
                         
 	
                        18
 
	
                        Section 302.
 	
                         
 	
                        Distributions from Series 2008-1 Series Account
 	
                         
 	
                        18
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        ARTICLE IV
                       
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        ADDITIONAL COVENANTS; ADDITIONAL EVENTS OF DEFAULT
                       
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Section 401.
 	
                         
 	
                        Increase in the Aggregate Series 2008-1 Note Existing Commitment
 	
                         
 	
                        21
 
	
                        Section 402.
 	
                         
 	
                        Issuance of Additional Series of Notes
 	
                         
 	
                        21
 
	
                        Section 403.
 	
                         
 	
                        Use of Proceeds
 	
                         
 	
                        21
 
	
                        Section 404.
 	
                         
 	
                        Additional Event of Default
 	
                         
 	
                        21
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        ARTICLE V
                       
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        CONDITIONS OF CLOSING AND FUTURE LENDING

                       
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Section 501.
 	
                         
 	
                        Conditions to Closing
 	
                         
 	
                        22
 
	
                        Section 502.
 	
                         
 	
                        Advances on Series 2008-1 Notes
 	
                         
 	
                        24
 

 

 

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TABLE OF CONTENTS

(continued)

 

	

      ARTICLE VI
     
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        REPRESENTATIONS AND WARRANTIES
                        
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Section 601.
 	
                         
 	
                        Existence
 	
                         
 	
                        24
 
	
                        Section 602.
 	
                         
 	
                        Authorization
 	
                         
 	
                        25
 
	
                        Section 603.
 	
                         
 	
                        No Conflict; Legal Compliance
 	
                         
 	
                        25
 
	
                        Section 604.
 	
                         
 	
                        Validity and Binding Effect
 	
                         
 	
                        25
 
	
                        Section 605.
 	
                         
 	
                        Material Adverse Change
 	
                         
 	
                        25
 
	
                        Section 606.
 	
                         
 	
                        Place of Business
 	
                         
 	
                        25
 
	
                        Section 607.
 	
                         
 	
                        No Agreement or Contracts
 	
                         
 	
                        25
 
	
                        Section 608.
 	
                         
 	
                        Consents and Approvals
 	
                         
 	
                        26
 
	
                        Section 609.
 	
                         
 	
                        Margin Regulations
 	
                         
 	
                        26
 
	
                        Section 610.
 	
                         
 	
                        Taxes
 	
                         
 	
                        26
 
	
                        Section 611.
 	
                         
 	
                        Other Regulations
 	
                         
 	
                        26
 
	
                        Section 612.
 	
                         
 	
                        Solvency and Separateness
 	
                         
 	
                        27
 
	
                        Section 613.
 	
                         
 	
                        Survival of Representations and Warranties
 	
                         
 	
                        27
 
	
                        Section 614.
 	
                         
 	
                        No Default
 	
                         
 	
                        27
 
	
                        Section 615.
 	
                         
 	
                        Litigation and Contingent Liabilities
 	
                         
 	
                        28
 
	
                        Section 616.
 	
                         
 	
                        Title; Liens
 	
                         
 	
                        28
 
	
                        Section 617.
 	
                         
 	
                        Subsidiaries
 	
                         
 	
                        28
 
	
                        Section 618.
 	
                         
 	
                        No Partnership
 	
                         
 	
                        28
 
	
                        Section 619.
 	
                         
 	
                        Pension and Welfare Plans
 	
                         
 	
                        28
 
	
                        Section 620.
 	
                         
 	
                        Ownership of the Issuer
 	
                         
 	
                        28
 
	
                        Section 621.
 	
                         
 	
                        Security Interest Representations
 	
                         
 	
                        28
 
	
                        Section 622.
 	
                         
 	
                        Tax Election of the Issuer
 	
                         
 	
                        30
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        ARTICLE VII
                       
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        THE GUARANTY
                       
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Section 701.
 	
                         
 	
                        The Guaranty
 	
                         
 	
                        30
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        ARTICLE VIII
                    
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	

                        MISCELLANEOUS PROVISIONS

                    
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Section 801.
 	
                         
 	
                        Ratification of Indenture
 	
                         
 	
                        30
 
	
                        Section 802.
 	
                         
 	
                        Counterparts
 	
                         
 	
                        31
 
	
                        Section 803.
 	
                         
 	
                        Governing Law
 	
                         
 	
                        31
 
	
                        Section 804.
 	
                         
 	
                        Amendments and Modifications
 	
                         
 	
                        31
 
	
                        Section 805.
 	
                         
 	
                        Consent to Jurisdiction
 	
                         
 	
                        31
 
	
                        Section 806.
 	
                         
 	
                        Waiver of Jury Trial
 	
                         
 	
                        32
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        EXHIBITS
 	
                         
 	
                         
 	
                         
 	
                         
 
	 
	 
	 
	 
	 

	
                        EXHIBIT A
 	
                         
 	
                        Form of Series 2008-1 Note
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 

 

 

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TABLE OF CONTENTS

(continued)

 

	SCHEDULES
	 
	 
	 
	 

	 
	 
	 
	 
	 

	SCHEDULE 1
	 
	Percentage of Minimum Targeted Principal Balance and Percentage of Scheduled Targeted Principal Balance Series 2008-1 Notes
	 
	 

	SCHEDULE 2
	 
	Commitments
	 
	 

 

 

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This SERIES 2008-1 SUPPLEMENT, dated as of March 27, 2008 (as amended, modified or supplemented from time to time in accordance with the terms hereof, this “Supplement”), is between TAL ADVANTAGE II LLC, a limited liability company organized under the laws of Delaware (the “Issuer”), and U.S. 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 2008-1 Noteholders:

ARTICLE I

Definitions

Section 101. Definitions. (a) Whenever used in this Supplement, the following words and phrases shall have the following meanings, and the definitions of such terms are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

“Additional Series 2008-1 Noteholder” shall have the meaning set forth in Section 205(d).

“Adjusted Eurodollar Rate”  means, for any Interest Accrual Period, an interest rate per annum equal to the quotient, expressed as a percentage and rounded upwards (if necessary) to the nearest 1/1000 of 1%, obtained by dividing (i) LIBOR on the second Business Day immediately preceding the first day of such Interest Accrual Period by (ii) the decimal equivalent of 100% minus the Eurodollar Reserve Percentage on the second Business Day immediately preceding the first day of such Interest Accrual Period.

“Aggregate Series 2008-1 Principal Balance” means, as of any date of determination, an amount equal to the sum of the Series 2008-1 Principal Balances of all Series 2008-1 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, one and one quarter of one percent (1.25%); or

 

 

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(ii) on or after the Conversion Date, one and one half of one percent (1.50%).

The amount of the Applicable Margin shall be increased from time to time in accordance with the provisions of Section 205(d).

“Availability” means, as of any date of determination for any Series 2008-1 Noteholder, the lesser of:

(A) the excess, if any, of (x) the Series 2008-1 Note Existing Commitment of such Series 2008-1 Noteholder on such date of determination over (y) the then Series 2008-1 Principal Balance of the Series 2008-1 Note owned by such Series 2008-1 Noteholder on such date of determination; and

(B) such Series 2008-1 Noteholder’s Percentage of an amount equal to the excess of (x) the Asset Base, over (y) the then Aggregate Note Principal Balance (calculated without giving effect to the requested Series 2008-1 Advance).

“Base Rate” means on any date, a fluctuating rate of interest per annum equal to the higher of (a) the Prime Rate and (b) the Federal Funds Rate plus 0.50% per annum.

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

“Breakage Costs” means, with respect to an Interest Accrual Period, any reasonable loss, cost or expense incurred by a Series 2008-1 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 2008-1 Noteholder to fund or maintain a Series 2008-1 Advance, as the case may be, during such Interest Accrual Period.

“Closing Date” means March 27, 2008.

“Commitment Fee” shall have the meaning set forth in Section 205(c) hereof.

“Commitment Fee Percentage” means three eighths of one percent (0.375%) per annum. The amount of the Commitment Fee Percentage shall be increased from time to time in accordance with the provisions of Section 205(d).

“Control Party” means, with respect to the Series 2008-1 Notes, the Majority of Holders of the Series 2008-1 Notes. 

“Conversion Date” means, with respect to the Series 2008-1 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) June 30, 2009 (as such date may be extended in accordance with Section 2.1(c) of the Note Purchase Agreement). 

 

 

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

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

“Deficiency Amount” means (a) for each Payment Date other than the Series 2008-1 Legal Final Maturity Date, any shortfall in the aggregate amount available in the Series 2008-1 Series Account for the Series 2008-1 Notes or any other amounts available under the Indenture or this Supplement to pay both (i) the Series 2008-1 Interest Payment for such Payment Date and (ii) the Scheduled Principal Payment Amount for such Payment Date, and (b) on the Series 2008-1 Legal Final Maturity Date, any shortfall in the aggregate amount available in the Series 2008-1 Series Account or any other amounts available under the Indenture or this Supplement to pay the then Aggregate Series 2008-1 Principal Balance, accrued but unpaid interest thereon and all other amounts owing to the Series 2008-1 Noteholders pursuant to the terms of
the Series 2008-1 Transaction Documents.

“Dollars” and the sign “$” means lawful money of the United States of America.

 “Early Amortization Event” shall have the meaning set forth in Appendix A to the Indenture.

“Eurodollar Disruption Event” means as of any date of determination, the existence of any of the following events or conditions: (a) a reasonable determination by a Series 2008-1 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 2008-1 Note, or (b) the inability of a Series 2008-1 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 2008-1 Note. 

“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).

“Fortis” means Fortis Capital Corp.

“Guaranty” means the guaranty, dated as of March 27, 2008, issued by the Guarantor in favor of the Indenture Trustee with respect to the Series 2008-1 Notes.

“Guarantor” means TAL International Group, Inc., a corporation organized under the laws of the State of Delaware.

“Indemnified Party” has the meaning given thereto in Section 206. 

 

 

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“Indenture” means the Indenture, dated as of March 27, 2008 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 2008-1 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 2008-1 Advance made on a date other than the first day of an Interest Accrual Period, the initial Interest Accrual Period for such Series 2008-1 Advance shall begin on the day of such Series 2008-1 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.

“Liquidity Provider” shall have the meaning set forth in the Series 2008-1 Note Purchase Agreement.

“Majority of Holders” means, with respect to the Series 2008-1 Notes, one or more Series 2008-1 Noteholders holding Notes constituting more than fifty percent (50%) of the then Aggregate Series 2008-1 Principal Balance. 

“Minimum Principal Payment Amount” means, for the Series 2008-1 Notes on any Payment Date, one of the following:

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

(2) for any Payment Date following the Conversion Date, the excess, if any, of (x) the Aggregate Series 2008-1 Principal Balance, over (y) the Minimum Targeted Principal Balance for the Series 2008-1 Notes for such Payment Date.

“Minimum Targeted Principal Balance” means for the Series 2008-1 Notes for each Payment Date, an amount equal to the product of (x) the Aggregate Series 2008-1 Principal Balance on the Conversion Date and (y) the percentage set forth opposite such Payment Date (based on the number of Payment Dates elapsed from the Closing Date) on Schedule 1 hereto under the column titled “Percentage (Minimum Targeted Principal Balance)”.

“Notice” means the telephonic or telegraphic notice, promptly confirmed in writing by telecopy in the form required by the Guaranty, the original of which is subsequently delivered by registered or certified mail, from the Indenture Trustee specifying the Deficiency Amount which shall be due and owing on the applicable Payment Date.

“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 2008-1 Noteholder as of any date of determination, a fraction (expressed as a percentage), the numerator of which is such Series 2008-1 Noteholder’s Series 2008-1 Note Existing Commitment and the denominator of which is equal to the sum of the Series 2008-1 Note Existing Commitments of all Series 2008-1 Noteholders.

 

 

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“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 Citibank, N.A., from time to time as its “prime rate” or “base rate” in the United States, such rate to change as and when such designated rate changes. The Prime Rate is not necessarily the lowest rate of interest charged by Citibank, N.A. in connection with extensions of credit to debtors.

“Scheduled Principal Payment Amount” means, for the Series 2008-1 Notes for any Payment Date, one of the following:

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

(2) for any Payment Date following the Conversion Date, the excess, if any, of (x) the then Aggregate Series 2008-1 Principal Balance (determined after giving effect to the Minimum Principal Payment Amount for the Series 2008-1 Notes actually paid on such Payment Date), over (y) the Scheduled Targeted Principal Balance for the Series 2008-1 Notes for such Payment Date.

“Scheduled Targeted Principal Balance” means, for the Series 2008-1 Notes for each Payment Date, an amount equal to the product of (x) the Aggregate Series 2008-1 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 Conversion Date) on Schedule 1 hereto under the column titled “Percentage (Scheduled Targeted Principal Balance)”.

“Series 2008-1” means the Series of Notes the terms of which are specified in this Supplement.

“Series 2008-1 Advance” means an advance of funds made by one or more of the Series 2008-1 Noteholders pursuant to the provisions of Section 205(b) of this Supplement.

“Series 2008-1 Expected Final Maturity Date” means the Payment Date occurring on the ninth (9th) annual anniversary of the Conversion Date. 

“Series 2008-1 Interest Payment” means for each Payment Date, an amount equal to the sum for each Series 2008-1 Advance outstanding for each day during the Interest Accrual Period ending on the preceding day of the product of (i) the principal amount of such Series 2008-1 Advance, (ii) an amount equal to the sum of (x) the Applicable Funding Basis for such Series 2008-1 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 2008-1 Legal Final Maturity Date” means the Payment Date occurring on the fifteenth (15th) annual anniversary of the Closing Date.

 

 

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“Series 2008-1 Note Existing Commitment” means, with respect to any Series 2008-1 Noteholder, the purchase limit or commitment set forth in the Series 2008-1 Note Purchase Agreement, as such commitment may be (i) increased upon the written consent of such Series 2008-1 Noteholder and the Requisite Global Majority in connection with each such increase or (ii) reduced from time to time at the request of the Issuer, in each case in accordance with the terms of the Series 2008-1 Note Purchase Agreement.

“Series 2008-1 Note Initial Commitment” means, with respect to any Series 2008-1 Noteholder, the amount set forth opposite the name of such Series 2008-1 Noteholder on Schedule 2 hereto (as such Schedule 2 shall be deemed to be amended by a properly executed Related Group Addition Notice (as such term is defined in the Series 2008-1 Note Purchase Agreement), Assignment and Acceptance (as such term is defined in the Series 2008-1 Note Purchase Agreement)) or Increase Letter (as such term is defined in the Series 2008-1 Note Purchase Agreement).

“Series 2008-1 Note Purchase Agreement” means the Note Purchase Agreement, dated as of March 27, 2008, among the Issuer, the initial Series 2008-1 Noteholder and various financial institutions from time to time, as such agreement may be amended or restated from time to time.

“Series 2008-1 Noteholder” shall mean the Person in whose name a Series 2008-1 Note is registered in the Note Register.

“Series 2008-1 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 2008-1 Principal Balance” means, with respect to any Series 2008-1 Note as of any date of determination, an amount equal to the excess, if any, of (x) the sum of all Series 2008-1 Advances made by such Series 2008-1 Noteholder on or subsequent to the Closing Date, over (y) the cumulative amount of all principal payments (including Prepayments) actually paid to such Series 2008-1 Noteholder subsequent to the Closing Date.

“Series 2008-1 Series Account” means a Series Account for Series 2008-1 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 2008-1 Transaction Documents” means this Supplement, the Series 2008-1 Notes, the Series 2008-1 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 2008-1 Notes, as any of the foregoing may from time to time be amended, modified, supplemented or renewed.

“Series 2008-1 Unused Commitment” means, with respect to any Series 2008-1 Noteholder as of any date of determination, the excess, if any, of (i) the Series 2008-1 Note Existing Commitment then in effect for such Series 2008-1 Noteholder over (ii) the Series 2008-1 Principal Balance of the Series 2008-1 Note owned by such Series 2008-1 Noteholder as of 

 

 

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such date of determination, such principal balance to be measured after giving effect to all Series 2008-1 Advances made and all principal payments to be received by such Series 2008-1 Noteholder on such date of determination.

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

ARTICLE II

Creation of the Series 2008-1 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 II LLC Series 2008-1 Floating Rate Secured Notes”. The Series 2008-1 Notes will be issued in the initial aggregate maximum principal balance of up to Two Hundred Fifty Million Dollars ($250,000,000). The Series 2008-1 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 2008-1 Notes are designated as a Series of Warehouse Notes.

(b) The Payment Date with respect to the Series 2008-1 Notes shall be the twentieth (20th) day of each month, commencing April 20, 2008 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 2008-1 Notes shall be payable from funds on deposit in the Series 2008-1 Series Account or otherwise at the times and in the amounts set forth in Article III of the Indenture and Article III hereof.

(d) The Series 2008-1 Interest Payment and the Commitment Fee shall constitute “Priority Payments” for Series 2008-1 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 2008-1. All of the Events of Default set forth in Section 801 of the Indenture are applicable to Series 2008-1 and each of the events and conditions set forth in Section 406 of this Supplement shall also constitute additional Events of Default applicable to Series 2008-1.

(f) The Series 2008-1 Notes shall have the benefit of the Guaranty. However such Guaranty shall not be considered to be an Enhancement Agreement and the Guarantor shall not have the benefits afforded to a Series Enhancer.

(g) The “Initial Commitment” for Series 2008-1, as such term is referred to in the Indenture, shall mean the Series 2008-1 Note Initial Commitment.

(h) The “Commitment” for Series 2008-1, as such term is referred to in the Indenture, shall mean the Series 2008-1 Note Existing Commitment.

 

 

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(i) 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.

(j) The “Expected Final Maturity Date” for Series 2008-1, as such term is referred to in the Indenture, shall mean the Series 2008-1 Expected Final Maturity Date.

(k) The “Legal Final Maturity Date” for Series 2008-1, as such term is referred to in the Indenture, shall mean the Series 2008-1 Legal Final Maturity Date.

(l) For purposes of the Indenture, only the Series 2008-1 Interest Payment and the Commitment Fee shall be a Priority Payment. For purposes of Section 801(1)(A) of the Indenture, the Series 2008-1 Interest Payment will be due and payable on each Payment Date. 

(m) The Series 2008-1 Notes have not been rated by a Rating Agency as of the Closing Date. Accordingly, any provision of the Series 2008-1 Transaction Documents requiring notification of or providing notices to the Rating Agencies or required for satisfaction of the Rating Agency Condition shall not be applicable to Series 2008-1 Notes until such time (if any) a Rating Agency has assigned a rating to the Series 2008-1 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 2008-1 Note Purchase Agreement, the Series 2008-1 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 2008-1 Note Purchase Agreement, shall deliver such Series 2008-1 Notes to the Noteholders in accordance with such written directions.

(b) Definitive Notes. In accordance with Section 202 of the Indenture, the Series 2008-1 Notes shall be represented by one or more Definitive Notes.

(c) Original or Facsimile Signatures. The Series 2008-1 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 2008-1 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 2008-1 Notes. Notwithstanding the provisions of Section 205 of the Indenture (except for Section 205(l) thereof), each Series 2008-1 Noteholder may sell, transfer or assign its Series 2008-1 Note(s) provided that (i) such Series 2008-1 Noteholder must obtain the Issuer’s prior written consent authorizing such Series 2008-1 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 

 

 

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an Eligible Assignee, such Series 2008-1 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 2008-1 Noteholder and the applicable purchaser, transferee or assignee; (iv) such sale, transfer or assignment will not result in any increased costs to the Issuer without its written consent; and (v) such sale, transfer or assignment is not to a Competitor. The provisions of this Section 205(e) may be modified in a written agreement between the Issuer and the Indenture Trustee. 

Section 203. Interest and Other Payments on the Series 2008-1 Notes.

(a) Interest on Series 2008-1 Notes. Interest will be owing on the Series 2008-1 Notes in an amount equal to the Series 2008-1 Interest Payment, which shall be payable on each Payment Date from amounts on deposit in the Series 2008-1 Series Account in accordance with Section 302 hereof including the priority of payments set forth therein.

(b) Interest on Overdue Amounts. If the Issuer shall default in the payment of (i) the unpaid principal balance of any Series 2008-1 Notes on the Series 2008-1 Legal Final Maturity Date, (ii) the Series 2008-1 Payment on any Series 2008-1 Note when due, or (iii) following the acceleration of the Series 2008-1 Notes in accordance with the terms of the Indenture, 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 2008-1 Note exceed the maximum amount permitted by Applicable Law. If at any time the interest rate charged with respect to the Series 2008-1 Notes exceeds the maximum rate permitted by Applicable Law, the rate of interest to accrue pursuant to this Supplement and such Series 2008-1 Note shall be limited to the maximum rate permitted by Applicable Law.

Section 204. Principal Payments on the Series 2008-1 Notes; Scheduled Amortization of Series 2008-1 Notes.

(a) The principal balance of the Series 2008-1 Notes shall be payable on each Payment Date from amounts on deposit in the Series 2008-1 Series Account in an amount equal to (i) so long as no Early Amortization Event is continuing, the Minimum Principal Payment Amount, the Scheduled Principal Payment Amount and the allocable portion of the Supplemental Principal Payment Amount (if any) for such Series 2008-1 Note for such Payment Date, to the extent that funds are available for such purpose in accordance with the provisions of part I of Section 302 hereof, or (ii) if an Early Amortization Event is then continuing, the Minimum Principal Payment Amount, the Scheduled Principal Payment Amounts and then unpaid Series 2008-1 Principal Balance of such Series 2008-1 Note shall be payable in full to the extent that funds are available for such purposes in accordance with the provisions
of part (II) of Section 302 hereof. Payment of the Supplemental Principal Payment Amount on each Payment 

 

 

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Date is subordinated to payment in full on such Payment Date of the Minimum Principal Payment Amount and the Scheduled Principal Payment Amount for the Series 2008-1 Notes and any other Notes then Outstanding. The unpaid principal amount of each Series 2008-1 Note, together with all unpaid interest (including all Default Fees), fees (including all Commitment Fees), expenses, costs and other amounts payable by the Issuer to the Series 2008-1 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 2008-1 Notes have been accelerated in accordance with Section 802 of the Indenture and (y) the Series 2008-1 Legal Final Maturity Date.

(b) The Issuer may, on any Payment Date and upon four (4) Business Days’ prior notice to the Series 2008-1 Noteholders in accordance with the terms of Section 8.2 of the Series 2008-1 Note Purchase Agreement, voluntarily prepay all, or any part, of the Series 2008-1 Principal Balance by making a wire transfer to the Series 2008-1 Noteholders; provided, however, that the Issuer may not make such repayment from funds in the Trust Account, the Series 2008-1 Series Account or the Restricted Cash Account (if such account has been opened) except to the extent that funds in any such account would otherwise be payable to the Issuer or available to prepay the Aggregate Series 2008-1 Principal Balance in accordance with the
terms of this Supplement or the Indenture. 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 2008-1 Noteholders in connection with such prepayment.

(c) Any Prepayment of less than the entire Aggregate Series 2008-1 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 2008-1 Notes were a Series of Term Notes.

Section 205. Amounts and Terms of Series 2008-1 Noteholder Commitments.

(a) Commitments. Subject to the terms and conditions of this Supplement and the Series 2008-1 Note Purchase Agreement, each Series 2008-1 Noteholder shall make its Percentage of the Series 2008-1 Note Initial Commitment available to the Issuer on the Closing Date.

(b) Advances. Prior to the Conversion Date, each Series 2008-1 Note shall be a revolving note with a maximum principal amount equal to the Series 2008-1 Note Existing Commitment then in effect for the related Series 2008-1 Noteholder. The Administrative Agent and each Series 2008-1 Noteholder shall maintain a record of all Series 2008-1 Advances and repayments made on the Series 2008-1 Notes and absent manifest error such records shall be conclusive. Each request for a Series 2008-1 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 2008-1 Advance to be
funded by the Series 2008-1 Noteholders. The Administrative Agent shall promptly forward any such Funding Notice, with the attached Asset Base Certificate, to each Series 2008-1 Noteholder or its designee. On any Business Day requested by the Issuer, and presuming that the Issuer shall have

 

 

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 satisfied all applicable conditions precedent set forth in Article V hereof, the Series 2008-1 Noteholders shall, subject to the terms and conditions of this Supplement and the Series 2008-1 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 2008-1 Advance; provided, however, that each Series 2008-1 Advance by each Series 2008-1 Noteholder shall be for: (I) a minimum amount of the lesser of (x) its then unused Series 2008-1 Note Existing Commitment and (y) such Series 2008-1 Noteholder’s Percentage of one million Dollars ($1,000,000) or an integral multiple of One Hundred Thousand Dollars ($100,000) in excess thereof; and (II) a maximum amount of the
Availability of such Series 2008-1 Noteholder on such Business Day. In the event that any Series 2008-1 Noteholder fails to make a Series 2008-1 Advance in accordance with its Series 2008-1 Note Existing Commitment, the other Series 2008-1 Noteholder(s) may but shall not be obligated to fund the Percentage of the defaulted Series 2008-1 Noteholder(s).

Each request for a Series 2008-1 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 2008-1 Notes contained in the Series 2008-1 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 2008-1 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 2008-1 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 2008-1 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 2008-1 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 2008-1 Unused Commitment of such Series 2008-1 Noteholder on such day. Such Commitment Fee shall be payable from amounts then on deposit in the Series 2008-1 Series Account, or amounts otherwise available for such purpose, in accordance with Section 302 hereof.

(d) Optional Increase in Series 2008-1 Note Existing Commitments. The Issuer may, by means of a letter delivered to Administrative Agent and the Indenture Trustee on not more than five (5) occasions prior to the Conversion Date, request that the aggregate Series 2008-1 Note Existing Commitments be increased by an aggregate amount not to exceed One Hundred Twenty Five Million Dollars ($125,000,000), by (a) increasing the commitment of one or more then existing Series 2008-1 Noteholders that have agreed to such increase and/or (b)

 

 

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 by issuing additional Series 2008-1 Notes to adding one or more commercial banks, finance companies or other Persons acceptable to the Issuer (each an “Additional Series 2008-1 Noteholder”) with a Series 2008-1 Note Existing Commitment in an amount agreed to by any such Additional Series 2008-1 Noteholder; provided that until such time as the Series 2008-1 Note Existing Commitment of Fortis shall have been reduced to Seventy Five Million Dollars ($75,000,000), any incremental additional commitments that may become available to the Issuer pursuant to this Section 205(d) shall be used to decrease the commitment of Fortis. Any such increase in the aggregate Series 2008-1 Note Existing Commitment made in accordance with this Section 205(d) shall be effective three Business Days after the date on which
Issuer has delivered to the Administrative Agent and the Indenture Trustee the Increase Letter (as such term is defined in the Series 2008-1 Note Purchase Agreement) (in the case of an increase in the Commitments of an existing Series 2008-1 Noteholder) or Related Group Additional Notice (as such term is defined in the Series 2008-1 Note Purchase Agreement) (in the case of the addition of an Additional  Series 2008-1 Noteholders). If the Issuer pays or agrees to pay to any Series 2008-1 Noteholder or Additional Series 2008-1 Noteholder, any increased Commitment Fee and/or Applicable Margin, then the terms of this Supplement shall automatically be amended with the effect that the amount of such increased Commitment Fee and/or Applicable Margin shall be payable on a prospective basis  to all then existing Series 2008-1 Noteholders.

Section 206. Taxes.

(a) Subject to clause (g) below, in addition to payments of principal and interest on the Series  2008-1 Notes when due, the Issuer shall pay, but only in accordance with the priorities for distributions set forth in Section 302 hereof, each Series 2008-1 Noteholder (an “Indemnified Party”) any and all present or future taxes, fees, duties, levies, imposts, or charges, or any other similar deduction or withholding, whatsoever imposed by any Governmental Authority, and all liabilities with respect thereto, excluding (i) franchise taxes, (ii) such taxes as are imposed on or measured by or determined (in whole or in part) by reference to each Indemnified Party’s net income by the jurisdiction under the laws of which such Indemnified Party, as the case may be (regardless of whether such tax is denominated as an “income tax” under applicable local
law), is organized or maintains an office or any political subdivision thereof, (iii) any other taxes, fees, duties, levies, imports, or charges, whether payable directly by the Series 2008-1 Noteholder or by deduction or withholding from any payment made in respect of a Series 2008-1 Note, on account of a connection, whether present or former, between the Series 2008-1 Noteholder and the relevant taxing jurisdiction and (iv) withholding taxes imposed on any payment in respect of a Series 2008-1 Note other than on account of a change in law or regulation occurring after the Person in respect of which such tax is imposed acquired a beneficial interest in a Series 2008-1 Note (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”).

(b) In addition subject to clause (g) below, the Issuer shall pay, but only in accordance with the priorities for distribution set forth in Section 302 hereof, any present or future stamp or documentary taxes or any other similar excise or property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Supplement or any other Series 2008-1 Transaction Document (hereinafter referred to as “Other Taxes”).

 

 

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(c) Subject to clause (g) below, if any Taxes or Other Taxes are directly asserted or imposed against any Indemnified Party, the Issuer shall indemnify and hold harmless such Indemnified Party, but only in accordance with the priorities for distribution set forth in Section 302 hereof, for the full amount of the Taxes or Other Taxes (including any Taxes or Other Taxes asserted or imposed by any jurisdiction on amounts payable under this Section 206) paid by the Indemnified Party and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted or imposed. If the Issuer fails to pay any Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the Indemnified Party the required receipts or other required documentary
evidence, the Issuer shall indemnify the Indemnified Party for any incremental Taxes or Other Taxes, interest or penalties that may become payable by the Indemnified Party as a result of any such failure. Payment under this indemnification shall be made in accordance with the payment priorities set forth in Section 302 hereof after the Indemnified Party makes written demand therefor. Each Indemnified Party shall give prompt notice to the Issuer of any assertion of Taxes or Other Taxes so that the Issuer may, at its option, contest such assertion.

(d) Within thirty (30) days after the date of any payment by the Issuer of Taxes or Other Taxes, the Issuer shall furnish to the affected Indemnified Party the original (or a certified copy) of a receipt evidencing payment thereof, or other evidence of payment thereof satisfactory to such Indemnified Party.

(e) Taxes, Other Taxes and other indemnification payments owing pursuant to the provisions of this Section 206 shall not constitute a “claim” (as defined in Section 101(5) of the Bankruptcy Code) against the Issuer in the event there are insufficient funds available to make such payments in accordance with the payment priority set forth in Section 302 hereof.

(f) If an Indemnified Party is not a “United States person” as defined in section 7701(a)(30) of the Internal Revenue Code of 1986, as amended, such Indemnified Party shall deliver to the Issuer, with a copy to the Administrative Agent and the Manager, within 15 days after the Closing Date, or, if such Indemnified Party becomes an Indemnified Party after the Closing Date, the date on which such Indemnified Party becomes an Indemnified Party hereunder:  (i) two (or such other number as may from time to time be prescribed by Applicable Laws) duly completed copies of (A) IRS Form W-8BEN claiming eligibility of the Indemnified Party for benefits of an income tax treaty to which the United States is a party or (B) IRS Form W-8ECI (or any successor forms or other certificates or statements that may be required from time to time by the relevant United States
taxing authorities or Applicable Laws) or (ii) in the case of an Indemnified Party that is not legally entitled to deliver either form listed in clause (f)(i), (A) a certificate of a duly authorized officer of such Indemnified Party to the effect that such Indemnified Party is not (x) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (y) a “10 percent shareholder” of the Issuer within the meaning of Section 881(c)(3)(B) of the Code, or (z) a controlled foreign corporation receiving interest from a related person  within the meaning of Section 881(c)(3)(C) of the Code (such certificate, an “Exemption Certificate”) and (B) two duly completed copies of IRS Form W-8BEN or applicable successor form certifying the foreign status of such Indemnified Party, as appropriate, to permit the Issuer to make payments hereunder for the account of such Indemnified Party, without deduction or withholding of United States federal
income or similar Taxes. Each other Indemnified Party

 

 

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 agrees to deliver to the Issuer, with a copy to the Administrative Agent and the Manager, within 15 days after the Closing Date, or, if such Indemnified Party becomes an Indemnified Party after the Closing Date, the date on which such Indemnified Party becomes an Indemnified Party hereunder, one or more accurate and complete original signed copies (as the Issuer, Administrative Agent or Manager may reasonably request) of IRS Form W-9 or successor applicable form (if required by law), as the case may be, providing the employer identification number for such Indemnified Party. Additionally, upon the obsolescence of, or after the occurrence of any event requiring a change in, any form or certificate previously delivered by an Indemnified Party pursuant to this Section 206(f), such Indemnified Party shall deliver such forms, amended or successor forms, certificates or statements as may be
required under Applicable Laws to permit the Issuer to make payments hereunder for the account of such Indemnified Party, without deduction or withholding of United States federal income or similar Taxes.

(g) The Issuer shall not be obligated to pay any additional amounts to any Indemnified Party pursuant to clause (a), or to indemnify any Indemnified Party pursuant to clause (c), in respect of United States federal withholding taxes to the extent imposed as a result of (i) the failure of such Indemnified Party to deliver to the Issuer any form and/or Exemption Certificate pursuant to clause (f), (ii) such form not establishing a complete exemption from U.S. federal withholding tax or the information or certifications made therein by the Indemnified Party being untrue or inaccurate on the date delivered in any material respect, or (iii) the Indemnified Party designating a successor office at which it maintains the Series 2008-1 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 occurring after the date the Person in respect of which such tax is imposed acquired a beneficial interest in a Series 2008-1 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 2008-1 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 2008-1 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 2008-1 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 2008-1 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

 

 

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 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. The provisions of this Section 207 shall also be applicable to each Liquidity Provider.

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 provisions of this Section 208 shall also be applicable to each Liquidity Provider.

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 2008-1 Noteholder’s right to demand such compensation; provided, that the Issuer shall not be under any obligation to compensate any Indemnified Party under this Section 207 for any Increased Costs and other amounts owed pursuant to this Section 207 with respect to any period prior to the date that is 120 days prior to such request if such Indemnified Party knew of the circumstances giving rise to such Increased Costs and other amounts owed pursuant to this Section 207 and of the fact that such circumstances would result in a claim for increased compensation by reason of such Increased Costs and other amounts owed pursuant to this Section 207.

Section 208. Capital Requirements. 

If any Indemnified Party shall determine that (i) any change after the Closing Date in any law, rule, regulation or guideline adopted pursuant to or arising out of the July 1988 report of the Basel Committee on Banking Regulations and Supervisory Practices entitled “International Convergence of Capital Measurement and Capital Standards”, or (ii) the adoption after the date hereof of any other law or requirement of law regarding capital adequacy, including the proposed “The New Basel Capital Accord”, or (iii) any change after the Closing Date in any of the foregoing or in the enforcement or interpretation or administration of any of the foregoing by any Governmental Authority charged with the enforcement or interpretation or administration thereof, or (iv) compliance by any Indemnified Party (or any business office of the Indemnified Party) or the Indemnified
Party’s holding company with any request or directive regarding capital adequacy of any Governmental Authority, has or would have the effect of reducing the rate of return on the Indemnified Party’s capital or on the capital of the Indemnified Party’s holding company, to a level below that which the Indemnified Party or the Indemnified Party’s holding company could have achieved, in each case but for such adoption, change or compliance (taking into consideration the Indemnified Party’s policies and the policies of the Indemnified Party’s holding company with respect to capital adequacy) by an amount reasonably deemed by the Indemnified Party to be material, then, within (10) ten days after written demand for the payment thereof, then the Issuer will pay to the affected Indemnified Party such additional amount or amounts as will compensate the Indemnified Party or the Indemnified Party’s holding company for any such reduction suffered. Payment under
this indemnification shall be made only in accordance with the priorities for distributions set forth in Section 302 hereof after the Indemnified Party makes written demand therefor. Indemnification amounts contemplated by this Section shall not constitute a “claim” (as defined in Section 101(5) of the

 

 

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 Bankruptcy Code) against the Issuer in the event there are insufficient funds available to make such payments on a Payment Date under Section 302 hereof. Without affecting its rights under this Section 208 or any other provision of this Supplement, each Indemnified Party agrees that if there is a reduction in a rate of return with respect to which the Issuer would be obligated to compensate the Indemnified Party pursuant to this Section 208, the Indemnified Party shall use reasonable efforts to select an alternative business office which would not result in any reduction in rate of return contemplated by this Section; provided, however, that the Indemnified Party shall not be obligated to select an alternative business office if the Indemnified Party determines that (i) as a result of such selection the Indemnified
Party would be in violation of any Applicable Law, or would incur additional costs or expenses, or (ii) such selection would be unavailable for regulatory reasons or (iii) such selection would otherwise be illegal or disadvantageous to such Indemnified Party. 

The failure or delay on the part of any Indemnified Party to demand compensation for any reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of such Series 2008-1 Noteholder’s right to demand such compensation; provided, that the Issuer shall not be under any obligation to compensate any Indemnified Party under this Section 208 for any reductions with respect to any period prior to the date that is 120 days prior to such request if such Indemnified Party knew of the circumstances giving rise to such reductions and of the fact that such circumstances would result in a claim for increased compensation by reason of such reductions.

Section 209. Replacement of Series 2008-1 Noteholder. 

(a) In the event (i) any Series 2008-1 Noteholder (or any Indemnified Party with respect to any Series 2008-1 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 2008-1 Noteholder (or any Indemnified Party with respect to any Series 2008-1 Noteholder) or any Governmental Authority on account of any Series 2008-1 Noteholder (or any Indemnified Party with respect to any Series 2008-1 Noteholder) pursuant to Section 206 or (iii) any Series 2008-1 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 2008-1 Noteholder), the Issuer may, at its sole expense and effort, upon notice to such Series 2008-1 Noteholder, require such Series 2008-1 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 2008-1 Noteholder, if a Series 2008-1 Noteholder accepts such assignment); provided that:

(i) such Series 2008-1 Noteholder shall have received payment of an amount equal to the outstanding principal of its Series 2008-1 Note, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Transaction Documents from the Issuer or the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Issuer (in the case of all other amounts);

 

 

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(ii) in the case of any such assignment resulting from a claim for compensation under Section 207 or 208 or payments required to be made pursuant to Section 206, such assignment will result in a reduction in such compensation or payments thereafter; and

(iii) such assignment does not conflict with Applicable Law.

ARTICLE III

Series 2008-1 Series Account and

Allocation and Application of Amounts Therein

Section 301. Series 2008-1 Series Account.  The Issuer shall establish on the Closing Date and maintain, so long as any Series 2008-1 Note is Outstanding, an Eligible Account in the name of the Issuer with the Indenture Trustee which shall be designated as the Series 2008-1 Series Account, which account shall be pledged to the Indenture Trustee pursuant to the Indenture for the benefit of the Series 2008-1 Noteholders and any Hedge Counterparty. The Series 2008-1 Series Account shall only be relocated to another financial institution in accordance with the express provisions of Section 303(d) of the Indenture. All deposits of funds by, or for the benefit of, the Series 2008-1 Noteholders from the Trust Account and the Restricted Cash Account (if such account has been
opened), shall be accumulated in, and withdrawn from, the Series 2008-1 Series Account in accordance with the provisions of the Indenture and this Supplement.

Section 302. Distributions from Series 2008-1 Series Account.  On each Payment Date, the Indenture Trustee shall distribute funds then on deposit in the Series 2008-1 Series Account in accordance with the provisions of one of subsection (I), (II) and (III) of this Section 302.

(I) If no Early Amortization Event nor an Event of Default shall have occurred and be continuing:

(a) To each Series 2008-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2008-1 Interest Payment for such Payment Date;

(b) To each Series 2008-1 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 2008-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Minimum Principal Payment Amount then due and payable to Series 2008-1 Noteholders on such Payment Date;

(d) To each Series 2008-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Scheduled Principal Payment Amount then due and payable to Series 2008-1 Noteholders on such Payment Date;

 

 

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(e) To each Series 2008-1 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 2008-1 Noteholders on such Payment Date, until the Aggregate Series 2008-1 Note Principal Balance has been reduced to zero;

(f) To each Series 2008-1 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 2008-1 Noteholders and each other Indemnified Party pursuant to the Series 2008-1 Transaction Documents; and

(g) After application of the amounts required to be paid pursuant to Section 302 of the Indenture, to the Guarantor, an amount equal to any reimbursements owing to the Guarantor pursuant to the terms of the Guaranty and then to the Issuer or its assigns, any remaining amounts then on deposit in the Series 2008-1 Series Account.

(II) If an Early Amortization Event shall have occurred and then be continuing with respect to any Series but no Event of Default shall have occurred and be continuing with respect to any Series (or an Event of Default has occurred but the Notes have not been accelerated in accordance with Section 802 of the Indenture):

(a) To each Series 2008-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2008-1 Interest Payment for such Payment Date;

(b) To each Series 2008-1 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 2008-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Minimum Principal Payment Amount then due and payable to Series 2008-1 Noteholders on such Payment Date;

(d) To each Series 2008-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Scheduled Principal Payment Amount then due and payable to Series 2008-1 Noteholders on such Payment Date;

(e) To each Series 2008-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the then Aggregate Series 2008-1 Principal Balance until the Aggregate Series 2008-1 Principal Balance has been reduced to zero;

 

 

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(f) To each Series 2008-1 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 2008-1 Noteholders pursuant to the Series 2008-1 Transaction Documents; and

(g) After application of the amounts required to be paid pursuant to Section 302 of the Indenture, to the Guarantor, an amount equal to any reimbursement owing to the Guarantor pursuant to the terms of the Guaranty and then to the Issuer or its assigns, any remaining amounts then on deposit in the Series 2008-1 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 2008-1 Noteholder on the immediately preceding Record Date, an amount equal to its pro rata portion of the Series 2008-1 Interest Payment for such Payment Date;

(b) To each Series 2008-1 Noteholder on the immediately preceding Record Date on a pro rata basis, an amount equal to the then Aggregate Series 2008-1 Principal Balance until the Series 2008-1 Notes are paid in full; 

(c) To each Series 2008-1 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 2008-1 Noteholders pursuant to the Series 2008-1 Transaction Documents; and

(d) After application of the amounts required to be paid pursuant to Section 302 of the Indenture, to the Guarantor, an amount equal to any reimbursement owing to the Guarantor pursuant to the terms of the Guaranty and then to the Issuer or its assigns, any remaining amounts then on deposit in the Series 2008-1 Series Account.

Any amounts payable to a Series 2008-1 Noteholder or Guarantor pursuant to this Section 302 shall be made by wire transfer of immediately available funds to the account that such Series 2008-1 Noteholder has designated to the Indenture Trustee in writing at least five Business Days prior to the applicable Payment Date. 

 

 

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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 2008-1 Noteholders:

Section 401. Increase in the Aggregate Series 2008-1 Note Existing Commitment. The Issuer shall not issue on or after the Closing Date any additional Series 2008-1 Notes pursuant to this Supplement or otherwise increase the aggregate Series 2008-1 Note Existing Commitment without (a) complying with the provisions of Section 205(d) hereof with respect to each such increase in the Series 2008-1 Note Existing Commitment, and (b) receipt by the Indenture Trustee and the Administrative Agent of a certificate from an officer of the Issuer stating that no Early Amortization Event, Manager Default or Event of Default has occurred and is then continuing or would result from the issuance of such new Series. Nothing contained in this Section 401 shall prohibit the
assignment by any Series 2008-1 Noteholder of all or a portion of its Series 2008-1 Note Existing Commitment if, after giving effect to such assignment, the aggregate Series 2008-1 Note Existing Commitment shall not have increased.

Section 402. Issuance of Additional Series of Notes. So long as the Series 2008-1 Supplement and related Series 2008-1 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 2008-1.

Section 403. Use of Proceeds. The proceeds from the issuance of the Series 2008-1 Notes shall be used as follows: (i) to acquire Containers and Related Assets, (ii) to pay the costs of issuance of the Series 2008-1 Notes and (iii) for general corporate purposes. For avoidance of doubt, the Issuer may use the proceeds of any Series 2008-1 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 2008-1 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 as a condition precedent unless such action shall have also been approved by the Majority of Holders of the Series 2008-1 Notes.

Section 405. United States Federal Income Tax Election. The Issuer shall not elect to be classified as an association taxable as a corporation under Section 301.7701-3 of the Treasury Regulations.

Section 406. Additional Event of Default. In addition to the events and conditions set forth in Section 801 of the Indenture, the occurrence of any of the following events or conditions shall also constitute an Event of Default with respect to the Series 2008-1 Notes: 

(1) default in the payment on any Payment Date of any Scheduled Principal Payment Amount then due and payable on any Series 2008-1 Notes and the continuation of such default for more than three (3) Business Days; 

(2) an involuntary case is commenced under the Bankruptcy Code against the Guarantor and the petition is not controverted within 10 days, or is not dismissed within 60 days, after commencement of the case, or a decree or order for relief by a court having jurisdiction in respect of the Guarantor is entered appointing a receiver, liquidator, assignee, custodian, trustee, or sequestrator (or other similar official) for the Guarantor or

 

 

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for any substantial part of its properties, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days;

(3) the commencement by the Guarantor of a voluntary case under any applicable Insolvency Law, or other similar law now or hereafter in effect, or the consent by the Issuer to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or other similar official) of the Guarantor, or any substantial part of its properties, or the making by the Guarantor of any general assignment for the benefit of creditors, or the failure by the Guarantor generally to pay its debts as they become due, or the taking of corporate action by the Issuer in furtherance of any such action; 

(4) the rendering against the Guarantor of a final, non-appealable judgment, decree or order for the payment of money in excess of Twenty Million Dollars ($20,000,000), (to the extent not paid when due or covered by a reputable and solvent insurance company, with any portion of such judgment, decree or order not so paid or not so covered, as applicable, to be included in the determination of the dollar amount specified in this clause (4)) which judgment, decree or order results in a claim that would entitle the claimholder to petition for the involuntary bankruptcy of the Guarantor under the Bankruptcy Code, and the continuance of such judgment, decree or order for a period of 60 consecutive days; 

(5) the Guarantor or any of its subsidiaries fails to make any payment when due (beyond the applicable grace or cure period with respect thereto, if any) or defaults in the observance or performance (beyond the applicable grade or cure period with respect thereto, if any) of any payment obligation, or any other agreement or covenant with respect to the Indebtedness that, individually or in the aggregate for all such Persons, exceeds Twenty Million Dollars ($20,000,000) and the holder(s) of such Indebtedness have accelerated such Indebtedness; 

(6) any law, rule or regulation shall render invalid, or preclude enforcement of, any material provision of the Guaranty or impair performance of the obligations of the Guarantor under the Guaranty, for any reason other than any action taken by the Indenture Trustee or any Series 2008-1 Noteholder or the failure of the Indenture Trustee or any Series 2008-1 Noteholder to take any action within its control; and

(7) the Guarantor shall repudiate or attempt to repudiate its obligations under the Guaranty.

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 2008-1 Noteholders.

 

 

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(a) Series 2008-1 Note. A separate Series 2008-1 Note executed by the Issuer in favor of each Series 2008-1 Noteholder in the stated principal amount equal to the Series 2008-1 Note Initial Commitment of each such Series 2008-1 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 2008-1 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 2008-1 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 2008-1 Noteholders, shall have been executed and delivered by the Issuer and all other parties thereto and filed in the appropriate jurisdictions, together with all Uniform Commercial Code financing statements and documents of similar import in other jurisdictions specified in Section 2.03(a) of the Contribution and Sale Agreement.

(d) Opinions of Counsel. Opinions of Counsel to the Issuer, as to perfection of the Indenture Trustee’s security interest in the Collateral and enforceability of the Transaction Documents and from counsel to the Issuer, Seller and Manager, in form and in substance satisfactory to the Administrative Agent, the Series 2008-1 Noteholders, as to such matters as they shall require.

(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 2008-1 Transaction Documents. The Series 2008-1 Transaction Documents (other than Interest Rate Hedge Agreements) 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.

(h) Issuance of Guaranty. The Guaranty has been issued and is in full force and effect.

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.

 

 

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Section 502. Advances on Series 2008-1 Notes. The obligation of each of the Series 2008-1 Noteholders to make a Series 2008-1 Advance pursuant to its commitment under this Supplement and the Series 2008-1 Note Purchase Agreement is subject to the following further conditions precedent being fulfilled with respect to each such Series 2008-1 Advance: 

(a) Default. Before and after giving effect to such Series 2008-1 Advance, no Event of Default shall have occurred and be continuing unless such Series 2008-1 Advance has been approved by each Series 2008-1 Noteholder.

(b) Early Amortization Event. Before and after giving effect to such Series 2008-1 Advance, no Early Amortization Event shall have occurred and be continuing unless such Series 2008-1 Advance has been approved by each Series 2008-1 Noteholder.

(c) Asset Base Imbalance. Before and after giving effect to such Series 2008-1 Advance, the Aggregate Note Principal Balance (calculated after giving effect to such Series 2008-1 Advance) does not exceed the Asset Base (calculated to give effect to the Eligible Containers to be acquired with the proceeds of such Series 2008-1 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 2008-1 Advance).

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

(f) Note Purchase Agreement. All conditions precedent to such Series 2008-1 Advance set forth in the Series 2008-1 Note Purchase Agreement have been met.

(g) Discharge of Existing Indebtedness. If the Issuer requests that the proceeds of such Series 2008-1 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 2008-1 Note Purchase Agreement) shall include the name of the related lienholders and their related wiring instructions.

ARTICLE VI

Representations and Warranties

The Issuer hereby represents and warrants (as of the Closing Date and each date on which a Series 2008-1 Advance is made) to the Series 2008-1 Noteholders and the Indenture Trustee that:

Section 601. Existence.   The Issuer is a limited liability company duly organized, validly existing and in compliance under the laws of Delaware. The Issuer is in good standing and is duly qualified to do business in each jurisdiction where the failure to do so would reasonably be expected to have a material adverse effect upon the Issuer, and has all licenses, permits, charters and registrations the failure to hold which would reasonably be expected to have a material adverse effect on the Issuer.

 

 

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Section 602. Authorization.   The Issuer has the power and is duly authorized to execute and deliver this Supplement, the Indenture and the other Series 2008-1 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 2008-1 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 2008-1 Transaction Documents. The execution, delivery and performance by the Issuer of this Supplement, the Indenture and the other Series 2008-1 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 2008-1 Transaction Documents and the execution, delivery and payment of the Series 2008-1 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 2008-1 Transaction Documents, any other indenture or other loan or credit agreement, or other agreement or instrument
to which Issuer is a party or by which Issuer, or its property and assets may be bound or affected. 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 2008-1 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 Issuer’s only “place of business” (within the meaning of Section 9-307 of the UCC) is located at its address determined in accordance with Section 1307 of the Indenture.

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 2008-1 Transaction Documents and the Transaction Documents (as defined in the Indenture).

 

 

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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 2008-1 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 2008-1 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 2008-1 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 2008-1 Advances under this Supplement to be considered a “purpose credit” within the meaning of Regulations T, U and X. The Issuer will not take or permit any agent acting on its
behalf to take any action which might cause the Indenture or this Supplement or any document or instrument delivered by the Issuer pursuant hereto to violate any regulation of the Federal Reserve Board.

Section 610. Taxes.  All federal, state, local and foreign tax returns, reports and statements required to be filed by the Issuer have been filed with the appropriate Governmental Authorities, and all Taxes, Other Taxes and other impositions shown thereon to be due and payable by the Issuer have been paid prior to the date on which any fine, penalty, interest or late charge may be added thereto for nonpayment thereof, or any such fine, penalty, interest, late charge or loss has been paid, or the Issuer is contesting its liability therefor in good faith and has fully reserved all such amounts according to GAAP in the financial statements provided pursuant to Section 626 of the Indenture. The Issuer has paid when due and payable all charges upon the books of the Issuer and no
Government Authority has asserted any Lien against the Issuer with respect to unpaid Taxes or Other Taxes. Proper and accurate amounts have been withheld by the Issuer from its employees for all periods in full and complete compliance with the tax, social security and unemployment withholding provisions of applicable federal, state, local and foreign law and such withholdings have been timely paid to the respective Governmental Authorities.

Section 611. Other Regulations.   The Issuer is not: (a) a “public utility company” or a “holding company,” or an “affiliate” or a “Subsidiary company” of a “holding company,” or an “affiliate” of such a “Subsidiary company,” as such terms are defined in the Public Utility Holding Company Act of 1935, as amended, or (b) 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

 

 

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issuance of the Series 2008-1 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 2008-1 Transaction Documents will not violate any provision of the Investment Company Act or the Public Utility Holding Company Act, or any rule, regulation or order issued by the Securities and Exchange Commission thereunder.

Section 612. Solvency and Separateness.

(a) The capital of the Issuer is adequate for the business and undertakings of the Issuer.

(b) Other than with respect to the transactions contemplated by the Transaction Documents, the Issuer is not engaged in any business transactions with the Manager except as permitted by the Management Agreement or with the Seller except as permitted by the Contribution and Sale Agreement.

(c) At all times, at least one (1) member of the board of directors of the Issuer shall qualify as an Independent Manager (as defined in the Issuer’s limited liability company agreement).

(d) The Issuer’s funds and assets are not, and will not be, commingled with those of the Manager, except as permitted by the Management Agreement.

(e) The Issuer shall maintain (A) correct and complete books and records of account, and (B) minutes of the meetings and other proceedings of its board of managers.

(f) The Issuer is not insolvent under the Insolvency Law and will not be rendered insolvent by the transactions contemplated by the Series 2008-1 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. Survival of Representations and Warranties.  So long as any of the Series 2008-1 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.

Section 614. 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.

 

 

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Section 615. 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 616. Title; Liens.  The Issuer has good, legal and marketable title to each of its respective assets, and none of such assets is subject to any Lien, except for Permitted Encumbrances and the Liens created or permitted pursuant to the Indenture.

Section 617. Subsidiaries.  The Issuer has no subsidiaries.

Section 618. No Partnership.  Issuer is not a partner or joint venturer in any partnership or joint venture.

Section 619. 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 620. Ownership of the Issuer.  All of the issued and outstanding membership interests of the Issuer are owned by TAL. 

Section 621. 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 any 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 2008-1 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.

 

 

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

(e) Other than the security interest granted to the Indenture Trustee pursuant to the Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Collateral, except as permitted pursuant to the Indenture. The Issuer has not authorized the filing of, and is not aware of, any financing statements against the Issuer that include a description of collateral covering the Collateral other than any financing statement or document of similar import (i) relating to the security interest granted to the Indenture Trustee in the Indenture or (ii) that has been terminated. The Issuer has no actual knowledge of any judgment or tax lien filings against the Issuer.

(f) Pursuant to Section 3.3.5 of the Management Agreement, the Manager has acknowledged that it is holding the Leases, to the extent they relate to the Managed Containers on behalf of, and for the benefit of, the Indenture Trustee. None of the Leases that constitute or evidence the Collateral has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person. The Seller has caused the filing of all appropriate financing statements or documents of similar import in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the ownership interest of the Issuer (and the Indenture Trustee as its assignee) in the Leases (to the extent that such Leases relate to the Managed Containers) arising under the Contribution and Sale Agreement.

(g) The Issuer has received all necessary consents and approvals required by the terms of the Collateral to the pledge to the Indenture Trustee of its interest and rights in such Collateral hereunder or under the Indenture.

(h) U.S. 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 2008-1 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 2008-1 Series Account are not in the name of any Person other than the Issuer. The Issuer has not consented for U.S. Bank National Association (as the securities intermediary of the Trust Account and the Series 2008-1 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 621 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 621 may be waived by the Indenture Trustee, only with the prior written consent of the Control Party.

 

 

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Section 622. 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.

ARTICLE VII

The Guaranty

Section 701. The Guaranty. (a) On each Determination Date, the Indenture Trustee shall determine, with respect to the immediately following Payment Date, based solely on the information contained in the Manager Report, whether there exists a Deficiency Amount.

(b) If there exists a Deficiency Amount with respect to a Payment Date, the Indenture Trustee shall complete a Notice in the form of Exhibit A to the Guaranty and submit such claim for such Deficiency Amount to the Guarantor in accordance with the terms of the Guaranty. Any payment made by the Guarantor under the Guaranty shall be applied solely to the payment of principal of or interest on the Series 2008-1 Notes subject to the terms of the Guaranty.

(c) The Indenture Trustee shall (i) receive Deficiency Amounts as attorney-in-fact of each of the Series 2008-1 Noteholders and (ii) disburse such Deficiency Amounts directly to the Series 2008-1 Noteholders. 

(d) The Indenture Trustee shall keep a complete and accurate record of the amount and allocation of Deficiency Amounts and the Guarantor shall have the right to inspect such records at reasonable times upon three (3) Business Days’ prior written notice to the Indenture Trustee. 

(e) The Indenture Trustee shall be entitled to enforce on behalf of the Series 2008-1 Noteholders the obligations of the Guarantor under the Guaranty. 

(f) Nothing in this Section 701 or in any other Section hereof shall or is intended to modify any of the terms, provisions or conditions of the Guaranty.

ARTICLE VIII

Miscellaneous Provisions

Section 801. 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.

 

 

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Section 802. 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 803. Governing Law.  THIS SUPPLEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW, AND THE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF  NEW YORK.

Section 804. 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 701(g) hereof or pursuant to Section 1001 or 1002(a) of the Indenture, each affected Series 2008-1 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 2008-1 Note Existing Commitment of an
individual Series 2008-1 Noteholder may only be increased, and the Conversion Date of an individual Series 2008-1 Noteholder may only be extended, in accordance with the provisions of Section 8.1(a) of the Note Purchase Agreement.

(b) Promptly after the execution by the Issuer and the Indenture Trustee of any written instrument pursuant to this Section, the Indenture Trustee shall mail to each Rating Agency, if any, then having a rating in effect with respect to the Series 2008-1 Notes, the Noteholders, the Administrative Agent, each Hedge Counterparty and the Guarantor 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 805. 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. 

 

 

-31-

 

Section 806. Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, AS AGAINST THE OTHER PARTIES HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING UNDER OR RELATING TO THIS SUPPLEMENT OR ANY OTHER TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF.

Section 807. Third Party Beneficiary.  The Guarantor is a third party beneficiary of this Supplement and shall be entitled to rely on all representations, warranties, covenants and agreements contained herein, and in the Indenture to the extent related hereto, as if made directly to it and as if it were a party hereto and shall have full power and authority to enforce the obligations of the parties hereunder.

[Signature page follows.]

 

 

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

 

 

 

	
                         
 	
                         
 	
                        U.S. BANK NATIONAL ASSOCIATION,
 not individually but solely as Indenture Trustee
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        By: 
 	
                         
 
	
                         
 	
                         
 	
                        Name:
 	
                         
 
	
                         
 	
                         
 	
                        Title:MANAGEMENT AGREEMENT

 

between

TAL INTERNATIONAL CONTAINER CORPORATION

Manager

and

TAL ADVANTAGE II LLC

Owner

 

Dated as of

March 27, 2008

 

 

Table of Contents

 

	
                         
 	
                         
 	
                         
 	
                         
 	
                        Page
 
	
                        Section 1.
 	
                         
 	
                        Definitions
 	
                         
 	
                        1
 
	 	 	 	 	 
	
      Section 2.
 	
                         
 	Appointment of the Manager
	
                         
 	
      1
 
	
                         
 	
                         
 	
                        2.1
 	
                         
 	
                        Appointment of Manager
 	
                         
 	
                        1
 
	
                         
 	
                         
 	
                        2.2
 	
                         
 	
                        Appointment of Subservicers
 	
                         
 	
                        2
 
	
                         
 	
                         
 	
                        2.3
 	
                         
 	
                        Retention of Title
 	
                         
 	
                        2
 
	
                         
 	
                         
 	
                        2.4
 	
                         
 	
                        Exclusive Representation of Owner
 	
                         
 	
                        2
 
	 	 	 	 	 
	
                        Section 3.
 	
                         
 	
                        Manager’s Services with Respect to the Managed Containers
 	
                         
 	
                        2
 
	
                         
 	
                         
 	
                        3.1
 	
                         
 	
                        Non-Discrimination
 	
                         
 	
                        2
 
	
                         
 	
                         
 	
                        3.2
 	
                         
 	
                        Terms of Lease Agreements
 	
                         
 	
                        3
 
	
                         
 	
                         
 	
                        3.3
 	
                         
 	
                        Leasing
 	
                         
 	
                        3
 
	
                         
 	
                         
 	
                        3.4
 	
                         
 	
                        Maintenance and Repair
 	
                         
 	
                        4
 
	
                         
 	
                         
 	
                        3.5
 	
                         
 	
                        Compliance With Law
 	
                         
 	
                        4
 
	
                         
 	
                         
 	
                        3.6
 	
                         
 	
                        Markings
 	
                         
 	
                        4
 
	
                         
 	
                         
 	
                        3.7
 	
                         
 	
                        Casualty Losses; Sale of Managed Containers; Lost or Destroyed Containers
 	
                         
 	
                        5
 
	
                         
 	
                         
 	
                        3.8
 	
                         
 	
                        Sales of Managed Containers
 	
                         
 	
                        5
 
	
                         
 	
                         
 	
                        3.9
 	
                         
 	
                        Insurance
 	
                         
 	
                        5
 
	
                         
 	
                         
 	
                        3.10
 	
                         
 	
                        Books and Records; Inspection of Books and Records; Inspection of Managed Containers; Back-up Tape
 	
                         
 	
      6
 
	
                         
 	
                         
 	
                        3.11
 	
                         
 	
                        Concentration Account and Payment Instructions
 	
                         
 	
                        7
 
	
                         
 	
                         
 	
                        3.12
 	
                         
 	
                        Identification of Funds in the Concentration Account
 	
                         
 	
                        7
 
	
                         
 	
                         
 	
                        3.13
 	
                         
 	
                        Transfer of Funds Received by the Manager
 	
                         
 	
                        8
 
	
                         
 	
                         
 	
                        3.14
 	
                         
 	
                        Time and Attention to Duties
 	
                         
 	
                        8
 
	 	 	 	 	 
	
                        Section 4.
 	
                         
 	
                        Reporting Obligations of the Manager
 	
                         
 	
                        8
 
	
                         
 	
                         
 	
                        4.1
 	
                         
 	
                        Reports Due from the Manager
 	
                         
 	
                        8
 
	
                         
 	
                         
 	
                        4.2
 	
                         
 	
                        Manager Advances
 	
                         
 	
                        10
 
	 	 	 	 	 
	
                        Section 5.
 	
                         
 	
                        Deposits to Trust Account; Payment of Management Fee
 	
                         
 	
                        10
 
	
                         
 	
                         
 	
                        5.1
 	
                         
 	
                        Deposits
 	
                         
 	
                        10
 
	
                         
 	
                         
 	
                        5.2
 	
                         
 	
                        Compensation of Manager
 	
                         
 	
                        11
 
	 	 	 	 	 
	
                        Section 6.
 	
                         
 	
                        Term
 	
                         
 	
                        12
 
	 	 	 	 	 
	
                        Section 7.
 	
                         
 	
                        Reserved
 	
                         
 	
                        12
 
	 	 	 	 	 
	
                        Section 8.
 	
                         
 	
                        Representations and Warranties; Covenants
 	
                         
 	
                        12
 
	
                         
 	
                         
 	
                        8.1
 	
                         
 	
                        Manager Representations
 	
                         
 	
                        12
 
	
                         
 	
                         
 	
                        8.2
 	
                         
 	
                        Owner Representations
 	
                         
 	
                        14
 
	
                         
 	
                         
 	
                        8.3
 	
                         
 	
                        Covenants of the Manager
 	
                         
 	
  15
 

 

 

-i-

 

Table of Contents

(continued)

 

	 	 	 	 	Page

	
                        Section 9.
 	
                         
 	
                        Manager Default
 	
                         
 	
                        16
 
	
       
 	
                         
 	
      9.1
 	
                         
 	
                        Manager Default
 	
                         
 	
      16
 
	
                         
 	
                         
 	
                        9.2
 	
                         
 	
                        Remedies
 	
                         
 	
                        18
 
	
                         
 	
                         
 	
                        9.3
 	
                         
 	
                        Transfer of Managed Containers
 	
                         
 	
                        19
 
	
                         
 	
                         
 	
                        9.4
 	
                         
 	
                        Power of Attorney
 	
                         
 	
                        19
 
	
                         
 	
                         
 	
                        9.5
 	
                         
 	
                        Owner Power of Attorney
 	
                         
 	
                        20
 
	 	 	 	 	 
	
                        Section 10.
 	
                         
 	
                        No Partnership
 	
                         
 	
                        21
 
	 	 	 	 	 
	
                        Section 11.
 	
                         
 	
                        No Warranties
 	
                         
 	
                        21
 
	 	 	 	 	 
	
                        Section 12.
 	
                         
 	
                        Non-Exclusivity
 	
                         
 	
                        22
 
	 	 	 	 	 
	
                        Section 13.
 	
                         
 	
                        Assignment
 	
                         
 	
                        22
 
	 	 	 	 	 
	
                        Section 14.
 	
                         
 	
                        Indemnification
 	
                         
 	
                        22
 
	
                         
 	
                         
 	
                        14.1
 	
                         
 	
                        By the Owner
 	
                         
 	
                        22
 
	
                         
 	
                         
 	
                        14.2
 	
                         
 	
                        By the Manager
 	
                         
 	
                        22
 
	 	 	 	 	 
	
                        Section 15.
 	
                         
 	
                        No Bankruptcy Petition Against the Owner
 	
                         
 	
                        23
 
	 	 	 	 	 
	
                        Section 16.
 	
                         
 	
                        Notices
 	
                         
 	
                        23
 
	 	 	 	 	 
	
                        Section 17.
 	
                         
 	
                        Governing Law; Consent to Jurisdiction
 	
                         
 	
                        25
 
	
                         
 	
                         
 	
                        17.1
 	
                         
 	
                        Governing Law
 	
                         
 	
                        25
 
	
                         
 	
                         
 	
                        17.2
 	
                         
 	
                        Consent to Jurisdiction
 	
                         
 	
                        25
 
	
                         
 	
                         
 	
                        17.3
 	
                         
 	
                        Waiver of Jury Trial
 	
                         
 	
                        25
 
	 	 	 	 	 
	
                        Section 18.
 	
                         
 	
                        Successors and Assigns
 	
                         
 	
                        25
 
	 	 	 	 	 
	
                        Section 19.
 	
                         
 	
                        Severability
 	
                         
 	
                        25
 
	 	 	 	 	 
	
                        Section 20.
 	
                         
 	
                        Entire Agreement; Amendments; Waiver
 	
                         
 	
                        25
 
	 	 	 	 	 
	
                        Section 21.
 	
                         
 	
                        Counterparts
 	
                         
 	
                        26
 
	 	 	 	 	 
	
                        Section 22.
 	
                         
 	
                        Intended Third Party Beneficiaries
 	
                         
 	
  26
 

 

 

-ii-

 

Table of Contents

(continued)

 

	
                        EXHIBIT A – MANAGER REPORT
	
                         
 	
       
 
	 	 	 
	
                        EXHIBIT B – AFFILIATES OF MANAGER AND APPROVED SUBSERVICERS
 	
                         
 	
                         
 
	 	 	 
	
                        EXHIBIT C – CREDIT AND COLLECTION POLICY
 	
                         
 	
                         
 
	 	 	 
	
                        EXHIBIT D – AGREED UPON PROCEDURES
 	
                         
 	
                         
 
	 	 	 
	
                        EXHIBIT E – DEPRECIATION POLICY
 	
                         
 	
   
 

 

 

-iii-

 

 

 

This MANAGEMENT AGREEMENT, dated as of March 27, 2008 (as amended, modified or supplemented from time to time in accordance with the terms hereof, this “Agreement”), between TAL ADVANTAGE II LLC, a limited liability company organized and existing under the laws of the State of Delaware (together with its successors and permitted assigns, the “Owner” or the “Issuer”) and TAL INTERNATIONAL CONTAINER CORPORATION, a Delaware corporation (together with its successors and permitted assigns, “Manager”).

W I T N E S S E T H

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

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

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

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

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

Section 1. Definitions. Terms capitalized but not defined herein shall have the meanings ascribed thereto in Appendix A to that certain Indenture dated as of March 27, 2008, between the Issuer and U.S. Bank National Association, as Indenture Trustee (as amended, restated or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), as such Appendix A may be amended, supplemented or otherwise modified from time to time in accordance with the provisions of the Indenture.

Section 2. Appointment of the Manager.

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

 

 

1

 

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

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

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

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

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

3.1 Non-Discrimination. In performing its duties pursuant to this Agreement, the Manager shall exercise substantially the same degree of skill and care with which it services, leases and manages containers held for its own account and consistent with the reasonable commercial practices of a prudent container lessor engaged in the administration, leasing and

 

 

2

 

servicing of shipping containers (such standard of care, the “Servicing Standard”). Without limiting the foregoing, the Manager shall not knowingly discriminate in favor of or against the Managed Containers in connection with the management and operation of the Container Fleet. 

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

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

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

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

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

 

 

3

 

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

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

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

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

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

 

 

4

 

3.7 Casualty Losses; Sale of Managed Containers;  Lost or Destroyed Containers. If any Managed Container shall suffer a Casualty Loss while it is subject to the terms of this Agreement, the Manager shall remit to the Trust Account, in accordance with the provisions of Section 5.1.1 hereof, the Casualty Proceeds (net of any expenses, taxes or reserves in respect thereof), if any, received as a consequence of such Casualty Loss.

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

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

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

 

 

5

 

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

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

3.10.2 The Manager shall make available to the Owner, the Indenture Trustee, the Administrative Agent and each Series Enhancer, for inspection and copying, its books, records and reports relating to the Managed Containers and copies of all Lease Agreements or other documents relating thereto, all in the format which the Manager uses for its own operations. The Person(s) desiring to conduct any such inspection of the books, records and reports shall provide the Manager with not less than (i) five (5) Business Days’ notice if a Manager Default is not then continuing or (ii) one (1) Business Day’s notice if a Manager Default shall have occurred and is then continuing, and shall specify in such notice the matters to be addressed in such inspection; provided, however, that, unless an Event of Default or Manager Default shall have occurred and is then continuing, the
Indenture Trustee shall not be permitted to deliver any such notice or to seek the right to any such inspection pursuant to this Section 3.10.2, and the Manager shall not be obligated to permit any such inspection pursuant to this Section 3.10.2, in the event that the Indenture Trustee shall have consummated two inspections pursuant to this Section 3.10.2 at any time in the previous 12-month period. All such inspections shall be conducted during normal business hours and shall not unreasonably disrupt the Manager’s business, and, subject to the foregoing, the Owner, Indenture Trustee, the Administrative Agent or Series Enhancer, as applicable will be permitted to discuss, with any Authorized Officer, Managing Officer or the Manager’s independent accountants, the affairs, finances and accounts of the Manager as they relate to the Managed Containers and this Agreement. All inspections conducted by the Indenture Trustee shall be conducted by an independent diligence service
selected by the Administrative Agent (provided, however, that if no Manager Default, Early Amortization Event or Event of Default is continuing, the second annual inspection permitted pursuant to this Section 3.10.2 shall not involve a collateral or field audit). So long as no Manager Default, Early Amortization Event or Event of Default is continuing, the Manager shall pay the reasonable and documented costs and expenses incurred by such Person(s) in conducting not more than one such inspection in any calendar year. In addition, the Manager shall pay the reasonable and documented costs and expenses incurred by such Person(s) in conducting any such examinations during the continuation of any of a Manager Default, Early Amortization Event or Event of Default.

 

 

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

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

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

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

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

 

 

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

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

Section 4. Reporting Obligations of the Manager.

4.1 Reports Due from the Manager.

4.1.1 Financial Statements. The Manager will maintain the Owner’s financial books and records and prepare the Owner’s financial statements. The Manager will deliver to the Indenture Trustee, the Rating Agencies, the Administrative Agent and each Series Enhancer the financial statements required to be delivered to the Indenture Trustee pursuant to Section 625 of the Indenture. All such financial statements shall be prepared in accordance with GAAP, subject to, in the case of unaudited financial statements, the absence of footnotes, and in the quarterly financial statements, the absence of year-end adjustments.

4.1.2 Manager Reports. On or prior to each Determination Date, the Manager shall deliver to the Owner, the Administrative Agent and the Indenture Trustee a report as to deposits into and instructions for payments out of the Trust Account, substantially in the form of Exhibit A hereto (each such report, the “Manager Report”), which report shall be certified by the chief financial officer, controller, treasurer or other financial officer of the Manager with primary responsibility for matters arising under this Agreement or another authorized signatory acceptable to the Administrative Agent. Each such Manager Report shall also include (a) evidence of the Manager’s compliance with the financial covenants set
forth in Sections 9.1.9, 9.1.10 (beginning with the Manager Report delivered on November 2008 Determination Date) and 9.1.11 hereof, which calculations shall be based on the most recently certified quarterly financial information, (b) accounts receivable agings, (c) top-25 lessee concentrations, (d) utilization ratios for both the Managed Containers and the Container Fleet, (e) other information regarding the Container Fleet upon request, and (f) the calculations required to demonstrate compliance by the Issuer with clauses (3), (4), (5) and (6) of Section 1201 of the Indenture.

 

 

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

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

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

4.1.6 Independent Accountant’s Report. The Manager shall, at its sole cost and expense, deliver to the Issuer, Administrative Agent, the Indenture Trustee, and each Series Enhancer a report from a firm of nationally recognized independent certified public accountants, who may also render other services to TAL International Group or any of its affiliates, on or before May 30th of each year (or 150 days after the end of the Manager’s fiscal year, if other than December 31st of each year), beginning on May 30, 2009, with respect to the twelve months ended on the preceding December 31 (or other applicable fiscal year-end date) (or such other period as shall have elapsed from the Closing Date to the date of such statement), a report (the “Accountants’
Report”) addressed to the Board of Directors of TAL International Group, to the effect that such firm of accountants has audited the books and records of TAL International Group, and issued its report thereon in connection with the audit report on the consolidated financial statements of TAL International Group and (1) such audit was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as such firm considered necessary in the circumstances; (2) the firm is independent of TAL International Group within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants; and (3) specifies the results of the application of such agreed upon procedures, as the Administrative Agent shall reasonably agree from time to time, relating to (i) maintenance of the separateness of the Issuer for bankruptcy remoteness purposes and
(ii) three selected Manager Reports and Asset Base Certificates delivered during the preceding year, to achieve the objectives specified on Exhibit D hereto.

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

 

 

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

4.2 Manager Advances. The Manager may, at its option, remit to the Trust Account by 1:00 p.m. New York time on the Business Day prior to a Payment Date, any amount of funds (a “Manager Advance”) elected by the Manager. Under no circumstances shall this Section 4.2 be interpreted as obligating the Manager to make any Manager Advance. The Manager shall be reimbursed for Manager Advances on each Payment Date from amounts on deposit in the Trust Account, subject to the priority of payments set forth in Sections 302 and 806 of the Indenture.

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

5.1 Deposits.

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

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

 

 

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5.2 Compensation of Manager.

5.2.1 Management Fee. As compensation to the Manager for the performance of its services hereunder, the Owner shall pay the Management Fee to the Manager in arrears on each Payment Date (or, in the case of the first payment of the Management Fee, on the Closing Date). Subject to the terms and conditions of the Indenture, the Management Fee shall be payable to the Manager (to the extent not previously withheld in accordance with the terms hereof) from amounts on deposit in the Trust Account to the extent monies are available for the payment thereof in accordance with the provisions of Section 302(c) of the Indenture;  provided, however, that, as long as no Manager Default shall have occurred and been continuing for a period
in excess of thirty (30) days, the Manager shall be entitled to withhold in advance, at periodic intervals more frequent than each Payment Date, the pro rata portion of the Management Fee owing to the Manager for such interval from the actual Container Revenues, Sales Proceeds or Casualty Proceeds received by it from lessees or sublessees. For the sake of clarity, to the extent the Manager has withheld amounts from the actual Container Revenues, Sales Proceeds or Casualty Proceeds received by it from lessees or sublessees, then such amounts shall be deducted from the Management Fee owing to the Manager from the Owner hereunder. On each Payment Date, the Manager and the Owner shall determine whether the amounts actually paid to or withheld by the Manager during the preceding calendar month pursuant to the terms of this Section 5.2.1 accord with the Management Fee owing under this Agreement for such month and
shall arrange that any excess or deficiency promptly be corrected (i.e., in the case of an overpayment to the Manager, the Manager shall promptly repay such overpayment, and in the case of an underpayment to the Manager such underpayment shall be added to the Management Fee payable to the Manager on such Payment Date). Upon any resignation or termination of the Manager in accordance with the terms of this Agreement and the other Transaction Documents, such resigning or terminated Manager shall not be entitled to receive any Management Fee accruing on or after the effective date of such termination or resignation and such resigning or terminated Manager shall immediately remit to the Trust Account any portion of the Management Fee deducted in advance by such resigning or terminated Manager which did not accrue as of the date following such termination or resignation on which a replacement Manager has assumed the responsibilities of the resigning or terminated Manager.

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

5.2.3 No Set-Off, Counterclaim, etc. The Manager’s obligation under this Agreement to transfer to or to deposit any amount to the Trust Account shall (subject to the withholding of the Management Fee as contemplated by Section 5.2.1 hereof) be absolute and unconditional and all payments thereof shall be made free and clear of and without any deduction for or on account of any set-off or counterclaim or any circumstance, recoupment, defense or other right which the Manager may have against the Owner or any other Person for any reason whatsoever (whether in connection with the transactions contemplated hereby or any other transactions), including without limitation, (i) any defect in title, condition, design or fitness for use, of, or any damage to or loss or destruction of, any Managed Container, (ii) any

 

 

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insolvency, bankruptcy, moratorium, reorganization or similar proceeding by or against the Manager or any other Person, or (iii) any other circumstance, happening or event whatsoever, whether or not unforeseen or similar to any of the foregoing.

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

Section 6. Term.

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

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

Section 7. Reserved.

Section 8. Representations and Warranties; Covenants.

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

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

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

 

 

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

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

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

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

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

8.1.8 Promptly, but in any case within seven (7) Business Days of an Authorized Officer becoming aware of a Manager Default, Early Amortization Event or an Event of Default, and which, in each case, has not been waived in writing by the Requisite Global Majority, the Manager shall deliver to the Owner, the Administrative Agent, the Indenture Trustee and each Series Enhancer a written notice describing the nature of such event and period of existence and, in the case of a Manager Default, the action the Manager is taking or proposed to take with respect thereto.

 

 

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8.1.9 Since December 31, 2007, there has been no Material Adverse Change in the financial condition of the Manager.

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

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

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

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

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

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

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

 

 

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

8.3 Covenants of the Manager.

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

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

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

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

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

8.3.6 Inspections. The Manager shall, upon reasonable prior notice, allow the Indenture Trustee, the Administrative Agent, each Hedge Counterparty and each Series Enhancer to inspect, under guidance of officers of the Manager, the Manager’s facilities during normal

 

 

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business hours; provided, however, that unless an Event of Default or a Manager Default shall have occurred and then be continuing, the Indenture Trustee, the Administrative Agent, the Hedge Counterparties and the Series Enhancers may request, in the aggregate, only one inspection under this Section 8.3.6 during any twelve-month period.

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

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

Section 9. Manager Default.

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

9.1.1 The Manager shall fail to make any deposits of Container Revenues, Sales Proceeds, Casualty Proceeds or any other amounts due and payable under this Agreement to the Trust Account within three (3) Business Days after the date such deposit is due;  provided, that if such Container Revenues, Sales Proceeds, Casualty Proceeds or other amounts are on deposit in the Concentration Account (or a related post office box or lockbox), failure of the bank holding the Concentration Account to comply with the instructions of the Manager (or to comply with the terms of any intercreditor agreement) shall not constitute a Manager Default.

9.1.2 The Manager shall fail (A) to deliver any report required to be delivered to the Indenture Trustee pursuant to the terms of Sections 4.1.2 or 4.1.3 hereof such failure shall continue unremedied for three (3) Business Days or (B) in any material respect to perform the covenant of the Manager to deliver financial statements set forth in the second sentence of Section 4.1.1 and such failure shall continue unremedied for thirty (30) days after the date on which there has been given to the Manager by the Indenture Trustee, the Administrative Agent, any Series Enhancer or any Noteholder a written notice specifying such default or breach and requiring it to be remedied; provided, however, that (x) if the reason for such
failure is primarily attributable to changes in accounting principles or interpretations or the application of the same, (y) such changes are not related to the assets of the Issuer and (z) no Manager Default then exists under Sections 9.1.9 through 9.1.12 of this Agreement, then such failure shall not constitute a Manager Default under this subsection 9.1.2(B) unless such failure materially and adversely affects the interests of any Noteholder or any Series Enhancer (if such Series Enhancer is then the Control Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement).

 

 

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9.1.3 The Manager shall fail to (A) deliver any report required to be delivered to the Indenture Trustee pursuant to the terms hereof or of any other Transaction Document (which is not otherwise addressed in Section 9.1.2) and such failure shall continue unremedied for thirty (30) days, or (B) perform or observe, or cause to be performed or observed, in any material respect any other covenant or agreement contained herein or in any other Transaction Document (including in its capacity as Seller) (which is not otherwise addressed in this Section 9.1), which failure materially and adversely affects the interests of the Noteholders or (if it is then the Control Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement) any Series Enhancer and such failure, if capable of remedy, shall continue unremedied for a period of thirty
(30) days after the date on which the Manager has received written notice specifying such failure from the Owner, the Indenture Trustee, any Noteholder, the Administrative Agent, any Series Enhancer or any other Person. 

9.1.4 Any representation or warranty made by the Manager in this Agreement or any other Transaction Document (including in its capacity as Seller), or in any certificate, report or financial statement delivered by it pursuant hereto or thereto proves to have been untrue in any material respect when made, such breach materially and adversely affects the interests of the Noteholders or (if it is then the Control Party for a Series of Outstanding Notes or shall have made an unreimbursed payment on its Enhancement Agreement) any Series Enhancer and such breach, if capable of remedy, shall continue unremedied for a period of thirty (30) days after the date on which the Manager has received written notice specifying such failure from the Owner, the Indenture Trustee, any Noteholder, the Administrative Agent, any Series Enhancer or any other Person.

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

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

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

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

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

 

 

17

 

9.1.10 As of the last day of each fiscal quarter beginning with the fiscal quarter ending September 30, 2008, the Consolidated EBIT to Consolidated Cash Interest Expense Ratio is less than 1.10 to 1.00. 

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

9.1.12 TAL International Group, the Borrower (as such term is defined in the Credit Agreement) or any Restricted Subsidiary (as such term is defined in the Credit Agreement) fails to make any payment when due (beyond the applicable grace or cure period with respect thereto, if any) or defaults in the observance or performance (beyond the applicable grace or cure period with respect thereto, if any) of any payment obligation, or any other agreement or covenant with respect to the Indebtedness that, individually or in the aggregate for all such Persons, exceeds Twenty Million Dollars ($20,000,000) and the holder(s) of such Indebtedness has accelerated such Indebtedness. 

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

A Manager Default may be waived in a written instrument executed by the Requisite Global Majority in each such instance. Any such waiver of a Manager Default shall not be construed as a waiver of any subsequent Manager Default. No delay by the Requisite Global Majority or any of its assigns, shall constitute any such waiver or prejudice the Requisite Global Majority in exercising any right, power or privilege arising out of such Manager Default.

9.2 Remedies. If a Manager Default shall have occurred and be continuing, and any Notes are then Outstanding, the Indenture Trustee, acting at the direction of the Requisite Global Majority and in the Requisite Global Majority’s discretion, shall have the right (upon written notice (a “Manager Termination Notice”) to the Manager, the Issuer and the Rating Agencies), in addition to other rights or remedies that the Issuer or its assignee may have under any Applicable Law or in equity to: (i) terminate this Agreement, (ii) take control of the Managed Containers wherever located, subject to the rights of lessees under Lease Agreements to which any of the Managed Containers shall at the time be subject or to appoint a replacement Manager to manage the Managed Containers, and (iii) appoint
an independent auditor of national reputation and mutually acceptable to the Issuer and the Requisite Global Majority to verify that all prior

 

 

18

 

Manager Reports and Asset Base Certificates prepared by the Manager are in accordance with this Agreement. Notwithstanding such termination, until the Manager is notified of the appointment of a replacement manager and the replacement manager has assumed such responsibility, the Manager shall continue to manage the Managed Containers and the Owner’s business, and deposit into the Trust Account all Container Revenues, Sales Proceeds, Casualty Proceeds and other amounts, and submit all reports due hereunder and perform all other services required hereunder, all in accordance with this Agreement.

9.3 Transfer of Managed Containers. Upon any termination of this Agreement pursuant to Section 9.2, the Manager shall cooperate with the Owner, the Indenture Trustee, the Administrative Agent and the Requisite Global Majority in transferring management of the Managed Containers as provided in the Indenture, including, but not limited to making available all books and records (including computer systems and data contained therein) pertaining to the Manager’s activities hereunder, providing access to, and cooperating in the transfer of, information from the Manager’s computer system to the Owner’s or its designee’s system, promptly notifying lessees of the termination of management of the Managed Containers by the Manager and assumption of management by the Owner or its designee,
depositing funds belonging to the Owner but not yet in the Trust Account to such account as designated by the Owner or its assignee, executing assignments of interests in Lease Agreements pertaining to the Managed Containers and taking any other action as may be reasonably requested by the Owner or its assignee to ensure the orderly assumption of management of the Managed Containers by the Owner or its designee. During such transition period, the outgoing Manager shall continue to provide notices pursuant to Section 8.1.8 and Section 6.19 of the Indenture that relate to occurrences of which it is aware.

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

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

 

 

19

 

 

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

(iii) So long as an Event of Default or Manager Default has not occurred, upon the failure of the Manager to comply with the provisions of Section 8.1.6 (and so long as an Event of Default or Manager Default has occurred, whether or not the Manager has complied with the provisions of Section 8.1.6), to execute and deliver those agreements, instruments, documents and papers (including, without limitation, deeds of trust) as the Manager may otherwise be required to file in accordance with the provisions of Section 8.1.6 hereof.

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

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

(i) So long as a Manager Default has occurred and is continuing and a Manager Termination Notice has been delivered in accordance with the terms hereof, at any time, in the name of the Owner or its own name, or otherwise, to take possession of and indorse and collect any checks, drafts, notes, acceptances or other instrument, general intangible or contract or any other Collateral and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Indenture Trustee or any

 

 

20

 

Series Enhancer for the purpose of collecting any and all such moneys due under any account, instrument, general intangible or contract with respect to the Managed Containers and the other Collateral whenever payable;

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

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

Section 10. No Partnership.

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

Section 11. No Warranties.

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

 

 

21

 

Section 12. Non-Exclusivity.

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

Section 13. Assignment.

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

Section 14. Indemnification.

14.1 By the Owner. The Owner, at its own expense, shall defend, indemnify and hold the Manager harmless from and against any and all claims, actions, damages, losses, liabilities, costs and expenses (including reasonable legal fees) (each, a “Claim”) incurred by or asserted against the Manager to the extent resulting or arising from the Manager’s performance of its obligations under this Agreement or from the Owner’s failure to comply with or perform its obligations under this Agreement, except for Claims which arise out of the Manager’s willful misconduct, or gross negligence, or failure to comply with or perform its obligations under this Agreement. Manager subordinates its claims under this Section 14.1 to all claims which have priority in payment
pursuant to the provisions of Section 302 and Section 806 of the Indenture.

14.2 By the Manager.

14.2.1 The Manager, in its capacity as the Manager, agrees to, and hereby does, indemnify and hold harmless the Owner, the Indenture Trustee (for the benefit of the Noteholders), any Series Enhancer, any Hedge Counterparty, the Deal Agents (as such term is defined in the Note Purchase Agreement), the Liquidity Agents (as such term is defined in the Note Purchase Agreement), the Purchasers (as such term is defined in the Note Purchase Agreement), the Administrative Agent and their respective officers, directors, employees and agents (each of the foregoing, an “Indemnified Party”) against any and all liabilities, losses, damages, penalties, costs and expenses which may be incurred or suffered by such Indemnified Party (except to the extent caused by the gross negligence or willful misconduct on the part of the Indemnified Party) as a result of claims, actions, suits or
judgments asserted or imposed against an Indemnified Party and arising out of (i) an action or inaction by the Manager that is contrary to the Servicing Standard or otherwise in violation of the terms of this Agreement; or (ii) any breach of or any inaccuracy in any representation or warranty made by the Manager in this Agreement or in any certificate delivered by the Manager pursuant hereto; or (iii) any breach of or failure by the Manager to perform any covenant or obligation of the Manager set out or contemplated in this Agreement; (iv) personal injury or property damage claim arising out of or

 

 

22

 

in connection with the negligence of the Manager; or (v) any defense, setoff or counterclaim arising out of any negligence of the Manager or any acts or omissions of the Manager related to the performance hereunder of its duties with respect to the Managed Containers; provided however, that the foregoing indemnity shall in no way be deemed to impose on the Manager any obligation to reimburse an Indemnified Party for: (A) losses arising from the financial inability of the related obligor on a Lease Agreement to make the payments due thereunder or because the Leases otherwise are uncollectible, or (B) losses arising from the failure of the remarketing proceeds of the Managed Containers to achieve historical or projected levels for reasons other than the Manager’s failure to comply with the terms of this Agreement.
The provisions of this Section 14.2 shall run directly to and be enforceable by an injured party, subject to the limitations hereof. The obligations of the Manager under this Section 14.2 shall survive the resignation or removal of the Manager and each Indemnified Party, the payment of the Notes and Outstanding Obligations and the termination of this Agreement or the Indenture; it being understood and agreed that the Manager shall have no liability for the actions or inactions of any replacement Manager.

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

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

Section 15. No Bankruptcy Petition Against the Owner.

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

Section 16. Notices.

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

 

	
                        To the Manager:
 	
                        TAL International Container Corporation
 
	
                         
 	
                        100 Manhattanville Road
 Purchase, New York 10577-2135
 Attn: Jeffrey Casucci, Vice President, Treasury and Credit
 Fax: (914) 697-2526
 

 

 

23

 

 

	
                         
 	
                        with a copy to:
 
	
                         
 	
                         
 
	
                         
 	
                        TAL International Container Corporation
 100 Manhattanville Road
 Purchase, New York 10577-2135
 Attn: Marc A. Pearlin, Vice President, General Counsel & Secretary
 Fax: (914) 697-2526
 
	
                         
 	
                         
 
	
                        To the Owner:
 	
                        TAL Advantage II LLC
 100 Manhattanville Road
 Purchase, New York 10577-2135
 Attn: Jeffrey Casucci
 
	
                         
 	
                         
 
	
                         
 	
                        with a copy to:
 
	
                         
 	
                         
 
	
                         
 	
                        TAL International Container Corporation
 100 Manhattanville Road
 Purchase, New York 10577-2135
 Attn: Jeffrey Casucci, Vice President, Treasury and Credit
 Fax: (914) 697-2526
 
	
                         
 	
                         
 
	
                        To the Indenture Trustee:
 	
                        U.S. Bank National Association
 60 Livingston Avenue
 St. Paul, Minnesota 55107
 Attention: TAL Advantage II, LLC, Variable Rate Secured Notes, Series 2008-1
 
	
                         
 	
                        Fax: 651-495-8090
 
	
                        
 	
                         
 
	
                        To the Administrative Agent:
 	
                        Fortis Capital Corp.
 
	
                         
 	
                        Loan Syndications/Agency
 520 Madison Avenue
 New York, NY 10022
 Attn: Gloria Beloti-Fields, Assistant Vice President
 Fax: 212-340-5450
 
	
                         
 	
                         
 
	
                         
 	
                        With a copy to:
 
	
                         
 	
                         
 
	
                         
 	
                        Fortis Capital Corp.
 
	
                         
 	
                        Two Embarcadero Center – Suite 1330
 San Francisco, CA 94111
 Attn: Menno van Lacum
 Fax: (415) 283-3046
 
	
                         
 	
                         
 
	
                        To any Series Enhancer:
 	
                        At the address set forth in the related Enhancement Agreement
 
	 	 
	
                        To any Hedge Counterparty:
 	
                        At the address set forth in the related Hedge Agreement
 

 

 

24

 

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

Section 17. Governing Law; Consent to Jurisdiction.

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

17.2 Consent to Jurisdiction. Any legal suit, action or proceeding against Owner or Manager arising out of or relating to this Agreement, or any transaction contemplated hereby, may be instituted in any federal or state court in the County of New York, State of New York and each of Owner and Manager hereby waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and, solely for the purposes of enforcing this Agreement, Owner and Manager each hereby irrevocably submits to the jurisdiction of any such court in any such suit, action or proceeding.

17.3 Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, AS AGAINST EACH OTHER PARTY HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM ARISING UNDER THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF OR THEREOF. 

Section 18. Successors and Assigns.

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

Section 19. Severability.

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

Section 20. Entire Agreement; Amendments; Waiver.

This Agreement represents the entire agreement between the parties with respect to the subject matter hereof and may not be amended or modified except by an instrument in writing signed by the parties hereto and approved by the Administrative Agent and the Requisite Global Majority and, if such amendment or modification would cause any of the events set forth in Section 1002(a)(i) through (vii) of the Indenture to occur, the Persons specified in Section 1002(a) of the Indenture are then the Control Party for such Series or shall have made an

 

 

25

 

unreimbursed payment; provided, that, if any such amendment or modification would (i) reduce the amount payable to such Series Enhancer, (ii) amend the relative priority of any such payment pursuant to Sections 302 or 806 of the indenture (other than to increase the priority thereof) or increase the amount of any applicable dollar limitations on amounts having a higher payment priority to such payments pursuant to Sections 302 or 806 of the Indenture or otherwise change such payments in a manner adverse to such Series Enhancer, (iii) change the date on which or the amount of which, or the place or payment where, or the coin or currency in which, such amount is paid to such Series Enhancer, (iv) increase or accelerate such Series
Enhancer’s payment obligations under its Enhancement Agreement or otherwise materially and adversely affect the rights, interests or obligations of such Series Enhancer under this Agreement and the other Transaction Documents, or (v) modify provisions of any Transaction Document relating to requirements that the consent of such Series Enhancer be obtained, the approval of such Series Enhancer shall be required. The Manager will send prior notice of any amendment or modification to the Rating Agencies setting forth in general terms the substance of such amendment or modification. Waiver of any terms or conditions of this Agreement (including any extension of time required for performance) shall be effective only if in writing and shall not be construed as a waiver of any subsequent breach or waiver of the same terms or conditions or a waiver of any other term or condition of this Agreement. No delay on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.

Section 21. Counterparts.

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

Section 22. Intended Third Party Beneficiaries.

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

 

 

26

 

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

 

	
                         
 	
                         
 	
                        TAL INTERNATIONAL CONTAINER
 CORPORATION, as Manager

             
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                         
 	
                        Title:
 

 

 

 

	
                         
 	
                         
 	
                        TAL ADVANTAGE II LLC, as Owner,
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        By:
 	
                        TAL International Container Corporation,
 its manager
 
	 	 	 	 
	
                          
 	
                         
 	
                        By: 
 	
                        
 
	
                         
 	
                         
 	
                         
 	
                        Title:

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