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JSO\29833-10\168.4
REVOLVING CREDIT AND TERM LOAN AND SECURITY AGREEMENT
THIS REVOLVING CREDIT AND TERM LOAN AND SECURITY
AGREEMENT is entered into as of December 20, 1996, 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 $75,000,000 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 of 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 December 20, 1996,
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 any Swap Agreement then in effect);
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" has the meaning set forth for such term
in the Contribution and Sale Agreement, which shall be the
first day TLFC acquires assets from TLI under the
Contribution and Sale Agreement.
"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 Initial Cut-Off Date and ending on the last day of
the month in which the Initial Cut-Off Date occurs. 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, Partial 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 June 30, 1997.
"Contribution and Sale Agreement" means the
Contribution and Sale Agreement between Borrower and Trans
Leasing entered into in connection with this Agreement, in
the form of Exhibit E hereto, 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, the Initial Cut-Off Date, 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 following 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, calculated 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 (other than Scheduled Lease
Payments to the extent there has been a Servicer Advance
with respect thereto); provided, however, that the
Discounted Lease Balance of any Defaulted Lease, Early
Termination Lease, Expired Lease or Lease purchased by Trans
Leasing or the Servicer, or replaced with a Substitute
Lease, 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:
(ii) all payments due in any Collection Period are due
on the last day of such Collection Period;
(iii) payments are discounted on a monthly basis using a
30-day month and a 360-day year;
(iv) 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 all 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, or replaced with a Substitute Lease, shall be
equal to zero.
"Discount Rate" means, as of any date of
determination, a per annum rate equal to
(a) with respect to any date of determination prior to
the Transition Date, (A) if at any such date there are no
Swap Agreements in effect which provide for payments to be
made on the next following Payment 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, (B) if at any such
date there is one or more Swap Agreements in effect which
provide for payments to be made on the next following
Payment Date and the aggregate notional amount of such Swap
Agreements is greater than or equal to the balance of the
Loan as of such date, the sum of (i) 75 basis points, (ii)
the weighted average fixed rate of interest to be paid by
Borrower under all such Swap Agreements and (iii) the
Servicing Fee Rate, and (C) if at any such date there is one
or more Swap Agreements in effect which provide for payments
to be made on the next following Payment Date and the
aggregate notional amount of such Swap Agreements is less
than the balance of the Loan as of such date, the weighted
average of the rates determined pursuant to clauses (A) and
(B), with the rate in clause (B) weighted by the aggregate
notional amount of such Swap Agreements and the rate in
clause (A) weighted by the amount the Loan as of such date
exceeds the aggregate notional amount of such Swap
Agreements, 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
required to be maintained under the first sentence of
Section 8.9(a), 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 in full 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 for any Equipment the
anticipated residual value of such Equipment upon the
expiration of the related 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 originated or
acquired by Trans Leasing in accordance with its normal
valuation procedures and not including any administrative
costs incurred in the realization of such residual value),
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 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.
"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" has the meaning set forth for such
term in the Contribution and Sale Agreement.
"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).
"Initial Cut-Off Date" has the meaning set forth for
such term in the Contribution and Sale Agreement.
"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 (immediately
prior to the acquisition thereof by the Borrower) 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, a Lease is replaced with a
Substitute Lease pursuant to Section 10.4 or all Liquidation
Proceeds or other proceeds from the disposition of the
related Equipment upon expiration or termination of a Lease
have been deposited in the Collection Account, 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 Jones 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, on any date a Swap Agreement is in effect which
provides for payments to be made on the next following
Payment Date, if the interest rate to be used in determining
the amount of payments to be received by Borrower with
respect to such Payment Date under such 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,
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.
"Limited Recourse Agreement" means that the Limited
Recourse Agreement executed by Trans Leasing in favor of
Lender in connection with this Agreement, in the form of
Exhibit G hereto, including all amendments, modifications
and supplements hereto, renewals, extensions or restatements
thereof.
"Liquidation Expenses" means, with respect to any Lease
and the related Equipment, 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 such Equipment upon or
after the expiration or earlier termination of such Lease
(or a portion thereof) 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
Initial 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
Initial Cut-Off Date, of all Original Leases identified by
Lease Number, original Equipment cost, Discounted Lease
Balance as of the Initial 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
Initial 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 $75,000,000.
"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.
"Original Lease Transfer Agreements" means the
Assignment of Contributed Assets and the Assignment of
Purchased Assets, in the form of Exhibit A and B,
respectively, to the Contribution and Sale Agreement,
pursuant to which the Original Leases are transferred to
Borrower by Trans Leasing.
"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 in
the month next succeeding the month in which the Closing
Date occurs, 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.
"Partial Early Termination Lease" means any Lease
a portion of which relating to particular Equipment has been
terminated (including because of a Casualty Loss) prior to
its scheduled expiration date.
"Partial Early Termination Lease Proceeds" means
any and all cash proceeds or rents realized from the sale or
re-Lease of Equipment related to the terminated portion of a
Partial Early Termination Lease (net of Liquidation
Expenses).
"Permitted Liens" means:
(b) Liens granted in favor of Lender or any Swap
Counterparty under or in connection with this Agreement
(including as contemplated by Section 10.6);
(c) 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
(d) 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 or Partial 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.
"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 or, with respect to any
Substitute Lease, after the applicable Substitution Cut-Off
Date, in each case after giving effect to 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)
.
"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 Advance" shall have the meaning set forth for
such term in the Servicing Agreement.
"Servicer Default" has the meaning specified in the
Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement
among Borrower, Trans Leasing, as Servicer, and Lender
entered into in connection with this Agreement, in the form
of Exhibit F hereto, 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
related Determination Date.
"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 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 over the period the Swap Agreement is
effective anticipated on the date the Swap Agreement is
executed.
"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, and (iii) unless a
Substitute Lease was substituted therefor in accordance with
Section 10.4, an amount equal to (A) 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 and
(B) the Discounted Lease Balance of the terminated portion
of any Lease that became a Partial Early Termination Lease;
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, plus the amount of any
unreimbursed Servicer Advances with respect to such Lease,
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) Subject to the limitation set forth in Section
2.1, Borrower may request an initial Revolving Loan on any date
prior to the Commitment Expiration Date in an amount up to the
product of (i) the Advance Rate and (ii) the sum of the
Discounted Lease Balance of the Original Leases that are to
become part of the Collateral in accordance with Section 10.3 on
the Borrowing Date.
(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 up 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(a), (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 required to be maintained
under the first sentence of Section 8.9(a). 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 an interest in any or all of the
Collateral or 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 the Swap Counterparty, if any, by wire transfer
to the Swap Counterparty Account, any amounts due to the
Swap Counterparty under any Swap Agreement then in effect;
(4) to Lender, any Interest Arrearage for such Payment
Date; and
(5) 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 Agreement, 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 date hereof (other than those
contained in Section 7.12) 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 upon execution will 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 3000 Dundee Road,
Northbrook, Illinois 60062 and 1209 Orange Street, Wilmington,
Delaware 19801.
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,
the Amended and Restated Contribution and Sale Agreement, the
Pooling and Servicing Agreement and the Trust Agreement, each
dated as of October 6, 1995, and the Amended and Restated
Contribution and Sale Agreement, the Pooling and Servicing
Agreement and the Trust Agreement, each dated as of November 26,
1996, 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
Initial Cut-Off Date is located (based on billing addresses of
the related Lessees)), (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 and (iii) for the
interest of any Swap Counterparty as set forth herein. 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 the
Collateral 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.
Within 30 days of each six-month anniversary of the date of this
Agreement, Borrower shall obtain and deliver to Lender a copy of
UCC, judgment and tax lien searches, or updates since the date of
the last search supplied to Lender, with respect to each of
Borrower and Trans Leasing in the States of California, Delaware,
Florida, Illinois, New York, Pennsylvania and Texas.
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 Transition 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 after 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 any Swap Agreement, including any Swap Agreement
required to be maintained pursuant to Section 8.9 hereof, (d)
pursuant to the Pooling and Servicing Agreement, dated as of
October 6, 1995, or as permitted thereunder and (e) pursuant to
the Pooling and Servicing Agreement, dated as of November 26,
1996, 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, (d) all amounts due from and other
obligations of Borrower to the Swap Counterparty under any Swap
Agreement and (e) 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 Leases as Collateral. Any Lease contributed to
Borrower pursuant to the Limited Recourse Agreement shall become
Collateral hereunder.
(b) Each Lease shall be an Eligible Lease as of the
related Cut-Off Date, and (1) with respect to Original Leases,
all of the Specified Portfolio Characteristics shall be true with
respect to the Original Leases as of the Initial Cut-Off Date,
and (2) with respect to Additional Leases, the addition of such
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) Concurrent with the addition of any Leases
(including the Original Leases) pursuant to this Section 10.3,
Lender shall receive the following:
(1) (A) with respect to Original Leases, the Original
Lease Transfer Agreements for the unconditional contribution
and sale of the Original Leases and the related Equipment to
Borrower and the initial List of Leases or (B) with respect
to Additional Leases, 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 (e), after the Transition Date Borrower may substitute a
Substitute Lease and the related Equipment for and replace (i) a
Lease (and the related Equipment) that has become a Defaulted
Lease or an Early Termination Lease, (ii) that portion of a
Partial Early Termination Lease (and the related Equipment) that
has been terminated prior to the scheduled expiration date of
such Lease or (iii) a Lease (and the related Equipment) that 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 the
substitutions pursuant to Section 10.4(a), made as of any
Substitution Date, considered as a whole, shall not cause any of
the Specified Portfolio Characteristic to be untrue as of the
related 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
Substitute Lease 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
Substitute Lease 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 Substitute Lease Cut-Off Date,
the Substitute Leases being substituted on such date have an
aggregate Discounted Lease Balance not less than the
aggregate Discounted Lease Balance of the Leases (or
portions thereof) 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
labeled "Aggregate Scheduled Lease Payments" (a "Payment
Deficiency"), or increase the amount of such a Payment
Deficiency.
(e) The Borrower shall also have the right to
substitute Equipment under any Lease for comparable Equipment so
long as there is no change in the amount, number or timing of the
Scheduled Lease Payments with respect to such Lease and as of the
related date of substitution the Discounted Equipment Residual
Value of the substitute Equipment is not less than the Discounted
Equipment Residual Value of the original Equipment and provided
that, with respect to the substitute Equipment, the
representations and warranties set forth in subsections (i),
(vii) and (ix) of Section 3.01(a) of the Contribution and Sale
Agreement and Section 7.12 hereof are true as of the date of such
substitution.
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.
10.6 Swap Agreements. At any time and from time to
time prior to the Conversion Date, Borrower and Lender may agree
that Borrower shall maintain a Swap Agreement with a Swap
Counterparty reasonably acceptable to Lender. If Borrower elects
to obtain a Swap Agreement (including any Swap Agreement required
under Section 8.9) from a Swap Counterparty other than Lender,
Lender agrees to cooperate in good faith and execute such
documents (including any necessary intercreditor agreements) as
may be reasonably necessary so as to grant and provide to such
Swap Counterparty a security interest in the Collateral
equivalent to the security interest therein that the Lender would
have as Swap Counterparty by virtue of this Agreement.
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 all documents required under the provisions
of Section 10.3.
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 Kirkland & Ellis, 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 Initial Cut-Off Date.
13.10 Initial Additional Certificate. An Initial
Addition Certificate in the form of Exhibit K hereto signed by a
Responsible Officer (x) indicating the sum of the Discounted
Lease Balances of the Original Leases added to the Collateral in
accordance with Section 10.3 on initial Borrowing Date and (y)
certifying that the requirements of Section 10.3 have been
satisfied and that the conditions precedent set forth in Sections
12 and 13 have been satisfied.
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 marshall 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 Cook 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 /s/ Norman Smagley
Printed Name: Norman Smagley
Title: Vice President, Finance
Notice to be sent to:
TL Lease Funding Corp. IV
c/o The Corporation Trust Company
Wilmington, Delaware 19801
With a copy to:
Trans Leasing International, Inc.
3000 Dundee Road
Northbrook, Illinois 60062
Attention: Chief Financial Officer
Telephone: (708) 291-7110
Facsimile: (708) 291-7318
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA,
as Lender
By: /s/ Bill A. Shirley,
Printed Name: Bill A. Shirley
Title: Vice President
Notice to be sent to:
First Union National Bank of North
Carolina
One First Union Center TW-6
301 South College Street
Charlotte, NC 28288-0610
Attention: Christopher R. Snyder
Vice President
Telephone: 704/374-3017
Facsimile: 704/374-3254
Exhibit A
REVOLVING CREDIT AND TERM LOAN NOTE
$75,000,000.00 Dated: December 20, 1996
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 Seventy-Five
Million Dollars ($75,000,000.00) 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 December 20,
1996 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
301 South College Street
Charlotte, North Carolina 28288-0735
Attention: Hannah Carmody, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan
and Security Agreement dated as of December 20, 1996 (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 [(a)]/[(b)]/[(c)] of the
Agreement, this Notice of Borrowing in respect of the Revolving
Loans represents the request of the undersigned to borrow on
_____________, 199_ (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(a) NO ADDITIONAL PARAGRAPH IS
INSERTED.]
[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
301 South College Street
Charlotte, North Carolina 28288-0735
Attention: Hannah Carmody, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan
and Security Agreement dated as of December 20, 1996 (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
301 South College Street
Charlotte, North Carolina 28288-0735
Attention: Hannah Carmody, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan
and Security Agreement dated as of December 20, 1996 (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 Payment due Schedule
Payment Scheduled Servicing to Swap Company Principal
Date Lease Fee Payment
Payments
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
231 South LaSalle Street
Chicago, Illinois 60617
ABA No.: 071000039
Account No.: 7804563
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 Certificate
[Company's Letterhead]
_____________, 199_
First Union Capital Markets Group
One First Union Center TW-19
301 South College Street
Charlotte, North Carolina 28288-0735
Attention: Hannah Carmody, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan
and Security Agreement dated as of December 20, 1996 (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.
The undersigned hereby certifies that the requirements of
Sections 8.1(b) and (c) have been satisfied.
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 K
Form of Initial Addition Certificate
[Company's Letterhead]
_____________, 199_
First Union Capital Markets Group
One First Union Center TW-19
301 South College Street
Charlotte, North Carolina 28288-0735
Attention: Hannah Carmody, Asset-Backed Structured Finance
Ladies/Gentlemen:
Reference is made to the Revolving Credit and Term Loan
and Security Agreement dated as of December 20, 1996 (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(A) of the Agreement, Borrower
hereby certifies that on _______________ it acquired Original
Leases from Trans Leasing with an aggregate Discounted Lease
Balance as of the Initial Cut-Off Date (calculated using the
Discount Rate for the Closing Date) equal to $___________
pursuant to the Initial Lease Transfer Agreements. The
undersigned hereby certifies that the requirements of Sections
8.1(b) and (c) and Section 10.3 of the Agreement have been
satisfied and all conditions precedent set forth in Sections 12
and 13 of the Agreement have been satisfied.
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:________________________
_______
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 December 20, 1996
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
1.1 Defined Terms 1
SECTION 2. COMMITMENT TO LEND 17
2.1 Revolving Loans 17
2.2 Term Loan 18
SECTION 3. BORROWING PROCEDURES; CERTAIN LOAN TERMS 18
3.1 Borrowing Procedures for Revolving Loans; Deemed
Requests for
Amounts Due on each Payment Date 18
3.2 Transition to Term Loan; Final Revolving Loan or
Draw on
Limited Recourse Agreement 19
3.3 Capital Adequacy 19
SECTION 4. INTEREST AND FEES 20
4.1 Revolving Loans 20
4.2 Term Loan 20
4.3 Method of Calculating Interest and Fees 20
SECTION 5. REPAYMENT OF PRINCIPAL 20
5.1 Revolving Loan Principal Payments 20
5.2 Term Loan Principal Payments 21
5.3 Prepayment of Loan upon Sale of Other Notes 21
SECTION 6. APPLICATION OF AMOUNTS ON DEPOSIT IN COLLECTION
ACCOUNT 21
6.1 Application of Amounts on Deposit in the Collection
Account 21
6.2 Taxes 23
SECTION 7. BORROWER'S REPRESENTATIONS AND WARRANTIES 24
7.1 Existence and Power 24
7.2 Loan Documents and Note Authorized; Binding
Obligations 24
7.3 No Conflict; Legal Compliance 24
7.4 Executive Offices 25
7.5 Litigation 25
7.6 Consents and Approvals 25
7.7 Other Agreements 25
7.8 Margin Regulations 25
7.9 Taxes 25
7.10 Solvency 26
7.11 Representations and Warranties 26
7.12 Good Title to the Collateral; First Priority
Security Interest 26
7.13 Investment Company Act 26
SECTION 8. BORROWER'S AFFIRMATIVE COVENANTS 26
8.1 Asset Base Certificates; Additional Access and
Information 26
8.2 Existence; Compliance with Law, Books and Records,
Commingling of Funds 27
8.3 Taxes and Other Liabilities 28
8.4 Notice of Liens 28
8.5 Obligations with Respect to Leases 28
8.6 Preservation of Security Interest 28
8.7 Consolidated Return 28
8.8 Taxable Income from the Leases 29
8.9 Maintenance of Swap Agreement 29
8.10 Contribution and Sale Agreement 29
8.11 Borrower's Identity 29
8.12 Filing Locations 29
SECTION 9. BORROWER'S NEGATIVE COVENANTS 29
9.1 Liens; Negative Pledges; and Encumbrances 29
9.2 Indebtedness and Guarantees 30
9.3 Amendments of Charter Documents; Conduct of
Business;
No Merger 30
9.4 No Use of Lender's Name 30
SECTION 10. GRANTS OF SECURITY INTEREST; THE COLLATERAL 30
10.1 Security Interest 30
10.2 Creation of Collection Account; Investments 31
10.3 Addition of Leases 32
10.4 Substitution of Leases 32
10.5 Release of Liens 34
10.6 Swap Agreements 34
SECTION 11. LIMITATION ON LIABILITY 34
SECTION 12. CONDITIONS PRECEDENT TO ALL REVOLVING LOANS 35
12.1 Notice 35
12.2 Default 35
12.3 Warranties 35
12.4 Additional Lease Transfer Agreements 35
SECTION 13. CONDITIONS PRECEDENT TO INITIAL REVOLVING LOAN 35
13.1 Note 35
13.2 Other Agreements and Financing Statements 35
13.3 Resolutions 36
13.4 Incumbency Certificate 36
13.5 By-Laws 36
13.6 Certificate of Incorporation 36
13.7 Good Standing 37
13.8 Opinion 37
13.9 Asset Base Certificate 37
13.10 Initial Additional Certificate 37
SECTION 14. EVENTS OF DEFAULT AND REMEDIES 37
14.1 Events of Default 37
14.2 Waiver of Default 38
14.3 Remedies 38
SECTION 15. EXPENSES AND INDEMNITEES 41
15.1 Expenses 41
15.2 Indemnification 41
(a) General Indemnity. 41
(b) Procedures for Suits 41
(c) Survival; Defense 41
SECTION 16. MISCELLANEOUS 42
16.1 Survival 42
16.2 No Waiver by Lender 42
16.3 Notices 42
16.4 Headings 42
16.5 Severability 42
16.6 Entire Agreement; Construction; Amendments and
Waivers 43
16.7 Reliance by Lender 43
16.8 Marshalling; Payments Set Aside 43
16.9 No Set-Offs by Borrower 43
16.10 Binding Effect, Assignment Transfer 43
16.11 Counterparts 44
16.12 Equitable Relief 44
16.13 Governing Law 44
16.14 Consent to Jurisdiction 45
16.15 Waiver of Jury Trial 45
16.16 General Interpretive Principles 45
16.17 Termination 46
16.18 No Petition Covenants 46
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
Exhibit K Form of Initial Addition Certificate