CALL OPTION LETTER
Exhibit 10.13
EXECUTION COPY
October 31, 2005
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withdrawn.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/ Xxxxxxxxx Xxxxx | |||
| Name: | Xxxxxxxxx Xxxxx | |||
| Title: | Chief Financial Officer | |||
| THE TENSAR CORPORATION, LLC |
|||
| By | /s/ Xxxxxxxxx Xxxxx | ||
| Name: | Xxxxxxxxx Xxxxx | ||
| Title: | Chief Financial Officer | ||
| CREDIT SUISSE, Cayman Islands Branch, as Administrative Agent |
||||
| By | /s/ XXXXXXX XX | |||
| Name: XXXXXXX XX | ||||
| Title: | DIRECTOR | |||
| By | /s/ XXXXXX XXXXX | |||
| Name: | XXXXXX XXXXX | |||
| Title: | ASSOCIATE | |||
[Signature Page to Call Option Letter]
SCHEDULE 1
CALL OPTION NOTICE
[Date]
TCO Funding Corp.
c/o Global Securitization Services, LLC
000 Xxxxx Xxxxxx Xxxx — Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
c/o Global Securitization Services, LLC
000 Xxxxx Xxxxxx Xxxx — Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
| 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]
| 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: | ||||
