36
JSO\29833-10\166.4
_________________________________________________________________
CONTRIBUTION AND SALE AGREEMENT
______________________
between
TRANS LEASING INTERNATIONAL, INC.
and
TL LEASE FUNDING CORP. IV
_______________________
Dated as of
January 21, 1997
_________________________________________________________________
TABLE OF CONTENTS
PAGE
ARTICLE IDEFINITIONS 1
1.01 Definitions 1
1.02 Other Definitional Provisions 6
ARTICLE IICONTRIBUTION OF CONTRIBUTED ASSETS; SALE OF PURCHASED
ASSETS; 7
2.01 [Reserved.] 7
2.02 Contribution of Contributed Assets and
Sale of Purchased Assets 7
2.03 Contribution or Sale of Additional Assets 8
2.04 Custody of Lease Files 10
ARTICLE IIIREPRESENTATIONS AND WARRANTIES 10
3.01 Representations and Warranties of
Trans Leasing 10
3.02 Representations and Warranties of TLFC 16
3.03 Purchase of Leases and Equipment by
Trans Leasing 18
3.04 Indemnification 18
ARTICLE IVCOVENANTS OF TRANS LEASING AND TLFC 19
4.01 Trans Leasing Covenants 19
4.02 TLFC Covenants 22
4.03 Grant of Security Interest 22
ARTICLE VCONDITIONS PRECEDENT 22
5.01 Conditions to TLFC's Obligations 22
5.02 Conditions to Trans Leasing's
Obligations 23
ARTICLE VITERMINATION 24
6.01 Termination 24
6.02 Effect of Termination 24
ARTICLE VIIMISCELLANEOUS PROVISIONS 24
7.01 Amendment 24
7.02 Governing Law 24
7.03 Notice 24
7.04 Severability of Provisions 26
7.05 Assignment 26
7.06 No Waiver; Cumulative Remedies 26
7.07 Counterparts 26
7.08 Binding Effect; Third-Party
Beneficiaries 26
7.09 Merger and Integration 26
7.10 Headings 27
7.11 Schedules and Exhibits 27
7.12 No Petition Covenants 27
EXHIBITS
Exhibit A Form of Assignment of Contributed Assets
Exhibit B Form of Assignment of Purchased Assets
Exhibit C Form of Assignment of Additional Assets
Exhibit D Forms of Lease
SCHEDULES
Contributed Lease Schedule
Purchased Lease Schedule
Lease Criteria Schedule
Specified Portfolio Characteristics Schedule
CONTRIBUTION AND SALE AGREEMENT
THIS CONTRIBUTION AND SALE AGREEMENT, dated as of
January 21, 1997 (this "Agreement"), is entered into between
Trans Leasing International, Inc. ("Trans Leasing"), a Delaware
corporation, and TL Lease Funding Corp. IV ("TLFC"), a Delaware
corporation.
Trans Leasing in the ordinary course of its business
originates and acquires equipment and other leases in the United
States.
Trans Leasing desires, on the date hereof, to transfer
the Purchased Leases, the Contributed Leases, its interests in
the related Equipment and other assets (as such capitalized terms
are defined pursuant to Article I below) to TLFC upon the terms
and conditions set forth in this Agreement.
It is contemplated that, from time to time after the
date hereof, Trans Leasing and TLFC may agree that Trans Leasing
will transfer additional Leases, its interests in the related
Equipment and other assets to TLFC upon the terms and conditions
set forth in this Agreement.
It is contemplated that, following such transfers,
Trans Leasing, in its capacity as Servicer pursuant to the
Servicing Agreement, will continue to administer and service the
Leases and Equipment transferred to TLFC.
In consideration of the mutual covenants set forth in
this Agreement, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, Trans
Leasing and TLFC agree as follows:
ARTICLE I
DEFINITIONS
I.1 Definitions. Whenever used in this Agreement,
the following words and phrases will have the following meanings:
"Addition Date" has the meaning set forth in Section
2.03(a) of this Agreement.
"Additional Assets" means all right, title and interest
of Trans Leasing in, to, and under (i) the Additional Leases
(including all of Trans Leasing's obligations under the
Additional Leases) and all monies due or to become due thereunder
after the related Additional Cut-Off Date, (ii) the related
Equipment (other than any licensed products that may accompany
any of such Equipment), (iii) the Lease Files for the Additional
Leases, (iv) any Insurance Policies (including all of Trans
Leasing's obligations thereunder) and the related Insurance
Proceeds with respect to the Additional Leases and (v) all income
and proceeds relating to the foregoing.
"Additional Lease Schedule" has the meaning set forth
in Section 2.03(a) of this Agreement.
"Additional 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 Leases" means the Leases listed on any
Additional Lease Schedule delivered by Trans Leasing to TLFC
pursuant to Section 2.03(a).
"Assets" means the Purchased Assets, the Contributed
Assets and any Additional Assets.
"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.
"Closing Date" means January 21, 1997.
"Common Stock" means 1,000 shares of the common stock
of TLFC, par value $0.01 per share, constituting all of its
authorized capital stock.
"Contributed Assets" means all right, title and
interest of Trans Leasing in, to, and under (i) the Contributed
Leases (including all of Trans Leasing's obligations under the
Contributed Leases) and all monies due or to become due
thereunder after the Initial Cut-Off Date, (ii) the related
Equipment (other than any licensed products that may accompany
any of such Equipment), (iii) the Lease Files for the Contributed
Leases, (iv) any Insurance Policies (including all of Trans
Leasing's obligations thereunder) and the related Insurance
Proceeds with respect to the Contributed Leases and (v) all
income and proceeds relating to the foregoing.
"Contributed Leases" means the Leases listed on the
Contributed Lease Schedule attached hereto.
"Credit Agreement" means the Revolving Credit and Term
Loan and Security Agreement between TLFC and the Lender, dated as
of December 20, 1996, together with all amendments, restatements,
supplements and modifications thereof or thereto.
"Debt Agreement" means, at any time, any then existing
agreement pursuant to which TLFC has borrowed money, pledged its
interest in the Assets and assigned its rights hereunder (as such
agreement is then in effect), and shall initially refer to the
Credit Agreement.
"Equipment" means the assets leased to a Lessee
pursuant to any Lease.
"Excluded Amounts" means any payments received from or
on behalf of 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.
"Filing Locations" means the States of Alabama,
Arizona, California, Delaware, Florida, Georgia, Illinois,
Indiana, Massachusetts, Michigan, New Jersey, New York, North
Carolina, Ohio, Pensylvania, Texas and Virgina.
"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.
"Initial Cut-Off Date" means January 17, 1997.
"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.
"Lease" means each agreement, including, as applicable,
schedules, subschedules, summary schedules, supplements and
amendments to a master lease, pursuant to which (immediately
prior to the acquisition thereof by TLFC) Trans Leasing, as
lessor, leases specified assets to a Lessee at a specified
monthly or quarterly rental, and which is identified in the Lease
Schedule, including all Contributed Leases, Purchased Leases and
Additional Leases; provided that from and after the date on which
a Lease is purchased by Trans Leasing pursuant to Section 3.03 of
this Agreement or a Lease is otherwise purchased by Trans
Leasing, such Lease shall no longer be a Lease for purposes of
this Agreement.
"Lease File" means, with respect to any Lease, the
Lease and all other documents relating to such Lease in the
possession of Trans Leasing or held by the Servicer under the
Servicing Agreement, as the context requires.
"Lease Management System" means the computerized
electronic lease management system maintained by Trans Leasing
for all Leases and other agreements similar to the Leases.
"Lease Schedule" means the Contributed Lease Schedule,
the Purchased Lease Schedule and all Additional Lease Schedules,
as amended to show the deletion of Leases purchased by Trans
Leasing pursuant to Section 3.03 or otherwise purchased by TLFC
to Trans Leasing.
"Lender" means First Union National Bank of North
Carolina.
"Lessee" means, with respect to any Lease, the Person
or Persons obligated to make payments with respect to such Lease,
including any guarantor thereof.
"Lien" means any mortgage, pledge, hypothecation,
assignment for security, security interest, encumbrance, levy,
lien 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.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel to Trans Leasing or other counsel,
acceptable to TLFC.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit
corporation, firm, joint stock company, estate, entity or
Governmental Authority.
"Property" means any interest in any kind of property
or asset, whether real, personal or mixed, whether tangible or
intangible.
"Purchased Assets" means all right, title and interest
of Trans Leasing in, to, and under (i) the Purchased Leases
(including all of Trans Leasing's obligations under the Purchased
Leases) and all monies due or to become due thereunder after the
Initial Cut-Off Date, (ii) the related Equipment (other than any
licensed products that may accompany any of such Equipment),
(iii) the Lease Files for the Purchased Leases, (iv) any
Insurance Policies (including all of Trans Leasing's obligations
thereunder) and the related Insurance Proceeds with respect to
the Purchased Leases and (v) all income and proceeds relating to
the foregoing.
"Purchased Leases" means the Leases listed on the
Purchased Lease Schedule attached hereto.
"Responsible Officer" of any Person means any of the
President, Executive Vice President, Vice President, Chief
Financial Officer, Treasurer or Corporate Controller of such
Person.
"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 Initial Cut-Off Date or the related Additional Cut-Off Date,
as applicable, in each case, after the effect of any adjustments
as a result of a portion of such Lease being terminated prior to
its scheduled expiration date (it being understood that Scheduled
Lease Payments do not include any Excluded Amounts).
"Secured Party" means, at any time, any Person that is
granted the rights of a secured party under any then existing
Debt Agreement and to which TLFC's rights under this Agreement
have been assigned and shall initially refer to the Lender.
"Servicer" means, at any time, any Person then acting
as servicer under a Servicing Agreement, and shall initially
refer to Trans Leasing in its capacity as the initial servicer
under the initial Servicing Agreement.
"Servicing Agreement" means, at any time, any agreement
then in effect pursuant to which any Person has agreed to service
the Assets (as such agreement is then in effect), and shall
initially refer to the Servicing Agreement dated as of the date
hereof among TLFC, the Lender and Trans Leasing, as servicer.
"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 or all of the attachment, perfection or
priority of the Lien of the Secured Party 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" means, with respect to any Lease, that
Trans Leasing is obligated to purchase such Lease pursuant to
Section 3.03 hereof.
"Warranty Purchase Price" means, with respect to any
Lease and the related Equipment to be purchased by Trans Leasing,
(a) the amount set forth as such in any then applicable Debt
Agreement, or (b) if no such amount is set forth or no Debt
Agreement is then in effect, an amount agreed to by Trans Leasing
and TLFC as reflecting the fair market value therefor, determined
on the same basis as the purchase price for sales of Purchased
Leases and Additional Leases has been determined hereunder,
provided that the Warranty Purchase Price for any such Lease and
related Equipment determined pursuant to this clause (b) shall
not exceed the value ascribed thereto at the time of the
contribution or sale thereof by Trans Leasing to TLFC as
described herein.
I.2 Other Definitional Provisions.
(a) Terms used in Related Documents. Each term
defined in this Agreement will have the meaning assigned to
such term in this Agreement when used in any certificate or
other document made or delivered pursuant to this Agreement,
unless such term is otherwise defined therein.
(b) Accounting Terms. As used in this
Agreement, accounting terms which are not defined in Section
1.01 have the respective meanings given to them under
generally accepted accounting principles as in effect on the
date of this Agreement. To the extent that the definitions
of accounting terms in this Agreement are inconsistent with
the meanings of such terms under generally accepted
accounting principles, the definitions contained in this
Agreement will control.
(c) "Hereof," etc. The words "hereof," "herein"
and "hereunder" and words of similar import when used in
this Agreement will refer to this Agreement as a whole and
not to any particular provision of this Agreement; and
Section, Schedule and Exhibit references contained in this
Agreement are references to Sections, Schedules and Exhibits
in or to this Agreement, unless otherwise specified.
(d) Number and Gender. Each defined term used
in this Agreement has a comparable meaning when used in its
plural or singular form. Each gender-specific term used in
this Agreement has a comparable meaning whether used in a
masculine, feminine or gender-neutral form.
(e) Including. Whenever the term "including"
(whether or not that term is followed by the phrase "but not
limited to" or "without limitation" or words of similar
effect) is used in this Agreement in connection with a
listing of items within a particular classification, that
list will be interpreted to be illustrative only and will
not be interpreted as a limitation on, or an exclusive list
of, the items within that classification.
ARTICLE II
CONTRIBUTION OF CONTRIBUTED ASSETS;
SALE OF PURCHASED ASSETS;
SALE OF ADDITIONAL ASSETS
II.1 [Reserved.]
II.2 Contribution of Contributed Assets and Sale of
Purchased Assets.
(a) Contribution. On the Closing Date, Trans
Leasing will make a capital contribution to TLFC of the
Contributed Assets, and Trans Leasing will deliver to TLFC
an executed assignment substantially in the form of Exhibit
A attached hereto. The contribution of the Contributed
Assets will be without recourse to Trans Leasing, subject to
the obligations of Trans Leasing pursuant to Section 3.03.
(b) Sale. For a purchase price of $28,036,079
in cash, on the Closing Date, Trans Leasing will sell to
TLFC the Purchased Assets and will deliver to TLFC an
executed assignment substantially in the form of Exhibit B
attached hereto. Except for the obligations of Trans
Leasing pursuant to Section 3.03, the sale of the Purchased
Assets will be without recourse to Trans Leasing.
(c) Recordation. In connection with the
contribution of the Contributed Assets and sale of the
Purchased Assets, Trans Leasing agrees to record and file at
its own expense financing statements and continuation
statements with respect to the Leases meeting the
requirements of applicable state law, in such manner and in
such jurisdictions as are necessary to perfect and to
maintain the perfection of the contributions and sales of
the Leases and Trans Leasing's interests in the related
Equipment contributed or sold by Trans Leasing to TLFC as
described in this Section 2.02, and to deliver a file-
stamped copy of such financing statements or other evidence
of such filings to TLFC (and copies to the Lender) promptly
after the Closing Date, provided, however, that (i) the
Lease Files for the Leases will not be physically delivered
to TLFC but instead will be held by the Servicer pursuant to
the Servicing Agreement, (ii) Trans Leasing will not be
required to file any financing or continuation statements
with respect to the Equipment in any jurisdiction other than
the Filing Locations, (iii) 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 Trans Leasing agrees to make such filings
within 5 Business Days of the Closing Date) and (iv) Trans
Leasing will not be required to cause the certificate of
title or other title document to any Equipment consisting of
motor vehicles to be marked to indicate the transfer from
Trans Leasing to TLFC or the security interest of the
Secured Party therein.
(d) Marking of Lease Management System. In
connection with the contribution of the Contributed Assets
and sale of the Purchased Assets, Trans Leasing will, for
the benefit of TLFC and any Secured Party, at its own
expense, cause the Lease Management System to be marked to
show that the Contributed Assets and the Purchased Assets
have been contributed and sold to TLFC in accordance with
this Agreement and pledged to Lender under the Credit
Agreement, on or prior to the Closing Date.
II.3 Contribution or Sale of Additional Assets.
(a) Additional Sales and Contributions. From
time to time after the date hereof, TLFC may request to
purchase additional assets from Trans Leasing. If Trans
Leasing so agrees to sell any additional assets, the
purchase price thereof shall be an amount agreed to by Trans
Leasing and TLFC, which price shall represent reasonably
equivalent value therefor and shall be no less than the fair
market value of such assets as then determined, including
consideration of then current interest rates. From time to
time after the date hereof, in connection with a sale of
Additional Assets or otherwise, Trans Leasing may contribute
to TLFC as an additional contribution to the equity of TLFC,
Additional Assets. The date on which any such sale or
contribution of any Additional Assets to TLFC takes place is
herein referred to as an "Addition Date". The purchase
price for any Additional Assets to be purchased by TLFC will
be payable by TLFC on the related Addition Date in cash. On
each Addition Date, Trans Leasing will deliver to TLFC an
executed assignment substantially in the form of Exhibit C
attached hereto together with a schedule identifying each
Additional Lease included in the Additional Assets (an
"Additional Lease Schedule"). Except for the obligations of
Trans Leasing pursuant to Section 3.03, the sale and
contribution of the Additional Assets will be without
recourse to Trans Leasing.
(b) Recordation. In connection with any
contribution or sale of Additional Assets, Trans Leasing
agrees to record and file at its own expense financing
statements and continuation statements with respect to the
related Additional Leases meeting the requirements of
applicable state law, in such manner and in such
jurisdictions as are necessary to perfect and to maintain
the perfection of the contributions and sales of the
Additional Leases by Trans Leasing to TLFC and Trans
Leasing's interests in the related Equipment contributed or
sold by Trans Leasing to TLFC as described in this Section
2.03, and to deliver a file-stamped copy of such financing
statements or other evidence of such filings to TLFC (and
copies to the Secured Party) promptly after the applicable
Addition Date, provided, however, that (i) the Lease Files
for such Additional Leases will not be physically delivered
to TLFC but instead will be held by the Servicer pursuant to
the Servicing Agreement, (ii) Trans Leasing will not be
required to file any financing or continuation statements
with respect to the Equipment in any jurisdiction other than
the Filing Locations and (iii) Trans Leasing will not be
required to cause the certificate of title or other title
document to any Equipment consisting of motor vehicles to be
marked to indicate the transfer from Trans Leasing to TLFC
or the security interest of the Secured Party therein.
(c) Marking of Lease Management System. In
connection with any contribution or sale of Additional
Assets, Trans Leasing will, at its own expense, cause the
Lease Management System to be marked to show that such
Additional Assets have been contributed or sold to TLFC in
accordance with this Agreement, on or prior to the
applicable Addition Date.
II.4 Custody of Lease Files. In connection with the
contribution and sale of the Assets, Trans Leasing, in its
capacity as the Servicer pursuant to the Servicing Agreement,
will retain custody of the Lease Files and any related evidence
of Insurance Policies, Insurance Proceeds and other payments.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
III.1 Representations and Warranties of Trans Leasing.
Trans Leasing makes the following representations and warranties
for the benefit of TLFC and any Secured Party, on which TLFC
relies and will rely in accepting the contribution of the
Contributed Assets and purchasing the Purchased Assets and in
accepting the contribution of and purchasing any Additional
Assets. Unless otherwise indicated, such representations and
warranties, with respect to the Contributed Assets and the
Purchased Assets, speak as of the Closing Date and, with respect
to any Additional Assets, as of the related Addition Date, but in
each case will survive the contribution and sale of the Assets to
TLFC, and the grant of a security interest therein to any Secured
Party.
(a) Representations and Warranties with respect
to the Assets. As to the Assets:
(i) the information with respect to the
Leases and the Equipment in the Contributed Lease Schedule,
the Purchased Lease Schedule or any Additional Lease
Schedule, as the case may be, is true and correct in all
material respects;
(ii) no provision of any Lease has been
waived, altered or modified in any respect, except by an
instrument or document contained in the related Lease File
and except with respect to a Skipped Payment (as defined in
the Servicing Agreement);
(iii) each Lease is a valid and binding
payment obligation of the related Lessee and is enforceable
in accordance with its terms, except as such enforceability
may be limited by (A) applicable bankruptcy, insolvency,
moratorium, reorganization or other similar laws now or
hereafter in effect affecting the enforcement of creditors'
rights generally and (B) general principles of equity
(whether considered in a suit at law or in equity);
(iv) the Leases are not and will not be
subject to rights of rescission, setoff, counterclaim or
defense;
(v) the Leases, at the time they were
made, did not violate applicable state or federal laws;
(vi) each Lease contains provisions
requiring the Lessee to assume all risk of loss or
malfunction of the related Equipment;
(vii) except as set forth in the provisos
of Sections 2.02(c) and 2.03(b), all action will have been
taken by Trans Leasing to transfer all its right, title and
interest in, to and under the Leases and the related
Equipment to TLFC;
(viii) each party to a Lease had the
authority and legal capacity to execute such Lease at the
time that it did so;
(ix) no Asset has been sold,
transferred, assigned or pledged by Trans Leasing to any
Person (other than TLFC), and immediately prior to
contributing or selling such Asset to TLFC, Trans Leasing is
the sole owner of, and holder of title to, the Leases, the
Equipment (or a security interest therein) and the other
Assets free and clear of any Liens (except for the interests
of Lessees under the Leases), and immediately following the
transfer by Trans Leasing to TLFC of the Assets, the Assets
will be free and clear of all Liens (except for the
interests of Lessees under the Leases and Liens contemplated
by the Credit Agreement);
(x) no Lease requires the substitution,
addition or exchange of any item of Equipment which would
result in any reduction of the Scheduled Lease Payments
pursuant to such Lease;
(xi) there is only one secured party's
original of each Lease that constitutes "chattel paper" for
purposes of the UCC and such original has not been delivered
to any Person other than the Secured Party or the Servicer
pursuant to the Servicing Agreement;
(xii) Trans Leasing has duly fulfilled in
all material respects all obligations on its part in
connection with the Leases and has done nothing to
materially impair the rights of TLFC and the Secured Party
in the Leases or the proceeds with respect thereto;
(xiii) to the best of Trans Leasing's
knowledge, no proceedings or investigations are pending or
have been threatened asserting the invalidity of any Lease
or seeking any determination or ruling that might adversely
and materially affect the validity or enforceability of any
Lease;
(xiv) all filings necessary to evidence
the contribution and sale of the Leases to TLFC have been
made in all appropriate jurisdictions;
(xv) none of the Lessees are, to Trans
Leasing's knowledge, the subject of bankruptcy or other
insolvency proceedings;
(xvi) each Lessee's billing address is in
the United States;
(xvii) all payments under the Leases are
required to be made in United States dollars;
(xviii)the substance of each Lease is
substantially similar to one of the forms of Lease in
Exhibit D attached hereto, except that any guaranty
provision may have been varied or deleted and any purchase
option at Lease termination may be contained in a separate
side letter; provided that any variation or deletion will
not cause any representation herein with respect to such
Lease to be untrue and will not reasonably be expected to
adversely affect the transactions contemplated by this
Agreement and the Credit Agreement;
(xix) each of the Leases satisfies the
criteria set forth on the Lease Criteria Schedule attached
hereto (as such schedule may be amended by Trans Leasing and
TLFC from time to time to reflect the criteria required by
any then applicable Debt Agreement);
(xx) the Contributed Lease Schedule is a
true and complete list of all Contributed Leases, the
Purchased Lease Schedule is a true and complete list of all
Purchased Leases and each Additional Lease Schedule will be
a true and complete list of all Additional Leases to be
transferred on the related Addition Date, in each case
identified by, among other things, its Lease Number, its
original Equipment cost, the effective date of such Lease,
the original term of such Lease, and the amount of Scheduled
Lease Payments pursuant to such Lease, in each case as of
the Initial Cut-Off Date or the related Additional Cut-Off
Date, as appropriate; and
(xxi) (A) as of the Closing Date, the
Purchased Leases and the Contributed Leases satisfy, as of
the Initial Cut-Off Date, the criteria set forth on the
Specified Portfolio Characteristics Schedule attached
hereto, (B) as of any Addition Date, the addition of the
related Additional Leases does not cause any of the criteria
set forth on the attached Specified Portfolio
Characteristics Schedule attached hereto (as such schedule
may be amended by Trans Leasing and TLFC from time to time
to reflect the criteria required by any then applicable Debt
Agreement) not to be satisfied as of the related Additional
Cut-Off Date or, if any of such criteria are not satisfied
as of the first day of the month in which the related
Addition Date occurs (without giving effect to the addition
of such Additional Leases), such addition does not increase
the amount by which such criteria are not satisfied (in each
case, based on the characteristics of such Additional Leases
as of the related Additional Cut-Off Date) and (C) if so
agreed by Trans Leasing and TLFC at such time, as of any
Addition Date (or other specified date), the Leases, as of
the related Additional Cut-Off Date (or other specified
date), satisfy such criteria.
(b) Representations and Warranties with respect
to Trans Leasing. As to Trans Leasing:
(i) Organization and Good Standing.
Trans Leasing is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, with all requisite corporate power and authority
to own its properties and to conduct its business as
presently conducted;
(ii) Due Qualification. Trans Leasing
is qualified to do business as a foreign corporation, is in
good standing, and has obtained all licenses and approvals
required under the laws of, all states in which the
ownership or lease of its property, the performance of its
obligations pursuant to this Agreement or the conduct of its
business requires such qualification, standing, license or
approval, except to the extent that the failure to so
qualify, maintain such standing or be so licensed or
approved would not, in the aggregate, materially and
adversely affect the ability of Trans Leasing to comply with
this Agreement;
(iii) Power and Authority. Trans Leasing
has the corporate power and authority to execute and deliver
this Agreement and to carry out its terms; and Trans Leasing
has duly authorized the execution, delivery, and performance
of this Agreement by all requisite corporate action;
(iv) Valid Contribution and Sale;
Binding Obligations. The contribution and sale of the
Contributed Assets and the Purchased Assets constitute, and
each contribution and sale of any Additional Assets, will
constitute, a legal and valid contribution, assignment,
transfer and conveyance to TLFC of all right, title, and
interest of Trans Leasing in, to and under such Assets, and
such Assets will be held by TLFC free and clear of any Lien
of any Person claiming through or under Trans Leasing,
except for Liens permitted under, or to be created by, any
Debt Agreement; and this Agreement constitutes a legal,
valid, and binding obligation of Trans Leasing, enforceable
against Trans Leasing in accordance with its terms, except
as such enforceability may be limited by (A) applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the
enforcement of creditors' rights generally and (B) general
principles of equity (whether considered in a suit at law or
in equity);
(v) No Violation. The consummation of
the transactions contemplated by, and the performance of the
terms of, this Agreement by Trans Leasing (with or without
the giving of any notice or the lapse of time) will not
(after giving effect to all consents and waivers received on
or prior to the date hereof or the Addition Date, as the
case may be);
(A) conflict with, result in any breach of any of
the terms or provisions of, or constitute a
default under, the certificate of incorporation
or by-laws of Trans Leasing, or any term of any
indenture, agreement, mortgage, deed of trust,
or other instrument to which Trans Leasing is a
party or by which it is bound;
(B) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed
of trust, or other instrument (other than this
Agreement); or
(C) violate any legal requirement applicable to
Trans Leasing or any of its properties in any
manner;
which conflict, breach, default, Lien or violation would
have a material and adverse effect on the ability of Trans
Leasing to comply with this Agreement;
(vi) No Consent. No consent, approval,
authorization, order, registration, filing, qualification,
license or permit of or with any Governmental Authority
having jurisdiction over Trans Leasing or any of its
properties or assets is required to be obtained by or with
respect to Trans Leasing in connection with the execution,
delivery and performance by Trans Leasing of this Agreement
and the consummation of the transactions contemplated
herein;
(vii) No Proceedings. To the best of
Trans Leasing's knowledge, there are no proceedings or
investigations pending or threatened before any Governmental
Authority (A) asserting the invalidity of this Agreement,
(B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, or (C) seeking
any determination or ruling that might (in the reasonable
judgment of Trans Leasing) materially and adversely affect
the performance by Trans Leasing of its obligations under,
or the validity or enforceability of, this Agreement;
(viii) Insolvency. Trans Leasing is not
insolvent and will not be rendered insolvent by the consum
mation of the transactions contemplated by this Agreement;
(ix) Principal Place of Business. Trans
Leasing's principal place of business and chief executive
office are in the State of Illinois, County of Cook;
(x) Ability to Perform. At the date
hereof, Trans Leasing does not believe, nor does it have any
reasonable cause to believe, that it cannot perform each and
every covenant contained in this Agreement;
(xi) Fair Consideration. The
consideration received by Trans Leasing in exchange for the
contribution and sale of the Assets to be contributed and
sold on the date hereof and on each Addition Date is fair
consideration having value equivalent to or in excess of the
value of the Assets transferred on each such date;
(xii) Bulk Transfer Provisions. The
sale, transfer, assignment and conveyance of the Leases and
its interests in the related Equipment by Trans Leasing
described in this Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(xiii) Transfer Taxes. The sale,
transfer, assignment and conveyance of the Assets by Trans
Leasing described in this Agreement will not result in the
imposition of any tax Lien or any liability of TLFC for any
tax on such sale, transfer, assignment and conveyance; and
(xiv) Common Stock. Trans Leasing owns
all of the Common Stock free and clear of all mortgages,
assignments, pledges, security interests, warrants, options
and rights to purchase.
III.2 Representations and Warranties of TLFC. TLFC
makes the following representations and warranties on which Trans
Leasing relies in contributing the Contributed Assets, selling
the Purchased Assets and contributing and selling any Additional
Assets. Such representations and warranties speak as of the
Closing Date and each Addition Date, but will survive the
contribution and sale of the Assets to TLFC.
(a) Organization and Good Standing. TLFC is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all
requisite corporate power and authority to own its
properties and to conduct its business as presently
conducted and to enter into and perform its obligations
under this Agreement;
(b) Due Qualification. TLFC is qualified to do
business as a foreign corporation, is in good standing, and
has obtained all licenses and approvals required under the
laws of, all states in which the ownership or lease of its
property or the conduct of its business requires such
qualification, standing, license or approval, except to the
extent that the failure to so qualify, maintain such
standing or be so licensed or approved would not, in the
aggregate, materially and adversely affect the ability of
TLFC to perform its obligations under this Agreement;
(c) Power and Authority. TLFC has the corporate
power and authority to execute and deliver this Agreement
and to carry out its terms; and TLFC has duly authorized the
execution, delivery, and performance of this Agreement by
all requisite corporate action;
(d) Binding Obligations. This Agreement
constitutes a legal, valid, and binding obligation of TLFC,
enforceable in accordance with its terms, except as such
enforcement may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent
conveyance or other laws now or hereafter in effect
affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (whether considered in a
suit at law or in equity);
(e) No Violation. The consummation of the
transactions contemplated by, and the fulfillment of the
terms of this Agreement, by TLFC (with or without the giving
of any notice or the lapse of time) will not
(i) conflict with, result in any breach
of any of the terms and provisions of, or constitute a
default under, the certificate of incorporation or by-laws
of TLFC, or any term of any indenture, agreement, mortgage,
deed of trust, or other instrument to which TLFC is a party
or by which it is bound;
(ii) result in the creation or
imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement, mortgage,
deed of trust, or other instrument (other than this
Agreement); or
(iii) violate any legal requirement
applicable to TLFC or any of its properties in any manner;
which conflict, breach, default, Lien or violation would
have a material and adverse effect on the ability of TLFC to
comply with this Agreement;
(f) No Proceedings. To the best of TLFC's
knowledge, there are no proceedings or investigations
pending or threatened before any Governmental Authority
having jurisdiction over TLFC or its properties against TLFC
or its properties (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement, or (iii)
seeking any determination or ruling that might materially
and adversely affect the performance by TLFC of its
obligations under, or the validity or enforceability of,
this Agreement;
(g) Insolvency. TLFC is not insolvent and will
not be rendered insolvent by the consummation of the
transactions contemplated by this Agreement and has an
adequate amount of capital to conduct its business in the
ordinary course and to carry out its obligations under this
Agreement;
(h) Ability to Perform. As of the date hereof,
TLFC does not believe, nor does it have any reasonable cause
to believe, that it cannot perform each and every covenant
contained in this Agreement;
(i) Common Stock. Trans Leasing is the
registered owner of all the issued and outstanding capital
stock of TLFC, and the Common Stock is validly issued, fully
paid and nonassessable and owned of record by Trans Leasing,
free and clear of all mortgages, assignments, pledges,
security interests, warrants, options and rights to
purchase; and
(j) Places of Business. TLFC's sole places of
business and offices are located in Northbrook, Illinois and
Wilmington, Delaware.
III.3 Purchase of Leases and Equipment by Trans
Leasing. In the event of discovery at any time that a
representation or warranty set forth in Section 3.01 is untrue in
any respect, the Secured Party or TLFC may by written notice
direct Trans Leasing to purchase each Lease materially and
adversely affected by such untruth, and all related Equipment, on
or prior to the thirtieth day after such notice is received by
Trans Leasing (or such later date as the Secured Party may
specify), and Trans Leasing will purchase each such Lease and the
related Equipment, for the Warranty Purchase Price, on or prior
to such thirtieth (or later) day; provided that Trans Leasing
will not be required to purchase any such Lease (or the related
Equipment) if prior to such thirtieth (or later) day (i) such
untruth has been cured with respect to such Lease in all material
respects and (ii) Trans Leasing delivers to the Secured Party and
TLFC a certificate of a Responsible Officer to that effect. In
consideration for the purchase of any such Lease and the related
Equipment, Trans Leasing will remit the Warranty Purchase Price
to the Servicer for allocation of such Warranty Purchase Price
pursuant to the terms of the Debt Agreement or, if not required
to be so remitted by any Debt Agreement, will remit the Warranty
Purchase Price to TLFC. It is understood and agreed that in the
event that any representation or warranty set forth in Section
3.01 is untrue, the purchase of any affected Lease and Equipment
subject to such Lease as provided in this Section 3.03 and the
indemnification provided in Section 3.04 will constitute the only
remedies available to TLFC and the Secured Party in respect of
such untruth.
III.4 Indemnification. In addition to any remedy
pursuant to Section 3.03, Trans Leasing agrees to indemnify,
defend and hold TLFC harmless from and against any out of pocket
expense (including interest, penalties, reasonable attorneys'
fees and amounts paid in settlement) to which TLFC may become
subject insofar as such expense arises solely out of or is based
solely upon the untruth of any representation or warranty of
Trans Leasing set forth in Section 3.01. The obligations of
Trans Leasing under this Section 3.04 will be considered to have
been relied upon by TLFC and will survive the execution,
delivery, and performance of this Agreement regardless of any
investigation made by TLFC or on its behalf.
ARTICLE IV
COVENANTS OF TRANS LEASING AND TLFC
IV.1 Trans Leasing Covenants. Trans Leasing covenants
and agrees with TLFC as follows for the benefit of TLFC and any
Secured Party:
(a) Merger, Consolidation or Assumption of the
Obligations of Trans Leasing. Any Person (i) into which
Trans Leasing may be merged or consolidated, (ii) resulting
from any merger, conversion, or consolidation to which Trans
Leasing is a party, or (iii) succeeding to the business of
Trans Leasing substantially as a whole, which Person in any
of the foregoing cases executes an agreement of assumption
to perform every obligation of Trans Leasing under this
Agreement, will be the successor to Trans Leasing under this
Agreement, without the execution or filing of any document
or any further act on the part of Trans Leasing, TLFC or
such Person, anything in this Agreement to the contrary
notwithstanding; provided, however, that (x) immediately
after giving effect to such transaction, no representation
or warranty made pursuant to Section 3.01 will have been
breached, (y) Trans Leasing will have delivered to TLFC a
certificate of a Responsible Officer and an Opinion of
Counsel each stating that such consolidation, merger, or
succession and such agreement of assumption comply with this
Section 4.01(a) and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction
have been complied with and (z) Trans Leasing will have
delivered an Opinion of Counsel either (1) stating that, in
the opinion of such counsel, all financing statements and
continuation statements and amendments thereto that are
necessary fully to preserve and protect the interests of
TLFC in the Leases have been executed and filed or
(2) stating that, in the opinion of such counsel, no such
action is necessary to preserve and protect such interest.
(b) Limitation of Liability of Trans Leasing and
Others. Trans Leasing and any director, officer, employee
or agent of Trans Leasing may rely in good faith on any
document of any kind submitted by any Person respecting any
matters arising under this Agreement as being prima facie
properly executed. Other than in its capacity as the
Servicer pursuant to the Servicing Agreement and except as
provided in Sections 3.04, 4.01(e) and 4.01(i), Trans
Leasing will not be under any obligation to appear in,
prosecute, or defend any legal action in any way relating to
the Assets that is not incidental to its obligations as the
contributor and seller of the Assets under this Agreement
and that in its opinion may cause it to incur any expense or
liability.
(c) Preservation of Security Interest. Trans
Leasing will execute and file such continuation statements
and any other documents requested by TLFC to be filed or
which may be required to be filed by any legal requirement
to preserve fully and protect the interest of TLFC in, to
and under the Assets; provided, however, that (i) Trans
Leasing will not be required to deliver physical possession
of the Lease Files to TLFC and may retain possession of the
Lease Files in its capacity as the Servicer, (ii) Trans
Leasing will not be required to file any financing or
continuation statements with respect to the Equipment in any
jurisdiction other than the Filing Locations and (iii) Trans
Leasing will not be required to cause the certificate of
title or other title document to any Equipment consisting of
motor vehicles to be marked to indicate the transfer from
Trans Leasing to TLFC or the security interest of the Lender
therein.
(d) Preservation of Name and Office. Unless
Trans Leasing provides not less than thirty days prior
written notice to TLFC and files such amendments to any
previously filed financing or continuation statements as
TLFC may require, Trans Leasing will not (i) change the
location of its principal executive office, (ii) change its
name, identity or corporate structure in any manner which
would make any financing statement or continuation statement
filed by Trans Leasing in accordance with this Agreement
seriously misleading within the meaning of Article 9-402(7)
of the UCC or (iii) delete or otherwise modify the marking
of the Lease Management System referred to in Section
2.02(d) or Section 2.03(c) of this Agreement or the
Servicing Agreement.
(e) Obligations with Respect to Leases; Defense
of Assets. Trans Leasing will do nothing to impair the
rights of TLFC in the Leases or the Equipment except as it
is expressly permitted to do so in its capacity as the
Servicer in accordance with the terms of the Servicing
Agreement, and Trans Leasing will defend the interests of
TLFC in the Assets contributed and sold hereby against all
claims of third parties claiming through or under Trans
Leasing.
(f) Compliance with Law. Trans Leasing will
comply, in all material respects, with all legal
requirements applicable to Trans Leasing with respect to the
Assets; provided, however, that Trans Leasing may contest
any such legal requirement in any reasonable manner which
will not materially and adversely affect the rights of TLFC
or the Secured Party in the Assets or the value thereof.
(g) Notification of Breach. Trans Leasing will
advise TLFC, the Servicer (if Trans Leasing is not the
Servicer) and the Secured Party, in reasonable detail, of
the occurrence of any breach by Trans Leasing of any of its
representations, warranties and covenants contained herein,
promptly after it becomes aware of any such breach.
(h) Servicing Agreement. On or before the
Closing Date, Trans Leasing will enter into the servicing
agreement, to be dated as of the date hereof with TLFC and
the Lender.
(i) Further Assurances. Trans Leasing will
make, execute or endorse, acknowledge and file or deliver to
TLFC from time to time such schedules, confirmatory
assignments, conveyances, transfer endorsements, powers of
attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the
Assets and other rights covered by this Agreement as TLFC
may request and reasonably require.
(j) Indemnification. Trans Leasing agrees to
indemnify, defend and hold TLFC harmless from and against
any and all loss, liability, damage, judgment, claim,
deficiency, or expense (including interest, penalties,
reasonable attorneys' fees and amounts paid in settlement)
to which TLFC may become subject insofar as such loss,
liability, damage, judgment, claim, deficiency, or expense
arises out of or is based upon a breach by Trans Leasing of
its covenants contained in this Section 4.01. The
obligations of Trans Leasing under this Section 4.01(j) will
be considered to have been relied upon by TLFC and will
survive the execution, delivery, and performance of this
Agreement regardless of any investigation made by TLFC or on
its behalf.
(k) Insurance Premiums. With respect to any
Lease on which the related Lessee pays insurance premiums
directly to Trans Leasing (or such premiums are otherwise
included in the Scheduled Lease Payments under such Lease),
until such Lease expires, otherwise terminates, is purchased
under Section 3.03 hereof or is charged-off as uncollectible
by Trans Leasing, Trans Leasing shall pay the insurance
premiums required to maintain the insurance on the related
Equipment required by such Lease.
IV.2 TLFC Covenants. TLFC covenants and agrees with
Trans Leasing not to disclose to any Person (except the Secured
Party and the holders of any indebtedness issued under any Debt
Agreement) any of the information contained in the Lease
Management System, the Lease Files, the Contributed Lease
Schedule, the Purchased Lease Schedule or any Additional Lease
Schedule, except as required upon the appointment of a successor
Servicer pursuant to the Servicing Agreement or by any legal
requirement. TLFC agrees to take such measures as Trans Leasing
reasonably requests to protect and maintain the security and
confidentiality of such information and, in connection therewith,
will allow Trans Leasing to inspect the applicable security and
confidentiality arrangements during normal business hours. TLFC
will provide Trans Leasing written notice not less than five
Business Days prior to any disclosure which TLFC proposes to make
in accordance with this Section 4.02.
IV.3 Grant of Security Interest. Trans Leasing
understands that TLFC intends to grant a security interest in the
Assets to the Lender pursuant to the Credit Agreement and may
from time to time hereafter grant a security interest therein to
another Secured Party under another Debt Agreement. Trans
Leasing consents to the assignment of all or any portion of this
Agreement by TLFC to the Lender and any such Secured Party. Trans
Leasing agrees that the Lender or any such Secured Party (or, in
each case, the Servicer on its behalf) may exercise the rights of
TLFC hereunder and will be entitled to all of the benefits of
TLFC hereunder to the extent provided in the Credit Agreement or
the related Debt Agreement, as applicable.
ARTICLE V
CONDITIONS PRECEDENT
V.1 Conditions to TLFC's Obligations. The
obligations of TLFC to accept the contribution of the Contributed
Assets and to purchase the Purchased Assets on the Closing Date
and to accept and/or purchase, as the case may be, any Additional
Assets on the related Addition Date are subject to the
satisfaction or waiver of the following conditions as of such
Closing Date or Addition Date, as applicable:
(a) Representations and Warranties. All
representations and warranties of Trans Leasing contained in
this Agreement will be true and correct in all material
respects as of the Closing Date and such Addition Date
(except as otherwise specified herein), as if each such
representation or warranty were made as of the Closing Date
or such Addition Date;
(b) Other Information. All information
concerning the Assets provided to TLFC will be true and
correct as of the Initial Cut-Off Date or the related
Additional Cut-Off Date, as applicable, in all material
respects;
(c) Obligations. Trans Leasing will have
performed in all material respects all obligations required
to be performed by Trans Leasing on or prior to the Closing
Date or the related Addition Date, as applicable, pursuant
to the provisions of this Agreement; and
(d) Corporate Proceedings. All corporate and
legal proceedings and all instruments in connection with the
transactions contemplated by this Agreement will be satisfac
tory in form and substance to TLFC, and TLFC will have
received from Trans Leasing such copies of documents
(including records of corporate proceedings) relevant to the
transactions herein contemplated as TLFC may reasonably have
requested.
V.2 Conditions to Trans Leasing's Obligations. The
obligations of Trans Leasing to contribute the Contributed Assets
and to sell the Purchased Assets on the Closing Date, and to
contribute or sell any Additional Assets as of any Addition Date,
will be subject to the satisfaction or waiver of the following
conditions as of the Closing Date or such Addition Date, as
applicable:
(a) Representations and Warranties. All
representations and warranties of TLFC contained in this
Agreement will be true and correct in all material respects
as of the Closing Date or such Addition Date (except as
otherwise specified herein), as if each such representation
or warranty were made as of the Closing Date or such
Addition Date; and
(b) Corporate Proceedings. All corporate and
legal proceedings and all instruments in connection with the
transactions contemplated by this Agreement will be
satisfactory in form and substance to Trans Leasing, and
Trans Leasing will have received from TLFC such copies of
documents (including records of corporate proceedings)
relevant to the transactions herein contemplated as Trans
Leasing may reasonably have requested.
ARTICLE VI
TERMINATION
VI.1 Termination. The respective obligations and
responsibilities of Trans Leasing and TLFC created by this
Agreement will terminate upon the last to occur of (i) the
maturity or other liquidation of all Leases and (ii) the
termination of all Debt Agreements.
VI.2 Effect of Termination. No termination, rejection
or failure to assume the executory obligations of this Agreement
in the bankruptcy of Trans Leasing or TLFC will be deemed to
impair or affect the obligations pertaining to any executed
contribution, executed sale or executed obligations, including
breaches of representations and warranties by Trans Leasing or
TLFC prior to termination. Without limiting the foregoing, prior
to termination, the failure of Trans Leasing to pay a Warranty
Purchase Price will not render such contribution, sale or
obligations executory and the continued respective duties of
Trans Leasing and TLFC pursuant to Article IV will not render an
executed sale or contribution executory.
ARTICLE VII
MISCELLANEOUS PROVISIONS
VII.1 Amendment. This Agreement may be amended only by
written agreement of TLFC, Trans Leasing and the Secured Party.
VII.2 Governing Law. This Agreement will be governed
by and construed in accordance with the domestic laws of the
State of Illinois, without giving effect to any choice of law or
conflict provision or rule (whether of the State of Illinois or
any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois. In
furtherance of the foregoing, the internal law of the State of
Illinois will control the interpretation and construction of this
Agreement, even in the event that under such jurisdiction's
choice of law or conflict of law analysis the substantive law of
some other jurisdiction would ordinarily apply.
VII.3 Notice. Except as otherwise provided in this
Agreement, any notice or other communication herein required or
permitted to be given will be in writing and may be delivered in
person, with receipt acknowledged, or sent 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 follows (or at such other address as may be
substituted by notice given as herein provided):
If to TLFC:
TL Lease Funding Corp. IV
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
with a copy (which copy
will not constitute notice
to TLFC) to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Jill L. Sugar
If to Trans Leasing:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, IL 60062
Attention: Chief Financial Officer
with a copy (which copy will not constitute
notice to Trans Leasing) to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Jill L. Sugar
Every notice, demand, request, consent, approval, declaration or
other communication hereunder will be deemed to have been duly
given or served on the date on which the same will have been
personally delivered, with receipt acknowledged, three (3)
Business Days after the same will 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 will in no way adversely
affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
VII.4 Severability of Provisions. If any covenant,
agreement, provision, or term of this Agreement is held invalid
for any reason whatsoever, then such covenant, agreement,
provision, or term will be deemed severable from the remaining
covenants, agreements, provisions, and terms of this Agreement
and will in no way affect the validity or enforceability of the
other provisions of this Agreement.
VII.5 Assignment. This Agreement may not be assigned
by Trans Leasing, except as provided in Section 4.01(a) above,
without the prior written consent of TLFC and the Secured Party;
and TLFC may collaterally assign its rights under this Agreement
to the Lender pursuant to the Credit Agreement and to the Secured
Party under any related Debt Agreement, but, in all other cases
this Agreement may not be assigned by TLFC without the prior
written consent of Trans Leasing and the Secured Party.
VII.6 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of TLFC or Trans
Leasing, any right, remedy, power or privilege under this
Agreement will operate as a waiver of such right, remedy, power
or privilege; nor will any single or partial exercise of any
right, remedy, power or privilege under this Agreement preclude
any other or further exercise of such right, remedy, power or
privilege. The rights, remedies, powers and privileges provided
under this Agreement are cumulative and not exhaustive of any
other rights, remedies, powers and privileges provided by law.
VII.7 Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties on separate
counterparts), each of which will be an original, but all of
which will constitute one and the same instrument.
VII.8 Binding Effect; Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon Trans
Leasing, TLFC, their respective successors and permitted assigns
and will also, to the extent expressly provided in Section 4.03
or elsewhere in this Agreement, inure to the benefit of the
Servicer and the Secured Party. Except as otherwise provided in
this Agreement, no other Person will have any right or obligation
pursuant to this Agreement.
VII.9 Merger and Integration. Except as specifically
stated otherwise in this Agreement, this Agreement sets forth the
entire understanding of the parties relating to the subject
matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement.
VII.10 Headings. The headings used in this
Agreement are for purposes of reference only and will not
otherwise affect the meaning or interpretation of any provision
of this Agreement.
VII.11 Schedules and Exhibits. The Schedules and
Exhibits constitute a part of this Agreement and are incorporated
into this Agreement for all purposes.
VII.12 No Petition Covenants. Notwithstanding any
prior termination of this Agreement, Trans Leasing shall not,
prior to the date which is one year and one day after the final
distribution with respect to the notes, certificates and other
securities issued by TLFC or any trust formed by TLFC which have
been rated by any nationally recognized statistical rating
organization, acquiesce, petition or otherwise invoke or cause
TLFC to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against TLFC
under any federal or state bankruptcy, insolvency or similar law
or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of TLFC or any
substantial part of its property, or ordering the winding up or
liquidation of the affairs of TLFC.
* * * * *
Trans Leasing and TLFC have caused this Contribution
and Sale Agreement to be duly executed by their respective
officers as of the day and year written above.
TRANS LEASING INTERNATIONAL, INC.
By: /s/ Norman Smagley
Name: Norman Smagley
Title: Vice President - Finance
TL LEASE FUNDING CORP. IV
By: /s/ Norman Smagley
Name: Norman Smagley
Title: Vice President - Finance
EXHIBIT A
FORM OF ASSIGNMENT OF CONTRIBUTED ASSETS
For value received, in accordance with the Contribution
and Sale Agreement dated as of _________________, 1997 (the "Sale
Agreement"), between Trans Leasing International, Inc., a
Delaware corporation ("Trans Leasing"), and TL Lease Funding
Corp. IV, a Delaware corporation ("TLFC"), Trans Leasing does
hereby sell, assign, transfer and otherwise convey unto TLFC,
without recourse, all of its right, title and interest in, to and
under (i) the Contributed Leases (including all of Trans
Leasing's obligations under the Contributed Leases) and all
monies due or to become due thereunder after _________________,
1997, (ii) the related Equipment (other than any licensed
products that may accompany such Equipment), (iii) the Lease
Files for the Contributed Leases, (iv) any Insurance Policies
(including all of Trans Leasing's obligations thereunder) and the
related Insurance Proceeds with respect to the Contributed Leases
and (v) all income and proceeds relating to the foregoing.
It is the intention of Trans Leasing and TLFC that the
sales, transfers, assignments and conveyances contemplated by
this Assignment constitute a contribution of the property
described herein and in the Sale Agreement from Trans Leasing to
TLFC and the beneficial interest in and title to such property
will not be part of Trans Leasing's estate in the event of the
filing of a bankruptcy petition by or against Trans Leasing under
any bankruptcy law.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the
undersigned contained in the Sale Agreement and is to be governed
by the Sale Agreement.
Capitalized terms used herein and not otherwise defined
will have the meanings assigned to them in the Sale Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of ________________, 1997.
TRANS LEASING INTERNATIONAL, INC.
By: _____________________________
Name: ___________________________
Title: __________________________
EXHIBIT B
FORM OF ASSIGNMENT OF PURCHASED ASSETS
For value received, in accordance with the Contribution
and Sale Agreement dated as of _________________, 1997 (the "Sale
Agreement"), between Trans Leasing International, Inc., a
Delaware corporation ("Trans Leasing"), and TL Lease Funding
Corp. IV, a Delaware corporation ("TLFC"), Trans Leasing does
hereby sell, assign, transfer and otherwise convey unto TLFC,
without recourse, all of its right, title and interest in, to and
under (i) the Purchased Leases (including all of Trans Leasing's
obligations under the Purchased Leases) and all monies due or to
become due thereunder after __________________, 1997, (ii) the
related Equipment (other than any licensed products that may
accompany such Equipment), (iii) the Lease Files for the
Purchased Leases, (iv) any Insurance Policies (including all of
Trans Leasing's obligations thereunder) and the related Insurance
Proceeds with respect to the Purchased Leases and (v) all income
and proceeds relating to the foregoing.
It is the intention of Trans Leasing and TLFC that the
sales, transfers, assignments and conveyances contemplated by
this Assignment constitute a sale of the property described
herein and in the Sale Agreement from Trans Leasing to TLFC and
the beneficial interest in and title to such property will not be
part of Trans Leasing's estate in the event of the filing of a
bankruptcy petition by or against Trans Leasing under any
bankruptcy law.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the
undersigned contained in the Sale Agreement and is to be governed
by the Sale Agreement.
Capitalized terms used herein and not otherwise defined
will have the meanings assigned to them in the Sale Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of ____________________, 1997.
TRANS LEASING INTERNATIONAL, INC.
By: _____________________________
Name: ___________________________
Title: __________________________
EXHIBIT C
FORM OF ASSIGNMENT OF ADDITIONAL ASSETS
For value received, in accordance with the Contribution
and Sale Agreement dated as of ________________, 1997 (the "Sale
Agreement"), between Trans Leasing International, Inc., a
Delaware corporation ("Trans Leasing"), and TL Lease Funding
Corp. IV, a Delaware corporation ("TLFC"), Trans Leasing does
hereby sell, assign, transfer and otherwise convey unto TLFC,
without recourse, (i) the Additional Assets listed on the
Additional Lease Schedule attached hereto (including all of Trans
Leasing's obligations under the Additional Leases) and all monies
due or to become due thereunder after [__________], (ii) the
related Equipment (other than any licensed products that may
accompany any of such Equipment), (iii) the Lease Files for such
Leases, (iv) any Insurance Policies (including all of Trans
Leasing's obligations thereunder) and the related Insurance
Proceeds with respect to such Leases and (v) all income and
proceeds relating to the foregoing (collectively, the "Additional
Assets").
It is the intention of Trans Leasing and TLFC that the
sales, transfers, assignments and conveyances contemplated by
this Assignment constitute a contribution and/or sale of the
property described herein and in the Sale Agreement from Trans
Leasing to TLFC and the beneficial interest in and title to such
property will not be part of Trans Leasing's estate in the event
of the filing of a bankruptcy petition by or against Trans
Leasing under any bankruptcy law.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the
undersigned contained in the Sale Agreement and is to be governed
by the Sale Agreement.
Capitalized terms used herein and not otherwise defined
will have the meanings assigned to them in the Sale Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of [____ __], 199[_].
TRANS LEASING INTERNATIONAL, INC.
By: _____________________________
Name: ___________________________
Title: __________________________
EXHIBIT D
FORMS OF LEASE
See Attached.
CONTRIBUTED LEASE SCHEDULE
See Attached.
PURCHASED LEASE SCHEDULE
See Attached.
LEASE CRITERIA SCHEDULE
1. As of the Initial Cut-Off Date or the applicable
Additional Cut-Off Date, as the case may be, the remaining term
of each Lease is between 2 months and 66 months; provided that
there is no Lease with a term that extends beyond December 31,
2002.
2. As of the Initial Cut-Off Date or the applicable
Additional Cut-Off Date, as the case may be, no unpaid scheduled
lease payment pursuant to any Lease (other than a Skipped
Payment, as defined in the Servicing Agreement) has been due and
payable for more than 30 days (other than due to administrative
delays, such as initial billings) and Trans Leasing has received
at least one scheduled lease payment on each Lease.
3. As of the Initial Cut-Off Date or the applicable
Additional Cut-Off Date, as the case may be, no scheduled lease
payment on any Lease other than a Skipped Payment (as defined in
the Servicing Agreement) was more than 90 days delinquent during
the 12-month period prior to such date (other than due to
administrative delays, such as initial billings).
SPECIFIED PORTFOLIO CHARACTERISTICS SCHEDULE1
1. With respect to any Lessee, the aggregate Discounted
Lease Balance of all Leases of such Lessee does not exceed 1.5%
(2.10% if the Aggregate Discounted Lease Balance is less than
$25,000,000) of the Aggregate Discounted Lease Balance.
2. The sum of the Discounted Lease Balances of the 25
Leases with the greatest Discounted Lease Balance does not exceed
16% (23% if the Aggregate Discounted Lease Balance is less than
$25,000,000) of the Aggregate Discounted Lease Balance.
3. The sum of the Discounted Lease Balances of all Leases
with respect to which the related Equipment was purchased from
one Person (as determined by Trans Leasing in accordance with its
customary procedures) does not exceed 10% of the Aggregate
Discounted Lease Balance.
4. The sum of the Discounted Lease Balances of all Leases
with respect to which the related Lessees operate in the same
industry (as determined by Trans Leasing in accordance with its
customary procedures) does not exceed 40% of the Aggregate
Discounted Lease Balance.
5. The sum of the Discounted Lease Balances of all Leases
with respect to which the billing address of the related Lessees
are located in the same state does not exceed 30% of the
Aggregate Discounted Lease Balance.
6. The sum of the Discounted Lease Balances of all Leases
with respect to which the related Equipment is of the same type
(as determined by Trans Leasing in accordance with its customary
procedures) does not exceed 45% of the Aggregate Discounted Lease
Balance.
7. The average original acquisition cost of the Equipment
(as capitalized in accordance with GAAP) does not exceed $20,000.
8. The sum of the Discounted Lease Balances of all Leases
with respect to which the related Lessee is a governmental agency
does not exceed 5% of the Aggregate Discounted Lease Balance.
9. The sum of the Discounted Lease Balances of all Leases
with respect to which there has been a Skipped Payment (as
defined in the Servicing Agreement) prior to the Initial Cut-Off
Date does not exceed 5% of the Aggregate Discounted Lease Balance
as of the Initial Cut-Off Date.2
_______________________________
1 Capitalized terms used in this Schedule and not otherwise
defined shall have the respective meanings set forth in the
Credit Agreement.
2 Applies to the Initial Cut-Off Date only.