EXHIBIT 10.37
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AMENDED AND RESTATED CONTRIBUTION AND SALE AGREEMENT
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between
TAL INTERNATIONAL CONTAINER CORPORATION,
and
TAL ADVANTAGE I LLC
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Dated as of
April 12, 2006
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS....................................................
1
SECTION 1.01
Definitions............................................
1
SECTION 1.02
General Interpretive Principles........................
1
ARTICLE II TRANSFER OF
CONTAINERS........................................
2
SECTION 2.01
Transfer of Transferred Assets on the Initial Closing
Date...................................................
2
SECTION 2.02
Transferred Containers and Related Assets after the
Initial Closing Date...................................
2
SECTION 2.03
Required Financing Statements; Marking of Records......
4
SECTION 2.04
General Provisions Regarding All Transfers of
Containers.............................................
4
SECTION 2.05
Transfer of the Subordinated Note......................
6
ARTICLE III REPRESENTATIONS AND
WARRANTIES...............................
6
SECTION 3.01
Representations and Warranties of the Seller...........
6
SECTION 3.02
Representations and Warranties of the Issuer...........
12
SECTION 3.03
Breach of Representations and Warranties Regarding
Certain Transferred Assets.............................
15
SECTION 3.04
Substitute Container...................................
15
ARTICLE IV COVENANTS OF THE
SELLER.......................................
16
SECTION 4.01
Seller Covenants.......................................
16
SECTION 4.02
Pledge of Transferred Assets...........................
19
ARTICLE V CONDITIONS
PRECEDENT...........................................
19
SECTION 5.01
Conditions to Issuer Obligations.......................
19
SECTION 5.02
Conditions to the Seller's Obligations.................
19
SECTION 5.03
Waiver of Conditions...................................
20
ARTICLE VI
TERMINATION...................................................
20
SECTION 6.01
Termination............................................
20
SECTION 6.02
Effect of Termination..................................
20
ARTICLE VII INDEMNIFICATION
PAYMENTS.....................................
20
SECTION 7.01
Indemnification........................................
20
SECTION 7.02
Procedure for Indemnification..........................
21
ARTICLE VIII MISCELLANEOUS
PROVISIONS....................................
21
SECTION 8.01
Amendment..............................................
21
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TABLE OF CONTENTS
(continued)
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SECTION 8.02
Governing Law..........................................
22
SECTION 8.03
Notices................................................
22
SECTION 8.04
Severability of Provisions.............................
24
SECTION 8.05
Assignment.............................................
24
SECTION 8.06
Further Assurances.....................................
24
SECTION 8.07
Waiver; Cumulative Remedies............................
24
SECTION 8.08
Counterparts...........................................
24
SECTION 8.09
Binding................................................
24
SECTION 8.10
Merger and Integration.................................
24
SECTION 8.11
Headings...............................................
25
SECTION 8.12
Schedules and Exhibits.................................
25
SECTION 8.13
Intended Third Party Beneficiaries.....................
25
SECTION 8.14
Consent to Jurisdiction................................
25
SECTION 8.15
WAIVER OF JURY TRIAL...................................
25
SECTION 8.16
Effect on Prior Agreement..............................
25
SECTION 8.17
No Claim...............................................
25
EXHIBIT A - List of Containers
EXHIBIT B - Container Transfer Certificate
EXHIBIT C - Form of Subordinated Note
SCHEDULE 3.01 - Other Names of Seller
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AMENDED AND RESTATED CONTRIBUTION AND SALE AGREEMENT
THIS AMENDED AND RESTATED CONTRIBUTION AND SALE AGREEMENT, dated as
of
April 12, 2006 (as amended, modified or supplemented from time to
time in
accordance with the terms hereof, this "Agreement"), is entered
into between TAL
INTERNATIONAL CONTAINER CORPORATION (together with its permitted
successors and
assigns, the "Seller"), a Delaware corporation, and TAL ADVANTAGE I
LLC
(together with its permitted successors and assigns, the "Issuer"),
a limited
liability company organized under the laws of Delaware.
WITNESSETH:
WHEREAS, the Seller wishes to transfer to the Issuer from time to
time
containers, leases and other related assets, and the Issuer desires
to acquire
such assets from the Seller, in each case on the terms and
conditions set forth
herein;
WHEREAS, the assets transferred by the Seller to the Issuer
hereunder
will subsequently be pledged by the Issuer to the Indenture Trustee
as
collateral for the Notes to be issued from time to time pursuant to
the terms of
the Indenture;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and
adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. Capitalized terms used in this Agreement
but
not defined herein shall have the meaning assigned to such terms in
Appendix A
to the Amended and Restated Indenture dated as of April 12, 2006,
between the
Issuer and U.S. Bank National Association, as Indenture Trustee, as
such
Appendix A may be amended, supplemented or otherwise modified from
time to time
in accordance with the terms of the Indenture.
SECTION 1.02 General Interpretive Principles. For purposes of this
Agreement except as otherwise expressly provided or unless the
context otherwise
requires:
(a) the terms defined in this Agreement have the meanings assigned
to
them in this Agreement and include the plural as well as the
singular, and the
use of any gender herein shall be deemed to include the other
gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with Generally Accepted Accounting
Principles;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a
document are to
designated Articles, Sections, Subsections, paragraphs and other
subdivisions of
this Agreement;
(d) a reference to a Subsection without further reference to a
Section
is a reference to such Subsection as contained in the same Section
in which the
reference appears, and this rule shall also apply to paragraphs and
other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by
reason of enumeration.
ARTICLE II
TRANSFER OF CONTAINERS
SECTION 2.01 Transfer of Transferred Assets on the Initial Closing
Date. On the Initial Closing Date, the Seller sold, transferred and
conveyed to
the Issuer, and the Issuer acquired from the Seller, all of the
Seller's rights,
title and interest in, and under (i) the Containers identified on
Exhibit A
hereto and (ii) the Related Assets with respect thereto (the items
described in
clauses (i) and (ii) collectively, the "Initial Transferred
Assets"). The
purchase price for the Initial Transferred Assets was an amount
equal to the sum
of (x) the sum of the Net Book Values (determined as of the last
day of the
month preceding the Initial Closing Date) of such Containers, and
(y) the sum of
the then Fair Market Values of such Related Assets (the sum of (x)
and (y), the
"Initial Purchase Price"). The Initial Purchase Price was paid by
the Issuer on
the Initial Closing Date by (i) making a cash payment to the Seller
in an amount
equal to Seven Hundred Five Million Dollars ($705,000,000), and
(ii) the
issuance by Issuer to the Seller of all of the authorized
membership interests
of the Issuer. The excess of (a) the aggregate Fair Market Value of
the Initial
Transferred Assets, over (b) the amount of cash described in the
preceding
sentence, was treated as a contribution to capital of the Issuer.
SECTION 2.02 Transferred Containers and Related Assets after the
Initial Closing Date.
(a) Subsequent to the Initial Closing Date, the Seller may, from
time
to time, sell, transfer and convey, to the Issuer, and the Issuer
may in its
sole discretion, acquire from the Seller, all of such Seller's
rights, title and
interest in, to and under such additional Containers and the
Related Assets with
respect thereto (collectively, the "Additional Transferred Assets")
as shall be
identified from time to time on a Container Transfer Certificate to
be delivered
on such Transfer Date. The Seller and the Issuer hereby agree that
the purchase
price of such Additional Transferred Assets (such purchase price,
the
"Additional Purchase Price") sold by the Seller on any such
subsequent Transfer
Date shall be an amount equal to the sum of (x) the sum of the Net
Book Values
(determined as of the last day of the month preceding such Transfer
Date) of
such additional Containers and (y) the sum of the Fair Market
Values of such
Related Assets. The Additional Purchase Price will be paid on the
related
Transfer Date in full by (x) wire transfer of immediately available
funds on
such Transfer Date to the extent of funds available to the Issuer
pursuant to
the terms of the Indenture and the Transaction Documents, and (y)
if the
Additional Purchase Price to be paid to such Seller for the
Additional
Transferred Assets exceeds the amount set forth in clause (x), by
increasing the
principal balance of the Subordinated Note
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payable to the Seller by an amount equal to (1) the Additional
Purchase Price
minus (2) the amount set forth in clause (x).
Notwithstanding the foregoing, the principal balance of the
Subordinated Note shall not be increased, and no applicable
Additional Purchase
Price shall be paid by means of the Subordinated Note, except to
the extent
that, after giving effect to such increase, the Deferred Purchase
Price
Condition is satisfied. "Deferred Purchase Price Condition" means
that, at any
time, the result of (a) the Aggregate Net Book Value, plus (b) the
aggregate
outstanding balance of any receivables resulting from the sale or
disposition of
any Containers that were either owned by the Issuer or subject to a
Finance
Lease for which the Issuer is the lessor, so long as such
receivables were not
outstanding for more than ninety (90) days (measured from the issue
date of such
receivables), less (c) the Outstanding Obligations, less (d) the
Designated
Non-Investment Grade Exposure Amount, exceeds One Hundred Thousand
Dollars
($100,000). "Designated Non-Investment Grade Exposure Amount"
means, at any
time, an amount equal to the result of (a) three multiplied by (b)
the highest
outstanding balance of a Lease of a Managed Container of any lessee
which has no
long-term debt rating from S&P or Moody's or which has a
long-term debt rating
from S&P or Moody's of less than "BBB-" or "Baa3", as
applicable.
At the option of the Seller, some or all of the Additional
Transferred
Assets may be transferred by the Seller to the Issuer as a capital
contribution.
In connection with any transfer of Additional Transferred Assets to
the Issuer, the Seller shall, on or prior to the respective
Transfer Date, (i)
execute and deliver each of the documents set forth in Section
2.02(b) hereof,
and (ii) complete the actions required by Section 2.03 hereof.
(b) In connection with any transfer of Transferred Assets by the
Seller to the Issuer in accordance with the provisions of Section
2.01 or
Section 2.02 of this Agreement, the Seller shall execute and
deliver to the
Issuer (and the Issuer shall deliver to the Administrative Agent
and the
Indenture Trustee) on or before the related Transfer Date, each of
the following
documents:
(i) A completed Container Transfer Certificate which certificate
shall
operate as an assignment, without recourse, representation or
warranty
(except for the representations and warranties specifically set
forth in
this Agreement) of all such Seller's right, title, and interest in
and to
the Transferred Assets identified in such Container Transfer
Certificate;
(ii) Completed UCC financing statements and documents of similar
import, if applicable, described in Section 2.03(a) hereof,
together with
evidence of filing of such financing statements, changes or similar
documents, in the appropriate filing offices and jurisdictions as
may be
required to perfect the Issuer's ownership of the Related Assets;
and
(iii) A supplement to the List of Containers (or, in the case of
the
first Transfer Date, the List of Containers itself). Upon delivery
of such
supplement, the List of
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Containers shall be deemed to have been amended to incorporate the
information contained in such supplement.
SECTION 2.03 Required Financing Statements; Marking of Records.
(a) In connection with the transfer by it on any Transfer Date, the
Seller agrees to record and file, at its own expense, the following
UCC
financing statements (and/or amendments to previously filed UCC
financing
statements) with respect to the Related Assets, such filings to be
made (unless
otherwise requested by the Administrative Agent or any Series
Enhancer) in each
case only to the extent necessary pursuant to applicable law to
perfect the
ownership interest of the Issuer:
(i) UCC financing statements filed against the Seller and covering
the
Transferred Assets. Such financing statements (or documents of
similar
import) shall be filed in the appropriate filing offices in the
jurisdiction in which the Seller is located (as defined in the UCC)
or as
otherwise required under Applicable Law;
(ii) UCC financing statements or documents of similar import,
evidencing the release of the security interest of any other Person
with
respect to any of the Transferred Assets; and
(iii) With respect to each Finance Lease included in the
Transferred
Assets, a UCC financing statement (or document of similar import),
naming
each lessee of Containers subject to such Finance Lease, as debtor,
the
Seller, as secured party, and the Containers under such related
Finance
Lease as collateral, such financing statement against the lessee
shall be
filed in the appropriate filing offices in the jurisdiction in
which the
lessee is located (as determined under the UCC); provided, however,
that
the Seller shall not be required to change the name of the secured
party as
of record in any such filing office.
All UCC financing statements required pursuant to this Section 2.03
shall meet
the requirements of Applicable Law. Nothing contained in this
Section 2.03 shall
limit the Seller's obligation to file continuation or termination
statements in
accordance with Section 4.01(g) of this Agreement and Applicable
Law.
The Seller shall forward, promptly upon receipt, file-stamped
copies of all UCC
financing documents described in paragraphs (i) and (ii) above to
the Indenture
Trustee and each Series Enhancer.
(b) In connection with each transfer of Transferred Assets, the
Seller
shall, at its own expense on or prior to each Transfer Date, cause
its master
accounting and data processing records to be marked to indicate
that all right,
title and interest in each Transferred Asset has been irrevocably
and absolutely
transferred to the Issuer.
SECTION 2.04 General Provisions Regarding All Transfers of
Containers.
(a) Except as specifically provided in Sections 3.03 and 7.01 of
this
Agreement, all transfers of Transferred Assets by the Seller to the
Issuer
pursuant to this
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Agreement shall be without recourse to the Seller; it being
understood that the
Seller shall be liable to the Issuer for all representations,
warranties,
covenants and indemnities made by the Seller pursuant to the terms
of this
Agreement, all of which representations, warranties, covenants and
indemnifications shall survive the transfer of such Transferred
Assts hereunder.
Notwithstanding any term or provision of this Agreement, nothing in
this
Agreement shall create (or shall be deemed to create) recourse to
the Seller for
(i) the failure of the lessees under the Leases included in the
Transferred
Assets to make any payments under such Leases or the Leases
otherwise being
uncollectible and/or (ii) the failure of the Issuer to realize an
amount equal
to the sum of (x) the Net Book Value of a Transferred Container and
(y) the Fair
Market Value of the Related Assets with respect to such Transferred
Containers.
(b) The Seller and the Issuer intend all transfers of Transferred
Assets to be "true sales" or "true contributions" by the Seller to
the Issuer
that are absolute and irrevocable and that provide the Issuer with
the full
benefits of ownership of the Transferred Assets, and neither the
Seller nor the
Issuer intend the transactions contemplated hereunder to be, or for
any purpose
to be characterized as, loans from the Issuer to the Seller. It is,
further, not
the intention of the Issuer or the Seller that the conveyance of
the Transferred
Assets by the Seller be deemed a grant of a security interest in
the Transferred
Assets by the Seller to the Issuer to secure a debt or other
obligation of the
Seller. However, in the event that, notwithstanding the intent of
the parties,
any Transferred Assets are considered to be property of the
Seller's estate,
then (i) this Agreement also shall be deemed to be and hereby is a
security
agreement within the meaning of Applicable Law, and (ii) the
conveyance by the
Seller provided for in this Agreement shall be deemed to be a grant
by the
Seller to the Issuer of, and the Seller hereby grants to the
Issuer, a security
interest in and to all of the Seller's right, title and interest
in, to and
under the Transferred Assets, whether now or hereafter existing or
created, to
secure (A) the rights of the Issuer hereunder, (B) a loan by the
Issuer to the
Seller in an amount equal to the sum of (1) the sum of the Net Book
Values of
all Transferred Containers and (2) the sum of the Fair Market
Values of all
Related Assets, in each case to the extent of all of the
Transferred Containers
transferred or purported to be transferred by the Seller hereunder,
(C) without
limiting the foregoing, the payment and performance of the Seller's
obligations
(whether monetary or otherwise) hereunder, and (D) payment to the
Issuer of all
lease rentals, and other payments in respect of the Leases and
proceeds of the
Transferred Assets transferred or purported to be transferred
hereunder. The
Seller and the Issuer shall, to the extent consistent with this
Agreement, take
such actions as may be necessary to ensure that, if this Agreement
were deemed
to create a security interest in the Transferred Assets, such
security interest
would be deemed to be a perfected security interest of first
priority in favor
of the Issuer under Applicable Law and will be maintained as such
throughout the
term of this Agreement. The Seller hereby irrevocably authorizes
the Issuer (and
the Issuer hereby authorizes the Indenture Trustee (as pledgee of
the Issuer's
rights hereunder)), at any time, and from time to time, to file in
any filing
office in any jurisdiction any initial financing statements or
documents of
similar import and amendments thereto that (x) indicate Transferred
Assets as
collateral regardless of whether any particular asset included in
the
Transferred Assets falls within the scope of Article 9 of the UCC,
and (y)
provide any other information required for the sufficiency or
filing office
acceptance of any financing statement or document of similar import
or
amendment. The Seller agrees to furnish any such information to the
Issuer
promptly upon the Issuer's request, and the Issuer agrees to
furnish any such
information to the Indenture Trustee (as pledgee of the Issuer's
rights
hereunder) promptly upon the Indenture Trustee's request. The
Seller also
ratifies its
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authorization for the Issuer and the Issuer also ratifies its
authorization for
the Indenture Trustee having filed in any jurisdiction any
financing statements
or documents of similar import or amendments thereto if filed prior
to the date
hereof.
(c) Consistent with the Issuer's ownership of the Transferred
Assets,
as between the parties to this Agreement, the Issuer shall have the
sole right
to service, administer and collect the Transferred Assets and to
assign and/or
delegate such right to others;
(d) Except as specifically provided for in Section 3.03 and Section
3.04 hereof, the Issuer shall have no obligation to account to the
Seller for
the Transferred Assets. The Issuer shall have no obligation to
account for, or
to return rental payments on or with respect to any Transferred
Asset, or any
interest or other finance charge collected pursuant thereto, to the
Seller,
irrespective of whether such collections and charges are in excess
of the
Initial Purchase Price or Additional Purchase Price, as
appropriate, of such
Transferred Asset. The Issuer shall have the sole right to retain
any gains or
profits created by buying, selling or holding the Transferred
Assets and shall
have the sole risk of and responsibility for losses or damages
created by such
buying, selling or holding;
(e) The Issuer shall have the unrestricted right to further assign,
transfer, deliver, hypothecate, subdivide or otherwise deal with
the Transferred
Assets, and all of the Issuer's right, title and interest in, to
and under this
Agreement, on whatever terms the Issuer shall determine, pursuant
to this
Agreement or otherwise.
SECTION 2.05 Transfer of the Subordinated Note. The Seller
acknowledges and agrees that the Subordinated Note was issued in a
transaction
that was not required to be registered under the Securities Act.
Any transfer or
assignment of the Subordinated Note shall be subject to the same
conditions as a
transfer or assignment of a Subject Note pursuant to Section 205(l)
of the
Indenture. Each holder of a Subordinated Note hereby represents and
covenants
that throughout the period during which such holder holds an
interest in a
Subordinated Note, either: (i) such holder is not a partnership,
grantor trust
or S corporation for United States federal income tax purposes; or
(ii) such
holder is a partnership, grantor trust or S corporation for United
States
federal income tax purposes, and with regard to each beneficial
owner of such
holder, the principal purposes for the establishment or use of such
holder to
hold the Subordinated Note do not include avoidance of the
limitations set forth
in this paragraph.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the Seller. The
Seller
hereby makes the following representations and warranties. The
Issuer has relied
upon such representations and warranties in accepting the
conveyance of the
Transferred Assets. Such representations and warranties are made
only as of a
Transfer Date with respect to the Transferred Assets transferred to
the Issuer
on such date and, with respect to the representation and warranty
set forth in
clause (v) below, as of the date which is two Business Days
following the later
of the acquisition of the applicable Transferred Asset by the
Issuer or the
inclusion of
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the applicable Transferred Asset in the Asset Base, but shall
survive each
transfer and conveyance of the respective Transferred Assets to the
Issuer.
(a) Organization and Good Standing. The Seller is a corporation
duly
organized, validly existing and in compliance under the laws of the
State of
Delaware, with power and authority to own its properties and to
conduct its
business as such properties are currently owned and such business
is currently
conducted, had at all relevant times, and now has, power,
authority, and legal
right to acquire and own the Transferred Assets and to perform its
obligations
hereunder and under any Transaction Document to which it is a
party;
(b) Due Qualification. The Seller is qualified as a foreign
corporation in each jurisdiction where failure to be so qualified
would have a
material adverse effect upon its business and has obtained all
necessary
licenses and approvals as required under Applicable Law, in each
case, where the
failure to be so qualified, licensed or approved, would reasonably
be expected
to materially and adversely affect the ability of the Seller to
perform its
obligations under and comply with the terms of this Agreement and
any other
Transaction Document to which it is a party;
(c) Power and Authority; Due Execution and Delivery. The Seller has
the corporate power and authority to execute and deliver this
Agreement and any
other Transaction Document to which it is a party and to carry out
the terms
thereof; the Seller has duly authorized the transfer and conveyance
to the
Issuer of the Transferred Assets by all necessary corporate action;
the
execution, delivery, and performance by the Seller of this
Agreement and any
other Transaction Document to which it is a party has been duly
authorized by
the Seller by all necessary corporate action and this Agreement and
any other
Transaction Document to which it is a party have been duly executed
and
delivered by the Seller;
(d) Legal Name. The legal name of the Seller is as set forth on the
signature page of the Seller for this Agreement, and, except as set
forth in
Schedule 3.01 hereof, in the five years preceding the date of this
Agreement:
(a) the Seller has not changed its name, the Seller has not used,
and does not
currently use, any trade names, fictitious names, assumed names or
"doing
business as" names, and (b) the Seller has not been known by any
name other than
"TAL International Container Corporation";
(e) Valid Assignment; Binding Obligations. This Agreement
constitutes
a valid transfer and conveyance to the Issuer of all right, title,
and interest
of the Seller in, to and under the Transferred Assets and the
Transferred Assets
will be held by the Issuer free and clear of any Lien of any Person
claiming
through or under the Seller, except for Permitted Encumbrances; and
this
Agreement and each other Transaction Document to which the Seller
is a party,
when duly executed and delivered by the other parties thereto, will
constitute a
legal, valid, and binding obligation of the Seller enforceable
against the
Seller in accordance with its terms subject as to enforceability to
applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or
other laws affecting creditors' rights generally and to general
principles of
equity (regardless of whether enforcement is sought in a proceeding
in equity or
at law);
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(f) No Violation. The consummation of the transactions contemplated
by
and the fulfillment of the terms of this Agreement and the
Transaction Documents
to which it is a party 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 charter documents or by-laws of
the Seller,
or any material term of any indenture, agreement, mortgage, deed of
trust, or
other instrument to which the Seller 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, other than this Agreement and the Indenture,
or violate any
material provision of any law, order, rule, or regulation
applicable to the
Seller of any court or of any federal or state regulatory body,
administrative
agency, or other Governmental Authority having jurisdiction over
the Seller 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;
(g) No Proceedings or Injunctions. There are (i) no actions, suits,
proceedings or investigations pending, or, to the knowledge of the
Seller,
threatened, before any court, regulatory body, administrative
agency, or other
tribunal or Governmental Authority (A) asserting the invalidity of
this
Agreement or any other Transaction Document to which it is a party,
(B) seeking
to prevent the consummation of any of the transactions contemplated
by this
Agreement or any other Transaction Document to which it is a party,
or (C)
seeking any determination or ruling that might materially and
adversely affect
the performance by the Seller of its obligations under, or the
validity or
enforceability of, this Agreement or any other Transaction Document
to which it
is a party, and (ii) no injunctions, writs, restraining orders or
other orders
are in effect against the Seller that would materially and
adversely affect its
ability to perform under this Agreement or any other Transaction
Document to
which it is a party;
(h) Compliance with Law. The Seller:
(i) is not in violation of any laws, ordinances, governmental rules
or
regulations or any court order to which it is subject or by which
it is
bound, in each case the violation of which would reasonably be
expected to
materially and adversely affect the ability of the Seller to
perform its
obligations under this Agreement or any other Transaction Document
to which
it is a party; and
(ii) has obtained all licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its
property or
to the conduct of its business including, without limitation, with
respect
to transactions contemplated by this Agreement and the other
Transaction
Documents to which it is a party, in each case, other than any such
license, permit, franchise or other authorization the failure to so
obtain
will not reasonably be expected to result in a Material Adverse
Change;
(i) Insolvency. The Seller is not insolvent under the Insolvency
Law
and will not be rendered insolvent by the transactions contemplated
by this
Agreement; the Seller is paying its debts as they become due and,
after giving
effect to the transactions contemplated hereby, will have adequate
capital to
conduct its business;
(j) [Reserved];
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(k) Place of Business. As of the Initial Closing Date, the
principal
place of business and chief executive office of the Seller and the
place where
the accounting books and records of the Seller are maintained is
located at its
address set forth in Section 8.03 and has been located at such
address at all
times since the later of (i) the date of formation of the Seller,
and (ii) the
date that is five years prior to the Initial Closing Date;
(l) Accounting and Tax Treatment. The Seller will treat the
transfer
of the Transferred Assets to the Issuer pursuant to this Agreement
as a capital
contribution (in part) and sale (in part) of such Transferred
Assets (which
allocation between capital contribution and sale will be determined
in
accordance with Sections 2.01 and 2.02 hereof) for financial
reporting and
accounting purposes. The Seller will treat the transfer of the
Transferred
Assets as a transfer to an entity disregarded as separate from its
owner for
U.S. federal, state and local income tax purposes;
(m) Bulk Transfer Provisions. No transfer, assignment or conveyance
of
the Transferred Assets by the Seller to the Issuer contemplated by
this
Agreement will be subject to the bulk transfer or any similar
statutory
provisions in effect in any applicable jurisdiction;
(n) All Representations and Warranties True. All representations,
warranties, certifications and statements made by the Seller in any
certificate
or other document delivered in connection with the closing of the
transactions
contemplated by the Transaction Documents including all
representations,
warranties, certifications and statements made to Mayer, Brown,
Rowe & Maw LLP
in support of its opinions issued and delivered in connection with
the issuance
of the Notes and each of the factual assumptions contained in such
opinions, to
the extent compliance with such assumptions is in the control of
the Seller, are
true and correct in all material respects as of the date made and
do not omit or
fail to state a material fact necessary to make the statements
contained therein
not misleading as of such date.
(o) Approvals. All approvals, authorizations, consents, orders or
other actions of any Person required to be obtained by the Seller
in order to
execute and deliver this Agreement and any other Transaction
Documents to which
it is a party have been or will be taken or obtained on or prior to
the Closing
Date;
(p) Financial Statements. The consolidated balance sheet of TAL
International Group at December 31, 2005 and the consolidated
statements of
income, retained earnings and cash flows for the twelve months
ended on such
date, are accompanied by reports thereon containing opinions
without
qualification, except as therein noted, by the independent
accountants, have
been prepared in accordance with Generally Accepted Accounting
Principles
consistently applied, and present fairly the financial position of
TAL
International Group and its consolidated Subsidiaries (including
the Seller) as
of such dates and the results of their operations for such periods;
Since December 31, 2005 there has been no change in the business or
financial condition of TAL International Group and its consolidated
Subsidiaries
(including the Seller) except as disclosed in TAL International
Group's
financial reports, or changes in the ordinary course of business,
which
individually or in the aggregate may have been materially adverse.
Neither TAL
International Group nor any of its consolidated Subsidiaries
(including the
Seller)
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has any material liabilities or obligations other than those
disclosed in the
financial statements (including the notes thereto) referred to in
the preceding
paragraph or for which adequate reserves are reflected in such
financial
statements or which were incurred in the ordinary course of
business since the
date of such financial statements;
(q) Governmental Consent. No consent, approval or authorization of,
or
filing, registration or qualification with, any Governmental
Authority is or
will be necessary or required on the part of the Seller in
connection with the
execution, delivery, legality, binding effect or enforceability of
this
Agreement or any other Transaction Document to which it is a party
or the
transfer and conveyance of the Transferred Assets hereunder except
for (A) the
filing of any financing statements and (B) such the failure of
which to make or
obtain, individually or in the aggregate, would not reasonably be
expected to
result in a material adverse effect on the Seller;
(r) Investment Company. The Seller is not an "investment company"
or a
company controlled by an "investment company" within the meaning of
the
Investment Company Act of 1940, as amended;
(s) Substantive Consolidation. The Seller is operated such that the
Issuer would not be "substantively consolidated" in the bankruptcy
estate of the
Seller and its separate existence disregarded in the event of the
bankruptcy of
the Seller under any applicable Insolvency Law;
(t) Financial Statements. The financial statements and books and
records of the Seller will reflect the separate existence of the
Issuer, the
annual consolidated financial statements of the Seller after the
date hereof
will contain disclosures to the effect that the Seller has or will
have one or
more direct and indirect Subsidiaries that were or may be
established as
bankruptcy remote entities to facilitate asset securitization
transactions;
(u) Valid Business Purpose. The transfers and conveyances of
Transferred Assets by the Seller to the Issuer pursuant to the
terms of this
Agreement are being consummated by the Seller in good faith, with
no
contemplation of insolvency and with no intent to hinder, delay or
defraud any
of its present or future creditors of the Seller;
(v) Title to Containers. Immediately prior to the transfer of any
Transferred Asset to the Issuer pursuant to the terms of this
Agreement, the
Seller had good and marketable title to such Transferred Asset,
free and clear
of all Liens, except (i) Permitted Encumbrances and (ii) a
manufacturer's or
vendor's lien for the unpaid purchase price of such Transferred
Asset so long as
such unpaid purchase price is paid within two Business Days
following the later
of the acquisition of such Transferred Asset by the Issuer or the
inclusion of
such Transferred Asset in the Asset Base. The Seller has not
authorized the
filing of, and is not aware of, any financing statements against
the Seller that
include a description of collateral covering the Transferred Assets
other than
any financing statement or document of similar import (i) in favor
of the Issuer
pursuant to this Agreement or (ii) that has been terminated. The
Seller is not
aware of any judgment or tax lien filings against the Seller;
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(w) Rights to Lease Agreements are Assignable. The assignment of
the
rights with respect to each Lease Agreement (to the extent related
to a
Transferred Container) and all scheduled lease payments to become
due thereunder
(which relate to a Transferred Container) pursuant to this
Agreement does not
violate the terms of the applicable Lease Agreement and such
assignment by the
Seller is permitted without the consent of any Person other than
consents which
will have been obtained on or before the related Transfer Date;
(x) All Necessary Action Taken. Immediately after each of the
transfers and conveyances to the Issuer as contemplated in this
Agreement, all
necessary action will have been taken by the Seller to validly
transfer and
convey to the Issuer all right, title and interest of the Seller in
and to the
Transferred Containers and the Related Assets;
(y) Eligible Container. As of the related Transfer Date for a
Container, such Container is an Eligible Container.
(z) Ordinary Course of Business. All Lease Agreements related to
Transferred Containers were originated in the ordinary course of
business of the
Seller's business and in accordance with the Credit and Collection
Policy as in
effect on such origination date;
(aa) Binding Obligation. Each Lease included in the Related Assets
being transferred to the Issuer on the applicable Transfer Date
represents the
genuine, legal, valid and binding payment obligation in writing of
the related
lessee, enforceable in accordance with its terms, except only as
such
enforcement may be limited by bankruptcy, insolvency or similar
laws affecting
the enforcement of creditors' rights generally;
(bb) No Defenses. No right of rescission, setoff, counterclaim or
defense exists or has been asserted in writing or threatened in
writing with
respect to any Lease included in the Related Assets being
transferred to the
Issuer on the applicable Transfer Date. The exercise of any right
under any such
Lease will not render such Lease unenforceable in whole or in part
or subject to
any such right of rescission, setoff, counterclaim or defense;
(cc) Servicing. The servicing of each Lease included in the Related
Assets and the collection practices relating thereto have been
lawful and in
accordance with the standards set forth in the Credit and
Collection Policy;
(dd) Seller Acquisition Cost. One of the following: (A) with
respect
to any Container originally acquired by the Seller subsequent to
the Initial
Closing Date, the vendor's or manufacturer's invoice price of such
Container was
representative of the market price of containers of similar
specifications with
such vendor or manufacturer on the date on which the Seller placed
the order for
such Container with the vendor or manufacturer thereof; or (B) with
respect to
any Container not covered by clause (A), the purchase price
allocated to such
Container by the Seller was reflective of the market value (as
determined by
appraisal) of such class of Container on the Initial Closing Date;
(ee) Creation of Security Interest. In the event that, contrary to
the
intention of the parties hereto, the transfer of the Transferred
Assets pursuant
to the terms of this Agreement is held not to constitute a "true
sale" or a
"true contribution", this Agreement creates a valid and continuing
security
interest (as defined in the UCC) in the Transferred Assets in favor
of the
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Issuer, which security interest is prior to all other Liens other
than Permitted
Encumbrances, and is enforceable as such against creditors of and
purchasers
from the Seller;
(ff) UCC Classification. As of the Transfer Date for a Transferred
Container: (x) such Transferred Container constitutes "goods"
within the meaning
of the applicable UCC; (y) the related Lease constitutes "tangible
chattel
paper" within the meaning of the UCC; and (z) the lease receivables
under such
Lease constitute "accounts" or "proceeds" of such Lease within the
meaning of
the UCC;
(gg) Perfection of Security Interest. 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 Issuer's ownership interest in the Transferred
Assets. All
financing statements filed or to be filed against the Seller in
favor of the
Issuer in connection herewith contain a statement to the following
effect: "A
purchase of or any other security interest in any collateral
described in this
financing statement will violate the rights of the Issuer and the
Indenture
Trustee (as the pledgee of the Issuer)";
(hh) Possession of Leases. Aside from any original counterparts of
such Lease included in such Transferred Assets in the possession of
the lessee,
the only other original counterpart(s) of such Lease is in the
possession of the
Manager or an Affiliate of the Manager. Such Lease (to the extent
that such
Lease relates to the Transferred Containers) does not have any
marks or
notations indicating that such Lease (to the extent that such Lease
relates to
the Transferred Containers) has been pledged, assigned or otherwise
conveyed to
any Person.
SECTION 3.02 Representations and Warranties of the Issuer. The
Issuer
hereby makes the following representations and warranties. The
Seller has re
