Document:

EX-10.12 PUT OPTION LETTER DATED OCTOBER 31, 2005

 

Exhibit 10.12

EXECUTION COPY

PUT OPTION LETTER

October 31,
2005

TCO
Funding Corp.
 c/o Global
Securitization Services, LLC
 445
Broad Hollow Road, Suite 239

Melville, New York 11747

     Re:
Lease Financing and Purchase Option Agreement 

Ladies and Gentlemen:

     We refer to the Lease Financing and Purchase Option Agreement, dated as of the
Effective Date, among you, Tensar Holdings, Inc., Credit Suisse, as administrative
agent, and the undersigned (the “Agreement”). Capitalized terms used and not otherwise
defined herein have the meanings assigned to such terms in the Agreement. In
consideration of your entering into the Agreement and undertaking the transactions
contemplated by the Agreement, we hereby grant to you the options described below:

     SECTION
1. Put Upon Default. We hereby grant to you an option (the
“Default Option”)
to require us to purchase from you all of the Leased Assets then subject to the Agreement
upon the occurrence and during the continuance of an Event of Default under Section 22 of
the Agreement, and the delivery of the Default Option Notice (as defined below), for a
consideration equal to the Exercise Price as of the Exercise Price Payment Date (as
defined below). The “Exercise Price” of the Leased Assets means, as of any Exercise Price
Payment Date, an amount equal to the sum of (i) the aggregate amount of the then unpaid
Acquisition Cost of such Leased Assets, plus (ii) Rent for such Leased Assets due
on or prior to the Exercise Price Payment Date, calculated in accordance with Section 1
of Schedule 6 to the Agreement, plus (iii) if the Exercise Price Payment Date
does not fall on a Rent Payment Date, an amount equal to the product of (x) 0.90%
multiplied by (y) the aggregate unpaid Acquisition Cost of such Leased Assets, multiplied
by a fraction, the numerator of which equals the number of days remaining in the then
current Rent Period and the denominator of which equals 360 (payment of the amount
specified in this clause (iii) to be made without regard to any payment of Rent made or
required to be made pursuant to the Agreement for such Leased Assets for all or any part
of the Rent Period). The “Exercise Price Payment Date” means the date for payment of the
Exercise Price, as specified in the Default Option Notice. Notwithstanding the foregoing,
if an Event of Default under clauses (g) or (h) of Schedule 5 to the Agreement shall
occur, we hereby agree that our purchase of all of the Leased Assets then subject to the
Agreement shall automatically occur for a consideration equal to the Exercise Price as of
such date without the giving of any notice or other

 

 

action on your behalf. The Default Option must be exercised by notice in substantially the form
attached hereto as Schedule 1 (the “Default
Option Notice”), signed by you or your
representative.

     SECTION 2. Put Upon Asset Sales. Following the completion of any Asset Sale or the occurrence
of any Recovery Event, in respect of which any Net Cash Proceeds have been received by Tensar
Holdings or any of its Subsidiaries, we hereby grant to you an option (the “Asset Sales Option”)
to require us to purchase from you a portion (expressed as an undivided interest) of the Leased
Assets in an amount up to 100% of the Net Cash Proceeds from such Asset Sale or Recovery Event
(such amount being the “Asset Sales Purchase Amount”). You may exercise the Asset Sales Option by
delivering to us a written notice in substantially the form attached hereto as Schedule 2
(the “Asset Sales Option Notice”) which declares that you are exercising the Asset Sales Option
and specifies the Asset Sales Purchase Amount and the date of such purchase (the “Asset Sales
Option Purchase Date”). We hereby agree to purchase a portion (expressed as an undivided interest)
of the Leased Assets for a consideration equal to the Asset Sales Purchase Price on the Asset
Sales Option Purchase Date. The“Asset Sales Purchase Price” is an amount equal to the sum of (i)
the Asset Sales Purchase Amount or, if less, the unpaid Acquisition Cost of all of the Leased
Assets, plus (ii) U.S. $10.00, plus (iii) the Rental Rate applicable to the Asset
Sales Purchase Amount due on or prior to the Asset Sales Option Purchase Date, calculated in
accordance with Section l(c) of Schedule 6 to the Agreement, plus (iv) if the Asset Sales
Option Payment Date does not fall on a Rent Payment Date, an amount equal to the product of (x)
0.90% multiplied by (y) the amount referenced in clause (i) of this sentence multiplied by a
fraction, the numerator of which equals the number of days remaining in the then current Rent
Period and the denominator of which equals 360 (payment of the amount specified in this clause
(iv) to be made without regard to any payment of Rent made or required to be made pursuant to the
Agreement for such Leased Assets for all or any part of the Rent Period).

     SECTION 3. Put Upon Equity Issuance. In the event and on each occasion that an Equity
Issuance occurs, we hereby grant to you an option (the “Equity Issuance Option”) to require us to
purchase from you a portion (expressed as an undivided interest) of the Leased Assets in an amount
up to 100% of the Net Cash Proceeds from such Equity Issuance (such amount being the “Equity
Issuance Purchase Amount”). You may exercise the Equity Issuance Option by delivering to us a
written notice in substantially the form attached hereto as Schedule 3 (the “Equity
Issuance Option Notice”) which declares that you are exercising the Equity Issuance Option and
specifies the Equity Issuance Purchase Amount and the date of such purchase (the “Equity Issuance
Option Payment Date”). We hereby agree to purchase a portion (expressed as an undivided interest)
of the Leased Assets for a consideration equal to the Equity Issuance Purchase Price on the Equity
Issuance Option Payment Date. The “Equity Issuance Purchase Price” is an amount equal to the sum
of (i) the Equity Issuance Purchase Amount or, if less, the unpaid Acquisition Cost of all of the
Leased Assets, plus (ii) U.S. $10.00, plus (iii) the Rental Rate applicable to the Equity
Issuance Purchase Amount due on or prior to the Equity Issuance Option Payment Date, calculated in
accordance with Section l(c) of Schedule 6 to the Agreement, plus (iv) if the Equity
Issuance Option Payment Date does not fall on a Rent Payment Date, an amount equal to the product
of (x) 0.90% multiplied by (y) the amount referenced in clause (i) of this sentence multiplied by
a fraction, the numerator of which equals the number of days remaining in the then current Rent
Period and the denominator of which

2

 

equals 360 (payment of the amount specified in this clause (iv) to be made without regard to any
payment of Rent made or required to be made pursuant to the Agreement for such Leased Assets for
all or any part of the Rent Period).

     SECTION 4. Put Upon Issuance or Incurrence of Financing Obligation. In the event that any
Tensar Party or any subsidiary of a Tensar Party receives Net Cash Proceeds from the issuance
or other incurrence of Financing Obligation of any Tensar Party or any subsidiary of a Tensar Party
(other than Financing Obligations permitted to be incurred under Section 1.01 of Schedule 4 of the
Agreement), we hereby grant to you an option (the “Financing Obligation Option”), on the day of
such issuance, to require us to purchase from you a portion (expressed as an undivided interest) of
the Leased Assets in an amount up to 100% of the Net Cash Proceeds from such issuance or incurrence
of Financing Obligation (such amount being the “Financing Obligation Purchase Amount”).You may
exercise the Financing Obligation Option by delivering to us a written notice in substantially the
form attached hereto as Schedule 4 (the “Financing Obligation Option Notice”) which
declares that you are exercising the Financing Obligation Option and specifies the Financing
Obligation Purchase Amount and the date of such purchase (the “Financing Obligation Option Payment
Date”).We hereby agree to purchase a portion (expressed as an undivided interest) of the Leased
Assets for a consideration equal to the Financing Obligation Purchase Price on the Financing
Obligation Option Payment Date. The “Financing Obligation Purchase Price” is an amount equal to the
sum of (i) the Financing Obligation Purchase Amount or, if less, the unpaid Acquisition Cost of all
of the Leased Assets, plus (ii) the Rental Rate applicable to the Financing Obligation Purchase
Amount due on or prior to the Financing Obligation Option Payment Date, calculated in accordance
with Section l(c) of Schedule 6 to the Agreement, plus (iii) U.S. $10.00, plus (iv)
if the Financing Obligation Option Payment Date does not fall on a Rent Payment Date, an amount
equal to the product of (x) 0.90% multiplied by (y) the amount referenced in clause (i) of this
sentence multiplied by a fraction, the numerator of which equals the number of days remaining in
the then current Rent Period and the denominator of which equals 360 (payment of the amount
specified in this clause (iv) to be made without regard to any payment of Rent made or required to
be made pursuant to the Agreement for such Leased Assets for all or any part of the Rent Period).

     SECTION 5. Put Upon Excess Cash Flow. We hereby grant you an option (the “ECF Option”) to
require us to purchase from you, at any time on or after the earlier of (i) 90 days after the end
of each fiscal year of Tensar, commencing with the fiscal year ending on December 31, 2006 and (ii)
the date which is five Business Days after the date on which the financial statements with respect
to such period are delivered pursuant to Section 1.04 of Schedule 3 of the Agreement, a portion
(expressed as an undivided interest) of the Leased Assets in an amount up to the ECF Percentage of
our Excess Cash Flow for the fiscal year then ended (such amount being the “ECF Purchase Amount”).
You may exercise the ECF Option by delivering to us a written notice in substantially the form
attached hereto as Schedule 5 (the “ECF Option Notice”) which declares that you are
exercising the ECF Option and specifies the ECF Purchase Amount and the date of such purchase (the
“ECF Option Payment Date”).We hereby agree to purchase a portion (expressed as an undivided
interest) of the Leased Assets for a consideration equal to the ECF Purchase Price on the ECF
Option Payment Date. The “ECF Purchase Price” is an amount equal to the sum of (i) the ECF Purchase
Amount or, if less, the unpaid Acquisition Cost of all of the Leased Assets, plus (ii) the Rental
Rate applicable to the ECF Purchase Amount due on or prior to the Financing Obligation Option
Payment Date, calculated in accordance with

3

 

Section l(c) of Schedule 6 to the Agreement, plus (iii) U.S. $10.00, plus (iv) if
the ECF Option Payment Date does not fall on a Rent Payment Date, an amount equal to the product of
(x) 0.90% multiplied by (y) the aggregate unpaid Acquisition Cost of such Leased Assets, multiplied
by a fraction, the numerator of which equals the number of days remaining in the then current Rent
Period and the denominator of which equals 360 (payment of the amount specified in this clause (iv)
to be made without regard to any payment of Rent made or required to be made pursuant to the
Agreement for such Leased Assets for all or any part of the Rent Period).

     SECTION 6. Put Upon Illegality. We hereby grant to you an option (the “Illegality UnWind
Option”) to require us to purchase from you all of the Leased Assets then subject to the Agreement
upon your delivery to us of a notice in substantially the form attached hereto as Schedule
6 (the “Illegality Unwind Option
Notice”), which declares that you, or the Administrative
Agent on your behalf, has determined that one or more of the circumstances set forth in Section 16
of the Agreement has occurred and is continuing, for a consideration equal to the Illegality
Unwind Purchase Price as of the Illegality Unwind Payment Date (as defined below). The “Illegality
Unwind Purchase Price” of the Leased Assets means, as of any Illegality Unwind Payment Date, an
amount equal to the sum of (i) the aggregate amount of the then unpaid Acquisition Cost of such
Leased Assets, plus, (ii) Rent for such Leased Assets due on or prior to the Illegality
Unwind Payment Date, calculated in accordance with Section 1 of Schedule 6 to the Agreement,
plus (iii) if the Illegality Unwind Payment Date does not fall on a Rent Payment Date, an
amount equal to the product of (x) 0.90% multiplied by (y) the aggregate unpaid Acquisition Cost
of such Leased Assets, multiplied by a fraction, the numerator of which equals the number of days
remaining in the then current Rent Period and the denominator of which equals 360 (payment of the
amount specified in this clause (iii) to be made without regard to any payment of Rent made or
required to be made pursuant to the Agreement for such Leased Assets for all or any part of the
Rent Period). The “Illegality Unwind Payment Date” means the date for payment of the Illegality
Unwind Purchase Price, as specified in the Illegality Unwind Option Notice.

     SECTION 7. Application of Payments.

     (b) If a portion of the Leased Assets is to be purchased pursuant to an exercise of one of the
options set forth herein, the amount paid against the unpaid Acquisition Cost of the Leased Assets
shall be applied to reduce the unpaid Acquisition Cost on a pro rata basis against the remaining
scheduled Acquisition Cost payment installments set forth in Section l(b) of Schedule 6 to the
Agreement.

     (c) Upon the exercise of the Default Option or the Illegality Unwind Option and payment of the
Exercise Price or the Illegality Unwind Purchase Price, as applicable, you shall update the Leased
Assets Register to reflect the resulting reduction in the Acquisition Cost of the Leased Assets.
Title to the Leased Assets shall vest in and be accepted by us on the Exercise Price Payment Date
or the Illegality Unwind Payment Date or the date of sale pursuant to your exercise of the Default
Option or of the Illegality Unwind Option, as applicable, on an “as-is and where-is” basis, free
from all Liens, except for the first priority and second priority security interest created under
the Security Documents in your favor, but without any warranty by or recourse to you with regard to
the condition or fitness of such Leased Assets or otherwise in any

4

 

respect. Any passing of title hereunder shall be without prejudice to the accrued rights of the
parties under the Agreement, any other Lease Document, or under this letter.

     SECTION 8. Miscellaneous. We hereby covenant and agree to complete and convey an
acknowledgment in substantially the form set out in Schedule 7 hereto to you immediately
upon receipt of a Default Option Notice, an Asset Sales Option Notice, an Equity Issuance Option
Notice, a Financing Obligation Option Notice, an ECF Option Notice, or an Illegality Unwind Option
Notice, provided that the failure to complete and convey such acknowledgment shall not affect our
obligations hereunder. The options granted by this letter are irrevocable for so long as any sums
remain outstanding under the Agreement or any of the other Lease Documents and may in all instances
be exercised by you or your permitted assigns.

     SECTION 9. Lease Agreement Provisions. The provisions regarding Survival; Expenses; Indemnity;
Waiver of Jury Trial; etc. (Section 17), Notices (Section 25), Appointment of Administrative Agent
(Section 28) and Miscellaneous (Section 29) of the Agreement are hereby incorporated by reference
herein as if fully set forth herein, and all references therein to the Agreement, “hereunder”,
“hereof or words of similar effect shall be a reference to this letter agreement.

[Signature Page Follows]

5

 

     If you are in agreement with the terms of this Put Option Letter, please indicate such
agreement by signing this Put Option Letter in the space indicated below.

	 	 	 	 	 	 	 
	 	 	THE TENSAR CORPORATION, LLC	 	 
	 
	 	 	 	 	 	 
	 
	 	By	 	/s/ Katherine Spear	 	 
	 

	 		 	
 

Name Katherine Spear
	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 

	 	 	 	 	 
	Acknowledged and Agreed:	 	 
	 
	 	 	 	 
	TCO FUNDING CORP.	 	 
	 
	 	 	 	 
	BY

	 	/s/ Katherine Spear	 	 
	

	 	
 

Name: Katherine Spear
	 	 
	 

	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 
	CREDIT SUISSE, Cayman Islands Branch,	 	 
	As Administrative Agent	 	 
	 
	 	 	 	 
	BY

	 	/s/ PHILLIP HO
 

Name: PHILLIP HO
	 	 
	 

	 	Title: DIRECTOR	 	 
	 
	 	 	 	 
	BY

	 	/s/ RIANKA MOHAN
 

Name: RIANKA MOHAN
	 	 
	 

	 	Title: ASSOCIATE	 	 

[Signature
Page to Put Option Letter - Tensar]

 

 

SCHEDULE 1

DEFAULT OPTION NOTICE

[Date]

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite
330 
Atlanta, GA 30328

			
	     Re:	 	Put Option Letter — Default Option Notice — Lease Financing and
Purchase Option Agreement, dated October
      , 2005, among The Tensar
Corporation,
LLC, TCO Funding Corp., Tensar Holdings, Inc. and Credit
Suisse (the “Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Put Option Letter. Terms defined in the
Agreement have the same meanings herein.
	 
	2.	 	We hereby exercise the Default Option pursuant to the Put Option
Letter and sell to you the Leased Assets on the Exercise Price Payment Date
specified below, by issuing this Default Option Notice.
	 
	3.	 	The Exercise Price Payment Date shall be [                    ], on which date you shall pay
to us the Exercise Price.

	 	 	 	 	 	 	 
	 	 	TCO FUNDING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name
	 	 
	 

	 	 	 	Title	 	 

 

 

SCHEDULE 2

ASSET SALES OPTION NOTICE

[Date]

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite 330

Atlanta, GA 30328

			
	     Re:	 	Put Option Letter — Asset Sales Option Notice — Lease Financing and
Purchase
Option Agreement, dated October ___, 2005, among The
Tensar Corporation,
LLC, TCO Funding Corp., Tensar
Holdings, Inc. and Credit Suisse (the “Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Put Option
Letter. Terms defined in the Agreement have the same meanings herein.

	2.	 	We hereby exercise the Asset Sales Option pursuant to the Put Option Letter and sell
to you on [state the applicable sale date] [all of the Leased Assets for an amount equal to the Acquisition
Cost] [a portion (expressed as an undivided interest)
of the Leased Assets in an amount equal to U.S. $                    ].

	 	 	 	 	 	 	 
	 	 	TCO FUNDING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name
	 	 
	 

	 	 	 	Title	 	 

 

 

SCHEDULE 3

EQUITY ISSUANCE OPTION NOTICE

[Date]

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite 330

Atlanta, GA 30328

			
	     Re:	 	Put Option Letter — Equity Issuance Option
Notice — Lease Financing and Purchase Option Agreement, dated October __, 2005, among The Tensar
Corporation, LLC, TCO Funding Corp., Tensar Holdings, Inc. and Credit Suisse (the “Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Put Option Letter. Terms defined in the Agreement have the same meanings
herein.
	 
	2.	 	We hereby exercise the Equity Issuance Option pursuant to the Put Option Letter and sell to you on [state the applicable sale date] [all of the Leased Assets for an amount equal to the Acquisition Cost] [a portion (expressed as an undivided
interest) of the Leased Assets in an amount equal to U.S. $                    ].

	 	 	 	 	 	 	 
	 	 	TCO FUNDING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name
	 	 
	 

	 	 	 	Title	 	 

 

 

SCHEDULE 4

FINANCING OBLIGATION OPTION NOTICE

[Date]

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite 330

Atlanta, GA 30328

			
	     Re:	 	Put Option Letter — Financing Obligation Option Notice — Lease Financing and
Purchase Option Agreement, dated October ___, 2005, among The Tensar
Corporation, LLC, TCO Funding Corp., Tensar Holdings, Inc. and Credit Suisse (the “Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Put Option Letter. Terms defined in the Agreement have the same meanings herein.
	 
	2.	 	We hereby exercise the Financing Obligation Option pursuant to the Put Option Letter and sell to you on [state the applicable sale date] [all of the Leased Assets for an amount equal to the Acquisition Cost] [a portion (expressed as an undivided interest) of the Leased Assets in an amount equal to U.S. $                     ].

	 	 	 	 	 	 	 
	 	 	TCO FUNDING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name
	 	 
	 

	 	 	 	Title	 	 

 

 

SCHEDULE 5

ECF OPTION NOTICE

[Date]

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite 330

Atlanta, GA 30328

			
	     Re:	 	Put Option Letter — ECF Option Notice — Lease Financing and Purchase Option
Agreement, dated October        , 2005, among The Tensar Corporation, LLC, TCO
Funding Corp., Tensar Holdings, Inc. and Credit Suisse (the “Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Put Option Letter. Terms defined in the Agreement have the same meanings
herein.
	 
	2.	 	We hereby exercise the EFC Option pursuant to the
Put Option Letter and sell to you on [state the
applicable sale date] [all of the Leased Assets for
an amount equal to the Acquisition Cost.] [a
portion (expressed as an undivided interest) of the
Leased Assets in an amount equal to U.S. $                    ].

	 	 	 	 	 
	 	TCO FUNDING CORP.

 	 
	 	By  	 	 
	 	 	Name  	 
	 	 	Title 	 

 

 

	 	 	 	 	 

SCHEDULE 6

ILLEGALITY UNWIND OPTION NOTICE

[Date]

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite 330

Atlanta, GA 30328

			
	     Re:	 	Put Option Letter — Illegality Unwind Option Notice — Lease Financing and
Purchase Option Agreement, dated October ___, 2005, among The Tensar
Corporation, LLC, TCO Funding Corp., Tensar Holdings, Inc. and Credit Suisse (the
“Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Put Option Letter. Terms defined in the Agreement have the same meanings
herein.
	 
	2.	 	We hereby exercise the Illegality Unwind Option pursuant to the Put Option Letter and sell to
you the Leased Assets on the Illegality Unwind Payment Date specified below, by issuing this
Illegality Unwind Option Notice.
	 
	3.	 	The Illegality Unwind Payment Date shall be [ _____ ], on which date you shall pay to us the Illegality Unwind Purchase Price.

	 	 	 	 	 
	 	TCO FUNDING CORP.

 	 
	 	By  	 	 
	 	 	Name  	 
	 	 	Title 	 

 

 

	 	 	 	 	 

SCHEDULE 7

ACKNOWLEDGMENT

[Date]

TCO Funding Corp.

445 Broad Hollow Road, Suite 239

Melville, New York 11747

			
	     Re:	 	Put Option Letter — Acknowledgment of [Default Option Notice / Asset Sales
Option Notice / Equity Issuance Option Notice / Financing Obligation Option Notice /
ECF Option Notice / Illegality Unwind Option Notice] — Lease
Financing and Purchase Option Agreement, dated October       , 2005, among The
Tensar Corporation, LLC, TCO Funding Corp., Tensar Holdings, Inc. and Credit Suisse
(the “Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Put Option Letter dated October _, 2005. Terms defined in the Agreement
have the same meanings herein.
	 
	2.	 	We hereby confirm our receipt of your [ ____ Option Notice] and purchase on
[state the applicable sale date], for the [Exercise Price / Asset Sales Purchase
Price / Equity Issuance Purchase Price / Financing Obligation Purchase Price / ECF Purchase
Price / Illegality Unwind Purchase Price] [and acknowledge delivery of,
the Leased Assets to us] pursuant to the Put Option Letter.

	 	 	 	 	 
	 	THE TENSAR CORPORATION, LLC

 	 
	 	By  	 	 
	 	 	Name  	 
	 	 	TitleEX-10.13 CALL OPTION LETTER DATED OCTOBER 31, 2005

 

	 	 	 	 	 

Exhibit 10.13

EXECUTION COPY

CALL OPTION LETTER

October 31, 2005

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite 330

Atlanta, GA 30328

          Re: Lease Financing and Purchase Option Agreement

Ladies and Gentlemen:

     We refer to the Lease Financing and Purchase Option Agreement, dated as of the Effective
Date, among you, as lessee, TCO Funding Corp., as lessor, Tensar Holdings, and Credit Suisse,
as administrative agent (the “Agreement”). Capitalized terms used and not otherwise defined
herein have the meanings assigned to such terms in the Agreement. In consideration of your
entering into the Agreement and undertaking the transactions contemplated by the Agreement,
we have agreed to grant to you the options described below. We therefore agree with you as
follows:

     SECTION 1. Call Option. We hereby grant to you an option (the “Call Option”) to purchase
all or a portion (expressed as an undivided interest) of the Leased Assets on any date (the
“Exercise Date”), exercisable by you by notice in writing in the form set out in Schedule
1 hereto (a “Call Option Notice”) signed by yourself and served not later than three (3)
Business Days before such Exercise Date. Once given, a Call Option Notice may not be
withdrawn. The exercise of the Call Option is conditioned upon your payment on such Exercise
Date of a purchase price for the Leased Assets (or portion thereof) to be purchased (the
“Option Purchase Price”), as calculated in accordance with Section 2 hereof.

     SECTION 2. Call Purchase Price.

     (a) If all of the Leased Assets then subject to the Agreement are to be purchased
pursuant to an exercise of the Call Option, then the Option Purchase Price of the Leased
Assets shall be an amount equal to the sum of (i) the unpaid Acquisition Cost of the Leased
Assets then subject to the Agreement (after giving effect to any Rent payment to be made on
such Exercise Date), plus (ii) the Rental Rate applicable to such Leased Assets due
on or prior to the Exercise Date, calculated in accordance with Section l(c) of Schedule
6 to the Agreement plus (iii) if the Exercise Date does not fall on a Rent Payment
Date, an amount equal to the product of (x) 0.90% multiplied by (y) the aggregate unpaid
Acquisition Cost of such Leased Assets, multiplied by a fraction, the numerator of which
equals the number of days remaining in the then current Rent Period and the denominator of
which equals 360 (payment of the amount specified in this clause (iii) to be made without
regard to any payment of Rent made or required to be made pursuant to the Agreement for such
Leased Assets for all or any part of the Rent Period).

 

 

     (b) If less than all of the Leased Assets are to be purchased pursuant to an exercise of the
Call Option, then the Option Purchase Price of the Leased Assets to be purchased shall be an amount
equal to (i) the portion of the unpaid Acquisition Cost of the Leased Assets then subject to the
Agreement (after giving effect to any Rent payment made on such Exercise Date) being purchased,
plus (ii) U.S. $10.00, plus (iii) the Rental Rate applicable to such portion of the
unpaid Acquisition Cost of the Leased Assets being purchased due on or prior to the Exercise Date,
calculated in accordance with Section l(c) of Schedule 6 to the Agreement, plus (iv) if the
Exercise Date does not fall on a Rent Payment Date, an amount equal to the product of (x) 0.90%
multiplied by (y) the amount referenced in clause (i) of this sentence, multiplied by a fraction,
the numerator of which equals the number of days remaining in the then current Rent Period and the
denominator of which equals 360 (payment of the amount specified in this clause (iv) to be made
without regard to any payment of Rent made or required to be made pursuant to the Agreement for
such Leased Assets for all or any part of the Rent Period); provided, however, that such portion of
the unpaid Acquisition Cost in respect of the Leased Assets that are being purchased must be in an
amount of not less than $1,000,000 or an integral multiple of $500,000.

     SECTIONS 3. Reduction in Acquisition Cost; Title and Possession. Upon each utilization of the
Call Option for less than all of the Leased Assets, the amount paid representing a payment of
Acquisition Cost shall be applied against the unpaid Acquisition Cost of the Leased Assets pro
rata as against the remaining scheduled payment installments of the unpaid Acquisition Cost set
forth in Section l(b)(i) of Schedule 6 of the Agreement. After giving effect to an exercise of the
Call Option, we shall update the Leased Assets Register to reflect any and every such reduction in
the unpaid Acquisition Cost of the Leased Assets in connection with an exercise of the Call
Option. In the event the Leased Assets Register reflects an unpaid Acquisition Cost of U.S. $0.00
after any exercise of the Call Option, property and title in all Leased Assets shall vest in and
be accepted by you and property therein and title thereto shall be deemed to have passed on such
delivery free from all security interests (except for the Liens in our favor for our benefit and
the benefit of the Administrative Agent), but without any warranty by or recourse to us with
regard to the condition or fitness of the Leased Assets or otherwise in any respect. Any passing
of title hereunder shall be without prejudice to the accrued rights of the parties under the
Agreement or under this letter. You acknowledge and agree that the Leased Assets, once title rests
in you, shall be subject to the first priority security interests created under the Security
Documents in our favor for our benefit and the benefit of the Administrative Agent.

     SECTION 4. Covenants. We hereby covenant and agree to complete and convey an acknowledgment
of receipt of a Call Option Notice in the form set out in Schedule 2 hereto to you on the
Exercise Date.

     SECTION 5. Assignments. These options and your rights hereunder are personal to you and may
not be assigned and any such assignment shall be null and void. Our rights hereunder have been
assigned as set forth in Section 13 of the Agreement.

     SECTION 6. Miscellaneous. The provisions concerning Survival; Expenses;
Indemnity; Waiver of Jury Trial; etc. (Section 17), Notices (Section 25), Appointment of
Administrative Agent (Section 28), and Miscellaneous (Section 29) of the Agreement are hereby
incorporated by reference herein as if fully set forth herein, and all references therein to the
Agreement, “hereunder”, “hereof” or words of similar effect shall be a reference to this letter.

2

 

     If you are in agreement with the terms of this Call Option Letter, please so indicate
by signing this Call Option Letter in the space indicated below.

	 	 	 	 	 
	 	TCO FUNDING CORP.

 	 
	 	By  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 

	 	 	 	 
	THE TENSAR CORPORATION, LLC

 	 
	By  	
/s/ Katherine Spear	 
	 	Name:  	Katherine Spear	 
	 	Title:  	Chief Financial Officer	 
	 

	 	 	 	 	 
	 	CREDIT SUISSE, Cayman Islands Branch, 

as Administrative Agent

 	 
	 	By  	/s/ PHILLIP HO
 	 
	 	 	Name: PHILLIP HO 	 
	 	 	Title: 	DIRECTOR 	 
	 
	 	 	 
	 	By  	 /s/ RIANKA MOHAN 	 
	 	 	Name:  	RIANKA MOHAN 	 
	 	 	Title:  	ASSOCIATE 	 
	 

[Signature Page to Call Option Letter]

 

 

SCHEDULE 1

CALL OPTION NOTICE

[Date]

TCO Funding Corp. 
c/o Global
Securitization Services, LLC 
445 Broad
Hollow Road — Suite 239 
Melville, New York 11747

			
	     Re:	 	Call Option Letter — Call Option Notice — Lease Financing and Purchase Option
Agreement dated as of October 31, 2005, among TCO Funding Corp., The Tensar
Corporation, LLC, Tensar Holdings, Inc. and Credit Suisse (the “Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Call Option Letter. Terms defined in the Agreement have the same meaning
herein.
	 
	2.	 	We hereby exercise our Call Option to purchase from you on [state the proposed purchase date]
[a portion of all of the Leased Assets in the amount of U.S. $[ ][all of the Leased Assets].

	 	 	 	 	 
	 	THE TENSAR CORPORATION LLC

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

SCHEDULE 2

ACKNOWLEDGMENT

[Date]

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite 330

Atlanta, GA 30328

			
	     Re:	 	Call Option Letter — Acknowledgment of Call Option Notice — Lease Financing and
Purchase Option Agreement dated as of October 31, 2005, among TCO Funding Corp., The
Tensar Corporation, LLC, Tensar Holdings, Inc. and Credit Suisse (the “Agreement”)

Ladies and Gentlemen:

	1.	 	We refer to the Call Option Letter. Terms defined in the Agreement have the same meanings
herein.
	 
	2.	 	We hereby confirm our receipt of your Call Option Notice and confirm that we will sell to you
on [state the proposed purchase date], for the Option Purchase Price, [all of] [a portion of]
Leased Assets pursuant to the Call Option Letter and the Agreement.

	 	 	 	 	 
	 	TCO FUNDING CORP.

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:

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