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REVOLVING CREDIT AND TERM LOAN AND SECURITY AGREEMENT
BETWEEN
TL LEASE FUNDING CORP. IV
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
DATED AS OF NOVEMBER 28,1995
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . .1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . .1
SECTION 2. COMMITMENT TO LEND . . . . . . . . . . . . . . . . 16
2.1 Revolving Loans. . . . . . . . . . . . . . . . . . 16
2.2 Term Loan. . . . . . . . . . . . . . . . . . . . . 16
SECTION 3. BORROWING PROCEDURES; CERTAIN LOAN TERMS . . . . . 17
3.1 Borrowing Procedures for Revolving Loans; Deemed
Requests for Amounts Due on each Payment Date. . . 17
3.2 Transition to Term Loan; Final Revolving Loan or
Draw on Limited Recourse Agreement . . . . . . . . 18
3.3 Capital Adequacy . . . . . . . . . . . . . . . . . 18
SECTION 4. INTEREST AND FEES. . . . . . . . . . . . . . . . . 19
4.1 Revolving Loans. . . . . . . . . . . . . . . . . . 19
4.2 Term Loan. . . . . . . . . . . . . . . . . . . . . 19
4.3 Method of Calculating Interest and Fees. . . . . . 19
SECTION 5. REPAYMENT OF PRINCIPAL . . . . . . . . . . . . . . 19
5.1 Revolving Loan Principal Payments. . . . . . . . . 19
5.2 Term Loan Principal Payments . . . . . . . . . . . 20
5.3 Prepayment of Loan upon Sale of Other Notes. . . . 20
SECTION 6. APPLICATION OF AMOUNTS ON DEPOSIT IN
COLLECTION ACCOUNT . . . . . . . . . . . . . . . 20
6.1 Application of Amounts on Deposit in the
Collection Account . . . . . . . . . . . . . . . . 20
6.2 Taxes. . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7. BORROWER'S REPRESENTATIONS AND WARRANTIES. . . . . 23
7.1 Existence and Power. . . . . . . . . . . . . . . . 23
7.2 Loan Documents and Note Authorized; Binding
Obligations . . . . . . . . . . . . . . . . . . . 23
7.3 No Conflict; Legal Compliance. . . . . . . . . . . 23
7.4 Executive Offices. . . . . . . . . . . . . . . . . 24
7.5 Litigation . . . . . . . . . . . . . . . . . . . . 24
7.6 Consents and Approvals . . . . . . . . . . . . . . 24
7.7 Other Agreements . . . . . . . . . . . . . . . . . 24
7.8 Margin Regulations . . . . . . . . . . . . . . . . 24
7.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . 24
7.10 Solvency . . . . . . . . . . . . . . . . . . . . . 25
7.11 Representations and Warranties . . . . . . . . . . 25
7.12 Good Title to the Collateral; First Priority
Security Interest . . . . . . . . . . . . . . . . 25
7.13 Investment Company Act . . . . . . . . . . . . . . 25
SECTION 8. BORROWER'S AFFIRMATIVE COVENANTS . . . . . . . . . 25
8.1 Asset Base Certificates; Additional Access and
Information. . . . . . . . . . . . . . . . . . . . 25
8.2 Existence; Compliance with Law, Books and Records,
Commingling
of Funds . . . . . . . . . . . . . . . . . . . . 26
8.3 Taxes and Other Liabilities. . . . . . . . . . . . 27
8.4 Notice of Liens. . . . . . . . . . . . . . . . . . 27
8.5 Obligations with Respect to Leases . . . . . . . . 27
8.6 Preservation of Security Interest. . . . . . . . . 27
8.7 Consolidated Return. . . . . . . . . . . . . . . . 27
8.8 Taxable Income from the Leases . . . . . . . . . . 27
8.9 Maintenance of Swap Agreement. . . . . . . . . . . 28
8.10 Contribution and Sale Agreement. . . . . . . . . . 28
8.11 Borrower's Identity. . . . . . . . . . . . . . . . 28
8.12 Filing Locations . . . . . . . . . . . . . . . . . 28
SECTION 9. BORROWER'S NEGATIVE COVENANTS. . . . . . . . . . . 28
9.1 Liens; Negative Pledges; and Encumbrances. . . . . 28
9.2 Indebtedness and Guarantees. . . . . . . . . . . . 28
9.3 Amendments of Charter Documents; Conduct of
Business; No Merger . . . . . . . . . . . . . . . 29
9.4 No Use of Lender's Name. . . . . . . . . . . . . . 29
SECTION 10. GRANTS OF SECURITY INTEREST; THE COLLATERAL. . . . 29
10.1 Security Interest. . . . . . . . . . . . . . . . . 29
10.2 Creation of Collection Account; Investments. . . . 30
10.3 Addition of Leases . . . . . . . . . . . . . . . . 30
10.4 Substitution of Leases . . . . . . . . . . . . . . 31
10.5 Release of Liens . . . . . . . . . . . . . . . . . 32
SECTION 11. LIMITATION ON LIABILITY. . . . . . . . . . . . . . 32
SECTION 12. CONDITIONS PRECEDENT TO ALL REVOLVING LOANS. . . . 33
12.1 Notice . . . . . . . . . . . . . . . . . . . . . . 33
12.2 Default. . . . . . . . . . . . . . . . . . . . . . 33
12.3 Warranties . . . . . . . . . . . . . . . . . . . . 33
12.4 Additional Lease Transfer Agreements . . . . . . . 33
SECTION 13. CONDITIONS PRECEDENT TO INITIAL REVOLVING LOAN . . 33
13.1 Note . . . . . . . . . . . . . . . . . . . . . . . 33
13.2 Other Agreements and Financing Statements. . . . . 33
13.3 Resolutions. . . . . . . . . . . . . . . . . . . . 34
13.4 Incumbency Certificate . . . . . . . . . . . . . . 34
13.5 By-Laws. . . . . . . . . . . . . . . . . . . . . . 34
13.6 Certificate of Incorporation . . . . . . . . . . . 34
13.7 Good Standing. . . . . . . . . . . . . . . . . . . 35
13.8 Opinion. . . . . . . . . . . . . . . . . . . . . . 35
13.9 Asset Base Certificate . . . . . . . . . . . . . . 35
SECTION 14. EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . 35
14.1 Events of Default. . . . . . . . . . . . . . . . . 35
14.2 Waiver of Default. . . . . . . . . . . . . . . . . 36
14.3 Remedies . . . . . . . . . . . . . . . . . . . . . 36
SECTION 15. EXPENSES AND INDEMNITEES . . . . . . . . . . . . . 39
15.1 Expenses . . . . . . . . . . . . . . . . . . . . . 39
15.2 Indemnification. . . . . . . . . . . . . . . . . . 39
(a) General Indemnity.. . . . . . . . . . . . . . 39
(b) Procedures for Suits. . . . . . . . . . . . . 39
(c) Survival; Defense . . . . . . . . . . . . . . 39
SECTION 16. MISCELLANEOUS. . . . . . . . . . . . . . . . . . 40
16.1 Survival . . . . . . . . . . . . . . . . . . . . . 40
16.2 No Waiver by Lender. . . . . . . . . . . . . . . . 40
16.3 Notices. . . . . . . . . . . . . . . . . . . . . . 40
16.4 Headings . . . . . . . . . . . . . . . . . . . . . 40
16.5 Severability . . . . . . . . . . . . . . . . . . . 40
16.6 Entire Agreement; Construction; Amendments and
Waivers . . . . . . . . . . . . . . . . . . . . . 41
16.7 Reliance by Lender . . . . . . . . . . . . . . . . 41
16.8 Marshalling; Payments Set Aside. . . . . . . . . . 41
16.9 No Set-Offs by Borrower. . . . . . . . . . . . . . 41
16.10 Binding Effect, Assignment Transfer. . . . . . . . 42
16.11 Counterparts . . . . . . . . . . . . . . . . . . . 42
16.12 Equitable Relief . . . . . . . . . . . . . . . . . 42
16.13 Governing Law. . . . . . . . . . . . . . . . . . . 42
16.14 Consent to Jurisdiction. . . . . . . . . . . . . . 43
16.15 Waiver of Jury Trial . . . . . . . . . . . . . . . 43
16.16 General Interpretive Principles. . . . . . . . . . 43
16.17 Termination. . . . . . . . . . . . . . . . . . . . 44
16.18 No Petition Covenants. . . . . . . . . . . . . . . 44
INDEX OF EXHIBITS
Exhibit A Form of Note
Exhibit B-1 Form of Request for Borrowing
Exhibit B-2 Form of Request for Conversion to Term Loan
Exhibit C Form of Asset Base Certificate
Exhibit D Form of Payment Schedule
Exhibit E Form of Contribution and Sale Agreement
Exhibit F Form of Servicing Agreement
Exhibit G Form of Limited Recourse Agreement
Exhibit H Form of K&E Opinion
Exhibit I Account Information
Exhibit J Form of Addition Certificate
REVOLVING CREDIT AND TERM LOAN AND SECURITY AGREEMENT
THIS REVOLVING CREDIT AND TERM LOAN AND SECURITY AGREEMENT is
entered into as of November 28, 1995, by and between TL Lease Funding Corp.
IV, a Delaware special purpose corporation("Borrower"), and First Union
National Bank of North Carolina("Lender").
RECITALS
A. Borrower desires to enter into a revolving credit facility
with Lender in the principal amount of $35,000,000 for the period specified
herein, secured by, among other things, certain equipment leases and
interests in related equipment, all as more particularly described
below; and
B. Lender has agreed to make such facility available to
Borrower, but only upon the terms and subject to the conditions hereinafter
set forth and in reliance on the representations and warranties set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing
recitals and the mutual covenants hereinafter set forth, and intending
to be legally bound, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. As used herein, the following terms have the
following meanings:
"Additional Lease" means a Lease that is added to the
Collateral pursuant to Section 10.3.
"Additional Lease Cut-Off Date" means, with respect to an
Additional Lease, the close of business on the last day of the
month preceding the related Addition Date.
"Additional Lease Transfer Agreement" means an Assignment
for Additional Assets in the form of Exhibit C to the
Contribution and Sale Agreement pursuant to which Additional
Leases or Substitute Leases are transferred to Borrower by
Trans Leasing.
"Addition Date" means the date upon which an Additional
Lease is added to the Collateral pursuant to Section 10.3.
"Advance Payment" means, with respect to any Lease and
any Collection Period, any Scheduled Lease Payment (or portion
thereof) with respect to a subsequent Collection Period which
the Servicer has received and expressly permitted the related
Lessee to make in advance of its scheduled due date and which
will be applied to such Scheduled Lease Payment on such due date.
"Advance Rate" means 93.0%.
"Affiliate" means, with respect to any Person, (a) each
Person that, directly or indirectly, through one or more
intermediaries, owns or controls, whether beneficially or as a
trustee, guardian or other fiduciary, five percent (5.0%) or
more of the stock having ordinary voting power in the election
of directors of such Person or of the ownership interests in
any partnership or joint venture, (b) each Person that
controls, is controlled by or is under common control with such
Person or any Affiliate of such Person, or (c) each of such
Person's officers, directors, joint venturers and partners;
provided, however, that in no case shall Lender be deemed to be
an Affiliate of Borrower for purposes of this Agreement. For
the purpose of this definition, "control" of a Person shall
mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies,
whether through the ownership of voting securities, by contract
or otherwise.
"Aggregate Discounted Lease and Residual Balance" means
at any time of determination, an amount equal to the sum of the
Discounted Lease and Residual Balances of the Eligible Leases.
"Aggregate Discounted Lease Balance" means at any time of
determination, an amount equal to the sum of the Discounted
Lease Balances of the Eligible Leases.
"Agreement" means this Revolving Credit and Term Loan and
Security Agreement dated as of November 28, 1995, including all
amendments, modifications and supplements hereto, renewals,
extensions or restatements hereof, and all appendices, exhibits
and schedules to any of the foregoing, and shall refer to the
Agreement as the same may be in effect from time to time.
"Anticipated Pay-off Date" means the first Payment Date
on which the aggregate Scheduled Principal Payments for such
Payment Date and all Payment Dates since the Transition Date
equal or exceed the outstanding principal balance of the Loan
on the Transition Date.
"Asset Base" means, as at and for any date of
determination, an amount equal to the sum of (a) the Advance
Rate multiplied by the Aggregate Discounted Lease Balance and
(b) any amounts on deposit in the Collection Account.
"Asset Base Certificate" means a certificate with
appropriate insertions setting forth the components of the
Asset Base as of the date of determination for which such
certificate is submitted, which certificate shall be
substantially in the form set forth in Exhibit C and executed
by a Responsible Officer of Borrower.
"Available Amounts" means:
(A) For the Transition Date and any Payment Date
thereafter, all amounts on deposit in the Collection Account on
such Payment Date, other than any amounts (i) representing
Scheduled Lease Payments due in a Collection Period after the
Collection Period related to such Payment Date or (ii) that
were received by the Servicer after the last day of the related
Collection Period (other than any payments received under the
Swap Agreement); and
(B) For any date prior to the Conversion Date, all amounts
on deposit in the Collection Account on such date.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as
amended, as codified under Title 11 of the United States Code,
and the Bankruptcy Rules promulgated thereunder, as the case
may be in effect from time to time.
"Borrower" shall mean TL Lease Funding Corp. IV, a
Delaware corporation.
"Borrower's Account" shall mean the account specified in
Exhibit I hereto, or such other account as may be specified
from time to time by Borrower in writing.
"Business Day" means any day which is not a Saturday,
Sunday or a legal holiday under the laws of the State of
Illinois or North Carolina and is not a day on which banking
institutions located in the State of Illinois or North Carolina
are authorized or permitted by law or other governmental action
to close.
"Casualty Loss" means, with respect to any item of
Equipment, the loss, theft, damage beyond repair or
governmental condemnation or seizure of such item of Equipment.
"Casualty Payment" means any payment under a Lease in
connection with a Casualty Loss.
"Charges" means all federal, state, county, city,
municipal, local, foreign or other governmental taxes, levies,
assessments, charges or claims, in each case then due and
payable, upon or relating to (a) the Loan (but not Lender's
Income Taxes), (b) Borrower's employees, payroll, income or
gross receipts, (c) Borrower's ownership or use of any of its
Properties or (d) any other aspect of Borrower's business.
"Closing Date" means November 28, 1995.
"Code" means the Internal Revenue Code of 1986, as
amended, the Treasury Regulations adopted thereunder and the
Treasury Regulations proposed thereunder (to the extent Lender,
in its sole discretion, reasonably determines that such
proposed regulations set forth the regulations that apply in
the circumstances), as the same may be in effect from time to time.
"Collateral" means the collateral described in Section 10.1.
"Collection Account" means the account established pursuant to
Section 10.2(a).
"Collection Period" means a calendar month, except that
the first Collection Period shall be the period commencing on
the Cut-Off Date and ending on November 30, 1995. A Collection
Period is deemed to be related to the Payment Date occurring in
the immediately following Collection Period.
"Collections" means all payments received on or with
respect to the Leases or the related Equipment, including,
without limitation, Scheduled Lease Payments, Advance Payments,
Servicer Advances, Liquidation Proceeds, Warranty Purchase
Prices, Insurance Proceeds, Early Termination Lease Proceeds,
Expired Lease Proceeds and Prepayments, all as related to
amounts attributable to the Equipment and the Leases, but
excluding any Excluded Amounts.
"Commitment Expiration Date" means March 31, 1996.
"Contribution and Sale Agreement" shall mean the
Contribution and Sale Agreement dated as of November 28, 1995
between Borrower and Trans Leasing, as the same may from time
to time be amended, modified, supplemented or renewed.
"Conversion Date" means the earlier of (1) the last day
of the Collection Period in which the Commitment Expiration
Date occurs, (2) the last day of the Collection Period in which
an Early Amortization Event occurs, or (3) the date specified
by Borrower in a request for conversion to the Term Loan
pursuant to Section 3.2.
"Cut-Off Date" means, with respect to each Original
Lease, November 26, 1995, with respect to each Additional
Lease, the related Additional Lease Cut-Off Date, and with
respect to each Substitute Lease, the related Substitute Lease
Cut-Off Date
"Daily Interest" means, for any day, an amount equal to
the product of (i) the Interest Rate for such day divided by
360 times (ii) the balance of the Loan for such day.
"Defaulted Lease" means a Lease as to which (i) the
Servicer has determined in its sole discretion, in accordance
with its customary servicing procedures, that such Lease is not
collectible, or (ii) all or part of a Scheduled Lease Payment
thereunder (other than a Skipped Payment, as defined in the
Servicing Agreement) is more than 180 days delinquent.
"Determination Date" means, with respect to a Collection
Period, the close of business on the last day of such
Collection Period.
"Discounted Equipment Residual Value" means, with respect
to any Equipment, at any time of determination, the present
value of the Equipment Residual Value of such Equipment,
calculated at the Discount Rate in the manner described below:
In connection with all calculations required to be made
pursuant to this Agreement with respect to the determination of
Discounted Equipment Residual Values, for any date of
determination the "Discounted Equipment Residual Value" for
such Equipment shall be calculated assuming:
(i) all amounts are received on the last day of the
Collection Period in which the related Lease expires in
accordance with its terms;
(ii) amounts are discounted on a monthly basis using a
30-day month and a 360-day year;
(iii) payments are discounted to the last day of the
Collection Period in which the date of determination falls.
"Discounted Lease Balance" means, with respect to any
Lease, at any time of determination, the sum of (i) the present
value of all of the remaining Scheduled Lease Payments becoming
due under such Lease after such date of determination, discounted
monthly at the Discount Rate in the manner described below and
(ii) the aggregate amount of all Scheduled Lease Payments (due
after the Cut-Off Date) then due and payable under such Lease
which have not been received by the Servicer; provided, however,
that the Discounted Lease Balance of any Defaulted Lease, Early
Termination Lease or Expired Lease or Lease purchased by Trans
Leasing or the Servicer shall be equal to zero.
In connection with all calculations required to be made
pursuant to this Agreement with respect to the determination of
Discounted Lease Balances, for any date of determination the
"Discounted Lease Balance" for each Lease shall be calculated
assuming:
(i) all payments due in any Collection Period are due
on the last day of such Collection Period;
(ii) payments are discounted on a monthly basis using a
30-day month and a 360-day year;
(iii) payments are discounted to the last day of the
Collection Period in which the date of determination falls.
"Discounted Lease and Residual Balance" means, with respect
to any Lease, at any time of determination, the sum of (i) the
Discounted Lease Balance plus (ii) the Discounted Equipment
Residual Value for the related Equipment; provided, however, that
the Discounted Lease and Residual Balance of any Defaulted Lease,
Early Termination Lease or Expired Lease or Lease purchased by
Trans Leasing or the Servicer shall be equal to zero.
"Discount Rate" means, as of any date of determination, a
per annum rate equal to
(a) With respect to the Cut-Off Date and the Closing Date,
8.0% per annum, and for any other date of determination prior to
the Transition Date, the sum of (i) the average of the effective
yield on United States Treasury obligations with a remaining
maturity closest to the remaining average life of the Leases on
such date of determination for the days from the first day of the
Collection Period in which such date of determination occurs
through (x) the Business Day immediately prior to such date of
determination, or (y) if such date of determination is a
Determination Date, such Determination Date, (ii) 150 basis
points, and (iii) the Servicing Fee Rate, and
(b) On and after the Transition Date, the fixed rate of
interest determined as of the Transition Date equal to the sum of
(i) 100 basis points, (ii) the fixed rate of interest to be paid
by Borrower under the Swap Agreement, plus (iii) the Servicing
Fee Rate.
"Early Amortization Event" means the occurrence of any of
the following as of any date prior to the Conversion Date:
(1) Any Servicer Default has occurred under the
Servicing Agreement;
(2) The principal balance of the Loan as of any
Determination Date exceeds the Asset Base, as reflected on
the Asset Base Certificate prepared as of such Determination
Date; provided, that if Borrower cures such condition on or
prior to the immediately following Payment Date by the
addition of Leases pursuant to Section 10.3 or the
prepayment of principal (from funds other than Collections)
and submits to Lender a revised Asset Base Certificate as of
such Determination Date giving effect to such additions
and/or prepayments, no Early Amortization Event shall be
deemed to have occurred;
(3) The average of the sum of the Discounted Lease
Balances of Leases that are more than 90 days delinquent as
of the six (6) preceding Determination Dates exceeds two
percent (2%) of the average of the Aggregate Discounted
Lease Balance as of such six (6) preceding Determination
Dates, as reflected on the most recent Monthly Statement
delivered pursuant to the Servicing Agreement; or
(4) Two (2) times the sum of the Discounted Lease
Balances of Leases that became Defaulted Leases in the six
(6) preceding Collection Periods exceeds five percent (5%)
of the average of the Aggregate Discounted Lease Balances as
of the Determination Dates related to such six (6) preceding
Collection Periods, as reflected on the most recent Monthly
Statement delivered pursuant to the Servicing Agreement.
"Early Termination Lease" means any Lease that has
terminated prior to its scheduled expiration date (including
because of a Casualty Loss), other than a Defaulted Lease.
"Early Termination Lease Proceeds" means any and all cash
proceeds or rents realized from the sale or release of Equipment
under an Early Termination Lease (net of Liquidation Expenses).
"Eligible Investment" has the meaning set forth in the
Servicing Agreement.
"Eligible Lease" shall mean any Lease that is not a
Defaulted Lease and with respect to which all of the
representations and warranties set forth in Section 3.01(a) of
the Contribution and Sale Agreement were true as of the date
made.
"Equipment" means the assets leased to a Lessee pursuant to
a Lease.
"Equipment Residual Value" means the anticipated residual
value of the Equipment related to a Lease upon the expiration of
such Lease in accordance with its terms (as such residual value
is estimated by Trans Leasing on or about the date on which such
Lease was created in accordance with its normal valuation
procedures), but not in excess of any purchase option price with
respect thereto.
"Event of Default" means any of the events set forth in
Section 14.1.
"Excluded Amounts" means any payments received from a Lessee
in connection with any late fees, any taxes, fees or other charges
imposed by any Governmental Authority, any insurance premiums or fees,
any indemnity payments made by a Lessee for the benefit of the lessor
under the related Lease or any payments collected from a Lessee
relating to servicing and/or maintenance payments pursuant to the
related Lease or maintenance agreement,as applicable.
"Expired Lease" means any Lease that has terminated on its
scheduled expiration date.
"Expired Lease Proceeds" means any and all cash proceeds or
rents realized from the sale or release of Equipment under an
Expired Lease (net of Liquidation Expenses).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System and any successor thereto.
"Filing Locations" means the States of Alabama, Arizona,
California, Delaware, Florida, Georgia, Illinois, Indiana,
Maryland, Massachusetts, New Jersey, New York, North Carolina,
Ohio, Pennsylvania, Texas and Virginia.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other
statements by the Securities and Exchange Commission as may be in
general use by significant segments of the U.S. accounting
profession, which are applicable to the circumstances as of the
date of determination.
"Government Action" has the meaning set forth in Section
14.1(f).
"Governmental Authority" means (a) any federal, state,
county, municipal or foreign government, or political subdivision
thereof, (b) any governmental or quasi-governmental agency,
authority, board, bureau, commission, department, instrumentality
or public body, (c) any court or administrative tribunal or (d)
with respect to any Person, any arbitration tribunal or other
non-governmental authority to the jurisdiction of which such
Person has consented.
"Income Taxes" means any federal, state, local or foreign
taxes based upon, measured by, or imposed upon gross or net
income, gross or net receipts, capital, net worth, or the
privilege of doing business, including but not limited to the
Michigan single business tax, the Massachusetts excise tax, and
the Kentucky license tax, and any minimum taxes or withholding
taxes based upon any of the foregoing, including any penalties,
interest or additions to tax imposed with respect thereto.
"Indebtedness" means, as to any Person, (a) all indebtedness
of such Person for borrowed money, (b) all leases of equipment of
such Person as lessee, (c) to the extent not included in clause
(b), above, all capital leases of such Person as lessee, and (d)
all other obligations to make any payment of any kind, whether or
not such obligation is contingent upon any event or condition,
other than trade payables incurred in the ordinary course of its
business.
"Indemnified Liability" has the meaning set forth in Section
15.2(a).
"Indemnified Person" has the meaning set forth in Section
15.2(a).
"Insurance Policy" means with respect to any Lease, an
insurance policy covering physical damage to or loss of the
related Equipment.
"Insurance Proceeds" means, depending on the context, any
amounts payable or any payments made, to the Servicer under an
Insurance Policy.
"Interest Arrearage" means, with respect to any Payment
Date, any Monthly Interest and Interest Arrearage due on the
immediately preceding Payment Date, but remaining unpaid as of
such Payment Date, together with interest thereon at the Interest
Rate for such current Payment Date.
"Interest Rate" means:
(A) for any day on and prior to the Transition Date,
the LIBO Rate for such day plus 75 basis points, and
(B) for any day after the Transition Date, the LIBO
Rate for such day plus 100 basis points.
"Investment Company Act" means the Investment Company Act of
1940, as amended (15 U.S.C. 80a-1 et seq.), as the same may be in
effect from time to time, or any successor statute thereto.
"IRS" means the Internal Revenue Service and any successor
thereto.
"Lease" means each agreement, including, as applicable,
schedules, subschedules, summary schedules, supplements and
amendments to a master lease, pursuant to which Trans Leasing, as
lessor, leases specified assets to a Lessee at a specified
monthly or quarterly rental, and which is identified in the List
of Leases, including all Original Leases, Additional Leases and
Substitute Leases; provided, that, from and after the date on
which a Lease is purchased by Trans Leasing pursuant to Section
3.03 of the Contribution and Sale Agreement or a Lease is
replaced with a Substitute Lease pursuant to Section 10.4, such
Lease shall no longer be a Lease for purposes of this Agreement.
"Lease File" shall have the meaning set forth in the
Servicing Agreement.
"Lessee" means with respect to any Lease, the Person or
Persons obligated to make payments with respect to such Lease,
including any guarantor thereof.
"LIBO Rate" means, for any date, the rate per annum for
deposits in U.S. Dollars for a period of one month (adjusted for
reserves) which appears on the Dow ▇▇▇▇▇ Telerate Service Page
3750 as of 11:00 a.m., London time, on such date. If such rate
does not appear on such page (or such other page as may replace
that page on that service, or if such service is no longer
offered, such other service for displaying LIBOR or comparable
rates as may be selected by Lender after consultation with
Borrower), the rate shall be the Reference Bank Rate. The
"Reference Bank Rate" shall be determined on the basis of the
rates at which deposits in U.S. Dollars are offered by the
reference banks (which shall be four major banks that are engaged
in transactions in the London interbank market, selected by
Lender after consultation with Borrower) as of 11:00 a.m., London
time, on such date for a period of one month (adjusted for
reserves) in amounts of not less than U.S.$1,000,000 that are
representative for single transactions in such market at such
time. Lender shall request the principal London office of each
of such reference banks to provide a quotation of its rate. If
at least two such quotations are provided, the rate shall be the
arithmetic mean of the quotations, rounded upwards to the nearest
one-sixteenth of one percent. If on any such day fewer than two
quotations are provided as requested, the rate shall be the
arithmetic mean, rounded upwards to the nearest one-sixteenth of
one percent, of the rates quoted by one or more major banks in
New York City, selected by Lender after consultation with
Borrower, as of 11:00 a.m., New York City time, on such day to
leading European banks for United States dollar deposits for a
period of one month (adjusted for reserves) in amounts of not
less than U.S.$1,000,000 that are representative for single
transactions in such market at such time. If no such quotations
can be obtained, the rate shall be the LIBO Rate for the
immediately preceding date. Notwithstanding the foregoing, if,
for any date after the Transition Date, the interest rate used in
determining the amount of payments to be received by Borrower
under the then existing Swap Agreement is not equal to the LIBO
Rate determined as described above, the LIBO Rate shall be equal
to such interest rate as used in such Swap Agreement.
"LIBOR Business Day" means any day other than a Saturday,
Sunday or any other day on which banks in London are required or
authorized to be closed.
"Lien" means any mortgage, pledge, hypothecation, assignment
for security, security interest, encumbrance, ▇▇▇▇, ▇▇▇▇ or
charge of any kind, whether voluntarily incurred or arising by
operation of law or otherwise, affecting any Property, including
any agreement to grant any of the foregoing, any conditional sale
or other title retention agreement, any lease in the nature of a
security interest, and the filing of or agreement to file or
deliver any financing statement (other than a precautionary
financing statement with respect to a lease that is not in the
nature of a security interest) under the UCC or comparable law of
any jurisdiction.
"Limited Recourse Agreement" means that certain Limited
Recourse Agreement dated as of the date hereof, in the form of
Exhibit G hereto, executed by Trans Leasing in favor of Lender,
including all amendments, modifications and supplements hereto,
renewals, extensions or restatements thereof.
"Liquidation Expenses" means, with respect to any Lease, the
aggregate amount of out-of-pocket expenses incurred by the
Servicer (including amounts paid to any subservicer) in
accordance with the Servicer's customary procedures in connection
with the repossession, refurbishing and disposition of any
related Equipment upon or after the expiration or earlier
termination of such Lease and other out-of-pocket costs related
to the liquidation of any such Equipment, including the attempted
collection of any amount owing pursuant to such Lease if it is a
Defaulted Lease.
"Liquidation Proceeds" means with respect to a Defaulted
Lease, proceeds from the sale or release of the Equipment,
proceeds of the related Insurance Policy and any other recoveries
with respect to such Defaulted Lease and the related Equipment,
net of Liquidation Expenses and amounts so received that are
required to be refunded to the Lessee on such Lease.
"List of Leases" means a list, prepared as of the Cut-Off
Date, of the Original Leases delivered to Lender by Borrower and
certified by a Responsible Officer of Borrower which includes a
true and complete list as of the Cut-Off Date, of all Leases
identified by Lease Number, original Equipment cost, Discounted
Lease Balance as of the Cut-Off Date, effective date and the
original Lease term, in the form attached hereto as Schedule 1
and which shall have attached to it a list (in printed,
microfiche or computer tape form) showing the Scheduled Lease
Payments for each Original Lease as of the Cut-Off Date. The
List of Leases shall be deemed supplemented and amended to
incorporate therein the amendments delivered in connection with
the Additional Leases pursuant to Section 10.3 and Substitute
Leases pursuant to Section 10.4 and the deletion of Leases that
are repurchased by Trans Leasing pursuant to Section 3.03 of the
Contribution and Sale Agreement or replaced pursuant to Section
10.4 or with respect to which all Liquidation Proceeds or other
proceeds from the disposition of the related Equipment upon
expiration or termination thereof have been deposited in the
Collection Account.
"Loan" means the Revolving Loans and the Term Loan.
"Loan Commitment Amount" means $35,000,000.
"Loan Document" when used in the singular and "Loan
Documents" when used in the plural means any and all of this
Agreement, the Note, the Contribution and Sale Agreement, the
Servicing Agreement and the Limited Recourse Agreement, as the
same may from time to time be amended, modified, supplemented or
renewed.
"Material Adverse Effect" means any set of circumstances or
events which, individually or in the aggregate, (a) has or would
reasonably be expected to have any material adverse effect upon
the validity or enforceability of any Loan Document, (b) is or
would reasonably be expected to be material and adverse to the
condition (financial or otherwise) or business operations of
Borrower, or (c) materially impairs or would reasonably be
expected to materially impair the ability of Lender to enforce
any of its legal remedies pursuant to the Loan Documents.
"Maturity Date" means the Payment Date following the final
date on which a Scheduled Lease Payment is due under any Lease
that is included in the Collateral at the close of business on
the Transition Date.
"Monthly Interest" means, for any Payment Date, an amount
equal to the sum of the Daily Interest for each day in the
related Collection Period.
"Monthly Statement" shall have the meaning set forth in the
Servicing Agreement.
"Note" means Borrower's note in the form of Exhibit A
hereto, and any and all replacements, extensions, substitutions
and renewals thereof.
"Obligations" has the meaning set forth in Section 10.1.
"Original Lease" means a Lease that is included in the
Collateral on the Closing Date.
"Other Taxes" has the meaning set forth in Section 6.2(b).
"Payment Date" means (i) the 18th day of each calendar month
(other than the month following the month in which the Conversion
Date occurs) or if such day is not a Business Day, the
immediately following Business Day, commencing on January 18,
1996, and (ii) for the month following the month in which the
Conversion Date occurs, the Transition Date.
"Payment Schedule" means a schedule, substantially in the
form of Exhibit D hereto, setting forth, for each Payment Date
occurring after the Transition Date, the Scheduled Principal
Payment for such Payment Date, calculated as (a) the sum of all
Scheduled Lease Payments on the Leases becoming due in the
related Collection Period, after giving effect to the application
of any prepayment thereof prior to the Conversion Date, less (b)
the Servicing Fee for such Payment Date, less (c) the payment
(calculated based on a fixed rate of interest applied to the
anticipated balance of the Loan) that will be due to the Swap
Counterparty under the Swap Agreement on such Payment Date, less
(d) one twelfth of 1.00% of the anticipated balance of the Loan
for the last day of the related Collection Period, all calculated
assuming no defaults or prepayments under the Leases or on the
Term Loan.
"Permitted Liens" means:
(a) Liens granted in favor of Lender under this Agreement;
(b) Liens for Charges if payment shall not at the time be
required to be made in accordance with Section 8.3 and for which
Borrower has set aside adequate reserves on its books; and
(c) Liens constituting the rights of Lessees under Leases.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit
corporation, inn, joint stock company, estate, entity or
Governmental Authority.
"Potential Event of Default" means a condition or event
which, after notice or lapse of time or both, will constitute an
Event of Default.
"Prepayment" means with respect to each Lease, any one or
more Scheduled Lease Payments which are received in advance of
their scheduled due date from the Lessee (including early
termination payments under any Early Termination Lease), any
Liquidation Proceeds, Casualty Payments or Insurance Proceeds or
otherwise, other than Advance Payments.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, whether tangible or
intangible.
"Regulations G, T, U and X" means, collectively, Regulations
G, T, U and X adopted by the Federal Reserve Board (12 C.F.R.
Parts 207, 220, 221 and 224, respectively) and any other
regulation in substance substituted therefor.
"Responsible Officer" of any Person means any of the
President, Executive Vice President, Vice President-Finance,
Chief Financial Officer, Treasurer or Corporate Controller of
such Person.
"Restricting Event" shall be deemed to exist on any Payment
Date on which any of the following conditions has occurred and is
continuing: (1) a Servicer Default under the Servicing Agreement,
(2) the average of the sum of the Discounted Lease Balances of
Leases that are more than 90 days delinquent as of the six (6)
preceding Determination Dates exceeds three percent (3%) of the
average of the Aggregate Discounted Lease Balances as of such six
(6) preceding Determination Dates, as reflected on the most
recent Monthly Statement delivered pursuant to the Servicing
Agreement, or (3) two (2) times the sum of the Discounted Lease
Balances of Leases that became Defaulted Leases in the six (6)
preceding Collection Periods exceeds seven and one-half percent
(7.5%) of the average of the Aggregate Discounted Lease Balances
as of the Determination Dates related to such six (6) preceding
Collection Periods, as reflected on the most recent Monthly
Statement delivered pursuant to the Servicing Agreement.
"Revolving Loan" has the meaning set forth in Section 2.1.
"S&P" means Standard & Poor's Ratings Services, a division
of McGraw Hill Inc.
"Scheduled Lease Payments" means with respect to any Lease,
the monthly or quarterly rent payments scheduled to be made by
the related Lessee under the terms of such Lease after the
related Cut-Off Date.
"Scheduled Principal Payment" shall mean, for each Payment
Date, the amount set forth on the Payment Schedule for such
Payment Date.
"SEC" means the Securities and Exchange Commission and any
successor thereto.
"Servicer" means Trans Leasing, in its capacity as the
Servicer under the Servicing Agreement, or any successor servicer
under the Servicing Agreement.
"Servicer Default" has the meaning specified in the
Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement, dated
the date hereof, among Borrower, Trans Leasing, as Servicer and
Lender, as the same may from time to time be amended, modified,
supplemented or renewed.
"Servicing Fee" means, for any Payment Date, the monthly
servicing fee payable to the Servicer for its services under the
Servicing Agreement, which shall be equal to one-twelfth of the
product of the Servicing Fee Rate and the Aggregate Discounted
Lease and Residual Balance on the first day of the related
Collection Period.
"Servicing Fee Arrearage" means, for any Payment Date, any
Servicing Fee payable to the Servicer on a prior Payment Date,
but remaining unpaid as of such Payment Date.
"Servicing Fee Rate" means 1.00% per annum.
"Servicer's Account" shall mean the account specified in
Exhibit I hereto, or such other account as may be specified from
time to time by the Servicer in writing.
"Solvent" means, as to any Person at any time, that (a) the
fair value of the Property of such Person is greater than the
amount of such Person's liabilities (including disputed,
contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable
value of the Property of such Person in an orderly liquidation of
such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to realize
upon its Property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as
they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature; and (e) such Person is not engaged
in business or a transaction, and is not about to engage in
business or action, for which such Person's property would
constitute unreasonably small capital.
"Specified Portfolio Characteristics" means the
representations and warranties set forth in Section 3.01(a)(xxi)
of the Contribution and Sale Agreement
"Substitute Lease" means a Lease that is added to the
Collateral pursuant to Section 10.4.
"Substitute Lease Cut-Off Date" means, with respect to an
Substitute Lease, the close of business on the last day of the
month preceding the related Substitution Date.
"Substitution Date" means the date on which a Substitute
Lease is added to the Collateral pursuant to Section 10.4.
"Swap Agreement" means an interest rate swap agreement or a
combination of other derivatives which have the net effect of
creating a synthetic interest rate swap agreement between
Borrower and a Swap Counterparty reasonably satisfactory to
Lender, providing for payment of the LIBO Rate to Borrower in
return for a fixed rate of interest by Borrower, in each case, on
a notional amount based on the anticipated outstanding principal
balance of the Loan, on terms reasonably satisfactory to Lender.
"Swap Breakage Costs" means the payment, if any, necessary
in order to induce the Swap Counterparty to decrease the notional
amount of the Swap Agreement or to enter into a revised Swap
Agreement in order to provide for an effective notional amount
equal to the outstanding principal balance of the Loan.
"Swap Breakage Event" has the meaning set forth in Section
8.9.
"Swap Counterparty" means the counterparty on the Swap
Agreement.
"Swap Counterparty Account" shall mean the account specified
in the Swap Agreement for payments to the Swap Counterparty.
"Term Loan" has the meaning set forth in Section 2.2.
"Term Loan Monthly Principal" means, with respect to a
Payment Date, the sum of (i) the Scheduled Principal Payment for
such Payment Date, (ii) the Term Loan Principal Payment Arrearage
for such Payment Date, (iii) unless a Substitute Lease was
substituted therefor in accordance with Section 10.4, an amount
equal to the Discounted Lease Balance of any Lease that (a)
became a Defaulted Lease during the preceding Collection Period,
(b) became an Early Termination Lease prior to its scheduled
expiration for any other reason (including a Casualty Loss)
during the related Collection Period, or (c) was required to be
repurchased by Trans Leasing pursuant to Section 3.03 of the
Contribution and Sale Agreement during the related Collection
Period; provided, that the Term Loan Monthly Principal shall
equal the entire outstanding principal balance of the Term Loan
on the Maturity Date; and provided, that the Term Loan Monthly
Principal shall never exceed the outstanding principal balance of
the Note.
After the Transition Date, in the event that Borrower shall
have failed to deliver all of the documents required by Section
3.2, the Term Loan Monthly Principal shall equal all Available
Amounts remaining on deposit in the Collection Account after
payment of the amounts set forth in clauses (1) through (6) of
Section 6.1(b) until such documents are delivered to Lender
provided, that the Term Loan Monthly Principal shall never exceed
the outstanding principal balance of the Note.
"Term Loan Monthly Principal Arrearage" means, for any
Payment Date, that portion of the Term Loan Monthly Payment that
was due on the immediately preceding Payment Date, that was not
paid on such immediately preceding Payment Date.
"Transition Date" means the fifth day of the month following
the month in which the Conversion Date occurs, or if such day is
not a Business Day, the immediately following Business Day.
"Trans Leasing" means Trans Leasing International, Inc., a
Delaware corporation.
"UCC" means the Uniform Commercial Code as the same may,
from time to time, be in effect in the State of Illinois
provided, however, in the event that, by reason of mandatory
provisions of law, any and all of the attachment, perfection or
priority of the Lien of Lender in and to the Collateral is
governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Illinois the term "UCC"
shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of
definitions related to such provisions.
"Warranty Event" has the meaning provided in the
Contribution and Sale Agreement.
"Warranty Purchase Price" means, with respect to a Lease and
date of determination, an amount equal to the Discounted Lease
Balance as of the preceding Determination Date, plus one month's
interest thereon at the Interest Rate for the preceding Payment
Date, but in no event greater than the Discounted Lease Balance
of such Lease as of the related Cut-Off Date.
SECTION 2. COMMITMENT TO LEND. Subject to the terms and
conditions of this Agreement and in reliance upon the representations
and warranties of Borrower set forth herein, Lender agrees:
2.1 Revolving Loans. To make loans from time to time as
provided in Section 3.1 (a), Section 3.1(b), Section 3.1(c), Section
3.1(f) and Section 3.2(b) on or prior to the Transition Date
(collectively called the "Revolving Loans" and individually called a
"Revolving Loan") to Borrower, which Revolving Loans Borrower may from
time to time repay and reborrow during the period from the date hereof
to and including the Transition Date, but not exceeding in the
aggregate at any one time outstanding the Loan Commitment Amount.
2.2 Term Loan. On the Transition Date, the Revolving Loans
shall convert to a term loan (the "Term Loan").
SECTION 3. BORROWING PROCEDURES; CERTAIN LOAN TERMS.
3.1 Borrowing Procedures for Revolving Loans; Deemed
Requests for Amounts Due on each Payment Date.
(a) On the Closing Date, the Lender shall make a Revolving
Loan in the amount of $16,035,208, which shall not exceed the Advance
Rate multiplied by the Aggregate Discounted Lease Balance as of the
Cut-Off Date. Lender shall make such funds available to Borrower by
wire transfer to Borrower's Account.
(b) Subject to the limitation set forth in Section 2.1,
Borrower may request Revolving Loans on any date prior to the
Conversion Date in an amount equal to the product of (i) the Advance
Rate and (ii) the sum of the Discounted Lease Balances of Additional
Leases that are added to the Collateral in accordance with Section
10.3 on the day of such request (calculated using the Discount Rate
for such date). Each such request shall be accompanied by an Addition
Certificate in the form of Exhibit J hereto signed by a Responsible
Officer (x) indicating the sum of the Discounted Lease Balances of
Additional Leases that are added to the Collateral in accordance with
Section 10.3 on the day of such request and (y) certifying that the
requirements of Section 10.3 have been satisfied and that the
conditions precedent set forth in Section 12 have been satisfied.
(c) Subject to the limitation set forth in Section 2.1,
prior to the Conversion Date, on any date during any Collection Period
Borrower may request a Revolving Loan in an amount equal to the
amount, if any, by which the Asset Base reflected on the Asset Base
Certificate delivered pursuant to Section 8.1(a) as of the preceding
Determination Date, exceeds the outstanding principal balance of the
Loan as of such Determination Date.
(d) Borrower shall give Lender prior written notice or
telephonic notice followed within one day by written notice of each
requested Revolving Loan under Section 3.1(b) or (c). Each such
notice shall be in the form of Exhibit B-1 hereto and shall specify
(i) the borrowing date (which shall be a Business Day), and (ii) the
amount of the Revolving Loan. Each request for a Revolving Loan shall
be received by Lender not later than 11:00 a.m., Charlotte time, two
(2) Business Days prior to the borrowing date with respect to such
requested Revolving Loan. Each Revolving Loan shall be in a minimum
aggregate amount of $100,000. Each such written notice shall be
irrevocable.
(e) On or before 11:00 a.m., Charlotte time, on the
borrowing date specified for a requested Revolving Loan, provided that
all conditions precedent set forth herein to the making of such
requested Revolving Loan have been satisfied (unless waived in
accordance with the provisions of this Agreement) Lender shall make
funds available in the amount of such requested Revolving Loan to
Borrower by wire transfer to Borrower's Account.
(f) On each Payment Date through and including the
Transition Date, Borrower, without any action, shall be deemed to have
irrevocably requested a Revolving Loan in an amount equal to the sum
of (i) the Servicing Fee and any Servicing Fee Arrearage for such
Payment Date and (ii) the Monthly Interest due on such Payment Date
and any Monthly Interest Arrearage for such Payment Date, to the
extent that such amounts have not previously been paid and funds are
not available therefor as described in Section 6.1(a). Lender shall
remit the proceeds of such Revolving Loan on such Payment Date in the
manner set forth in Section 6.1(a).
3.2 Transition to Term Loan; Final Revolving Loan or Draw
on Limited Recourse Agreement.
(a) Borrower may, at its option, give Lender a written
request ("Request") to convert the Revolving Loans to the Term Loan.
The Request shall be in the form of Exhibit B-2 hereto and shall
specify (i) the Conversion Date (which shall be the last day of a
Collection Period) and (ii) Borrower's estimate of the fixed rate of
interest that will be payable to the Swap Counterparty under the Swap
Agreement. The Request shall be received by Lender not later than
11:00 a.m., Charlotte time, two (2) Business Days prior to the
Conversion Date. The Request shall be irrevocable.
(b) No later than 11:00 a.m., Charlotte time, on the
Transition Date, Borrower shall deliver a completed Asset Base
Certificate to Lender reflecting the Asset Base as of the Conversion
Date (calculated using the Discount Rate for the Transition Date). On
the Transition Date, Lender shall make a final Revolving Loan in the
amount equal to the amount, if any, by which (i) the lesser of (A) the
Asset Base reflected on such Asset Base Certificate and (B) the Loan
Commitment Amount, exceeds (ii) the outstanding principal balance of
the Loan, taking into account the Revolving Loan made on the
Transition Date pursuant to Section 3.1(f). Alternatively, on the
Transition Date, Lender shall require Trans Leasing to make a
contribution to Borrower in the amount, if any, required under the
Limited Recourse Agreement.
(c) On or prior to the Transition Date, Borrower shall
arrange for and enter into the Swap Agreement with the Swap
Counterparty. Borrower shall deliver to Lender evidence that it has
entered into the Swap Agreement no later than the second Business Day
following the Transition Date. Borrower shall deliver to Lender the
Payment Schedule no later than the fifth Business Day after the
Transition Date. Borrower shall deliver to Lender a copy of the
executed Swap Agreement as soon as practicable, but in no event later
than the thirtieth day following the Transition Date.
3.3 Capital Adequacy. On or prior to the Transition Date,
if Lender shall reasonably determine that the application or adoption
of any law, rule, regulation, directive, interpretation, treaty or
guideline regarding capital adequacy, or any change therein or in the
interpretation or administration thereof, whether or not having the
force of law (including, without limitation, application of changes to
Regulation H and Regulation Y of the Federal Reserve Board issued by
the Federal Reserve Board on January 19, 1989 and regulations of the
Comptroller of the Currency, Department of the Treasury, 12 CFR Part
3, Appendix A, issued by the Comptroller of the Currency on January
27, 1989) increases the amount of capital required or expected to be
maintained by Lender or any Person controlling Lender, and such
increase is based upon the existence of Lender's obligations hereunder
to make the Revolving Loans and other commitments of this type, then
from time to time, within 10 days after demand from Lender accompanied
by the certificate described in the second following sentence,
Borrower shall pay to Lender such amount or amounts as will reasonably
compensate Lender or such controlling Person, as the case may be, for
such increased capital requirement. The determination of any amount
to be paid by Borrower under this Section 3.3 shall take into
consideration the policies of Lender or any Person controlling Lender
with respect to capital adequacy and shall be based upon reasonable
averaging, attribution and allocation methods. A certificate of
Lender setting forth the calculation of the amount or amounts as shall
be necessary to reasonably compensate Lender as specified in this
Section 3.3 shall be delivered to Borrower and shall be conclusive in
the absence of manifest error.
SECTION 4. INTEREST AND FEES.
4.1 Revolving Loans. The Monthly Interest Amount and any
Interest Arrearage for any Payment Date through and including the
Transition Date shall be due and payable on such Payment Date as
described in Section 6.1(a).
4.2 Term Loan. The Monthly Interest and any Interest
Arrearage for each Payment Date after the Transition Date shall be due
and payable on such Payment Date after the Transition Date as
described in Section 6.1(b).
4.3 Method of Calculating Interest and Fees. Interest
shall be computed on the basis of a year consisting of 360 days and
paid for actual days elapsed.
SECTION 5. REPAYMENT OF PRINCIPAL.
5.1 Revolving Loan Principal Payments.
(a) Mandatory Prepayments. There shall be no mandatory
payments of principal on the Revolving Loans, except for an
acceleration of the Revolving Loans pursuant to Section 14.3.
(b) Optional Prepayments.
(i) Prior to the Transition Date, Borrower may from
time to time, in an amount not less than $100,000 upon prior written
or telephonic notice received by Lender on or prior to the date of
such prepayment, prepay the principal of the Revolving Loans in
whole or in part, without penalty.
(ii) On and prior to the Conversion Date, any Available
Amounts on deposit in the Collection Account at 2:00 p.m.,
Charlotte time, on any Business Day shall be withdrawn by Lender
and applied as a principal payment, unless Borrower shall have
instructed Lender in writing or by telephone, followed within one
Business Day by written confirmation, not to apply such amount as
a principal payment.
5.2 Term Loan Principal Payments.
(a) Mandatory Scheduled Prepayments and Arrearages. The Term
Loan Monthly Principal Amount shall be payable on each Payment Date
after the Transition Date; provided that the entire outstanding
principal balance of the Term Loan shall be due and payable on the
Maturity Date.
(b) Optional Prepayments. On the Transition Date and on any
Payment Date thereafter, Borrower may in an amount not less than
$100,000 upon at least one Business Day's prior written or telephonic
notice received by Lender, prepay the principal of the Term Loan in
whole or in part; provided that (i) such prepayment shall be made
after payment of the amounts described in clauses (1) through (7) of
Section 6.1(b) for such Payment Date, and (ii) Borrower shall have
paid any Swap Breakage Costs incurred in connection with any
corresponding reduction in the notional balance on the Swap Agreement.
Optional prepayments of principal under this Section 5.2(b) shall not
be deemed to include any amounts included in the definition of Term
Loan Monthly Principal.
5.3 Prepayment of Loan upon Sale of Other Notes. The
outstanding principal balance of the Loan, together with all accrued
and unpaid principal, interest, fees and other amounts then due and
owing hereunder shall be due and payable upon the sale to third
parties of notes secured by (or other instruments representing
interests in) any or all of the Collateral. In connection therewith,
Lender shall release its security interest in the Collateral and
execute all documents reasonably requested by Borrower in connection
therewith, including UCC-3 termination statements.
SECTION 6.APPLICATION OF AMOUNTS ON DEPOSIT IN COLLECTION ACCOUNT.
6.1 Application of Amounts on Deposit in the Collection Account.
(a) On each Payment Date prior to the Conversion Date and on
the Transition Date, Lender shall apply Available Amounts on deposit
in the Collection Account and proceeds of the Revolving Loan made on
such Payment Date under Section 3.1(f) to pay the following amounts in
the following priority:
(1) to the Servicer by wire transfer to the Servicer's
Account, any Servicing Fee Arrearage;
(2) to the Servicer by wire transfer to the Servicer's
Account, any other accrued and unpaid Servicing Fee;
(3) to Lender, any Interest Arrearage for such Payment Date;
and
(4) to Lender, the Monthly Interest for such Payment Date.
(b) On each Payment Date after the Transition Date, Lender
shall apply Available Amounts on deposit in the Collection Account to
pay the following amounts in the following priority:
(1) to the Servicer by wire transfer to the Servicer Account,
the amount of any unreimbursed Servicer Advances and advances for
Swap Breakage Costs that are reimbursable pursuant to the Servicing
Agreement;
(2) to the Servicer by wire transfer to the Servicer Account
any Servicer Fee Arrearage for such Payment Date;
(3) to the Servicer by wire transfer to the Servicer Account
the Servicing Fee for such Payment Date;
(4) to the Swap Counterparty by wire transfer to the Swap
Counterparty Account, (A) any amounts due to the Swap Counterparty
under the Swap Contract, and (B) any Swap Breakage Costs not
advanced by the Servicer pursuant to Section 2.9(h) of the
Servicing Agreement or paid by Borrower pursuant to Section 5.2(b);
(5) to Lender, any Interest Arrearage for such Payment Date;
(6) to Lender, the Monthly Interest for such Payment Date;
and
(7) to Lender, the Term Loan Monthly Principal for such
Payment Date.
(c) On each Payment Date after the Transition Date, any
Available Amounts remaining in the Collection Account after all
payments are made in full pursuant to Section 6.1(b) shall be applied
as follows:
(1) if a Restricting Event then exists, such amounts shall
remain on deposit in the Collection Account; and
(2) if no Restricting Event then exists, such amounts shall
be released to Borrower by wire transfer to the Borrower's Account.
(d) After the Conversion Date, all amounts in the Collection
Account constituting Advance Payments shall be held in the Collection
Account until such time as they constitute Available Amounts.
(e) Nothing herein shall in any way limit Lender's rights
with respect to the Collection Account or any other Collateral upon an
Event of Default as set forth in Section 14.3.
6.2 Taxes.
(a) Any and all payments by Borrower to Lender under this
Agreement shall be made free and clear of, and without deduction or
withholding for, any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto (all such taxes, excluding any Income Taxes of Lender
("Taxes")).
(b) In addition, Borrower shall pay any present or future
stamp or documentary taxes or any other excise or property taxes,
charges or similar levies (other than Income Taxes of Lender) which
arise from any payment made hereunder or from the execution, delivery
of, or otherwise with respect to, this Agreement or any other Loan
Documents (hereinafter referred to as "Other Taxes"); except for any
Other Taxes that may be paid without penalty and are being contested
in good faith by appropriate proceedings and for which an adequate
reserve has been established and is maintained in accordance with
GAAP.
(c) Borrower shall indemnify and hold harmless Lender for the
full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this
Section 6.2) paid by Lender 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; provided, that Lender shall pay and
seek indemnification hereunder only if it reasonably believes such
amounts are due. Payment under this indemnification shall be made
within thirty (30) days from the date Lender makes written demand
therefor and provides written evidence of payment thereof or a copy of
any invoice therefor showing such payment is due (or if later, the
date such payment is due), in each case reasonably satisfactory to
Borrower and together with any related information that Borrower may
reasonably request. The determination of any amount to be paid by
Borrower under this Section 6.2(c) shall be based upon reasonable
attribution and allocation methods. A certificate of Lender setting
forth the calculation of the amount or amounts as shall be necessary
to reasonably indemnify Lender as specified in this Section 6.2(c)
shall be delivered to Borrower and shall be conclusive in the absence
of manifest error.
(d) If Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to Lender then:
(i+) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 6.2)
Lender, shall receive an amount equal to the sum it would have
received had no such deductions been made;
(ii) Borrower shall make such deductions, and
(iii) Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
(e) The obligations in this Section 6.2 shall survive the
termination of the Loan Documents and payment of all other Obligations.
SECTION 7. BORROWER'S REPRESENTATIONS AND WARRANTIES.
Borrower hereby makes the following representations and
warranties to Lender, as of the Closing Date and as of the date of
each Revolving Loan:
7.1 Existence and Power. Borrower is a corporation, duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is duly qualified and licensed as a foreign
corporation and authorized to do business in each jurisdiction within
the United States where its ownership of Property and assets or
conduct of business requires such qualification, except where failure
to be so qualified and licensed would not have a Material Adverse
Effect. Borrower has the corporate power and authority, rights and
franchises to own its Property and to carry on its business as now
conducted. Borrower has the corporate power and authority to execute,
deliver and perform the terms of the Loan Documents (to the extent it
is a party thereto) and all other instruments and documents
contemplated hereby or thereby
7.2 Loan Documents and Note Authorized; Binding
Obligations. The execution, delivery and performance of this
Agreement and each of the other Loan Documents to which Borrower is a
party and payment of the Note have been duly authorized by all
necessary corporate action on the part of Borrower. The Loan
Documents constitute legally valid and binding obligations of
Borrower, enforceable against Borrower, to the extent Borrower is a
party thereto, in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally and by general principles of equity,
regardless of whether enforceability is at law or in equity.
7.3 No Conflict; Legal Compliance. The execution, delivery
and performance of this Agreement, and each of the other Loan
Documents to which it is a party will not: (a) contravene any
provision of Borrower's certificate of incorporation or bylaws; (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, which contravention, conflict or
violation, in the aggregate, would have a Material Adverse Effect; or
(c) violate or result in the breach of, or constitute a default under
any indenture or other loan or credit agreement, or other agreement or
instrument to which Borrower is a party or by which Borrower, or its
Property is bound or affected, which violation, breach or default
would have a Material Adverse Effect. Borrower 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, the non-compliance with, the violation or breach of or the
default under which would have a Material Adverse Effect.
7.4 Executive Offices. Borrower's only places of business
are located in Northbrook, Illinois and Wilmington, Delaware and its
only mailing addresses are ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
7.5 Litigation. To the best of Borrower's knowledge, there
are no claims, actions, suits, proceedings or other litigation pending
or threatened against Borrower, at law or in equity before any
Governmental Authority or, to the best of Borrower's knowledge, any
investigation by any Governmental Authority of Borrower's Properties.
7.6 Consents and Approvals. No approval, authorization or
consent of any trustee or holder of any indebtedness or obligation of
Borrower or of any other Person under any material agreement,
contract, lease or license or similar document or instrument to which
Borrower is a party or by which Borrower is bound, that has not been
obtained prior to the date hereof, is required to be obtained by
Borrower in order to make or consummate the transactions contemplated
under the Loan Documents. All consents and approvals of, filings and
registrations with, and other actions in respect of, all Governmental
Authorities required to be obtained by Borrower in order to make or
consummate the transactions contemplated under the Loan Documents have
been, or prior to the time when required will have been, obtained,
given, filed or taken.
7.7 Other Agreements. Borrower is not a party to any
material agreements other than such agreements as are contemplated by
this Agreement, the Note, the Contribution and Sale Agreement, the
Servicing Agreement and the Swap Agreement and the Amended and
Restated Contribution and Sale Agreement, the Pooling and Servicing
Agreement and the Trust Agreement, each dated as of October 6, 1995,
or as otherwise expressly provided for by any such agreement.
7.8 Margin Regulations. The proceeds of the Revolving
Loans under this Agreement will be used only to purchase Leases from
Trans Leasing under the Contribution and Sale Agreement, to pay
dividends to Trans Leasing and for other matters as contemplated
hereunder. None of the Loan 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 would cause the Loan to be considered a "purpose credit"
within the meaning of Regulations G, T, U and X.
7.9 Taxes. All federal, state, local and foreign tax
returns, reports and statements required to be filed by Borrower have
been filed with the appropriate Governmental Authorities, except where
the failure to file is reasonably likely to have a Material Adverse
Effect, and all material Charges and other impositions shown thereon
to be due and payable by Borrower 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. Borrower has paid when due and payable
all material Charges upon the books of Borrower and no Government
Authority has asserted any Lien against Borrower with respect to
unpaid Charges. All material amounts have been withheld by Borrower
from its employees for all periods in 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.
7.10 Solvency. Borrower is Solvent.
7.11 Representations and Warranties. To the knowledge of
Borrower, each of the representations and warranties made by the Trans
Leasing in Section 3.01(a) of the Contribution and Sale Agreement are
true as of the date such representations and warranties speak.
Borrower has taken no action to cause such representations and
warranties not to be true as of the date made.
7.12 Good Title to the Collateral; First Priority Security
Interest. Borrower owns the Collateral free and clear of any Lien
(including any Lien of any vendor of Equipment), except for Permitted
Liens. This Agreement creates in favor of Lender a valid security
interest in Borrower's interest in the Collateral. Such security
interest is and will be a first priority security interest, except (i)
with respect to any Equipment not located in the Filing Locations
(which constitute the States in which Equipment under Original Leases
constituting at least 75% of the Aggregate Discounted Lease Balance as
of the original Cut-Off Date is located (based on billing addresses of
the related Lessees)) and (ii) with respect to any Equipment located
in the Filing Locations, after all filings have been made in
accordance with Section 8.12, and, with respect to any vehicles
included in the Collateral, subject to the effects of any applicable
state vehicle titling statutes. Pursuant to the Servicing Agreement,
Trans Leasing shall retain possession of the Lease Files in its
capacity as Servicer.
7.13 Investment Company Act. Borrower is not required to be
registered as an investment company for purposes of the Investment
Company Act.
SECTION 8. BORROWER'S AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, until full complete and
indefeasible payment and performance of the Obligations, unless Lender
shall otherwise consent in writing, Borrower covenants and agrees as
follows:
8.1 Asset Base Certificates; Additional Access and
Information.
(a) Not later than the second Business Day preceding each
Payment Date prior to the Conversion Date, Borrower shall deliver to
Lender an Asset Base Certificate reflecting the Asset Base as of the
preceding Determination Date, duly executed by Borrower and signed by
a Responsible Officer of Borrower, with appropriate insertions.
(b) Promptly upon request by Lender, Borrower will furnish
(or cause the Servicer to furnish) to Lender any information which is
in Borrower's (or the Servicer's) possession reasonably relating to
the Collateral which Lender reasonably requests, including information
which is reasonably necessary in order for Lender to enforce its
rights under this Agreement. In addition Borrower will (or shall
cause the Servicer to) provide Lender with access to the Lease Files
and any documentation regarding the Collateral which is in Borrower's
(or the Servicer's) possession in order to permit Lender to obtain any
such information. Such access will be afforded without charge, but
only (i) upon reasonable request and with reasonable notice, (ii)
during normal business hours, (iii) subject to Borrower's normal
security and confidentiality procedures and (iv) at offices designated
by Borrower. Nothing in this Section 8.1(b) will derogate from any
obligation under this Agreement or obligation of Borrower, Lender or
the Servicer to observe any applicable law or agreement prohibiting
disclosure of information regarding the Lessees, and the failure of
Borrower or the Servicer to provide information or access as provided
in this Section 8.1(b) by reason of any such obligation will not
constitute a breach of this Section 8.1(b); provided that it has
provided Lender a written explanation of the reason such disclosure
may not be made indicating the applicable law or agreement.
(c) Promptly upon any Responsible Officer of Borrower
obtaining knowledge (i) of any condition or event which constitutes an
Event of Default or Potential Event of Default under this Agreement,
(ii) that any Person has given any notice to Borrower or taken any
other action with respect to a claimed default or event or condition
of the type referred to in Section 14.1(b) or (c), (iii) of the
institution of any litigation or of the receipt of written notice from
any Governmental Authority as to the commencement of any formal
investigation involving an alleged or asserted liability of Borrower
of any amount or any adverse judgment in any litigation involving a
potential liability of Borrower of any amount, Borrower shall deliver
to Lender a certificate of Borrower signed by a Responsible Officer of
Borrower, specifying the notice given or action taken by such Person
and the name of such claimed default, Event of Default, Potential
Event of Default, event or condition and what action Borrower has
taken, is taking and proposes to take with respect thereto.
8.2 Existence; Compliance with Law, Books and Records,
Commingling of Funds. Borrower shall (a) keep in full effect its
existence, rights and franchises as a corporation under the laws of
the State of Delaware and all of its licenses, permits, governmental
approvals, rights, privileges and franchises necessary in the normal
conduct of its business as now conducted or presently proposed to be
conducted; (b) obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of
the rights of Lender under this Agreement; (c) comply with (i) the
provisions of its certificate of incorporation and bylaws and (ii) the
requirements of all applicable laws, rules, regulations or orders of
any Governmental Authority, except to the extent that the failure to
comply therewith would not, in the aggregate, have a Material Adverse
Effect, (d) maintain its books and records separate from the books and
records of any other entity and (e) maintain separate bank accounts
and, except as contemplated by this Agreement and the Servicing
Agreement, not permit funds of Borrower to be commingled with funds of
any other entity.
8.3 Taxes and Other Liabilities. Promptly pay and
discharge all material Charges when due and payable, except (i) such
as may be paid thereafter without penalty or (ii) such as are being
contested in good faith by appropriate proceedings and for which an
adequate reserve has been established and is maintained in accordance
with GAAP. Borrower shall promptly notify Lender of any material
challenge, contest or proceeding pending by or against Borrower before
any taxing authority.
8.4 Notice of Liens. Borrower will notify Lender of the
existence of any Lien (except Permitted Liens) on any of its Property
immediately upon discovery thereof and Borrower shall defend the
security interest of Lender in the Collateral granted hereby (now
existing or hereafter created) against all claims of third parties
claiming through or under Borrower.
8.5 Obligations with Respect to Leases. Borrower will duly
fulfill all obligations on its part to be fulfilled under or in
connection with each Lease and will do nothing to impair the rights of
Lender in the Leases. As long as there is no event of default of any
of the provisions of the applicable Lease, Borrower will not disturb
the Lessee's quiet and peaceful possession of the related Equipment
and the Lessee's unrestricted use thereof for its intended purpose.
8.6 Preservation of Security Interest. Borrower shall
execute and file (or cause the Servicer to file) such continuation
statements and any other documents and take such other actions which
may be required by law to fully preserve and protect the security
interest of Lender in the Collateral granted hereby; provided that
Borrower shall not be required to file financing statements or any
related agreements or documentation with respect to any Equipment not
located in the Filing Locations, the financing statements to be filed
in the Filing Locations other than the States of Delaware and Illinois
will not be filed until after the Closing Date (and the Borrower
agrees to make such filings within 5 Business Days of the Closing
Date) and Borrower shall not be required to cause the title to any
Equipment consisting of motor vehicles to be marked to indicate the
transfer from Trans Leasing to Borrower under the Contribution and
Sale Agreement or the security interest of Lender granted hereby, and
the Servicer may retain possession of the Lease Files in accordance
with the Servicing Agreement.
8.7 Consolidated Return. Borrower and Trans Leasing are
members of an affiliated group within the meaning of section 1504 of
the Code which has filed, and will continue to file, a consolidated
return for federal income tax purposes at all times until the
termination of this Agreement and satisfaction in full of all
Obligations of Borrower hereunder.
8.8 Taxable Income from the Leases. Borrower shall treat
the Leases as owned by it for federal income tax purposes. The
affiliated group of which Borrower is a member, within the meaning of
section 1504 of the Code, shall treat the Leases as owned by Borrower
for federal income tax purposes, shall report and include in gross
income for Income Tax purposes in its consolidated, combined or
unitary return the rental and other income from the Leases and the
Equipment and shall deduct the interest paid or accrued, in accordance
with its applicable method of accounting for federal income tax
purposes, with respect to the Note.
8.9 Maintenance of Swap Agreement. After the Conversion
Date, Borrower shall maintain a Swap Agreement with a notional amount
based on the outstanding principal balance of the Loan with a Swap
Counterparty reasonably acceptable to Lender. If on any Payment Date,
after the payments set forth in Section 6.1(b) are made, the notional
amount of the Swap Agreement on which payments for the next succeeding
Payment Date are to be made exceeds the outstanding principal balance
of the Loan by more than $500,000 (a "Swap Breakage Event"), Borrower
shall, within two (2) Business Days, enter into a revised Swap
Agreement or an offsetting swap agreement, and within 30 days, deliver
to Lender a copy of the revised Swap Agreement. Any Swap Breakage
Costs associated therewith shall be reimbursed or paid in accordance
with Section 6.1(b).
8.10 Contribution and Sale Agreement. Borrower shall, on
its own behalf and on behalf of Lender, enforce all of its rights
under the Contribution and Sale Agreement.
8.11 Borrower's Identity. Borrower shall use its best
efforts to avoid the appearance of conducting business on behalf of
Trans Leasing or any Affiliate of Trans Leasing (other than Borrower).
Borrower shall conduct its business solely in its own name so as not
to mislead others as to the identity of the Person with which such
others are concerned.
8.12 Filing Locations. Within 10 days of the Closing Date,
Borrower shall have delivered to Lender acknowledgment copies (or
other evidence of filing satisfactory to Lender) of financing
statements filed with the appropriate offices in the Filing Locations
naming Borrower as debtor, Lender as secured party and the Equipment
under Leases included in the Asset Base as Collateral on the Closing
Date (or other evidence satisfactory to Lender).
SECTION 9. BORROWER'S NEGATIVE COVENANTS.
Except as contemplated by this Agreement, the Servicing
Agreement or the Contribution and Sale Agreement, until full, complete
and indefeasible payment and performance of the Obligations, unless
Lender shall otherwise consent in writing, Borrower covenants and
agrees as follows:
9.1 Liens; Negative Pledges; and Encumbrances. Borrower
shall not create, incur, assume or suffer to exist any Lien of any
nature upon or with respect to any of the Collateral, whether now or
hereafter owned, leased or acquired, except for Permitted Liens.
9.2 Indebtedness and Guarantees. Borrower shall not
create, incur, assume or suffer to exist any Indebtedness, and shall
not guarantee (directly or indirectly), endorse or otherwise become
contingently liable (directly or indirectly) for the obligations of
any other Person, other than (a) trade payables and expense accruals
in connection with its operations in the normal course of business,
(b) Obligations to Lender arising under this Agreement and the other
Loan Documents, (c) in connection with the Swap Agreement and (d)
pursuant to the Pooling and Servicing Agreement, dated as of October
6, 1995, or as permitted thereunder. Borrower shall not guarantee
(directly or indirectly), endorse or otherwise become contingently
liable (directly or indirectly) for the obligations of any other
Person.
9.3 Amendments of Charter Documents; Conduct of Business;
No Merger. Borrower shall not amend its certificate of incorporation
or bylaws and shall conduct its business within the limitations set
forth in its certificate of incorporation. Borrower shall not merge,
consolidate or transfer substantially all of its assets to any Person.
9.4 No Use of Lender's Name. Borrower shall not use or
authorize others to use Lender's name or marks in any publication or
medium, including, without limitation, any prospectus, without
Lender's advance written authorization.
SECTION 10. GRANTS OF SECURITY INTEREST; THE COLLATERAL.
10.1 Security Interest.
As collateral security for the prompt, complete and
indefeasible payment and performance of (a) the entire principal
amount of and interest accrued on the Loan, (b) all fees payable to
Lender hereunder, including, without limitation, any and all
commitment fees, agent fees and attorneys' fees and any and all other
fees, expenses, costs or other sums chargeable to Borrower under any
of the Loan Documents, (c) all other amounts and other obligations of
Borrower to Lender arising under this Agreement or any other Loan
Documents and (d) all covenants and duties regarding such amounts, of
any kind or nature, arising under any of the Loan Documents
(collectively, the "Obligations"), Borrower hereby assigns, pledges
and grants to Lender a lien on and security interest in all of
Borrower's right, title and interest in and to (but none of its
obligations under) the following property, whether now existing or
owned or hereafter arising or acquired by Borrower (collectively, the
"Collateral"):
(1) the Leases and all amounts due or to become due
thereunder after the related Cut-Off Date and all Collections;
(2) the related Equipment (other than any licensed products
that may accompany any of the Equipment);
(3) the related Lease Files;
(4) the Collection Account, all amounts on deposit therein
from time to time, and any investments thereof and earnings
thereon;
(5) the Contribution and Sale Agreement, including, but not
limited to, the obligation of Trans Leasing to repurchase Leases
under certain circumstances, but excluding the right to purchase
or receive contributions of additional leases;
(6) the Servicing Agreement;
(7) the Swap Agreement, and all payments thereunder;
(8) the Insurance Policies and any Insurance Proceeds
related to the Leases; and
(9) all income or proceeds of the foregoing or relating
thereto.
The assignment under this Section 10.1 does not constitute
and is not intended to result in a creation or an assumption by Lender
of any obligation of Borrower, or any other Person in connection with
the Collateral or under any agreement or instrument relating thereto.
Anything herein to the contrary notwithstanding, (a) Borrower shall
remain liable under the Leases to the extent set forth therein to
perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by
Lender of any of its rights in the Collateral shall not release
Borrower from any of its duties or obligations under the Leases and
(c) Lender shall not have any obligations or liability under the
Leases by reason of this Agreement, nor shall Lender be obligated to
perform any of the obligations or duties of Borrower thereunder or to
take any action to collect or enforce any claim for payment assigned
hereunder.
10.2 Creation of Collection Account; Investments.
(a) Prior to the Closing Date, Borrower shall, or shall
cause the Servicer to (or if Borrower and the Servicer fail to do so,
Lender may) establish with Lender a segregated account with the
following designation: "First Union National Bank of North Carolina -
TL Lease Funding Corp. IV Collection Account."
(b) All amounts on deposit in the Collection Account shall,
upon the direction of the Servicer in accordance with Section 3.2 of
the Servicing Agreement, be invested in accordance with Section 3.2 of
the Servicing Agreement.
(c) The Collection Account shall be the property of Borrower and
shall be so treated for Income Tax purposes. All earnings on amounts on
deposit in the Collection Account shall be for the account of Borrower and
Borrower agrees that it shall include such earnings in its income for
Income Tax purposes and shall be liable for any taxes thereon.
10.3 Addition of Leases.
(a) Borrower may from time to time, prior to or on the
Transition Date, give Lender prior written notice of its intent to provide
Additional Leases as Collateral. Any Lease contributed to Borrower
pursuant to the Limited Recourse Agreement shall become Collateral
hereunder.
(b) Each Additional Lease shall be an Eligible Lease as of
the related Additional Lease Cut-Off Date, and the addition of
Additional Leases shall not cause any of the Specified Portfolio
Characteristics to be untrue as of such Additional Lease Cut-Off Date
or, if any of the Specified Portfolio Characteristics is untrue as of
immediately prior to such Additional Lease Cut-Off Date, increase the
amount by which any Specified Portfolio Characteristic is untrue.
(c) Prior to any addition of Leases pursuant to this
Section 10.3, Lender shall have received the following:
(1) an Additional Lease Transfer Agreement providing for
the unconditional contribution and sale of the Additional Leases
and related Equipment to Borrower and an amended List of Leases
reflecting the addition of the Additional Leases; and
(2) a certificate of a Responsible Officer of Borrower to
the effect that the requirements set forth in Sections 8.1(b) and
(c) have been satisfied.
10.4 Substitution of Leases.
(a) Subject to the provisions of Section 10.4(b) through
(d), after the Transition Date Borrower may substitute a Substitute
Lease for a Lease that (i) becomes a Defaulted Lease or an Early
Termination Lease, or (ii) is the subject of a Warranty Event.
(b) Each Substitute Lease shall be an Eligible Lease as of
the related Substitute Lease Cut-Off Date, and no substitution
pursuant to Section 10.4(a) shall cause any of the Specified Portfolio
Characteristic to be untrue as of such Substitute Lease Cut-Off Date
or, if any of the Specified Portfolio Characteristics is untrue as of
immediately prior to such Substitute Lease Cut-Off Date, increase the
amount by which any Specified Portfolio Characteristic is untrue.
(c) Prior to any substitution pursuant to Section 10.4(a),
Lender shall have the received the following:
(1) an Additional Lease Transfer Agreement providing for
the unconditional contribution or sale of the Substitute Leases
and related Equipment to Borrower and an amended List of Leases
reflecting the substitution; and
(2) a certificate of a Responsible Officer of Borrower to
the effect that the requirements set forth in Section 10.4 have
been satisfied.
(d) No substitutions under Section 10.4(a) shall occur on
any Substitution Date if:
(1) on a cumulative basis from the Transition Date, the sum
of the Discounted Lease Balances (as of the related Substitution
Cut-Off Date) of Leases substituted for Defaulted Leases would
exceed ten percent (10%) of the Aggregate Discounted Lease
Balance as of the Transition Date;
(2) on a cumulative basis from the Transition Date, the sum
of the Discounted Lease Balances (as of the related Substitution
Cut-Off Date) of Leases substituted for Leases that are the
subject of a Warranty Event would exceed (5%) of the Aggregate
Discounted Lease Balance as of the Transition Date;
(3) as of the related Substitution Cut-Off Date, each
Substitute Lease and the related Equipment has a Discounted Lease
Balance not less than the Discounted Lease Balance of the Lease
being replaced; and
(4) as a result of all substitutions to be made on such
Substitution Date, the sum of the Scheduled Lease Payments on all
Leases due in any Collection Period prior to the Collection
Period in which the Anticipated Payoff Date occurs would be less
than the amount set forth for the related Payment Date in the
column of the Payment Schedule labelled "Aggregate Scheduled
Lease Payments" (a "Payment Deficiency"), or increase the amount
of such a Payment Deficiency.
10.5 Release of Liens. Lender's lien and security interest
in any Lease and the related Equipment shall be released upon (i) any
disposition of such Equipment in accordance with the Servicing
Agreement (including any sale to a Lessee exercising a purchase
option), and deposit of the proceeds of such sale in the Collection
Account as required pursuant to Section 3.3 of the Servicing
Agreement, or (ii) any purchase of such Lease and related Equipment by
Trans Leasing pursuant to the Contribution and Sale Agreement or the
Servicer pursuant to the Servicing Agreement, (iii) the substitution
of a Substitute Lease therefor as contemplated by Section 10.4, (iv)
the substitution or replacement of any unit of Equipment as
contemplated in Section 2.1(c) of the Servicing Agreement, or (v)
termination of this Agreement. In connection with any such
disposition, purchase, substitution, replacement or termination,
Lender will execute and deliver to the Servicer any assignments, bills
of sale, termination statements and any other releases and instruments
as the Servicer may request to in order to effect such release.
SECTION 11. LIMITATION ON LIABILITY. The principal and
interest on the Loan and other Obligations (including the payment of
expenses, amounts due under Section 3.3 and indemnification pursuant
to Sections 6.2 or 15) shall be limited to and payable only out of the
Collateral, and Lender (and any assignee or transferee of Lender)
shall have no recourse against Borrower for any deficiency in the
payment of such principal or interest or other Obligations and Lender
(and any assignee or transferee of Lender) shall look solely to the
Collateral for the payment of all principal and accrued interest and
other Obligations due and to become due hereunder and shall not look
to any other Property of Borrower in respect of the Obligations and
the Obligations shall not constitute a claim against Borrower in the
event the Collateral is insufficient to pay the Obligations in full;
provided, however, that nothing contained in this paragraph shall (x)
impair the validity of the indebtedness evidenced by the Note, (y) in
any way affect or impair the interest of Lender in any Collateral or
the right of Lender to exercise its rights and remedies with respect
to the Collateral pursuant to Section 14.2 and (z) in any way affect
or impair the rights of Lender under the Limited Recourse Agreement.
No provision of this Agreement shall relieve Borrower from or cause
Lender to be liable for the obligations of Borrower under any Lease.
It is further understood that a repurchase of a Lease as described in
Section 3.03 of the Servicing Agreement shall be the sole remedy for a
breach of a representation or warranty with respect to any Lease as
provided in such Section 3.03.
SECTION 12. CONDITIONS PRECEDENT TO ALL REVOLVING LOANS.
The obligation of Lender to make any Revolving Loan (other
than a Revolving Loan under Section 3.1(f) or 3.2(b)), is subject to
the satisfaction of each of the following conditions precedent, and
each request for such Revolving Loan shall be deemed a certification
to Lender that such conditions have been satisfied:
12.1 Notice. Lender shall have received timely notice of
such Revolving Loan and such other documents required by Section 3.1
or 3.2.
12.2 Default. Before and after giving effect to such
Revolving Loan, no Event of Default, Potential Event of Default or
Early Amortization Event shall have occurred and be continuing.
12.3 Warranties. Before and after giving effect to such
Revolving Loan, the representations and warranties in Section 7 shall
be true and correct in all material respects as though made on the
date of such Revolving Loan, and the Asset Base Certificate or
Addition Certificate related to such request for such Revolving Loan
shall be properly prepared and accurate.
12.4 Additional Lease Transfer Agreements. Lender shall
have received any previously undelivered amendments to the List of
Leases reflecting the addition of Eligible Leases to the Collateral in
accordance with the provisions of Section 10.3, and the Additional
Lease Transfer Agreements pursuant to which such amendment was made.
SECTION 13. CONDITIONS PRECEDENT TO INITIAL REVOLVING LOAN.
The obligation of Lender to make its initial Revolving Loan
hereunder is subject to the satisfaction of the condition precedent,
in addition to the applicable conditions precedent set forth in
Section 12 above, that Borrower shall have delivered to Lender all of
the following, each duly executed and dated the date of the initial
Revolving Loan, in form and substance reasonably satisfactory to
Lender:
13.1 Note. The Note.
13.2 Other Agreements and Financing Statements. (a) The
Contribution and Sale Agreement in the form of Exhibit E hereto, the
Servicing Agreement in the form of Exhibit F hereto and the Limited
Recourse Agreement of Trans Leasing in the form of Exhibit G hereto,
and (b) acknowledgment copies (or other evidence of filing
satisfactory to Lender) of financing statements (i) filed with the
Secretary of State of Illinois naming Trans Leasing as debtor,
Borrower as secured party, Lender as assignee and the Leases as
Collateral and (ii) filed with the Secretary of States of Illinois and
Delaware naming Borrower as debtor, Lender as secured party and the
Leases as Collateral.
13.3 Resolutions.
(a) A copy, duly certified by the secretary or an assistant
secretary of Borrower, of (i) the resolutions of Borrower's Board of
Directors authorizing or ratifying the execution and delivery of this
Agreement, the Note and the other Loan Documents to which it is a
party and authorizing the borrowings hereunder, (ii) all documents
evidencing other necessary corporate action, and (iii) all approvals
or consents, if any, required with respect to thereto.
(b) A copy, duly certified by the secretary or an assistant
secretary of Trans Leasing, of (i) the resolutions of the Trans
Leasing's Board of Directors authorizing or ratifying the execution
and delivery of the Contribution and Sale Agreement, the Servicing
Agreement and the Limited Recourse Agreement and authorizing the
borrowings hereunder, (ii) all documents evidencing other necessary
corporate action, and (iii) all approvals or consents, if any, with
respect to this Agreement, the Note and the other Loan Documents.
13.4 Incumbency Certificate.
(a) A certificate of the secretary or an assistant
secretary of Trans Leasing certifying the names of Trans Leasing's
officers authorized to sign the Limited Recourse Agreement and the
other Loan Documents to which it is a party, together with the true
signatures of such officers.
(b) A certificate of the secretary or an assistant secretary of
Borrower certifying the names of Borrower's officers authorized to sign
this Agreement, the Note and the other Loan Documents to which it is a
party, together with the true signatures of such officers.
13.5 By-Laws.
(a) A copy, certified as true and correct by the secretary
or an assistant secretary of Borrower, of Borrower's By-Laws.
(b) A copy, certified as true and correct by the secretary
or an assistant secretary of Trans Leasing, of Trans Leasing's By-Laws.
13.6 Certificate of Incorporation.
(a) A copy, certified by the Secretary of State of
Delaware, of Borrower's Certificate of Incorporation, together with
all amendments thereto.
(b) A copy, certified by the Secretary of State of
Delaware, of Trans Leasing's Certificate of Incorporation, together
with all amendments thereto.
13.7 Good Standing.
(a) A current Good Standing Certificate issued by the
Secretary of State of Delaware and each other state where Borrower is
qualified to do business.
(b) A current Good Standing Certificate issued by the
Secretary of State of Delaware and each other state where Trans
Leasing is qualified to do business.
13.8 Opinion. Opinions of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to
Borrower, addressed to Lender in substantially the form of Exhibit F-1, F-2
and F-3 hereto, together with copies of any officer's
certificate or legal opinion of other counsel or law firm specifically
identified and expressly relied upon by such counsel.
13.9 Asset Base Certificate. A duly executed Asset Base
Certificate, prepared as of the Cut-Off Date.
SECTION 14. EVENTS OF DEFAULT AND REMEDIES.
14.1 Events of Default. The occurrence of any one or more
of the following shall constitute an Event of Default:
(a) Failure to Deliver Term Loan Documentation. Borrower
fails to deliver to Lender any of the documents required pursuant to
Section 3.2 at or prior to the time such delivery is required pursuant
to Section 3.2;
(b) Failure to Perform. Borrower fails or neglects to
perform, keep or observe in any material respect any of the covenants
contained in this Agreement or in any other Loan Document within
thirty (30) calendar days after the earlier of (i) the date on which
written demand that such failure be remedied is given to Borrower by
Lender or (ii) the date on which a Responsible Officer of Borrower
becomes aware of such failure or neglect;
(c) Warranty. Any warranty made by Borrower herein is
untrue in any material respect when made or deemed made; or any
schedule, statement, report, notice or certificate specifically
required herein to be furnished by Borrower to Lender is untrue in any
material respect on the date as of which the facts set forth therein
are stated or certified; or any certification made or deemed made by
Borrower to Lender herein is untrue in any material respect on or as
of the date made or deemed made;
(d) Insolvency. Borrower becomes insolvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as
they mature, or applies for, consents to, or acquiesces in, the
appointment of a trustee, receiver or other custodian for Borrower or
for a substantial part of the property of Borrower, or makes a general
assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for Borrower or for a substantial part of the
property of Borrower and is not discharged within 90 days; or any
bankruptcy, reorganization, debt arrangement or other proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation
proceeding, is instituted by or against Borrower and, if instituted
against Borrower, is consented to or acquiesced in by Borrower or
remains for 90 days undismissed; or any warrant of attachment or
similar legal process is issued against any substantial part of the
property of Borrower which is not released within 90 days of service;
or
(e) Failure to Repay upon Sale of Other Notes. Borrower
fails to repay the outstanding principal balance of the Loan, together
with all accrued and unpaid principal, interest, fees and other
amounts then due and owing hereunder upon the sale to third parties of
notes secured by (or other instruments representing interests in) any
or all of the Collateral.
14.2 Waiver of Default. An Event of Default may be waived
only with the written consent of Lender. Any Event of Default so
waived shall be deemed to have been cured and not to be continuing;
but no such waiver shall be deemed a continuing waiver or shall extend
to or affect any subsequent like default or impair any rights arising
from any such subsequent like default.
14.3 Remedies.
(a) Upon the occurrence and continuance of any Event of
Default, Lender shall have no further obligation to make any Revolving
Loans hereunder.
(b) If an Event of Default has occurred and is continuing,
Lender may, at its option, subject to Section 16.18, do any one or
more of the following:
(i) Declare all or any of the Obligations of Borrower
to be immediately due and payable, and upon such declaration such
obligations so declared due and payable shall immediately become
due and payable; provided, that if such Event of Default is under
clause (d) of Section 14.1, then all of the Obligations shall
become immediately due and payable forthwith without the
requirement of any notice or other action by Lender;
(ii) In lieu of or in addition to exercising any other
power hereby granted, may upon notice to Borrower, proceed by an
action or actions in equity or at law for the seizure and sale of the
Collateral or any part thereof, for the specific performance of
any covenant or agreement herein contained or in aid of the
execution of any power herein granted, for the foreclosure or
sale of the Collateral or any part thereof under the judgment or
decree of any court of competent jurisdiction, for the
appointment of a receiver pending any foreclosure hereunder or
the sale of the Collateral or any part thereof or for the
enforcement of any other appropriate equitable or legal remedy;
and upon the commencement of judicial proceedings by Lender to
enforce any right under this Agreement, Lender shall be entitled
as a matter of right against Borrower to such appointment of a
receiver, without regard to the adequacy of the security by
virtue of this Agreement or any other collateral or to the
solvency of Borrower; or
(iii) Subject to the rights of the Lessees under the
Leases,exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default
under the UCC, whether or not the UCC applies to the affected
Collateral, and also may (i) require Borrower to, and Borrower
hereby agrees that at its expense and upon request of Lender it
shall forthwith, assemble all or part of the Lease Files and
Equipment (related to any Early Termination Lease, Expired Lease
or Defaulted Lease) that is in possession of Borrower or its
agent as directed by Lender and make it available to Lender at
such places reasonably convenient to all parties as Lender may
designate and (ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more sales at public
or private sales, at any of Lender's offices or elsewhere, for
cash, on credit or for future delivery, and at such price or
prices and upon such other terms as Lender may deem commercially
reasonable. Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days' notice to
Borrower of the time and place of any public sale or the time
after which any private sale is to be made shall constitute
reasonable notification. Lender shall not be obligated to make
any sale of Collateral regardless of notice of sale having been
given. Lender may adjourn any public or private sale from time
to time by public announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at
the tune and place to be which it was so adjourned.
(c) All cash proceeds received by Lender in respect of any
sale of, collection from or other realization upon all or any part of
the Collateral shall be applied as follows:
(i) First, to the payment of all costs and expenses
incident to the enforcement of this Agreement or the protection
of the Collateral, including but not limited to reasonable
compensation to the agents, contractors and attorneys of Lender;
(ii) Second, to the payment of all other Obligations,
first to interest (including interest on overdue amounts) and then to
principal; and
(iii) Third, the remainder, if any, to Borrower or to
whomever may be lawfully entitled to receive such remainder.
(d) Lender shall have the right to become the purchaser at
any public sale made pursuant to the provisions of this Section 14.3 and
shall have the right to credit against the amount of the bid made therefor
the amount payable to Lender out of the net proceeds of such sale.
(e) Any sale of the Collateral or any part thereof pursuant
to the provisions of this Section 14.3 shall operate to divest all
right, title, interest, claim and demand of Borrower in and to the
Property sold and shall be a perpetual bar against Borrower.
Nevertheless, if requested by Lender so to do, Borrower shall join in
the execution, acknowledgement and delivery of all proper conveyances,
assignments and transfers of the Property so sold. It shall not be
necessary for Lender to have physically present or constructively in
its possession any of the Collateral at any such sale, and Borrower
shall deliver all of the Lease Files and Equipment (related to any
Early Termination Lease, Expired Lease or Defaulted Lease) that is in
possession of Borrower or its agent to the purchaser at such sale on
the date of sale and, if it should be impossible or unpracticable then
to take actual delivery of the Lease Files and Equipment (related to
any Early Termination Lease, Expired Lease or Defaulted Lease) that is
in possession of Borrower or its agent, the title and right of
possession to all of the Collateral shall pass to the purchaser at
such sale as completely as if the same had been actually present and
delivered. Borrower agrees that if Borrower retains possession of the
Property or any part thereof subsequent to such sale, Borrower shall
be considered a tenant at sufferance of the purchaser and shall, if
Borrower remains in possession after demand to remove, be guilty of
forceful detainer and be subject to eviction and removal, forcible or
otherwise.
(f) Subject to any requirements of applicable law, Borrower
agrees that neither Borrower nor any of its Affiliates under its
control shall at any time have or assert any right, under any law
pertaining to the marshalling of assets, the sale of Property in the
inverse order of alienation, the administration of estates of
decedents, appraisement, valuation, stay, extension or redemption now
or hereafter in force in order to prevent or hinder the rights of
Lender or any purchaser of the Collateral or any part thereof under
this Agreement, and Borrower, to the extent permitted by applicable
law, hereby waives the benefit of all such laws.
(g) Upon any sale made under the powers of sale herein
granted and conferred, the receipt of Lender shall be sufficient
discharge to the purchaser or purchasers at any sale for the purchase
money, and such purchaser or purchasers and the heirs, devisees,
personal representatives, successors and assigns thereof shall not,
after paying such purchase money and receiving such receipt of Lender,
be obliged to see to the application thereof or be in any wise
answerable for any loss, misapplication or nonapplication thereof.
(h) If Borrower fails to perform any agreement contained
herein or under any Loan Document, then Lender may perform, or cause
performance of, such agreement, and the expenses of Lender incurred in
connection therewith shall constitute additional Obligations and shall
be payable by Borrower under Section 15.
14.4 Rights and Remedies Cumulative. The enumeration of the
rights and remedies of Lender set forth in this Agreement is not
intended to be exhaustive and the exercise by Lender of any right or
remedy shall not preclude the exercise of any other rights or
remedies, all of which shall be cumulative, and shall be in addition
to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by
suit or otherwise. No delay or failure to take action on the part of
Lender in exercising any right, power or privilege shall operate as a
waiver hereof, nor shall any single or partial exercise of any such
right, power or privilege preclude other or further exercise thereof
or the exercise of any other right, power or privilege or shall be
construed to be a waiver of any Event of Default of Potential Event of
Default. No course of dealing between Borrower and Lender or their
respective agents or employees. shall be effective to change, modify
or discharge any provision of this Agreement or any of the Loan
Documents or to constitute a waiver of any Event of Default or
Potential Event of Default.
SECTION 15. EXPENSES AND INDEMNITEES.
15.1 Expenses. Borrower shall upon demand and presentment
of a statement therefor reasonably satisfactory to Borrower, pay to
Lender the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and any experts and
agents, which Lender may reasonably incur in connection with (i) the
preparation, execution and delivery of this Agreement and the other
Loan Documents, (ii) the administration of this Agreement, (iii) the
custody, preservation, use or operation of, sale of, collection from
or other realization upon any of the Collateral, (iv) the exercise or
enforcement of any of the rights of Lender hereunder or any Loan
Document or (v) the failure by Borrower to perform or observe any of
the provisions hereof.
15.2 Indemnification. (a) General Indemnity. Borrower
shall pay, indemnify, and hold Lender and its employees (each, an
"Indemnified Person") harmless from and against any and all
liabilities, obligations, losses and damages (including reasonable
attorney's fees) arising directly from any investigation, litigation
or proceeding (including any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, dissolution or relief of
debtors or any appellate proceeding) related to this Agreement or the
Loan, whether or not any Indemnified Person is a party hereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided,
that Borrower shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities arising from the gross
negligence, willful misconduct or violation of the Loan Documents by
any Indemnified Person.
(b) Procedures for Suits. If a claim is made for which a
party seeks indemnification hereunder, the indemnified party and any
counsel retained by it shall consult with the indemnifying party on
all material issues and matters with respect thereto and the
indemnifying party will have no liability hereunder with respect to
any claim if the indemnifying party has not consented (which consent
shall not be unreasonably withheld) to the resolution or handling of
any such matter or issue, including, without limitation, any settlement
made without the indemnifying party's prior written consent.
(c) Survival; Defense. The obligations in this Section
15.2 shall survive the termination of the Loan Documents and payment
of all other Obligations. At the election of Borrower, Borrower shall
defend such Indemnified Person using legal counsel satisfactory to
such Indemnified Person in such Person's sole discretion, at the sole
cost and expense of Borrower. All amounts owing under this Section
15.2 shall be paid within thirty (30) days after written demand
therefor, including information as to the calculation thereof
reasonably satisfactory to Borrower.
SECTION 16. MISCELLANEOUS.
16.1 Survival. All covenants, agreements,
representations and warranties made herein shall survive the execution
and delivery of the Documents and the making of the Loan hereunder.
16.2 No Waiver by Lender. No failure or delay on the part
of Lender in the exercise of any power, right or privilege under this
Agreement, the Note or any of the other Loan Documents shall impair
such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.
16.3 Notices. Except as otherwise provided in this
Agreement, any notice or other communication herein required or
permitted to be given shall be in writing and may be delivered in
person, with receipt acknowledged, or sent by telecopy or by United
States mail, registered or certified, return receipt requested, or by
Federal Express or other nationally recognized overnight courier
service, postage prepaid and confirmation of receipt requested, and
addressed as set forth on the signature pages to this Agreement or at
such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived
in writing by the party entitled to receive such notice. Every
notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly given or
served on the date on which the same shall have been personally
delivered, with receipt acknowledged, or sent by telecopy, three (3)
Business Days after the same shall have been deposited in the United
States mail or on the next succeeding Business Day if the same has
been sent by Federal Express or other nationally recognized overnight
courier service. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication
to the persons designated above to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
16.4 Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose or
be given any substantive effect.
16.5 Severability. Whenever possible, each provision of
this Agreement, the Note and each of the other Loan Documents shall be
interpreted in such a manner as to be valid, legal and enforceable
under the applicable law of any jurisdiction. Without limiting the
generality of the foregoing sentence, in case any provision of this
Agreement, the Note or any of the other Loan Documents shall be
invalid, illegal or unenforceable under the applicable law of any
jurisdiction, the validity, legality and enforceability of the
remaining provisions, or of such provision in any other jurisdiction,
shall not in any way be affected or impaired thereby.
16.6 Entire Agreement; Construction; Amendments and Waivers.
(a) This Agreement, the Note and each of the other Loan
Documents dated as of the date hereof, taken together, constitute and
contain the entire agreement between Borrower and Lender and supersede
any and all prior agreements, negotiations, correspondence,
understandings and communications between the parties, whether written
or oral, respecting the subject matter hereof.
(b) This Agreement is the result of negotiations between
and has been reviewed by each of Borrower, Lender and their respective
counsel; accordingly, this Agreement shall be deemed to be the product
of the parties hereto, and no ambiguity shall be construed in favor of
or against Borrower or Lender. Borrower and Lender agree that they
intend the literal words of this Agreement and the other Loan
Documents and that no parol evidence shall be necessary or appropriate
to establish Borrower's or Lender's actual intentions.
(c) Any and all amendments, modifications, discharges or
waivers of, or consents to any departures from any provision of this
Agreement or of any of the other Loan Documents shall not be effective
unless set forth in a writing signed by Borrower and Lender. Any
waiver or consent with respect to any provision of the Loan Documents
shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Borrower in
any case shall entitle Borrower to any other or further notice or
demand in similar or other circumstances.
16.7 Reliance by Lender. All covenants, agreements,
representations and warranties made herein by Borrower shall,
notwithstanding any investigation by Lender be deemed to have been
relied upon by Lender.
16.8 Marshalling; Payments Set Aside. Lender shall be under
no obligation to ▇▇▇▇▇▇▇▇ any assets in favor of Borrower or any other
person or against or in payment of any or all of the Obligations. To
the extent that Borrower makes a payment or payments to Lender, or
Lender enforces its rights in the Collateral and such payment or
payments or the proceeds of such enforcement or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other
party under Title 11 of the United States Code or under any other
similar federal or state law, common law or equitable cause, then to
the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or
set-off had not occurred.
16.9 No Set-Offs by Borrower. All sums payable by Borrower
pursuant to this Agreement, the Note or any of the other Loan
Documents shall be payable without notice or demand and shall be
payable in United States Dollars without set-off or reduction of any
manner whatsoever.
16.10 Binding Effect, Assignment Transfer. This
Agreement, the Note and the other Loan Documents shall be binding upon
and shall inure to the benefit of the parties hereto and thereto and
their respective successors and assigns, except that Borrower may not
assign its rights hereunder or thereunder or any interest herein or
therein without the prior written consent of Lender and Lender may not
assign its rights hereunder prior to the Transition Date. After the
Transition Date, Lender shall (i) have the right to sell and assign to
any Person all or any portion of its interest under this Agreement,
the Note and the other Loan Documents and (ii) to grant any
participation or other interest herein or therein; provided, however,
that no such sale, assignment or participation grant shall result in
requiring registration under the Securities Act of 1933, as amended,
or qualification under any state securities law; and provided,
further, that after any such sale, assignment or participation, Lender
shall have the right, without the consent of any purchaser, assignee
or participant, to grant any consent, approval or waiver or take any
other action hereunder, or agree to any amendment hereof. Lender
shall not disclose to any Person (other than its directors, officers,
employees, auditors, legal counsel and other agents engaged in
connection with the transactions contemplated hereby, in each case to
the extent reasonably required to be disclosed to such Person in the
conduct of such Person's business) any information contained in the
List of Leases, the Lease Files or the Lease Management System or any
information furnished to it or obtained by it pursuant to this
Agreement; provided, that Lender may disclose such information (i)
which is or has become public (other than by reason of a breach of
this Section 16.10), (ii) as may be required under any applicable law
or regulation or (iii) in connection with any bona fide proposed sale,
assignment or participation to any Person permitted hereunder if such
Person has agreed in writing to be bound by this Section 16.10.
Lender (and each such other Person) will take such actions and abide
by such measures as are reasonably necessary to protect and maintain
the security and confidentiality of such information and, upon
reasonable request, will (to the extent permitted by law) inform the
Servicer and Borrower as to the identity and nature of all Persons to
whom any such information has been disclosed, the nature and substance
of the information so disclosed and the circumstances surrounding such
disclosure.
16.11 Counterparts. This Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number
of counterparts, and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
16.12 Equitable Relief. Borrower recognizes that, in
the event Borrower fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, the Note or any of
the other Loan Documents, any remedy at law may prove to be inadequate
relief to Lender; therefore, Borrower agrees that Lender shall be
entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
16.13 Governing Law. Except as otherwise expressly
provided in any of the Loan Documents, in all respects, including all
matters of construction, validity and performance, this Agreement and
the Obligations arising hereunder shall be governed by, and construed
and enforced in accordance with, the laws of the State of Illinois
applicable to contracts made and performed in such state, without
regard to the principles thereof regarding conflict of laws, and any
applicable laws of the United States of America.
16.14 Consent to Jurisdiction. Borrower and Lender each
hereby irrevocably consents to the personal jurisdiction of the state
and federal courts located in Mecklenburg County, North Carolina, and
in ▇▇▇▇ County, Illinois, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Note
and the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations.
Borrower and Lender each hereby irrevocably consents to the service of
a summons and complaint and other process in any action, claim or
proceeding brought by Lender or Lender in connection with this
Agreement or the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and
obligations, on behalf of itself or its Property by registered mail or
personal delivery to the address described in Section 16.3.
16.15 Waiver of Jury Trial. LENDER AND BORROWER HEREBY
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT
TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.
16.16 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 as in effect on the date hereof;
(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.
(g) With respect to any Payment Date, the "related
Determination Date" and the "related Collection Period" will mean
the Determination preceding such Payment Date, and the
relationships among Determination Dates and Collection Periods
will be correlative of the foregoing relationships.
16.17 Termination. This Agreement shall terminate upon
the earlier of (i) the satisfaction and discharge of the Obligations
in full and (ii) the later of (a) the maturity of all Leases or (b)
the other liquidation of all Leases and Equipment.
16.18 No Petition Covenants. Notwithstanding any prior
termination of this Agreement or any other provision of this
Agreement, Lender shall not, prior to the date which is one year and
one day after the final distribution with respect to all notes,
certificates and other securities issued by the Borrower or any trust
formed by the Borrower which have been rated by any nationally
recognized statistical rating organization, acquiesce, petition or
otherwise invoke or cause the Borrower to invoke the process of any
court or government authority for the purpose of commencing or
sustaining a case against the Borrower under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Borrower or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of
the Borrower.
WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written
above.
TL LEASE FUNDING CORP. IV,
as Borrower
By___________________________
Printed Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President-Finance
Notice to be sent to:
TL Lease Funding Corp. IV
c/o The Corporation Trust Company
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With a copy to:
Trans Leasing International, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA,
as Lender
By:___________________________
Printed Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
Notice to be sent to:
First Union National Bank of North Carolina
One First Union Center TW-19
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone: 704/▇▇▇-▇▇▇▇
Facsimile: 704/374-3254
Exhibit A
REVOLVING CREDIT AND TERM LOAN NOTE
$35,000,000.00 Dated: November 28, 1995
FOR VALUE RECEIVED, TL Lease Funding Corp. IV ("Borrower"),
hereby promises to pay to First Union National Bank of North Carolina
("Lender"), the principal sum of Thirty-Five Million Dollars
($35,000,000.00) to the extent funds have been advanced by Lender to
Borrower pursuant to the Revolving Credit and Term Loan and Security
Agreement dated as of November 28, 1995 between Borrower and Lender
(the "Agreement") and remain outstanding. Any capitalized terms used
herein and not otherwise defined shall have the meanings set forth in
the Agreement. Principal and interest shall be due and payable on
this Note in accordance with the Agreement.
All payments under this Note shall be made by Borrower in
lawful money of the United States of America in immediately available
funds delivered to Lender as provided in the Agreement.
This Note is secured as provided in the Agreement, to which
reference is made as to the nature and extent of the security
("Collateral") for this Note, the rights of Lender, Borrower and any
holder of this Note with respect to the Collateral and the
acceleration of the maturity of this Note. To the extent provided in
the Agreement, the principal and interest payable on the Note and all
other Obligations under the Agreement are limited to, and payable only
out of, the Collateral. Borrower may prepay this Note, in whole or in
part, in the manner, to the extent, under the circumstances, and
subject to any additional payments provided for in the Agreement, and
not otherwise.
Except as expressly provided in the Agreement, Borrower
hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
This Note is the Note referred to in the Agreement. This
Note shall be construed in accordance with and governed by the laws of
the State of Illinois.
TL LEASE FUNDING CORP. IV
By: _________________________________
Title:
Exhibit B-1
Form of Notice of Borrowing
[Company's Letterhead]
________________, 199_
First Union Capital Markets Group
One First Union Center TW-19
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan and
Security Agreement dated as of November 28, 1995 (as the same may be
amended, supplemented or otherwise modified, the "Agreement") between
TL Lease Funding Corp. IV and First Union National Bank of North
Carolina. All terms used herein which are defined in the Agreement
shall have the same meaning herein as therein.
Pursuant to Section 3.1 [(b)]/[(c)] of the Agreement, this
Notice of Borrowing in respect of the Revolving Loans represents the
request of the undersigned to borrow on _____________, 1995 (the
"Borrowing Date") a Revolving Loan in an aggregate principal amount of
$___________. The proceeds of such Revolving Loan are to be deposited
on the Borrowing Date in the Borrower's Account in immediately
available funds.
[FOR DRAWS UNDER 3.1(b) USE THE FOLLOWING PARAGRAPH]
Attached hereto is an Addition Certificate indicating that Additional
Leases with an aggregate Lease Discounted Balance of $______ were
added to the Collateral on 199_ in accordance with Section 10.3 of the
Agreement. The undersigned hereby certifies that all of the
requirements of Section 10.3 of the Agreement and all of the
conditions precedent set forth in Section 12 of the Agreement have
been satisfied.
[FOR DRAWS UNDER 3.1(c) USE THE FOLLOWING PARAGRAPH] The
undersigned hereby certifies that as of the Borrowing Date (i) all of
the conditions precedent contained in Section 12 of the Agreement have
been satisfied and (ii) the aggregate amount of the outstanding
Revolving Loans (after giving effect to the Revolving Loan requested
hereunder) does not exceed the Asset Base as set forth in the attached
Asset Base Certificate dated as of _____________, 199_.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Notice of Borrowing as of this __ day of
______________, 199_.
TL LEASE FUNDING CORP. IV
By:_____________________________
Title:____________________________
Exhibit B-2
Form of Notice to Convert the Revolving Loans to the Term Loan
("Notice of Conversion")
[Company's Letterhead]
________________, 199_
First Union Capital Markets Group
One First Union Center TW-19
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan and
Security Agreement dated as of November 28, 1995 (as the same may be
amended, supplemented or otherwise modified, the "Agreement) between
TL Lease Funding Corp. IV and First Union National Bank of North
Carolina. All terms used herein which are defined in the Agreement
shall have the same meaning herein as therein.
Pursuant to Section 3.2 of the Agreement, this Notice of Conversion
represents the request of the undersigned to fix ____________, 199_
as the "Conversion Date" for purposes of the Agreement. The estimated
fixed rate of interest that will be payable by the Borrower under the
Swap Agreement is ____% per annum.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Notice of Conversion as of this ____ day of ________,
199_.
TL LEASE FUNDING CORP. IV
By:_______________________________
Title: ___________________________
Exhibit C
Form of Asset Base Certificate
[Company's Letterhead]
_______________, 199_
First Union Capital Markets Group
One First Union Center TW-19
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan and
Security Agreement dated as of November 28, 1995 (as the same may be
amended, supplemented or otherwise modified, the "Agreement") between
TL Lease Funding Corp. IV and First Union National Bank of North
Carolina. All terms used herein which are defined in the Agreement
shall have the same meaning herein as therein.
Pursuant to Section 3 and Section 8.1(a) of the Agreement,
the undersigned hereby certifies that the aggregate outstanding
principal balance of the Revolving Loans as of ____________, 199_ (the
"Determination Date") did not exceed the Asset Base. The related
calculations are set forth in Schedule 1 hereto.
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Asset Base Certificate as of this _____ day
of_________, 199_.
TL LEASE FUNDING CORP. IV
By: ________________________________
Title: _______________________________
Exhibit C (cont'd)
Form of Schedule 1 to Asset Base Certificate
Schedule 1
to
Asset Base Certificate
dated __________, 199_
A. Aggregate Discounted Lease Balance
(i) Total remaining Scheduled Lease
Payments of Eligible Leases $_________________
(ii) Discount Rate _________________%
(iii) Present value of Item (i) using
the Discount Rate in Item (ii)
("Aggregate Discounted Lease
Balance") $_________________
B. Collection Account Balance $_________________
C. Asset Base (sum of (1) Item A (iii)
multiplied by the Advance Rate and (2)
Item B) $_________________
D. Outstanding Principal Balance of the
Loans $_________________
E. Excess Asset Base (Shortfall)
(i) Borrowing Availability (excess of
Item C over Item D) $_________________
(ii) Asset Base Shortfall (excess of Item
D over Item C) $_________________
F. Advance Rate
(i) Effective Advance Rate (Item D minus
Item B divided by Item A (iii)) _________________%
(ii) Maximum Advance Rate 93.0%
Exhibit D
Form of Payment Schedule
Aggregate
Scheduled Servicing Payment due Schedule
Payment Date Lease Payments Fee to Swap Company PrincipalPayment
------------ -------------- --------- --------------- ----------------
Exhibit E
Form of Contribution and Sale Agreement
Exhibit F
Form of Servicing Agreement
Exhibit G
Form of Limited Recourse Agreement
Exhibit H
Form of K&E Opinion
Exhibit I
Account Information
Servicer's Account: Bank of America, Illinois
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: ▇▇▇▇▇▇▇
Borrower's Account: Borrower directs that all amounts payable to
Borrower's Account shall be paid by depositing such amount in the
Servicer's Account for application as directed by Borrower to the
Servicer.
Exhibit J
Form of Addition Notice
[Company's Letterhead]
_____________, 199_
First Union Capital Markets Group
One First Union Center TW-19
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan and
Security Agreement dated as of November 28, 1995 (as the same may be
amended, supplemented or otherwise modified, the "Agreement") between
TL Lease Funding Corp. IV and First Union National Bank of North
Carolina. All terms used herein which are defined in the Agreement
shall have the same meaning herein as therein.
Pursuant to Section 3.1(b) of the Agreement, Borrower hereby
certifies that on ______________ it acquired Additional Leases from
Trans Leasing with an aggregate Discounted Lease Balance as of the
related Cut-Off Date (calculated using the Discount Rate for the
related Addition Date) equal to $___________ pursuant to an Additional
Lease Transfer Agreement.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this Notice of Borrowing as of this ___, day of ___________ 199_.
TL LEASE FUNDING CORP. IV
By:________________________________
Title:_____________________________