Exhibit 10.4
EXECUTION COPY
LOAN AND SECURITY AGREEMENT
Dated as of September 13, 2002
TAXI MEDALLION LOAN TRUST I
as Borrower
and
MERRILL LYNCH BANK USA
as Lender
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS...............................1
Section 1.01 Certain Defined Terms........................................1
Section 1.02 Accounting Terms and Determinations.........................21
ARTICLE II ADVANCES, NOTE AND PREPAYMENTS..................................21
Section 2.01 Advances....................................................21
Section 2.02 Note........................................................22
Section 2.03 Procedure for Borrowing.....................................22
Section 2.04 Delivery of Medallion Loan Files............................23
Section 2.05 Repayment of Advances; Interest.............................23
Section 2.06 Limitation on Advances; Illegality..........................23
Section 2.07 Determination of Borrowing Base; Mandatory Prepayments
or Pledge; Rapid Amortization Event......................24
Section 2.08 Optional Prepayments; Release of Medallion Loans upon
Repayment................................................24
Section 2.09 Requirements of Law.........................................25
Section 2.10 Purpose of Advances.........................................26
Section 2.11 Taxes.......................................................26
Section 2.12 Interest Reserve Deposit Account............................28
Section 2.13 Collection Account..........................................28
Section 2.14 Continuation................................................28
Section 2.15 Minimum Amounts and Maximum Number of Tranches..............29
Section 2.16 Indemnity...................................................29
ARTICLE III PAYMENTS; COMPUTATIONS; FEES....................................29
Section 3.01 Payments....................................................29
Section 3.02 Computations................................................30
Section 3.03 Facility Fee................................................30
Section 3.04 Non-Usage Fee...............................................31
ARTICLE IV COLLATERAL SECURITY.............................................31
Section 4.01 Collateral; Security Interest...............................31
Section 4.02 Further Documentation.......................................33
Section 4.03 Changes in Locations, Name, etc.............................33
Section 4.04 Lender's Appointment as Attorney-in-Fact....................33
Section 4.05 Performance by Lender of Borrower's Obligations.............35
Section 4.06 Proceeds....................................................35
Section 4.07 Remedies....................................................35
Section 4.08 Limitation on Duties Regarding Presentation of Collateral...36
Section 4.09 Powers Coupled with an Interest.............................36
-i-
Section 4.10 Release of Security Interest................................36
ARTICLE V CONDITIONS PRECEDENT............................................37
Section 5.01 Initial Advance.............................................37
Section 5.02 Initial and Subsequent Advances.............................40
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER..................42
Section 6.01 Eligible Medallion Loans....................................42
Section 6.02 Existence; Qualification....................................42
Section 6.03 Authority and Authorization; Enforceability; Approvals;
Absence of Adverse Notice................................42
Section 6.04 No Breach...................................................43
Section 6.05 Litigation..................................................43
Section 6.06 No Adverse Selection........................................43
Section 6.07 Bulk Transfer...............................................43
Section 6.08 Indebtedness................................................43
Section 6.09 Borrower's Purpose..........................................43
Section 6.10 Adverse Orders..............................................43
Section 6.11 Taxes.......................................................43
Section 6.12 Chief Executive Office; Jurisdiction of Organization........44
Section 6.13 Legal Name..................................................44
Section 6.14 Solvency....................................................44
Section 6.15 Subsidiaries................................................44
Section 6.16 Consideration...............................................44
Section 6.17 True and Complete Disclosure................................44
Section 6.18 Proceeds Regulations........................................44
Section 6.19 Adverse Agreements..........................................45
Section 6.20 Investment Company..........................................45
Section 6.21 No Default..................................................45
Section 6.22 Underwriting and Servicing..................................45
Section 6.23 ERISA.......................................................45
Section 6.24 Sharing of Payments.........................................45
Section 6.25 Collateral Security; Acquisition............................45
Section 6.26 Subsidiary..................................................46
Section 6.27 Subsidiaries of the Parent..................................46
ARTICLE VII COVENANTS OF THE BORROWER.......................................46
Section 7.01 Existence; etc..............................................46
Section 7.02 Special Purpose Entity......................................47
Section 7.03 Accuracy of Opinions........................................48
Section 7.04 Prohibition on Adverse Claims...............................48
Section 7.05 Prohibition on Fundamental Change...........................48
Section 7.06 Sale or Contribution Treatment..............................48
Section 7.07 Prohibition on Modifications................................49
Section 7.08 Amendment to Organizational Documents.......................49
Section 7.09 Remittance of Collections...................................49
-ii-
Section 7.10 Hedging Strategy............................................49
Section 7.11 Litigation..................................................49
Section 7.12 Notices.....................................................49
Section 7.13 Additional Information......................................50
Section 7.14 Transaction with Affiliates.................................50
Section 7.15 Limitation on Liens.........................................50
Section 7.16 Advertising, Origination and Servicing Activities...........50
Section 7.17 Required Filings............................................50
Section 7.18 Financial Statements........................................50
Section 7.19 Maintenance of Insurance....................................51
Section 7.20 Right of First Refusal Replacement Financing................51
Section 7.21 Monthly Pricing Reports; Monthly Liquidation Reports........51
Section 7.22 Underwriting Guidelines.....................................52
Section 7.23 Approved Purchase Agreement Sale or Contribution Treatment..52
Section 7.24 "Warm" Backup Servicer......................................52
Section 7.25 Allonge Identification......................................52
ARTICLE VIII EVENTS OF DEFAULT...............................................52
ARTICLE IX REMEDIES UPON DEFAULT...........................................54
ARTICLE X MISCELLANEOUS...................................................55
Section 10.01 Waiver......................................................55
Section 10.02 Notices.....................................................55
Section 10.03 Indemnification and Expenses................................56
Section 10.04 Amendments..................................................57
Section 10.05 Successors and Assigns......................................57
Section 10.06 Survival....................................................57
Section 10.07 Captions....................................................57
Section 10.08 Counterparts................................................57
Section 10.09 GOVERNING LAW; ETC..........................................58
Section 10.10 SUBMISSION TO JURISDICTION; WAIVERS.........................58
Section 10.11 WAIVER OF JURY TRIAL........................................58
Section 10.12 Acknowledgments.............................................59
Section 10.13 Hypothecation and Pledge of Collateral......................59
Section 10.14 Assignments; Participations.................................59
Section 10.15 Alteration of Medallion Loan Documents......................60
Section 10.16 Periodic Due Diligence Review...............................60
Section 10.17 Usury Savings Clause........................................61
Section 10.18 Pledge of Ownership Interest in the Borrower................62
-iii-
SCHEDULES
- ---------
SCHEDULE 1.01(a) Credit and Collection Policy
SCHEDULE 1.01(b) Existing Permitted Joint Participants
SCHEDULE 1.01(c) Existing Permitted Junior Participants
SCHEDULE 1.01(d) Underwriting Guidelines
SCHEDULE 1.01(e) Former FSP Medallion Loans
SCHEDULE 1.01(f) Specified 90% LTV Medallion Loans
SCHEDULE 1 Eligibility Criteria
SCHEDULE 6.25 Filing Jurisdictions
SCHEDULE 6.27 Parent Subsidiaries
SCHEDULE 7.20 Right of First Refusal
SCHEDULE 7.21 Monthly Pricing Reports
EXHIBITS
- --------
EXHIBIT A Form of Note
EXHIBIT B Form of Borrowing Base Certificate
EXHIBIT C Form of Collection Account Control Agreement
EXHIBIT D Form of Custodial Agreement
EXHIBIT E-1 RESERVED
EXHIBIT E-2 RESERVED
EXHIBIT E-3 RESERVED
EXHIBIT F-1 Form of Junior Participation Supplemental Agreement
(E.J.T.)
EXHIBIT F-2 Form of Junior Participation Supplemental Agreement (Elk)
EXHIBIT F-3 Form of Junior Participation Supplemental Agreement
(Susil Cab, Inc.)
EXHIBIT F-4 Form of Junior Participation Supplemental Agreement (The
OSG Corporation)
EXHIBIT G Form of Interest Reserve Deposit Account Control
Agreement
EXHIBIT H Form of Notice of Borrowing and Pledge
EXHIBIT I Form of Tax Certificate
EXHIBIT J Form of Assignment and Acceptance
EXHIBIT K-1 RESERVED
EXHIBIT K-2 RESERVED
-i-
EXHIBIT K-3 RESERVED
EXHIBIT L-1 Form of Approved Junior Participation Agreement (E.J.T.)
EXHIBIT L-2 Form of Approved Junior Participation Agreement (Elk)
EXHIBIT L-3 Form of Approved Junior Participation Agreement (Susil
Cab, Inc.)
EXHIBIT L-4 Form of Approved Junior Participation Agreement (The OSG
Corporation)
-ii-
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made as of September 13, 2002
between TAXI MEDALLION LOAN TRUST I, a Delaware business trust (the "Borrower"),
and MERRILL LYNCH BANK USA, a Utah industrial loan corporation (the "Lender").
RECITALS
WHEREAS, pursuant to the Purchase Agreement, the Borrower, a
special-purpose entity, has agreed to purchase Medallions Loans from time to
time from Medallion Funding (defined below), as Seller;
WHEREAS, pursuant to the Servicing Agreement, the Servicer has agreed
to perform certain services in connection with the collection of payments in
respect of the Medallion Loans;
WHEREAS, the Borrower has requested that the Lender from time to time
make revolving credit loans to the Borrower, the proceeds of which shall be used
to finance the purchase of Medallion Loans by the Borrower from Medallion
Funding, as Seller, pursuant to the Purchase Agreement or for other purposes
permitted hereby, and the Lender is prepared to make such loans upon the terms
and subject to the conditions hereof;
WHEREAS, the Borrower may request that the Lender from time to time
make revolving credit loans to the Borrower, the proceeds of which shall be used
to finance the purchase of Medallion Loans by the Borrower from an Approved
Seller pursuant to an Approved Purchase Agreement, and the Lender is prepared to
make such loans upon the terms and subject to the conditions hereof;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Loan Agreement in the singular to have the same
meanings when used in the plural and vice versa):
"Acceptable Refinancing" shall mean the refinancing of the Medallion
Credit Facilities on terms providing for no earlier amortization than in the
applicable amended Medallion Credit Facility or on terms otherwise reasonably
acceptable to the Lender.
"Accepted Servicing Practices" shall have the meaning assigned thereto
in the Servicing Agreement.
"Advance" shall have the meaning assigned to such term in Section
2.01(a).
"Advance Rate" shall mean:
(a) with respect to each Eligible Medallion Loan other than a
Specified 90% LTV Medallion Loan, the applicable advance rate set forth in the
chart below opposite the applicable class of such Eligible Medallion Loan:
-------------------------------------------------- ------------------
Type of Eligible Medallion Loans Advance Rate
-------------------------------------------------- ------------------
Class A Medallion Loans 90%
Class B Medallion Loans 90%
Class C Medallion Loans 85%
Class D Medallion Loans 75%
Class E Medallion Loans 50%
-------------------------------------------------- ------------------
(b) with respect to each Eligible Medallion Loan that is a Specified
90% LTV Medallion Loan, the applicable advance rate set forth in the chart below
opposite the applicable class of such Eligible Medallion Loan:
-------------------------------------------------- ------------------
Type of Specified 90% LTV Medallion Loans Advance Rate
-------------------------------------------------- ------------------
Class A Medallion Loans 80%
Class B Medallion Loans 80%
Class C Medallion Loans 75%
Class D Medallion Loans 65%
Class E Medallion Loans 40%
-------------------------------------------------- ------------------
provided, however, that an Advance Rate may be reduced by an amount of up to 2.5
percentage points, in the sole and absolute discretion of the Lender, if any of
the following events shall exist at any time:
(a) the Delinquency Ratio shall exceed 25%; or
-2-
(b) 10% or more of the Medallion Loans financed under this Loan
Agreement are Class D Medallion Loans and Class E Medallion Loans; or
(c) the Cumulative Losses for Medallion Loans shall exceed $1,000,000;
or
(d) (i) the average cost of fully liquidating a Medallion, determined
as of the last day of each month, based on the cost of liquidating
Medallions during the preceding three months (or if fewer than ten
Medallions were liquidated during such three-month period, based on the
cost of liquidating the ten most recently liquidated Medallions), exceeds
5% of the original principal balance, or (ii) the average time required to
fully liquidate a Medallion in a jurisdiction, determined as of the last
day of each month, based on the time of liquidating Medallions during the
preceding three months (or if fewer than ten Medallions were liquidated
during such three-month period, based on the time of liquidating the ten
most recently liquidated Medallions), exceeds the number of days allotted
per jurisdiction as set forth on Schedule 10 to the Borrowing Base
Certificate under "Cannot exceed ___ days" due to a change in the procedure
for liquidating Medallions estimated by the applicable Taxi Commission, in
each case as determined by the Lender in its sole discretion exercised in
good faith, in which case the Advance Rate may be reduced only with respect
to Medallion Loans secured by Medallions in the jurisdiction in which such
average time to liquidate Medallions exceeds the applicable allotted number
of days.
"Adverse Claim" means a lien, security interest, charge, encumbrance
or other right or claim of any Person other than, with respect to the
Collateral, any lien, security interest, charge, encumbrance or other right or
claim in favor of the Lender.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" (together with the
correlative meanings of "controlled by" and "under common control with") means
possession, directly or indirectly, of the power (a) to vote 10% or more of the
securities or interests (on a fully diluted basis) having ordinary voting power
for the directors or managing partners (or their equivalent) of such Person, or
(b) to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities or interests, by
contract, or otherwise.
"Applicable Margin" shall mean (i) for each Advance secured by
Eligible Medallion Loans other than Specified 90% LTV Medallion Loans, subject
to Section 7.24, 1.50%, and (ii) for each Advance secured by Specified 90% LTV
Medallion Loans, subject to Section 7.24, 1.75%.
"Approved Joint Participation Agreement" shall mean a participation
agreement between Medallion Funding and a Permitted Joint Participant,
substantially in the form of Exhibits K-1, K-2 and K-3 hereto, as amended,
supplemented or otherwise modified from time to time with the consent of the
Lender in its sole and absolute discretion.
"Approved Junior Participation Agreement" shall mean a participation
agreement between Medallion Funding and a Permitted Junior Participant,
substantially in the form of
-3-
Exhibits L-1, L-2, L-3 and L-4 hereto, as amended, supplemented or otherwise
modified from time to time with the consent of the Lender in its sole and
absolute discretion.
"Approved Seller" shall mean any Person, other than Medallion Funding,
acceptable to the Lender in its sole and absolute discretion and approved in
writing by the Lender, as seller of Medallion Loans to the Borrower pursuant to
an Approved Purchase Agreement.
"Approved Purchase Agreement" shall mean each purchase and sale
agreement for Medallion Loans between the Borrower, as purchaser, and an
Approved Seller, together with all instruments, documents and agreements
executed in connection therewith, acceptable to the Lender in writing in the
Lender's sole and absolute discretion, as such Approved Purchase Agreement may
from time to time be amended, supplemented or otherwise modified in accordance
with the terms hereof.
"Assignment and Acceptance" shall have the meaning set forth in
Section 10.14 hereof.
"Backup Servicer" shall have the meaning assigned to such term in the
Servicing Agreement.
"Backup Servicing Agreement" shall mean the Backup Servicing Agreement
between the Backup Servicer, the Borrower and the Lender, as amended,
supplemented or otherwise modified from time to time.
"Bankruptcy Event" shall be deemed to have occurred with respect to a
Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidation, assignee, sequestrator or the like for such Person or
all or substantially all of its assets, or any similar action with respect to
such Person under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of 30
consecutive days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the federal bankruptcy laws or other
similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail to, or admit in writing its
inability to, pay its debts generally as they become due, or, if a corporation
or similar entity, its board of directors or members shall vote to implement any
of the foregoing.
-4-
"Borrower" shall have the meaning assigned to such term in the
Preamble.
"Borrowing Base" shall mean at any time an amount equal to the
aggregate Collateral Value of all Eligible Medallion Loans pledged to the Lender
hereunder at such time.
"Borrowing Base Certificate" shall mean a certificate, substantially
in the form of Exhibit B hereto, with appropriate insertions, showing the
Borrowing Base as of the date set forth therein, and certified as complete and
correct by a Responsible Officer of the Servicer.
"Borrowing Base Deficiency" shall have the meaning provided in Section
2.07(b) hereof.
"Borrowing Base Period" shall have the meaning assigned to such term
in Section 2.01(a).
"Boston Medallion Loan" shall mean a Medallion Loan secured by
Medallion Collateral that includes a Medallion issued by the Taxi Commission for
the City of Boston, Massachusetts.
"Business Day" shall mean any day other than (i) a Saturday or Sunday
or (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of
New York, the Lender or the Custodian (if other than the Borrower) is authorized
or obligated by law or executive order to be closed and, if such day relates to
a borrowing of, a payment or prepayment of principal of or interest on, or an
Interest Period for, a Eurodollar Loan or a notice by the Borrower with respect
to any such borrowing, payment, prepayment or Interest Period, a day in which
dealings in Dollar deposits are carried out in the London interbank market.
"Cambridge Medallion Loan" shall mean a Medallion Loan secured by
Medallion Collateral that includes a Medallion issued by the Taxi Commission for
the City of Cambridge, Massachusetts.
"Chicago Medallion Loan" shall mean a Medallion Loan secured by
Medallion Collateral that includes a Medallion issued by the Taxi Commission for
the City of Chicago, Illinois.
"Class" shall mean the status of a Medallion Loan at any time as a
Class A Medallion Loan, Class B Medallion Loan, Class C Medallion Loan, Class D
Medallion Loan or Class E Medallion Loan.
"Class A Medallion Loans" shall mean Eligible Medallion Loans in
respect of which there is no delinquency in payment or there is a delinquency in
the payment of principal and/or interest which continues for a period of up to
30 days (without regard to any applicable grace periods).
"Class B Medallion Loans" shall mean Eligible Medallion Loans in
respect of which there is a delinquency in the payment of principal and/or
interest which continues for a period greater than and including 31 days but not
in excess of 60 days (without regard to any applicable grace periods).
-5-
"Class C Medallion Loans" shall mean Eligible Medallion Loans in
respect of which there is a delinquency in the payment of principal and/or
interest which continues for a period greater than and including 61 days but not
in excess of 90 days (without regard to any applicable grace periods).
"Class D Medallion Loans" shall mean Eligible Medallion Loans in
respect of which there is a delinquency in the payment of principal and/or
interest which continues for a period greater than and including 91 days but not
in excess of 180 days (without regard to any applicable grace periods).
"Class E Medallion Loans" shall mean Eligible Medallion Loans in
respect of which there is a delinquency in the payment of principal and/or
interest which continues for a period greater than and including 181 days but
not in excess of 360 days (without regard to any applicable grace periods).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall have the meaning provided in Section 4.01(b)
hereof.
"Collateral Value" shall mean, with respect to any Eligible Medallion
Loan on any date of determination, an amount equal to the product of (a) the
Advance Rate applicable to such Eligible Medallion Loan and (b) the Net
Principal Balance of such Eligible Medallion Loan; provided, that:
(a) the following additional limitations shall apply:
(i) the aggregate Collateral Value of all Eligible Medallion Loans
which consist of New York City Medallion Loans shall be no less than 66.67%
of the aggregate Collateral Value of all Eligible Medallion Loans at such
time (or such other percentage as the Lender may consent to from time to
time);
(ii) the aggregate Collateral Value of all Eligible Medallion Loans
which consist of Chicago Medallion Loans, Boston Medallion Loans, Cambridge
Medallion Loans, Newark Medallion Loans, Philadelphia Medallion Loans or
Other Acceptable Medallion Loans shall not exceed 33.33% of the aggregate
Collateral Value of all Eligible Medallion Loans at such time (or such
other percentage as the Lender may consent to from time to time);
(iii) the aggregate Collateral Value of all Eligible Medallion Loans
that are included in the Borrowing Base at any time and that are not Class
A Medallion Loans shall not exceed 25% of the aggregate Collateral Value of
all Eligible Medallion Loans at such time;
(iv) the aggregate Collateral Value of all Eligible Medallion Loans
that are included in the Borrowing Base at any time and that are not Class
A Medallion Loans or Class B Medallion Loans shall not exceed 10% of the
aggregate Collateral Value of all Eligible Medallion Loans at such time;
-6-
(v) the aggregate Collateral Value of all Eligible Medallion Loans
that are included in the Borrowing Base at any time and that are not Class
A Medallion Loans, Class B Medallion Loans or Class C Medallion Loans shall
not exceed 5% of the aggregate Collateral Value of all Eligible Medallion
Loans at such time;
(vi) the aggregate Collateral Value of all Eligible Medallion Loans
which consist of Junior Participation Medallion Loans shall not exceed the
lesser of $25,000,000 or 10% of the Maximum Committed Credit at such time;
(vii) the aggregate Collateral Value of all Eligible Medallion Loans
which consist of Joint Participation Medallion Loans shall not exceed the
lesser of $25,000,000 or 10% of the Maximum Committed Credit at such time;
(viii) the aggregate Collateral Value of all Eligible Medallion Loans
which consist of Former FSP Medallion Loans shall not exceed $13,500,000;
and
(ix) the aggregate Collateral Value of all Eligible Medallion Loans
which consist of Specified 90% LTV Medallion Loans shall not exceed
$10,000,000;
(b) the Collateral Value shall be deemed to be zero with respect to
each Medallion Loan:
(i) with respect to which the eligibility criteria set forth on
Schedule 1 are not satisfied on such date;
(ii) made to any one Obligor (or guaranteed by any one guarantor) in
an amount that exceeds $8,000,000 in the aggregate together with any other
Medallion Loans to such Obligor;
(iii) in respect of which there is a delinquency in the payment of
principal and/or interest which continues for a period greater than 360
days (without regard to any applicable grace periods);
(iv) for which the Medallion Loan File has been released from the
possession of the Custodian under the Custodial Agreement to any Person
other than the Lender or a Person acting as the consenting bailee for the
Lender for a period of fifteen (15) or more consecutive days;
(v) which exceeds the limitations on Collateral Value set forth in
paragraph (a) above;
(vi) for which the Custodian has not received the Medallion Loan File
with respect to such Medallion Loan in the time and manner set forth in
Section 2.04;
(vii) in respect of any Former FSP Medallion Loan that is pledged to
the Lender after the Effective Date; and
-7-
(viii) in respect of any Specified 90% LTV Medallion Loan that is
pledged to the Lender after the Effective Date.
"Collection Account" shall mean a segregated bank account maintained
by the Collection Account Bank, as depositary, pursuant to the Collection
Account Control Agreement, in the name of the Borrower for the benefit of the
Lender and subject to a security interest in favor of the Lender into which all
Collections shall be deposited by the Servicer.
"Collection Account Control Agreement" shall mean the Collection
Account Control Agreement, dated as of the date hereof, by and among the
Borrower, the Servicer, the Lender, and the Collection Account Bank,
substantially in the form of Exhibit C hereto, as amended, supplemented or
otherwise modified from time to time.
"Collection Account Bank" shall mean JPMorgan Chase Bank.
"Collections" shall mean, collectively, all collections, payments and
recoveries on or in respect of the Medallion Loans, the Hedging Arrangements and
the other Medallion Collateral (including without limitation insurance proceeds
and proceeds of the disposition of the Medallion Loans or of assets securing or
otherwise subject to the Medallion Loans), and all proceeds of the foregoing.
"Combined Loan-To-Value Ratio" shall have the meaning provided in
Section 2.07(d) hereof.
"Commitment Letter" shall mean the commitment letter, dated as of June
21, 2002, between the Lender and Medallion Funding, as such letter may be
amended from time to time.
"Continue", "Continuation" and "Continued" shall mean the continuation
of a Eurodollar Loan from one Interest Period to the next Interest Period.
"Contractual Obligation" shall mean as to any Person, any provision of
any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound or any provision of any security
issued by such Person.
"Corporate Medallion" shall mean a Medallion that is not an Individual
Medallion.
"Credit and Collection Policy" shall mean the credit and collection
policy of Medallion Funding, as Servicer, for Medallion Loans, a copy of which
is attached hereto as Schedule 1.01(a).
"Cumulative Losses" shall mean cumulative losses actually realized
with respect to Medallion Loans from and after the time such loans became
Medallion Loans, but shall not include costs, expenses or losses resulting from
Hedging Arrangements.
"Custodial Agreement" shall mean the Custodial Agreement, dated as of
the date hereof, among the Borrower, the Custodian, the Servicer and the Lender,
substantially in the
-8-
form of Exhibit D hereto, as the same shall be modified and supplemented and in
effect from time to time.
"Custodian" shall mean Wells Fargo Bank Minnesota, National
Association, as custodian under the Custodial Agreement, and its successors and
permitted assigns thereunder.
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"Default Rate" shall mean, in respect of any principal of any Advance
or, to the extent permitted by law, any other amount under this Loan Agreement,
the Note or any other Loan Document that is not paid when due to the Lender
(whether at stated maturity, by acceleration, by optional or mandatory
prepayment or otherwise), a rate per annum during the period from and including
the due date to but excluding the date on which such amount is paid in full
equal to the Eurodollar Rate plus 4.00% per annum.
"Delinquency Ratio" means, as of the last day of each month, (x) the
aggregate of the Net Principal Balance of all Medallion Loans for which the
related Obligors have been delinquent for thirty-one (31) or more days, divided
by (y) the aggregate of the Net Principal Balance of all Medallion Loans at such
time.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Due Diligence Review" shall mean the performance by the Lender of any
or all of the reviews permitted under Section 10.16 hereof with respect to any
or all of the Medallion Loans, as desired by the Lender from time to time.
"Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 5.01 shall have been satisfied.
"Eligible Medallion Loan" shall mean a Medallion Loan purchased by the
Borrower from a Seller (a) which satisfies the eligibility characteristics set
forth on Schedule 1 hereto on and as of the applicable Funding Date and which
continues to satisfy such eligibility characteristics at all times thereafter
while such Medallion Loan is included in the Borrowing Base and (b) in the case
of a Medallion Loan described in (ii) or (iii) of the definition of "Medallion
Loan," as to which the Lender has received evidence satisfactory to the Lender
that such Medallion Loan was acquired by such Seller in a "true sale"
transaction.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurocurrency Liabilities" shall have the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Base Rate" shall mean with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum equal to the
corresponding rate appearing on page BBAM of Bloomberg L.P. as LIBOR for such
Interest Period two (2) Business Days prior to the beginning of such Interest
Period (and if such date is not a Business
-9-
Day, the Eurodollar Rate in effect on the Business Day immediately preceding
such date), and if such rate shall not be so quoted, the rate per annum at which
the Lender is offered Dollar deposits at or about 10:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period by prime
banks in the interbank eurodollar market where the eurodollar and foreign
currency exchange operations in respect of its Advances are then being conducted
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Advances to
be outstanding during such Interest Period.
"Eurodollar Loan" shall mean an Advance the rate of interest
applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate" shall mean with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):
Eurodollar Base Rate
-----------------------------------------
1.00 - Eurodollar Rate Reserve Percentage
"Eurodollar Rate Reserve Percentage" shall mean, for any Interest
Period for all of the Eurodollar Loans comprising part of the same borrowing,
the reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor thereto) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York, New York with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities that includes deposits by reference to
which the interest rate on Eurodollar Loans is determined) having a term
comparable to such Interest Period.
"Event of Default" or "Default" shall have the meaning provided in
Article VIII hereof.
"Facility Fee" shall have the meaning provided in Section 3.03(a)
hereof.
"Federal Funds Rate" shall mean for any day, a fluctuating interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day for such transactions
received by the Lender from three Federal funds brokers of recognized standing
selected by the Lender.
"Financing Lease" shall mean any lease of property, real or personal,
the obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
-10-
"Former FSP Medallion Loan" shall mean a Medallion Loan that was
subject to a subordinated participation held by Freshstart but is no longer
subject to a participation interest listed on Schedule 1.01(b) hereto.
"Freshstart" shall mean Freshstart Venture Corp., a New York
corporation.
"Funding Date" shall mean, (x) with respect to a Medallion Loan, the
first date on which an Advance is made hereunder to fund the purchase of such
Medallion Loan, and (y) with respect to an Advance, the date on which such
Advance is made.
"Funding Date Documentation" shall have the meaning assigned to such
term in the Custodial Agreement.
"Funding Documentation Receipt Date" shall have the meaning assigned
to such term in the Custodial Agreement.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over the Borrower
or any of its properties.
"Hedging Arrangement" shall mean, with respect to any or all of the
Medallion Loans, any interest rate swap, cap or collar agreement, Eurodollar
future contracts, repurchase agreement or other agreements or arrangements
(including any arrangement providing for the short sale of U.S. Treasury
securities), and any securities, securities accounts or securities contracts
relating to the foregoing, in each case intended to provide protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies, entered into by the Borrower
or a designee of the Borrower and the hedging counterparty.
"Hedging Strategy" shall mean an interest rate hedging strategy for
the purpose of providing protection against fluctuations in interest rates,
which strategy may from time to time include the absence of Hedging
Arrangements.
"Indebtedness" shall mean, of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations of such Person in respect of letters
of credit, acceptances or similar instruments issued or created for the account
of such Person and (e) all liabilities secured by any Lien on any property owned
by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
-11-
"Indemnified Party" shall have the meaning provided in Section 10.03
hereof.
"Individual Medallion" shall mean a Medallion issued to an Obligor who
is a natural person in circumstances where such natural person is the only party
who may use such Medallion (commonly referred to as an "owner-driver
medallion").
"Interest Period" shall mean with respect to any Eurodollar Loan:
(i) initially, the period commencing on the Funding Date with respect
to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its Notice of Borrowing and
Pledge given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Lender not less than three Business Days prior to
the last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business
Day;
(2) any Interest Period that would otherwise extend beyond
the Termination Date shall end on the Termination Date;
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; and
(4) the Borrower shall select Interest Periods so as to
minimize any amounts payable under Section 2.16 as a result of
any payment or prepayment of any Eurodollar Loans which would be
scheduled to be due during any such Interest Periods.
"Interest Reserve Deposit Account" shall mean a segregated deposit
account maintained at the Interest Reserve Deposit Account Bank in the name of
the Borrower for the benefit of the Lender and subject to a security interest in
favor of the Lender.
-12-
"Interest Reserve Deposit Account Bank" shall mean Merrill Lynch Bank
USA or another bank or other financial institution acceptable to the Lender at
which the Interest Reserve Deposit Account is maintained.
"Interest Reserve Deposit Account Control Agreement" shall mean the
Interest Reserve Deposit Account Control Agreement, dated as of the date hereof,
by and among the Borrower, the Lender, and the Interest Reserve Deposit Account
Bank, substantially in the form of Exhibit G hereto, as amended, supplemented or
otherwise modified from time to time.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended.
"Joint Participation Medallion Loan" shall mean a Medallion Loan that
is subject to a Permitted Joint Participation Interest.
"Joint Participation Supplemental Agreement" shall mean each Joint
Participation Supplemental Agreement among the Lender, the Borrower, Medallion
Funding and a Permitted Joint Participant, substantially in the form of Exhibits
E-1, E-2 and E-3 hereto, or any other Joint Participation Supplemental Agreement
among the Lender, the Borrower, Medallion Funding and a Permitted Joint
Participant approved by the Lender in its sole and absolute discretion, in each
case as the same may be amended, supplemented or otherwise modified from time to
time.
"Junior Participation Medallion Loan" shall mean a Medallion Loan that
is subject to a Permitted Junior Participation Interest.
"Junior Participation Supplemental Agreement" shall mean each Junior
Participation Supplemental Agreement among the Lender, the Borrower, Medallion
Funding and a Permitted Junior Participant, substantially in the form of
Exhibits F-1, F-2, F-3, and F-4 hereto, or any other Junior Participation
Supplemental Agreement among the Lender, the Borrower, Medallion Funding and a
Permitted Junior Participant approved by the Lender in its sole and absolute
discretion, in each case as the same may be amended, supplemented or otherwise
modified from time to time.
"Lender" shall have the meaning assigned to such term in the Preamble.
"Lien" shall mean any mortgage, lien, pledge, charge, security
interest or similar encumbrance.
"Loan Agreement" shall mean this Loan and Security Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Loan Documents" shall mean, collectively, this Loan Agreement, the
Note, the Collection Account Control Agreement, the Interest Reserve Deposit
Account Control Agreement, the Custodial Agreement, the Servicing Agreement, the
Purchase Agreement, each Junior Participation Supplemental Agreement, each Joint
Participation Supplement Agreement, each Approved Purchase Agreement, the Backup
Servicing Agreement and the agreements relating to Hedging Arrangements.
-13-
"Loan-to-Value Ratio" shall mean, with respect to a Medallion Loan, as
of any date of determination, the percentage equivalent of a fraction the
numerator of which is the Net Principal Balance for such Medallion Loan and the
denominator of which is the Medallion Valuation Amount for the related
Medallion.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the contracts, property, business, condition (financial or otherwise) or
prospects of the Borrower, (b) the ability of the Borrower to perform its
obligations under any of the Loan Documents to which it is a party, (c) the
validity or enforceability of any of the Loan Documents, (d) the rights and
remedies of the Lender under any of the Loan Documents, (e) the timely payment
of the principal of or interest on the Advances or other amounts payable in
connection therewith or (f) the Collateral.
"Maximum Committed Credit" shall mean $250,000,000.
"Medallion" shall mean a medallion or other license issued by a Taxi
Commission which enables the holder thereof to operate a taxicab in New York
City, Chicago, Boston, Cambridge, Newark, Philadelphia or another location in
which the Lender in its sole discretion deems acceptable and approves in
writing.
"Medallion Collateral" shall mean, in respect of a Medallion Loan, the
related Medallion and any other interest in property securing such Medallion
Loan.
"Medallion Credit Facilities" shall mean, collectively, the Medallion
Funding Facility Agreements and the Parent Loan Agreement.
"Medallion Funding" shall mean Medallion Funding Corp., a New York
corporation, and its successors and permitted assigns.
"Medallion Funding Facility Agreements" shall mean, collectively, (i)
the Amended and Restated Loan Agreement, dated December 24, 1997, as amended,
between Medallion Funding, as borrower, the lenders party thereto, Fleet Bank,
National Association, as swing line lender, administrative agent, collateral
agent and arranger, and The Bank of New York, as documentation agent, and (ii)
the Note Purchase Agreement, dated June 1, 1999, as amended, between Medallion
Funding and each of the noteholders party thereto, in each case as the same may
be further amended, supplemented or otherwise modified from time to time.
"Medallion Loan" shall mean each of the loans secured by Medallion
Collateral originated by any of (i) the Seller, (ii) an Affiliate of Medallion
Funding or (iii) a third-party originator acceptable to the Lender in its sole
and absolute discretion and approved by the Lender in writing, and purchased by
the Borrower evidenced by, among other things, a Medallion Note and Medallion
Security Agreement, that is included in any Medallion Loan Schedule, and all
rights and obligations under such loan.
"Medallion Loan Documents" shall mean, with respect to any Medallion
Loan, each of the documents referred to in Section 2 of the Custodial Agreement
(regardless of whether such document has been delivered to the Custodian under
the Custodial Agreement).
-14-
"Medallion Loan File" shall mean, with respect to any Medallion Loan,
all Medallion Loan Documents related to such Medallion Loan.
"Medallion Loan Schedule" shall have the meaning assigned to such term
in the Custodial Agreement.
"Medallion Note" shall mean the original executed promissory note or
other evidence of indebtedness of an Obligor with respect to a Medallion Loan.
"Medallion Security Agreement" shall mean a security agreement between
a Seller and an Obligor under a Medallion Note pursuant to which the Obligor
grants such Seller a security interest in the underlying Medallion and any other
Medallion Collateral.
"Medallion Valuation Amount" shall mean, as of any date of
determination:
(a) in the case of a Medallion issued by the Taxi Commission for New
York City, (i) for an Individual Medallion, the prior month's average of
monthly sales prices for sales of Individual Medallions, as reported by
such Taxi Commission, and (ii) for a Corporate Medallion, the prior month's
average of monthly sales prices for sales of Corporate Medallions, as
reported by such Taxi Commission;
(b) in the case of a Medallion issued by any Taxi Commission other
than the Taxi Commission for New York City, the prior month's average of
monthly sales prices for sales of Medallions, as reported by the applicable
Taxi Commission;
provided that (x) in the event of a change in the manner in which a Taxi
Commission reports average sales prices of Medallions as in effect on the
Effective Date or (y) in the case of the determination of the Medallion
Valuation Amount by an Other Acceptable Taxi Commission, the Medallion Valuation
Amount shall be determined by the Lender pursuant to a methodology established
by the Lender in its sole discretion exercised in good faith, notice of which
methodology shall be given to the Borrower and the Servicer in writing.
"Net Principal Balance" shall mean, with respect to a Medallion Loan,
the unpaid principal balance of a Medallion Loan less the principal amount of
any Permitted Junior Participation Interest in such Medallion Loan; provided,
however, that if the Loan-to-Value Ratio of any Former FSP Medallion Loan
exceeds 90% at any time, the Net Principal Balance of such Former FSP Medallion
Loan for the purpose of determining the Collateral Value of such Former FSP
Medallion Loan shall equal 90% of the Medallion Valuation Amount for such Former
FSP Medallion Loan.
"New York City Medallion Loan" shall mean a Medallion Loan secured by
Medallion Collateral that includes a Medallion issued by the Taxi Commission for
the City of New York, New York.
"Newark Medallion Loan" shall mean a Medallion Loan secured by
Medallion Collateral that includes a Medallion issued by the Taxi Commission for
the City of Newark, New Jersey.
-15-
"Non-Excluded Taxes" shall have the meaning provided in Section 2.11
hereof.
"Non-Usage Fee" shall have the meaning provided in Section 3.04
hereof.
"Note" shall have the meaning assigned to such term in Section 2.02
hereof.
"Notice of Borrowing and Pledge" shall have the meaning provided in
Section 2.01(d) hereof.
"Obligor" shall mean the Person obligated to make payments under a
Medallion Loan.
"Other Acceptable Medallion Loan" shall mean a Medallion Loan issued
by an Other Acceptable Taxi Commission.
"Other Acceptable Taxi Commission" shall mean an agency, commission,
regulatory body or other municipal instrumentality of a jurisdiction approved by
the Lender in its sole and absolute discretion.
"Parent" shall mean Medallion Financial Corp., a Delaware corporation,
a "regulated investment company" within the meaning of the Code and a closed-end
management investment company registered under the Investment Company Act and
its permitted successors hereunder.
"Parent Loan Agreement" shall mean the Second Amended and Restated
Loan Agreement, dated September 22, 2000, as amended, between the Parent, as
borrower, Medallion Business Credit, LLC, the lenders party thereto and Fleet
Bank, National Association, as agent, swing line lender and arranger, as the
same may be further amended, supplemented or otherwise modified from time to
time.
"Partial Payment Date" shall have the meaning provided in Section
2.08(a) hereof.
"Payment Date" shall mean (i) each Regular Payment Date, (ii) any
Business Day designated by the Borrower as a "Payment Date", provided, that, in
the case of this clause (ii) the Borrower shall have given the Lender and the
Custodian one (1) Business Day's prior written notice of such Payment Date, and
the Servicer shall have delivered a current Servicing Report and Medallion Loan
Schedule to the Lender and the Custodian in accordance with the Servicing
Agreement, provided, further, that the Borrower shall designate a "Payment Date"
pursuant to this clause (ii) only if the principal amount of the Advances to be
paid on such day is at least $500,000, provided, further, that the Borrower
shall not designate more than one "Payment Date" pursuant to this clause (ii)
during any calendar week, (iii) each other Business Day on which a prepayment of
the Advances is required under Section 2.07 and (iv) the Termination Date.
"Permitted Encumbrances" shall mean mechanics liens, materialmen's
liens, liens relating to other matters to which like properties are commonly
subject and other similar statutory and common law liens, provided that such
liens and other matters (x) individually or in
-16-
the aggregate, do not materially and adversely affect the applicable Obligor's
ability to make payments on the related Medallion Loan or interfere with the
benefits of the security intended to be provided by the related Medallion Loan
Documents, and (y) do not constitute liens securing debt for borrowed money.
"Permitted Joint Participant" shall mean (a) a lender, financial
institution or other Person listed on Schedule 1.01(c) hereto or another lender,
financial institution or other Person acceptable to the Lender in its sole and
absolute discretion, in each case that is not an Affiliate of the Borrower, that
purchases participations in medallion loans; provided that in no event shall
Permitted Joint Participant include individuals, and (b) an Affiliate of the
Borrower that is a bankruptcy remote entity and is listed on Schedule 1.01(c)
hereto (and whose bankruptcy remoteness has been established to the satisfaction
of the Lender in its sole and absolute discretion, including, without
limitation, by delivery of a legal opinion of counsel to the Borrower relating
to the issues of substantive consolidation and true sale, in form and substance
satisfactory to the Lender) or another Affiliate of the Borrower that is a
bankruptcy remote entity that is acceptable to the Lender in its sole and
absolute discretion hereto (and whose bankruptcy remoteness has been established
to the satisfaction of the Lender in its sole and absolute discretion,
including, without limitation, by delivery of a legal opinion of counsel to the
Borrower relating to the issues of substantive consolidation and true sale, in
form and substance satisfactory to the Lender).
"Permitted Joint Participation Interest" shall mean a participation
interest in a Medallion Loan that (i) is pari passu in right of payment with the
rights of the Borrower under such Medallion Loan and is evidenced by an Approved
Joint Participation Agreement or another agreement in form and substance
acceptable to the Lender in its sole and absolute discretion, (ii) is held by a
Permitted Joint Participant, and (iii) is subject to a Joint Participation
Supplemental Agreement.
"Permitted Junior Participant" shall mean (a) a lender, financial
institution or other Person listed on Schedule 1.01(d) hereto or another lender,
financial institution or other Person acceptable to the Lender in its sole and
absolute discretion, in each case that is not an Affiliate of the Borrower, that
purchases participations in medallion loans; provided that in no event shall
Permitted Junior Participant include individuals, and (b) an Affiliate of the
Borrower that is a bankruptcy remote entity and is listed on Schedule 1.01(d)
hereto (and whose bankruptcy remoteness has been established to the satisfaction
of the Lender in its sole and absolute discretion, including, without
limitation, by delivery of a legal opinion of counsel to the Borrower relating
to the issues of substantive consolidation and true sale, in form and substance
satisfactory to the Lender) or another Affiliate of the Borrower that is a
bankruptcy remote entity that is acceptable to the Lender in its sole and
absolute discretion hereto (and whose bankruptcy remoteness has been established
to the satisfaction of the Lender in its sole and absolute discretion,
including, without limitation, by delivery of a legal opinion of counsel to the
Borrower relating to the issues of substantive consolidation and true sale, in
form and substance satisfactory to the Lender).
"Permitted Junior Participation Interest" shall mean a participation
interest in a Medallion Loan that (i) is subordinated in right of payment to the
rights of the Borrower and is evidenced by an Approved Junior Participation
Agreement or another agreement in form and
-17-
substance acceptable to the Lender in its sole and absolute discretion, (ii) is
held by a Permitted Junior Participant, and (iii) is subject to a Junior
Participation Supplemental Agreement.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association, government (or any agency, instrumentality or
political subdivision thereof) or any other entity of whatever nature.
"Philadelphia Medallion Loan" shall mean a Medallion Loan secured by
Medallion Collateral that includes a Medallion issued by the Taxi Commission for
the City of Philadelphia, Pennsylvania.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Agreement" means that certain Loan Sale and Contribution
Agreement, dated as of the date hereof, between Medallion Funding, as Seller,
and the Borrower, as purchaser, together with all instruments, documents and
agreements executed in connection therewith, as such Purchase Agreement may from
time to time be amended, supplemented or otherwise modified in accordance with
the terms hereof.
"Qualified Institutional Buyer" shall mean a "qualified institutional
buyer" as defined in Rule 144A of the U.S. Securities Act of 1933, as amended.
"Rapid Amortization Event" shall have the meaning provided in Section
2.07(d) hereof.
"Reconciliation" shall have the meaning set forth in the Servicing
Agreement.
"Reference Date" shall mean September 12, 2003.
"Regular Payment Date" shall mean the 16th Business Day of each month.
"Related Parties" means the Borrower, Medallion Funding and
Freshstart.
"Release Price" shall mean, with respect to a Medallion Loan, the
Lender's security interest in which is to be released in connection with the
repayment of an Advance pursuant to Section 2.08(b), an amount equal to the
Collateral Value of such Medallion Loan as of the date of such repayment plus
all accrued but unpaid interest thereon.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" shall mean, as to any Person, the chief
executive officer, president, vice president, treasurer or secretary or, with
respect to financial matters, the chief
-18-
financial officer, chief accounting officer, president, vice president,
treasurer or secretary of such Person; provided, that in the event any such
officer is unavailable at any time he or she is required to take any action
hereunder, Responsible Officer shall mean any officer authorized to act on such
officer's behalf as demonstrated to the Lender to its reasonable satisfaction.
"SBA" shall mean the U.S. Small Business Administration.
"SBA Commitment" shall mean the Commitment Letter, dated as of May 21,
2000, between Freshstart and the SBA, and all exhibits, schedules, applications
and other documents related thereto.
"Secured Obligations" shall mean the unpaid principal amount of, and
interest on the Advances, and all other obligations and liabilities of the
Borrower to the Lender, any Affiliate of the Lender that is a hedging
counterparty under a Hedging Arrangement or any Indemnified Party, (including,
but not limited to, fees, expenses and indemnification payments owed to the
Custodian under Sections 8 and 15 of the Custodial Agreement) whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of or in connection with this
Loan Agreement, the Note, any other Loan Document and any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements of counsel
to the Lender or otherwise). For purposes hereof, "interest" shall include,
without limitation, interest accruing after the maturity of the Advances and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding.
"Seller" shall mean (a) Medallion Funding, in its capacity as Seller
under the Purchase Agreement, or (b) an Approved Seller.
"Servicer" shall mean Medallion Funding, in its capacity as servicer
under the Servicing Agreement, or such other servicer as shall be acceptable to
the Lender in its sole discretion.
"Servicer Default" shall have the meaning provided for in the
Servicing Agreement.
"Servicing Agreement" shall mean the Servicing Agreement, dated as of
the date hereof, between the Borrower, the Lender and the Servicer for the
servicing of Medallion Loans, as the same may be amended, modified or
supplemented from time to time with the prior written consent of the Lender.
"Servicing Fee" shall have the meaning provided for in the Servicing
Agreement.
"Servicing Records" means all servicing records relating to the
Collateral, including but not limited to any and all servicing agreements,
files, documents, records, data bases, computer tapes, copies of computer tapes,
proof of insurance coverage, insurance policies,
-19-
appraisals, other closing documentation, payment history records, and any other
records relating to or evidencing the servicing of Medallion Loans.
"Servicing Report" shall have then meaning provided in the Servicing
Agreement.
"Specified 90% LTV Medallion Loan" shall mean a Medallion Loan with an
LTV less than or equal to 90% but greater than 80% on the date of origination of
such Medallion Loan listed on Schedule 1.01(e) hereto.
"Standard Form Medallion Loan Documentation" means the forms of
Medallion Loan Documents utilized by a Seller to originate Medallion Loans.
"Subsidiary" shall mean, with respect to any Person, any other Person
of which at least a majority of the securities or other ownership interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions of such
corporation, partnership, trust or other entity (irrespective of whether or not
at the time securities or other ownership interests of any other class or
classes of such corporation, partnership, trust or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Taxi Commission" shall mean (i) in the case of the City of New York,
New York, the New York City Taxicab and Limousine Commission, (ii) in the case
of the City of Boston, Massachusetts, the Boston Police Department, (iii) in the
case of the City of Chicago, Illinois, the Commissioner of the Department of
Consumer Services, Public Vehicles Operations Division for Chicago, Illinois,
(iv) in the case of the City of Cambridge, Massachusetts, the City of Cambridge,
Hackney Carriage Division, (v) in the case of the City of Newark, New Jersey,
the Division of Taxicabs, Newark Police Department, (vi) in the case of the City
of Philadelphia, Pennsylvania, the Pennsylvania Public Utilities Commission, or
(vii) any Other Acceptable Taxi Commission, and, in each case, any successor
agency, commission, regulatory body or other municipal instrumentality charged
with responsibility for licensing taxicabs in the applicable municipality.
"Termination Date" shall mean the earlier of: (i) the Reference Date;
provided, however, that in the event that both (X) the Parent Loan Agreement,
and (Y) the Medallion Funding Facility Agreements, are either refinanced by an
Acceptable Refinancing or otherwise repaid no later than the Reference Date,
such date shall be September 12, 2004, and (ii) the date on which an Event of
Default occurs, or, in either case, such earlier date on which this Loan
Agreement shall terminate in accordance with the provisions hereof or by
operation of law.
"Tranche" or "Eurodollar Tranche" shall mean Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day).
"Trigger Event" shall have the meaning provided in Section 3.03
hereof.
-20-
"Underwriting Guidelines" shall mean (i) in the case of Medallion
Loans sold by Medallion Funding, as Seller, to the Borrower, the underwriting
guidelines of Medallion Funding for Medallion Loans, a copy of which is attached
hereto as Schedule 1.01(f), or (ii) in the case of Medallion Loans sold by an
Approved Seller to the Borrower, the underwriting guidelines of such Approved
Seller for Medallion Loans delivered to the Lender and approved by the Lender in
writing in the Lender's sole and absolute discretion.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest or the renewal or enforcement thereof in
any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "Uniform Commercial Code" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such perfection or effect of perfection or
non-perfection.
"Warm Backup Servicer Event" shall have the meaning provided in
Section 7.24 hereof.
Section 1.02 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lender hereunder shall be
prepared, in accordance with GAAP.
ARTICLE II
ADVANCES, NOTE AND PREPAYMENTS
Section 2.01 Advances.
(a) Subject to the terms and conditions of this Loan Agreement, the
Lender agrees to make loans (individually, an "Advance"; collectively, the
"Advances") to the Borrower, from time to time on any Business Day from and
including the Effective Date to but excluding the Termination Date, in an
aggregate principal amount at any one time outstanding up to but not exceeding
the lesser of (i) the Maximum Committed Credit, and (ii) the Borrowing Base at
such time; provided that during each period from the date on which a Borrowing
Base Certificate is delivered until the earlier of (A) the date on which the
next Borrowing Base Certificate is delivered and (B) the date on which the next
Borrowing Base Certificate is required to be delivered (the "Borrowing Base
Period"), the Borrower may borrow Advances up to and equal to the lesser of (I)
the Maximum Committed Credit and (II) the sum of (x) the Borrowing Base as
reported in the then current Borrowing Base Certificate (less the Collateral
Value of any Medallion Loans released during such Borrowing Base Period pursuant
to Section 2.08(b)) and (y) the amount of principal repayments on Medallion
Loans received during such Borrowing Base Period as set forth on a
Reconciliation timely delivered by the Servicer pursuant to Section 4.01(b) of
the Servicing Agreement; provided further, that amounts borrowed on any date
other than a Regular Payment Date may only be used by the Borrower to purchase
additional Medallion Loans that are pledged to the Lender.
-21-
(b) Subject to the terms and conditions of this Loan Agreement, during
the period from and including the Effective Date to but excluding the
Termination Date the Borrower may borrow, repay and reborrow hereunder.
(c) In no event shall an Advance be made when any Default has occurred
and is continuing or would occur as a result of such Advance.
(d) The Lender shall have no obligation to make new Advances with
respect to any Medallion Loan at any time unless (x) an irrevocable written
Notice of Borrowing and Pledge substantially in the form of Exhibit H hereto (a
"Notice of Borrowing and Pledge") relating to such Medallion Loans has been
delivered to the Lender prior to the Funding Date for such Advance (as provided
in Section 2.03(a)) including the certification with respect to the delivery of
the Funding Date Documentation, and (y) the Custodian shall have received the
Funding Date Documentation with respect to such Medallion Loan in accordance
with the terms of the Custodial Agreement.
(e) There shall be no minimum amount required to be borrowed by the
Borrower in connection with the initial Advance under this Loan Agreement.
Section 2.02 Note.
(a) The Advances made by the Lender shall be evidenced by a single
promissory note of the Borrower substantially in the form of Exhibit A hereto
(the "Note"), dated the date hereof, payable to the Lender in a principal amount
equal to the amount of the Maximum Committed Credit and otherwise duly
completed. The Lender shall have the right to have its Note subdivided, by
exchange for promissory notes of lesser denominations or otherwise.
(b) The date, amount, Interest Period and interest rate of each
Advance made by the Lender to the Borrower, and each payment made on account of
the principal and interest thereof, shall be recorded by the Lender on its books
and records.
Section 2.03 Procedure for Borrowing.
(a) The Borrower may request an Advance hereunder, on any Business Day
during the period from and including the Effective Date to but excluding the
Termination Date, by delivering to the Lender, with a copy to the Custodian, a
Notice of Borrowing and Pledge, appropriately completed and executed by a
Responsible Officer of the Borrower, which Notice of Borrowing and Pledge must
be received by the Lender, with a copy to the Custodian, prior to 4 p.m., New
York City time, one (1) Business Day prior to the requested Funding Date of such
Advance; provided, that the Borrower shall not request more than one Advance per
Business Day; provided, further, that the Borrower shall not request more than
two Advances for any calendar week. Such Notice of Borrowing and Pledge shall
(i) attach a schedule identifying the Eligible Medallion Loans for each Advance
that the Borrower proposes to pledge to the Lender and to be included in the
Borrowing Base in connection with such Advance, (ii) contain the amount of the
requested Advance, which shall in all events be at least equal to $500,000, to
be made on such Funding Date, (iii) specify the requested Funding Date, (iv)
attach an officer's certificate signed by a Responsible Officer of the Borrower
as to the satisfaction of all of the matters referred to in Sections 5.02 (a),
(b) and (c) hereof, (v) specify the length of the initial
-22-
Interest Period, and (vi) contain (by attachment) such other information
reasonably requested by the Lender from time to time.
(b) With respect to each Advance, upon satisfaction of all conditions
precedent set forth in Section 5.01 and 5.02 hereof and the satisfaction of all
procedures set forth in this Section 2.03, the Lender shall transfer funds
relating to such Advance to such account as the Lender and the Borrower may from
time to time agree.
Section 2.04 Delivery of Medallion Loan Files. With respect to any
Medallion Loan, the Borrower shall deliver to the Custodian the related
Medallion Loan File in the manner set forth in Section 2 of the Custodial
Agreement.
Section 2.05 Repayment of Advances; Interest.
(a) The Borrower hereby promises to repay in full on the Termination
Date the aggregate outstanding principal amount of the Advances.
(b) The Borrower hereby promises to pay to the Lender interest on the
unpaid principal amount of each Advance for the period from and including the
Funding Date of such Advance to but excluding the date such Advance shall be
paid in full, at a rate per annum for each day during each Interest Period equal
to the Eurodollar Rate plus the Applicable Margin; calculated such that interest
shall accrue each day on the outstanding principal amount of all Advances as of
12:00 noon, New York City time, on such day. Notwithstanding the foregoing, the
Borrower hereby promises to pay to the Lender interest at the Default Rate on
any principal of any Advance and on any other amount payable by the Borrower
hereunder or under the other Loan Documents that shall not be paid in full when
due (whether at stated maturity, by acceleration or by mandatory prepayment or
otherwise) for the period from and including the due date thereof to but
excluding the date the same is paid in full. Accrued interest on each Advance
shall be payable on each Payment Date. Notwithstanding the foregoing, interest
accruing at the Default Rate shall be payable to the Lender on demand.
Section 2.06 Limitation on Advances; Illegality. Anything herein to
the contrary notwithstanding, if, on or prior to the determination of any
Eurodollar Rate:
(a) the Lender determines, which determination shall be conclusive,
that quotations of interest rates for the relevant deposits referred to in the
definition of "Eurodollar Rate" in Section 1.01 hereof are not being provided in
the relevant amounts or for the relevant maturities for purposes of determining
rates of interest for Advances as provided herein; or
(b) it becomes unlawful for the Lender to honor its obligation to make
or maintain Advances hereunder using the Eurodollar Rate;
then the Lender shall give the Borrower prompt notice thereof and, so long as
such condition remains in effect, the Lender shall be under no obligation to
Continue or make additional Advances using the "Eurodollar Rate", and the
Borrower shall, at its option, either prepay all such Advances as may be
outstanding or such Advances shall accrue interest at a rate equal to the sum of
(i) the Federal Funds Rate and (ii) the Applicable Margin.
-23-
Section 2.07 Determination of Borrowing Base; Mandatory Prepayments or
Pledge; Rapid Amortization Event.
(a) The Borrower shall cause the Servicer to deliver to the Lender a
Borrowing Base Certificate no later than the fifteenth (15th) Business Day after
the last day of each month calculating the Borrowing Base as of the last day of
such prior month, certified as complete and correct by a Responsible Officer of
the Servicer.
(b) Subject to Section 2.16 hereto, if at any time the aggregate
outstanding principal amount of Advances exceeds the Borrowing Base, including,
without limitation, as the result of any Medallion Loan ceasing to be an
Eligible Medallion Loan (a "Borrowing Base Deficiency") the Borrower shall no
later than 12:00 (noon) New York City time on the fifth (5th) Business Day
immediately succeeding the discovery of such Borrowing Base Deficiency (i)
prepay the outstanding principal amount of Advances in part or in whole,
together with accrued and unpaid interest on, and other costs relating to such
prepayment under this Loan Agreement payable by the Borrower with respect to,
the principal amount prepaid, or (ii) pledge additional Eligible Medallion Loans
to the Lender, such that after giving effect to such prepayment or pledge the
aggregate outstanding principal amount of the Advances does not exceed the
Borrowing Base.
(c) The Borrower shall prepay Advances as set forth in Section 4.01 of
the Servicing Agreement.
(d) Subject to Section 2.16 hereto, if at any time, the Weighted
Average Loan-To-Value Ratio (as defined below) of Eligible Medallion Loans
exceeds 90%, and such Weighted Average Loan-To-Value Ratio multiplied by the
then-applicable Advance Rate for Class B Medallion Loan (the "Combined
Loan-To-Value Ratio") exceeds 80% (a "Rapid Amortization Event"), the Servicer
or the Borrower shall so notify the Lender immediately following the discovery
of such Rapid Amortization Event. From and after the occurrence of a Rapid
Amortization Event, the Lender may, by notice to the Borrower and the Servicer,
direct that all Collections be applied to the payment of accrued but unpaid
interest on the Advances and the repayment of principal of the Advances until,
after giving effect to such repayments and any change in the Weighted Average
Loan-to-Value Ratio (including as a result of the pledge of additional Eligible
Medallion Loans to the Lender), the Combined Loan-to-Value Ratio is 72% or
lower. The "Weighted Average Loan-To-Value Ratio" shall be computed as the
decimal equivalent of a fraction by multiplying the Net Principal Balance and
accrued interest of each Medallion Loan by the Loan-To-Value Ratio of such
Medallion Loan, and dividing the sum of such numbers by the total outstanding
principal and accrued interest on all Medallion Loans.
Section 2.08 Optional Prepayments; Release of Medallion Loans upon
Repayment.
(a) Subject to Section 2.16 hereto, the Borrower may prepay, in whole
or in part, Advances at any time without premium or penalty. Any amounts prepaid
shall be applied to repay the outstanding principal amount of any Advances until
paid in full and shall be accompanied by repayment of accrued and unpaid
interest on the amount. Amounts repaid may be reborrowed in accordance with the
terms of this Loan Agreement. If the Borrower intends to
-24-
prepay an Advance in whole or in part from any source, the Borrower shall give
one (1) Business Day's prior written notice thereof to the Lender, specifying
the date (such date, a "Partial Payment Date") and amount of prepayment,
together with any amounts payable pursuant to Section 2.16 hereunder. If such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein. Partial prepayments shall be in an aggregate
principal amount of at least $500,000 or a whole multiple in excess thereof.
(b) With respect to any Advance, the Borrower may obtain the release
of the Lender's security interest in one or more Medallion Loans securing such
Advance, pursuant to Section 4.10, by (i) transferring to the account referenced
in Section 3.01(a) the Release Price therefor on the date of such repayment or
(ii) pledging to the Lender additional Eligible Medallion Loans having a
Collateral Value at least equal to the Collateral Value of the Medallion Loan(s)
to be released; provided, however, that a release pursuant to this Section
2.08(b) shall be available only if, after giving effect thereto (including the
application of the proceeds thereof or the grant of the security interest in the
additional Eligible Medallion Loans), there shall not exist a Default or Rapid
Amortization Event.
Section 2.09 Requirements of Law.
(a) If the introduction or adoption of or any change (other than any
change by way of the imposition of or increase in reserve requirements included
in the Eurodollar Rate Reserve Percentage) in any Requirement of Law (other than
with respect to any amendment made to the Lender's certificate of incorporation
and by-laws or other organizational or governing documents) or any change in the
interpretation or application thereof or compliance by the Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject the Lender to any tax of any kind whatsoever with
respect to this Loan Agreement, the Note or any Advance made by it
(excluding net income taxes or franchise taxes) or change the basis of
taxation of payments to the Lender in respect thereof;
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory advance or similar requirement against receivables or
other assets held by, deposits or other liabilities in or for the account
of, advances or other extensions of credit by, or any other acquisition of
funds by, any office of the Lender which is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on the Lender any other condition;
and the result of any of the foregoing is to increase the cost to the Lender, by
an amount which the Lender deems to be material, of making, participating in,
continuing or maintaining any Advance or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay the Lender such additional amount or amounts as will compensate the
Lender for such increased cost or reduced amount receivable.
(b) If the Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or
-25-
compliance by the Lender or any corporation controlling the Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof shall
have the effect of reducing the rate of return on the Lender's or such
corporation's capital as a consequence of its obligations hereunder to a level
below that which the Lender or such corporation (taking into consideration the
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by the Lender to be material, then from time to time, subject to
clause (c) below, the Borrower shall promptly pay to the Lender such additional
amount or amounts as will compensate the Lender for such reduction.
(c) If the Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.09, it shall notify the Borrower of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this Section 2.09 submitted by the Lender to the
Borrower shall be conclusive in the absence of manifest error. It is understood
and agreed that any additional amounts that the Lender is entitled to receive
pursuant to this Section 2.09 shall only include amounts incurred on or after
the ninetieth day immediately preceding the day on which the Lender shall have
notified the Borrower pursuant to this clause (c) of the event by reason of
which it became entitled to such additional amount.
(d) As promptly as practicable after the Lender becomes aware of the
occurrence of an event described in Section 2.09(a) or (b), the Lender shall use
reasonable efforts to make, fund or maintain its rights and obligations
hereunder through another office of the Lender, if as a result thereof the
grounds for payments under Section 2.09(a) or (b) would thereby cease to exist;
provided, that the Lender shall not be obligated to select an alternative office
if the Lender determines that (i) as a result of such selection the Lender would
be in violation of any applicable law, regulation, treaty, or guideline, or
would incur additional costs or expenses, or (ii) such selection would be
inadvisable for regulatory reasons or inconsistent with the interests of the
Lender.
Section 2.10 Purpose of Advances. Subject to the second proviso in
Section 2.01(a), Advances may be used by the Borrower for any lawful purpose.
Section 2.11 Taxes.
(a) All payments made by the Borrower under this Loan Agreement and
the Note shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority (collectively, "Taxes"), unless required by law. If the Borrower shall
be required under any applicable Requirement of Law to deduct or withhold any
Taxes from or in respect of any sum payable under or in respect of this Loan
Agreement to the Lender, (i) the Borrower shall make all such deductions and
withholdings in respect of Taxes, (ii) the Borrower shall pay the full amount
deducted or withheld in respect of Taxes to the relevant taxation authority or
other Governmental Authority in accordance with the applicable Requirement of
Law, and (iii) the sum payable by the Borrower shall be increased as may be
necessary so that after the Borrower has made all required deductions and
withholdings such Lender receives an amount equal to the sum it would have
received had no such deductions or withholdings been
-26-
made in respect of Non-Excluded Taxes. For purposes of this Agreement
"Non-Excluded Taxes" are Taxes other than, in the case of each Lender, Taxes
that are measured by or imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the state or foreign jurisdiction under the laws of
which such Lender is organized or of its Applicable Lending Office, or any
political subdivision thereof, unless such Taxes are imposed as a result of such
Lender or such Agent having executed, delivered or performed its obligations or
received payments under, or enforced, this Agreement or any of the other Loan
Documents (in which case such Taxes will be treated as Non-Excluded Taxes).
(b) The Borrower shall not be required to increase any amounts payable
under Section 2.11(a) to any Lender that is not organized under the laws of the
United States of America or a state thereof if the Lender fails to comply with
the requirements of clause (c) of this Section. Whenever any Non-Excluded Taxes
are payable by the Borrower, as promptly as possible thereafter the Borrower
shall send to the Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Lender the required receipts or other
required documentary evidence, the Borrower shall indemnify the Lender for any
incremental taxes, interest or penalties that may become payable by the Lender
as a result of any such failure. The agreements in this Section shall survive
the termination of this Loan Agreement and the payment of the Advances and all
other amounts payable hereunder.
(c) If the Lender (or transferee that acquires a interest hereunder in
accordance with Section 10.14 hereof) that is not a United States Person (as
such term is defined in Section 7701(a)(30) of the Code (a "US Person")) for
United States federal income tax purposes (a "Non-US Lender"), such Non-US
Lender shall deliver or caused to be delivered to the Borrower and the Servicer
the following properly completed and duly executed documents:
(1) two complete and executed (x) U.S. Internal Revenue
Forms W-8BEN (or any successor form thereto) with respect to an
income tax treaty providing for a zero rate of withholding tax on
interest, or (y) U.S. Internal Revenue Service Forms W-8ECI (or
any successor form thereto); or
(2) two complete and executed U.S. Internal Revenue Service
Forms W-8BEN (or any successor form thereto), including all
appropriate attachments, documenting the status of the Lender (or
transferee) as a Non-U.S. Lender and (y) a Certificate in the
form of Exhibit I hereto.
Such documents shall be delivered by each Lender (or transferee) on or before
the date it becomes a party to this Agreement (or, in the case of a transferee
or assignee that is a participation holder, on or before the date such
participation holder becomes a transferee hereunder) and on or before the date,
if any, such Lender (or transferee) changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Lender (or transferee) shall deliver or cause to be delivered such Forms
and/or Certificates promptly upon or before the expiration, obsolescence or
invalidity of any document previously delivered by such Lender (or transferee).
Notwithstanding any other provision of this Section
-27-
2.11(c), a Lender (or transferee) shall not be required to deliver any document
pursuant to this Section 2.11(c) that such Lender (or Transferee) is not legally
able to deliver.
Section 2.12 Interest Reserve Deposit Account. (a) The Borrower shall
establish, on or prior to the Effective Date, the Interest Reserve Deposit
Account in the name of the Borrower for the benefit of the Lender at the
Interest Reserve Deposit Account Bank and subject to a security interest in
favor of the Lender. The Borrower shall deposit or cause to be deposited
$1,000,000 into the Interest Reserve Deposit Account on or prior to the
Effective Date. Funds on deposit in the Interest Reserve Deposit Account shall
be invested in interest bearing demand cash accounts with the Interest Reserve
Deposit Bank.
(b) If an Event of Default has occurred and is continuing, the Lender
may, in its sole discretion, give notice to the Interest Reserve Deposit Account
Bank that the Lender is exercising its rights under the Interest Reserve Deposit
Account Control Agreement, and the Lender may direct the Interest Reserve
Deposit Bank that any and all amounts in the Interest Reserve Deposit Account
shall be used to repay the principal, interest and other amounts due hereunder
(such repayment to be applied in the order set forth in Section 4.01 of the
Servicing Agreement).
(c) Upon termination of this Loan Agreement and repayment in full to
the Lender of all Secured Obligations, the Lender shall cause to be paid to the
Borrower all amounts held in the Interest Reserve Deposit Account.
Section 2.13 Collection Account.
(a) The Borrower shall establish, on or prior to the Effective Date,
the Collection Account in the name of the Borrower for the benefit of the Lender
at the Collection Account Bank and subject to a security interest in favor of
the Lender. Pursuant to, and in accordance with the Collection Account Control
Agreement, funds on deposit in the Collection Account shall be invested by the
Collection Account Bank in interest bearing demand cash accounts with the
Collateral Account Bank, in the name of the Lender.
(b) In accordance with the Collection Account Control Agreement, the
Collection Account Bank shall not have any responsibility, or in any way be
liable to any party hereto, for any loss in the value of any investment
described in this Section 2.13 (including, without limitation, losses resulting
from a fluctuation in interest rates, market values or otherwise).
(c) Each of the Borrower and the Lender hereby agree that upon the
occurrence and during the continuation of a Default, the Lender may give notice
(i) to the Collection Account Bank that it is exercising its rights under the
Collection Account Control Agreement, and (ii) to the Obligors, directing them
to make payments on the Medallion Loans to a Person other than the Servicer,
including an account, other than the Collection Account, over which the Lender
or its designee shall have exclusive dominion and control.
Section 2.14 Continuation. Any Eurodollar Loans may be Continued as
such upon the expiration of the then current Interest Period with respect
thereto by the Borrower giving notice to the Lender, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.01,
of the length of the next Interest Period to be applicable to such
-28-
Advances, provided that no Eurodollar Loan may be Continued as a Eurodollar Loan
having an Interest Period longer than one-month (i) when any Event of Default
has occurred and is continuing and the Lender has determined that such a
Continuation is not appropriate, (ii) if, after giving effect thereto, Section
2.16 would be contravened, or (iii) after the date that is three (3) Business
Days prior to the end of the then current Interest Period, and provided,
further, that if the Borrower fails to give notice to the Lender of a
Continuation, such Advances shall be automatically continued as Eurodollar Loans
having a one-month Interest Period on the last day of such Interest Period.
Section 2.15 Minimum Amounts and Maximum Number of Tranches. All
borrowings and continuations of Advances hereunder and all selections of
Interest Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Advances comprising each Eurodollar Tranche shall be equal to $500,000 or
a whole multiple of $500,000 in excess thereof. In no event shall there be more
than three (3) Eurodollar Tranches outstanding at any time.
Section 2.16 Indemnity. The Borrower agrees to indemnify the Lender
and to hold the Lender harmless from any loss or expense which the Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of or Continuation of Eurodollar Loans after the Borrower has given a
notice requesting the same in accordance with the provisions of this Agreement,
(b) default by the Borrower in making any prepayment after the Borrower has
given a notice thereof in accordance with the provisions of this Agreement, or
(c) the making of a prepayment of Eurodollar Loans with Interest Periods of
either two, three or six months on a day which is not the last day of an
Interest Period with respect thereto. Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed or Continued, for the
period from the date of such prepayment or of such failure to borrow or Continue
to the last day of such Interest Period (or, in the case of a failure to borrow
or Continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Advances
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by the
Lender) which would have accrued to the Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. This covenant shall survive the termination of this Agreement
and the payment of the Advances and all other amounts payable hereunder.
ARTICLE III
PAYMENTS; COMPUTATIONS; FEES
Section 3.01 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrower under this Loan
Agreement and the other Loan Documents, shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to the Lender at
the following account maintained by the Lender:
-29-
Merrill Lynch Bank USA,
ABA# 124 084 669
A/C 62030
Ref: Credit Globus Account 0200001124 ML MCI,
Re: Taxi Medallion Loan Trust I,
not later than 3:00 p.m., New York City time, on the date on which such payment
shall become due (and each such payment made after such time on such due date
shall be deemed to have been made on the next succeeding Business Day). The
Borrower acknowledges that it has no rights of withdrawal from the foregoing
account.
(b) Except to the extent otherwise expressly provided herein, if the
due date of any payment under this Loan Agreement or the other Loan Documents
would otherwise fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall be payable for
any principal so extended for the period of such extension.
Section 3.02 Computations. (a) Interest on the Advances shall be
computed on the basis of a 360-day year for the actual days elapsed (including
the first day but excluding the last day) occurring in the period for which
payable. The Lender shall as soon as practicable notify the Borrower of each
determination of a Eurodollar Rate. Any change in the interest rate on an
Advance resulting from a change in the Eurocurrency Reserve Requirements shall
become effective as of the opening of business on the day on which such change
becomes effective. The Lender shall as soon as practicable notify the Borrower
of the effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Lender pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
in the absence of manifest error. The Lender shall, at the request of the
Borrower, deliver to the Borrower a statement showing the quotations used by the
Lender in determining any interest rate pursuant to Section 3.02.
Section 3.03 Facility Fee. The Borrower agrees to pay to the Lender
the following amounts (collectively, the "Facility Fee"):
(a) the Borrower shall pay the Lender an amount equal to one hundred
basis points (1.00%) of the Maximum Committed Credit (i.e., a fee of
$2,500,000), which shall be due and payable on or prior to the Effective Date,
(b) in the event that (i) an Acceptable Refinancing or other repayment
in full of all indebtedness of the Parent and Medallion Funding under the
Medallion Credit Facility has occurred prior to the Reference Date (the "Trigger
Event"), and (ii) the Borrower does not repay in full all the Secured
Obligations under this Loan Agreement and terminate this Loan Agreement on or
prior to the Reference Date, the Borrower shall pay to the Lender on the
Reference Date an amount equal to fifty basis points (0.50%) of the Maximum
Committed Credit (the Borrower having the option to permanently reduce the
Maximum Committed Credit on the Reference Date immediately prior to the
calculation and payment of such fee),
-30-
(c) in the event that (i) the Trigger Event shall not have occurred
prior to the Reference Date and (ii) the Lender elects not to extend the
Termination Date beyond the Reference Date, the Borrower shall pay the Lender on
the Reference Date the amount of $625,000,
(d) In the event that (i) the Trigger Event shall not have occurred
prior to the Reference Date and (ii) at the request of the Borrower, the Lender
elects to extend the Termination Date for an additional year, the Borrower shall
pay the Lender on the Reference Date the amount of $1,250,000, and
(e) in the event that on or prior to the Reference Date the Borrower
shall repay in full all the Secured Obligations under this Loan Agreement and
terminate this Loan Agreement, the Borrower shall pay the Lender on the date of
such repayment the amount of $1,250,000;
in each case, such payment to be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Lender at the account
set forth in Section 3.01(a) hereof. The Facility Fee shall be deemed fully
earned as of the Effective Date and shall not be subject to rebate or set-off
for any reason whatsoever, including, without limitation, early occurrence of
the Termination Date.
Section 3.04 Non-Usage Fee. The Borrower agrees to pay to the Lender a
Non-Usage fee (the "Non-Usage Fee") from and including the Effective Date to the
Termination Date, computed at the rate of 37.5 basis points (0.375%) per annum
on the average daily amount of the unutilized portion of the Maximum Committed
Credit during the period for which payment is made, in each case payable monthly
in arrears on the first Business Day of the following month and on the
Termination Date, commencing on September 1, 2002, such payment to be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Lender at the account set forth in Section 3.01(a) hereof.
ARTICLE IV
COLLATERAL SECURITY
Section 4.01 Collateral; Security Interest.
(a) The Custodian shall hold the Medallion Loan Documents as exclusive
bailee and agent for the Lender pursuant to terms of the Custodial Agreement.
(b) All of the Borrower's right, title and interest in, to and under
each of the following items of property, whether now owned or hereafter
acquired, now existing or hereafter created and wherever located, is hereinafter
referred to as the "Collateral":
(i) all Medallion Loans identified on a Notice of Borrowing and Pledge
delivered by the Borrower to the Lender and the Custodian from time to
time, including, without limitation all liquidation proceeds and recoveries
with respect thereto, and the
-31-
Medallion Collateral securing same, and any security interest in such
Medallion Loans in favor of the applicable Seller;
(ii) all Medallion Loan Documents;
(iii) the Purchase Agreement (including, without limitation all rights
of the Borrower to amounts due, and all rights of indemnity arising, under
or in connection with the Purchase Agreement);
(iv) all Approved Purchase Agreements (including, without limitation
all rights of the Borrower to amounts due, and all rights of indemnity
arising, under or in connection with any Approved Purchase Agreement);
(v) all Hedging Arrangements;
(vi) all insurance policies and any proceeds from such insurance
policies relating to the Medallion Loans, the Obligors or the related
Medallion Collateral;
(vii) all Collections and all rights with respect thereto;
(viii) the Collection Account, the Interest Reserve Deposit Account
and the balances, investments and other items of value attributable or
credited to the Collection Account or the Interest Reserve Deposit Account,
and all rights with respect thereto;
(ix) all "chattel paper" and "documents" (as defined in the Uniform
Commercial Code) evidencing or relating to the Medallion Loans;
(x) the Servicing Agreement and all Servicing Records;
(xi) all Permitted Joint Participation Interests and Permitted Junior
Participation Interests, and all agreements with respect thereto;
(xii) all "equipment", "general intangibles" and "instruments" as
defined in the Uniform Commercial Code relating to or constituting any and
all of the foregoing; and
(xiii) any and all replacements, substitutions, distributions on, or
proceeds of any and all of the foregoing.
(c) The Borrower hereby pledges to the Lender, and grants a security
interest in favor of the Lender in, all of the Borrower's right, title and
interest in, to and under the Collateral including without limitation the
repayment of principal of and interest on all Advances and all other amounts
owing to the Lender hereunder, under the Note and under the other Loan Documents
and all other amounts owing by such Borrower to the Lender, whether now owned or
hereafter acquired, now existing or hereafter created, to secure the Secured
Obligations. Each of the Borrower and the Servicer agrees to mark its master
computer databases and computer files (by way of the creation of a special
"field" or otherwise), in a manner acceptable to the Lender, to evidence the
interests granted to the Lender hereunder.
-32-
Section 4.02 Further Documentation. At any time and from time to time,
and at the sole expense of the Borrower, the Borrower will promptly and duly
execute and deliver, or will promptly cause to be executed and delivered, such
further instruments and documents and take such further actions as are necessary
(or as are reasonably requested by the Lender) for the purpose of obtaining or
preserving the full benefits of this Loan Agreement and of the rights and powers
herein granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the Liens created hereby or the taking of any other
action necessary to preserve the status of the Lender's Liens on the Collateral
as first priority perfected liens. The Borrower also hereby authorizes the
Lender to file any such financing or continuation statement without the
signature of the Borrower to the extent permitted by applicable law. A
photographic or other reproduction of this Loan Agreement shall be sufficient as
a financing statement for filing in any jurisdiction.
Section 4.03 Changes in Locations, Name, etc. The Borrower shall not
(i) change the location of its chief executive office/chief place of business
from that specified in Section 6.12 hereof, (ii) change its name, identity or
corporate structure (or the equivalent) or change the location where it
maintains its records with respect to the Collateral or (iii) reincorporate or
reorganize under the laws of another jurisdiction, in each case unless it shall
have given the Lender at least 30 days prior written notice thereof and shall
have delivered to the Lender all Uniform Commercial Code financing statements
and amendments thereto as the Lender shall reasonably request and taken all
other actions deemed reasonably necessary by the Lender to continue its
perfected status in the Collateral with the same or better priority. The
Borrower's organizational identification number is 3542576 and the Borrower's
federal tax identification number is 51-6527213 . The Borrower shall promptly
notify the Lender of any change in such organizational identification number. In
the event of a disaster at the location of the Borrower's chief executive office
or at the location of the Borrower's records regarding the Medallion Loans, the
Borrower shall maintain its backup office and records at 11-49 44th Drive, Long
Island City, New York 11101.
Section 4.04 Lender's Appointment as Attorney-in-Fact.
(a) The Borrower hereby irrevocably constitutes and appoints the
Lender and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of the Borrower and in the name of the Borrower or in its
own name, from time to time in the Lender's discretion, for the purpose of
carrying out the terms of this Loan Agreement, to take any and all appropriate
action and to execute any and all documents and instruments related to the
Collateral which may be necessary or desirable to accomplish the purposes of
this Loan Agreement, and, without limiting the generality of the foregoing, the
Borrower hereby gives the Lender the power and right, on behalf of the Borrower,
without assent by the Borrower, if an Event of Default shall have occurred and
be continuing, to do the following:
(i) in the name of the Borrower or its own name, or otherwise, to take
possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
insurance policy or with respect to any other Collateral and to file any
claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Lender for the purpose of
-33-
collecting any and all such moneys due under any such insurance policy or with
respect to any other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral; and
(iii) (A) to direct any party liable for any payment under any
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Lender or as the Lender shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) to sign and endorse any
invoices, assignments, verifications, notices and other documents in
connection with any of the Collateral; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any
other right in respect of any Collateral; (E) to defend any suit, action or
proceeding brought against the Borrower with respect to any Collateral; (F)
to settle, compromise or adjust any suit, action or proceeding described in
clause (E) above and, in connection therewith, to give such discharges or
releases as the Lender may deem appropriate; (G) to make any filing or
other submission to any Taxi Commission on behalf of the Borrower; and (H)
generally, to sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as
though the Lender were the absolute owner thereof for all purposes, and to
do, at the Lender's option and the Borrower's expense, at any time, and
from time to time, all acts and things which the Lender deems necessary to
protect, preserve or realize upon the Collateral and the Lender's Liens
thereon and to effect the intent of this Loan Agreement, all as fully and
effectively as the Borrower might do.
The Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) The Borrower also authorizes the Lender, at any time and from time
to time, to execute, in connection with any sale provided for in Section 4.07
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral and to file any initial financing
statements amendments thereto and continuation statements with or without the
signature of any Borrower as authorized by applicable law, as applicable to all
or any part of the Collateral and to file any initial financing statements,
amendments thereto and continuation statements with or without the signature of
any Borrower as authorized by applicable law, as applicable to all or any part
of the Collateral.
(c) The powers conferred on the Lender are solely to protect the
Lender's interests in the Collateral and shall not impose any duty upon the
Lender to exercise any such powers. The Lender shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and, without limiting Section 4.08, neither the Lender nor any of its officers,
directors, or employees shall be responsible to the Borrower for any act or
failure to act under this Section 4.04, except for its own gross negligence or
willful misconduct.
-34-
Section 4.05 Performance by Lender of Borrower's Obligations. If the
Borrower fails to perform or comply with any of its agreements contained in the
Loan Documents and the Lender may itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the out-of-pocket costs and
expenses of the Lender incurred in connection with such performance or
compliance, together with interest thereon at a rate per annum equal to the
Default Rate, shall be payable by the Borrower to the Lender on demand and shall
constitute Secured Obligations.
Section 4.06 Proceeds. If an Event of Default shall occur and be
continuing, (a) all proceeds of Collateral received by the Borrower consisting
of cash, checks and other cash equivalents shall be held by the Borrower in
trust for the Lender, segregated from other funds of the Borrower, and shall
forthwith upon receipt by the Borrower be turned over to the Lender in the exact
form received by the Borrower (duly endorsed by the Borrower to the Lender, if
required) and (b) any and all such proceeds received by the Lender (whether from
the Borrower or otherwise) may, in the sole discretion of the Lender, be held by
the Lender as collateral security for, and/or then or at any time thereafter may
be applied by the Lender against, the Secured Obligations (whether matured or
unmatured), such application to be in such order as the Lender shall elect. Any
balance of such proceeds remaining after the Secured Obligations shall have been
paid in full and this Loan Agreement shall have been terminated shall be paid
over to the Borrower or to whomsoever may be lawfully entitled to receive the
same. For purposes hereof, proceeds shall include, but not be limited to, all
principal and interest payments, all prepayments and payoffs, insurance claims,
recoveries against Obligors, sale and foreclosure proceeds, and any other income
and all other amounts received with respect to the Collateral.
Section 4.07 Remedies. If an Event of Default shall occur and be
continuing, the Lender may exercise, in addition to all other rights and
remedies granted to it in this Loan Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the Uniform Commercial Code.
Without limiting the generality of the foregoing, the Lender without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Borrower or any other Person (each and all of which demands, presentments,
protests, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell (on a servicing
released basis, at the Lender's option), lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels or as
an entirety at public or private sale or sales, at any exchange, broker's board
or office of the Lender or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Lender shall have
the right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right or equity of redemption in the
Borrower, which right or equity is hereby waived or released. In the event that
the Lender elects to take any action described in this Section 4.07, the
Borrower further agrees, at the Lender's request, to assemble the Collateral and
make it available to the Lender at places which the Lender shall reasonably
select, whether at the Borrower's premises or elsewhere. The Lender shall apply
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after
-35-
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Lender hereunder, including
without limitation reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Secured Obligations, in such order as the Lender may
elect, and only after such application and after the payment by the Lender of
any other amount required or permitted by any provision of law, including
without limitation Sections 9-610 and 9-615 of the Uniform Commercial Code, need
the Lender account for the surplus, if any, to the Borrower. To the extent
permitted by applicable law, the Borrower waives all claims, damages and demands
it may acquire against the Lender arising out of the exercise by the Lender of
any of its rights hereunder, other than those claims, damages and demands
arising from the gross negligence or willful misconduct of the Lender. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. The Borrower shall remain liable for
any deficiency (plus accrued interest thereon as contemplated pursuant to
Section 2.05(b) hereof) if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Secured Obligations, including the fees
and disbursements of any attorneys employed by the Lender to collect such
deficiency.
Section 4.08 Limitation on Duties Regarding Presentation of
Collateral. The Lender's duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Uniform Commercial Code or otherwise, shall be to deal with it in the
same manner as the Lender deals with similar property for its own account.
Neither the Lender nor any of its directors, officers or employees shall be
liable for failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Borrower or
otherwise.
Section 4.09 Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
Section 4.10 Release of Security Interest. Upon (x) termination of
this Loan Agreement, repayment to the Lender of all Secured Obligations and the
performance of all other obligations under the Loan Documents, the Lender shall
release its security interest in any remaining Collateral, (y) repayment of a
Medallion Loan in full by the related Obligor or sale of a Medallion Loan by the
Borrower to the extent permitted by this Loan Agreement, the Lender shall
release its security interest in any Collateral securing such Medallion Loan, in
the case of this clause (y), upon receipt by the Lender of the amount of such
repayment or sales proceeds (unless otherwise agreed by the Lender in its sole
discretion), or (z) deposit of the Release Price or pledge to the Lender of
additional Eligible Medallion Loans as contemplated by Section 2.08(b), provided
that no Event of Default or Rapid Amortization Event has occurred and is
continuing, the Lender shall release its security interest in any Collateral
securing such Medallion Loan; provided that if any payment, or any part thereof,
of any of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Borrower, or upon or as a result of the appointment of
a receiver, intervenor or conservator of, or a trustee or similar officer for,
the Borrower or any substantial part of its Property, or otherwise, this Loan
-36-
Agreement, all rights hereunder and the Liens created hereby (other than Liens
referred to in clause (y) above) shall continue to be effective, or be
reinstated, as though such payments had not been made.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.01 Initial Advance. The agreement of the Lender to make the
initial Advance requested to be made by it hereunder is subject to the
satisfaction, immediately prior to or concurrently with the making of such
Advance, of the following conditions precedent:
(a) Loan Agreement. The Lender shall have received this Loan
Agreement, executed and delivered by a duly authorized officer of the Borrower
and the Lender.
(b) Note. The Lender shall have received the Note, conforming to the
requirements hereof and executed by a duly authorized officer of the Borrower.
(c) Custodial Agreement. The Lender shall have received the Custodial
Agreement, conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower, the Lender and the Custodian.
(d) Servicing Agreement. The Lender shall have received the Servicing
Agreement, conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower, the Lender and the Servicer.
(e) Purchase Agreement. The Lender shall have received the Purchase
Agreement, conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower and Medallion Funding, as Seller.
(f) Organizational Documents. The Lender shall have received copies of
the organizational documents of the Related Parties, each in form and substance
satisfactory to the Lender and certified by a duly authorized officer of each of
the parties thereto.
(g) Filings, Registrations, Recordings. All documents (including,
without limitation, financing statements) required to be filed, registered or
recorded in order to create, in favor of the Lender, a perfected, first-priority
security interest in the Collateral, subject to no Liens other than those
created hereunder and those in favor of the applicable Seller or the Borrower
and pledged hereunder, shall have been properly prepared and executed for filing
(including the applicable county(ies) if the Lender determines such filings are
necessary in its reasonable discretion), registration or recording in each
office in each jurisdiction in which such filings, registrations and
recordations are required to perfect such first-priority security interest; and
lien search results in such jurisdictions of the Borrower, the Servicer and the
Parent are in form and substance satisfactory to the Lender.
(h) Closing Certificates. The Lender shall have received a certificate
of the Secretary or Assistant Secretary of each Related Party, dated as of the
date hereof, and certifying
-37-
(A) that attached thereto is a true, complete and correct copy of (i) the
organizational documents of each Related Party, and (ii) resolutions duly
adopted by such Related Party (or its general partner) authorizing the
execution, delivery and performance of this Loan Agreement, the Note and the
other Loan Documents to which it is a party, and the borrowings contemplated
hereunder, and that such resolutions have not been amended, modified, revoked or
rescinded, and (B) as to the incumbency and specimen signature of each officer
executing any Loan Documents on behalf of such Related Party and, in the case of
the Borrower, authorized to execute any Notice of Borrowing and Pledge, and such
certificate and the resolutions attached thereto shall be in form and substance
satisfactory to the Lender.
(i) Good Standing Certificates. The Lender shall have received copies
of certificates evidencing the good standing of the Borrower, Medallion Funding
and the Parent, dated as of a recent date, from the Secretary of State (or other
appropriate authority) of the jurisdiction under which such party is organized
and of each other jurisdiction where the ownership, lease or operation of
property, or the conduct of business, requires such party to qualify as a
foreign corporation, except where the failure to qualify would not have a
Material Adverse Effect.
(j) Legal Opinions. (i) The Lender shall have received the executed
legal opinions of Willkie Farr & Gallagher, counsel to the Related Parties,
dated the Effective Date and in form and substance acceptable to the Lender and
covering such other matters incident to the transactions contemplated by the
Loan Documents as the Lender shall request.
(ii) The Lender shall have received, from counsel acceptable to the
Lender and in form and substance satisfactory to the Lender, an opinion of
special New York, Illinois, Massachusetts, New Jersey and Pennsylvania
counsel of the Related Parties in form and substance acceptable to the
Lender and covering such matters incident to the transactions contemplated
by the Loan Documents as the Lender shall request.
(k) Fees and Expenses. The Borrower shall have paid the reasonable
fees and disbursements of (i) Cadwalader, Wickersham & Taft,
counsel to the Lender, and (ii) RSM McGladrey, Inc., outside due diligence
consultant to the Lender.
(l) Interest Reserve Deposit Account. The Interest Reserve Deposit
Account shall have been established, conforming to the requirements hereof, all
amounts to be deposited in the Interest Reserve Deposit Account shall have been
deposited by the Borrower pursuant to Section 2.12 hereto, and the Lender shall
have received the Interest Reserve Deposit Account Control Agreement executed by
duly authorized officers of the Borrower, the Lender and the Interest Reserve
Deposit Account Bank.
(m) Collection Account Control Agreement. The Collection Account shall
have been established conforming to the requirements hereof and the Lender shall
have received the Collection Account Control Agreement executed by duly
authorized officers of the Borrower, the Servicer, the Lender and the Collection
Account Bank.
(n) Due Diligence Review. The Lender shall have successfully completed
its due diligence review of the Medallion Loans and the Related Parties
(including, without limitation, a
-38-
comprehensive valuation and appraisal of the Medallion Loans and an assessment
of the management of the Related Parties) and be satisfied with the operations,
financial condition of the Related Parties, and with the Medallion Loan Files,
in each case in its sole discretion.
(o) Facility Fee. The Related Parties shall have paid in full the
Facility Fee to the Lender.
(p) Evidence of Insurance. The Lender shall have received evidence
satisfactory to it that (i) the requirements of Section 7.19 hereof, relating to
insurance coverage of the Borrower, and (ii) the requirements of Section 6.18 of
the Servicing Agreement, relating to insurance coverage of the Servicer, have
been satisfied.
(q) Standard Form Medallion Loan Documentation. The Lender shall have
received copies of the Standard Form Medallion Loan Documentation, which shall
be acceptable to the Lender.
(r) Borrowing Base Certificate. The Lender shall have received a
Borrowing Base Certificate showing the Borrowing Base as of the Effective Date,
with appropriate insertions and dated the Effective Date, satisfactory in form
and substance to the Lender, executed by the President, Vice President,
Treasurer or Secretary of the Borrower.
(s) Commitment Fee. Medallion Funding shall have paid in full the
commitment fee payable to the Lender pursuant to the Commitment Letter.
(t) Amendment to Medallion Funding Facility Agreements. Medallion
Funding shall have executed an amendment to each of the existing Medallion
Funding Facility Agreements providing for (i) an extension of the termination
date until no earlier than July 31, 2003, (ii) an amended amortization schedule
providing for fixed or scheduled payments no earlier than as set forth in Annex
1 to Exhibit B to the Amended and Restated Commitment Letter, dated as of August
5, 2002, between the Lender and Medallion Funding, as such letter may be amended
from time to time, (iii) removal of all financial covenants (but not the removal
of a borrowing base), and (iv) a waiver of all current defaults.
(u) Amendment to Parent Loan Agreement. The Parent shall have executed
an amendment to the existing Parent Loan Agreement providing for (i) an
extension of the termination date until no earlier than July 31, 2003, (ii) an
amended amortization schedule providing for fixed or scheduled payments no
earlier than as set forth in Annex 1 to Exhibit B to the Amended and Restated
Commitment Letter, dated as of August 5, 2002, between the Lender and Medallion
Funding, as such letter may be amended from time to time, (iii) removal of all
financial covenants (but not the removal of a borrowing base), and (iv) a waiver
of all current defaults.
(v) Identification of a Backup Servicer. The Borrower shall have
designated a servicer acceptable to the Lender to act as the Backup Servicer and
the Backup Servicer shall have agreed in principle to act as backup servicer,
subject to the execution and delivery of definitive documentation.
-39-
(w) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Loan Agreement and the other Loan Documents
shall be reasonably satisfactory in form and substance to the Lender, and the
Lender shall have received such other documents and legal opinions in respect of
any aspect or consequence of the transactions contemplated hereby or thereby as
it shall reasonably request.
(x) Other Conditions. The Related Parties shall have satisfied all
other conditions that the Lender may reasonably request.
Section 5.02 Initial and Subsequent Advances. The making of each
Advance to the Borrower (including the initial Advance) on any Business Day is
subject to the satisfaction of the following further conditions precedent, both
immediately prior to the making of such Advance and also after giving effect
thereto and to the intended use thereof:
(a) No Default. No Default or Event of Default shall have occurred and
be continuing.
(b) Representations and Warranties. Each representation and warranty
made by a Related Party in the Loan Documents, shall be true and correct in all
material respects on and as of the date of the making of such Advance with the
same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date). Each Related Party shall also be in
compliance in all material respects with all governmental licenses and
authorizations, statutory and regulatory requirements.
(c) Outstanding Advances. The aggregate outstanding principal amount
of the Advances shall not exceed the amount permitted to be outstanding as
described in Section 2.01(a) hereof.
(d) Notice of Borrowing and Pledge. The Lender shall have received a
completed Notice of Borrowing and Pledge and Medallion Loan Schedule in
accordance with Section 2.03 hereof.
(e) Medallion Loan Files. The Custodian shall have received a complete
Medallion Loan File with respect to each pledged Medallion Loan to be funded on
the Funding Date and which was required to have been received by the Custodian
(i) in the case of the initial Advance, at least three (3) Business Days prior
to the funding of such Advance, and (ii) at least one (1) Business Day prior to
the funding of such Advance.
(f) Additional Documents. The Lender shall have received with regard
to all Medallion Loans, such information, documents, agreement, opinions or
instruments (including, without limitation, good standing certificates of each
Obligor under each Medallion Loan pledged hereunder) as the Lender reasonably
requires with respect to Medallion Loans to be pledged hereunder on such
Business Day, each in form and substance satisfactory to the Lender.
-40-
(g) No Material Adverse Effect. There shall not have occurred one or
more events that, in the judgement of Lender exercised in good faith,
constitutes, or could reasonably be expected to constitute, a Material Adverse
Effect.
(h) Due Diligence Review. Without limitation the Lender's right to
perform one or more Due Diligence Reviews pursuant to Section 10.16 hereof, the
Lender shall have completed (i) any due diligence review of the Medallion Loan
Documents relating to such Advance and such other documents, records,
agreements, instruments, collateral or information relating to such Advances as
the Lender in its reasonable discretion deems appropriate to review and such
review shall be satisfactory to the Lender in its reasonable discretion, and
(ii) in the case of an Approved Seller, any due diligence review of the
applicable Approved Purchase Agreement and any due diligence review of such
Approved Seller (including, without limitation, a review of its Underwriting
Guidelines, credit and collection policy and creditworthiness) as the Lender in
its sole and absolute discretion deems appropriate and such review shall be
satisfactory to the Lender in its sole and absolute discretion, and the Borrower
shall have reimbursed the Lender for all reasonable out-of-pocket costs and
expenses incurred by the Lender in connection with such review pursuant to
Section 10.16(b) hereof.
(i) Junior Participation Medallion Loan. In the case of each Junior
Participation Medallion Loan, the Lender shall have determined in its sole and
absolute discretion that the subordinated participation is a Permitted Junior
Participation Interest and the Lender shall have so notified the Borrower.
(j) Joint Participation Medallion Loan. In the case of each Joint
Participation Medallion Loan, the Lender shall have determined in its sole and
absolute discretion that the pari passu joint participation is a Permitted Joint
Participation Interest and the Lender shall have so notified the Borrower.
(k) Evidence of Notification to the Taxi Commission of Chicago. The
Lender shall have received evidence that in connection with the financing of any
Chicago Medallion Loans to the Borrower, an appropriate UCC-3 Financing
Statements was filed with the Illinois Secretary of State assigning the
Borrower's security interest in such Chicago Medallion Loans to the Lender, and
within five days after receipt of notice that such UCC-3 Financing Statement was
properly filed, the Taxi Commission for Chicago, Illinois shall have received a
copy of such completed filing and all relevant documents pertaining to such
assignment of security interest to the Lender.
(l) Participation Agreements. The Lender shall have received copies of
any and all participation agreements executed by Medallion Funding in connection
with any Medallion Loan to be pledged under this Loan Agreement in connection
with such Advance, together with a certificate of a Responsible Officer that
such participation agreement does not vary in any material respect from the form
of participation agreement with the applicable Permitted Joint Participant or
Permitted Junior Participant previously provided to, and approved by, the
Lender.
(m) Bankruptcy Remoteness. In the case of an initial Advance where the
Collateral securing such initial Advance is held by either a Permitted Joint
Participant or a Permitted Junior Participant that is an Affiliate of the
Borrower, the bankruptcy remoteness of
-41-
such Permitted Joint Participant or Permitted Junior Participant shall be
established to the satisfaction of the Lender in its sole and absolute
discretion prior to such initial Advance.
(n) Other Actions. Any other actions required or advisable to be taken
by the Borrower in connection with the purchase and pledging of any Medallion
Loans to be included in the Borrowing Base (including, without limitation, the
giving of notice of the purchase of such Medallion Loans and the giving of any
notice required to be given with respect to the pledge of such Medallion Loans
to the Lender hereunder) shall have been taken.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
As of the Effective Date and each Funding Documentation Receipt Date,
the Borrower represents and warrants to the Lender that:
Section 6.01 Eligible Medallion Loans. (a) As of the date on which a
Medallion Loan is initially pledged hereunder, such Medallion Loan was an
Eligible Medallion Loan and (b) to the best of the Borrower's knowledge, each
Medallion Loan included as an Eligible Medallion Loan in any Medallion Loan
Schedule, or any calculation of the Borrowing Base made by the Borrower is (or
was) as of the date of such schedule, tape, report, other information or
calculation, an Eligible Medallion Loan.
Section 6.02 Existence; Qualification. The Borrower is a Delaware
business trust duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation and has the power and all licenses and
permits necessary to own its assets and to transact the business in which it is
presently engaged, and is duly qualified and in good standing under the laws of
each jurisdiction where the conduct of its business requires such qualification.
Section 6.03 Authority and Authorization; Enforceability; Approvals;
Absence of Adverse Notice. The Borrower has the power, authority and legal right
to make, deliver and perform this Loan Agreement and each of the Loan Documents
to which it is a party and all of the transactions contemplated hereby and
thereby, and has taken all necessary action to authorize the execution, delivery
and performance of this Loan Agreement and each of the Loan Documents to which
it is a party, and to grant to the Lender a first priority perfected security
interest in the Collateral on the terms and conditions of this Loan Agreement.
This Loan Agreement and each of the Loan Documents to which the Borrower is a
party constitutes the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with their respective terms
except as the enforceability hereof and thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization and other similar laws of general
application affecting creditors' rights generally and by general principles of
equity (whether such enforceability is considered in a proceeding in equity or
at law). No consent of any other party and no consent, license, approval or
authorization of, or registration or declaration with, any governmental
authority, bureau or agency (including, without limitation, any Taxi Commission)
is required in connection with the execution, delivery or performance by the
Borrower of this Loan Agreement or any Loan Document to which it is a party, or
the validity or enforceability of this Loan Agreement or any such Loan Document
or the Medallion Loans, other than such as
-42-
have been met or obtained. The Borrower has not received any notice, nor does
the Borrower have any knowledge or reason to believe, that any Taxi Commission
or other Governmental Authority intends to seek the cancellation, termination or
modification of any of its licenses or permits, or that valid grounds for such
cancellation, termination or modification exist.
Section 6.04 No Breach. The execution, delivery and performance of
this Loan Agreement and all other agreements and instruments executed and
delivered or to be executed and delivered pursuant hereto or thereto in
connection with the pledge of the Collateral will not (i) create any Adverse
Claim on the Collateral other than as contemplated herein or (ii) violate any
provision of any existing law or regulation or any order or decree of any court,
regulatory body or administrative agency or the certificate of formation or
by-laws of the Borrower or any mortgage, indenture, contract or other agreement
to which the Borrower is a party or by which the Borrower or any property or
assets of the Borrower may be bound.
Section 6.05 Litigation. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is presently pending or, to
the knowledge of the Borrower, threatened against the Borrower or any properties
of the Borrower or with respect to this Loan Agreement which, if adversely
determined, could have a material effect on the business, assets or financial
condition of the Borrower or which would draw into question the validity of this
Loan Agreement, any Loan Document to which the Borrower is a party, or any of
the other applicable documents forming part of the Collateral.
Section 6.06 No Adverse Selection. In selecting the Medallion Loans to
be pledged pursuant to this Loan Agreement, no selection procedures were
employed which are intended to be, of had the effect of being, adverse to the
interests of the Lender.
Section 6.07 Bulk Transfer. The grant of the security interest in the
Collateral by the Borrower to the Lender pursuant to this Loan Agreement is in
the ordinary course of business for the Borrower and is not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction.
Section 6.08 Indebtedness. The Borrower has no Indebtedness or
obligation, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than Indebtedness incurred under
(or contemplated by) the terms of this Loan Agreement.
Section 6.09 Borrower's Purpose. The Borrower has been formed solely
for the purpose of engaging in transactions of the types contemplated by this
Loan Agreement.
Section 6.10 Adverse Orders. No injunction, writ, restraining order or
other order of any nature adversely affects the Borrower's performance of its
obligations under this Loan Agreement or any Loan Document to which the Borrower
is a party.
Section 6.11 Taxes. The Parent has elected to be treated as and
qualifies as a "regulated investment company" within the meaning of the Code.
The Borrower has filed (on a consolidated basis or otherwise) on a timely basis
all tax returns (including, without limitation, all foreign, federal, state,
local and other tax returns) required to be filed, is not liable for taxes
payable by any other Person and has paid or made adequate provisions for the
payment of all
-43-
taxes, assessments and other governmental charges due from the Borrower. No tax
lien or similar adverse claim has been filed, and no claim is being asserted,
with respect to any such tax, assessment or other governmental charge. Any
taxes, fees and other governmental charges payable by the Borrower in connection
with the execution and delivery of this Loan Agreement and the other Loan
Documents and the transactions contemplated hereby or thereby have been paid or
shall have been paid if and when due.
Section 6.12 Chief Executive Office; Jurisdiction of Organization. On
the Effective Date, the Borrower's chief executive office is (and the location
of the Borrower's records regarding the Medallion Loans), and during the four
months immediately preceding July 1, 2001 such office has been, located at 437
Madison Avenue, New York, New York 10022. On the Effective Date, the Borrower's
jurisdiction of organization is the State of Delaware.
Section 6.13 Legal Name. The Borrower's legal name is as set forth in
this Loan Agreement; the Borrower has not changed its name since its formation;
the Borrower does not have trade names, fictitious names, assumed names or
"doing business as" names.
Section 6.14 Solvency. The Borrower is solvent and will not become
insolvent after giving effect to the transactions contemplated hereby; the
Borrower is paying its debts as they become due; and the Borrower, after giving
effect to the transactions contemplated hereby, will have adequate capital to
conduct its business.
Section 6.15 Subsidiaries. The Borrower has no subsidiaries.
Section 6.16 Consideration. Taking into account the capital
contribution in the Purchase Agreement, the Borrower has given fair
consideration and reasonably equivalent value in exchange for the sale of the
Medallion Loans by Medallion Funding, as Seller, under the Purchase Agreement.
Section 6.17 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Related Parties to the Lender or the Custodian in connection with
the negotiation, preparation or delivery of this Loan Agreement and the other
Loan Documents or included herein or therein or delivered pursuant hereto or
thereto are true and correct in every material respect, or (in the case of
projections) are based on reasonable estimates, on the date as of which such
information is stated or certified. There is no fact known to a Responsible
Officer of the Borrower that, after due inquiry, should reasonably be expected
to have a Material Adverse Effect that has not been disclosed herein, in the
other Loan Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Lender for use in connection
with the transactions contemplated hereby or thereby.
Section 6.18 Proceeds Regulations. No proceeds of any Advances will be
used by the Borrower (i) to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended
or (ii) for the purpose of purchasing or carrying any "margin stock" as such
term is defined in Regulation U of the Federal Reserve Board.
-44-
Section 6.19 Adverse Agreements. There are no agreements in effect
adversely affecting the rights of the Borrower to make, or cause to be made, the
grant of the security interest in the Collateral contemplated by Section 4.01.
Section 6.20 Investment Company. The Parent is a closed-end management
investment company registered under the Investment Company Act and has elected
to be treated as a "business development company" under and as defined in the
Investment Company Act. The Parent is an "investment company", as such term is
defined in the Investment Company Act. The Borrower is Subsidiary of an
"investment company", as such term is defined in the Investment Company Act. The
acquisition of the Note by the Lender, the making of Advances hereunder, the
application of the proceeds and repayment of Advances by the Borrower and the
performance of the transactions contemplated by this Agreement and the other
Loan Documents will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities Exchange Commission thereunder.
Section 6.21 No Default. No Default or Event of Default has occurred
and is continuing.
Section 6.22 Underwriting and Servicing. Each of the Medallion Loans
was underwritten in accordance with the Underwriting Guidelines and is being
serviced in conformance with the applicable Seller's standard underwriting,
credit, collection, operating and reporting procedures and systems and otherwise
in accordance with Accepted Servicing Practices and the Credit and Collection
Policy.
Section 6.23 ERISA. The Borrower is in compliance with ERISA and has
not incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) to the Pension Benefit
Guaranty Corporation (or any successor thereto) under ERISA.
Section 6.24 Sharing of Payments. There is not now, nor will there be
at any time in the future, any agreement or understanding between Medallion
Funding and the Borrower (other than as expressly set forth in the Loan
Documents) providing for the allocation or sharing of obligations to make
payments or otherwise in respect of any taxes, fees, assessments or other
governmental charges.
Section 6.25 Collateral Security; Acquisition. (a) The Borrower has
not assigned, pledged, or otherwise conveyed or encumbered any Medallion Loan or
other Collateral to any other Person, and immediately prior to the pledge of
such Medallion Loan or any other Collateral to the Lender, the Borrower was the
sole owner of such Medallion Loan or such other Collateral and had good and
marketable title thereto, free and clear of all Liens other than those created
hereunder and those in favor of the applicable Seller or the Borrower and
pledged hereunder, in each case except for Permitted Participation Interests and
Liens to be released simultaneously with the Liens granted in favor of the
Lender hereunder. Each Medallion Loan was acquired by the Borrower from a
Seller.
-45-
(b) The provisions of this Loan Agreement are effective to create in
favor of the Lender a valid security interest in all right, title and interest
of the Borrower in, to and under the Collateral.
(c) Upon delivery to the Custodian of a complete Medallion Loan File,
the Lender shall have a fully perfected first priority security interest
therein, in each Medallion Loan pledged hereunder and in the Borrower's interest
in the related Medallion Collateral.
(d) Upon the filing of financing statements on Form UCC-1 naming the
Lender as "secured party" and the Borrower as "debtor", and describing the
Collateral, in the jurisdictions and recording offices listed on Schedule 6.25
attached hereto, the security interests granted hereunder in the Collateral will
constitute fully perfected first priority security interests under the Uniform
Commercial Code in all right, title and interest of the Borrower in, to and
under such Collateral which can be perfected by filing under the Uniform
Commercial Code.
Section 6.26 Subsidiary. The Borrower is a wholly-owned subsidiary of
Medallion Funding.
Section 6.27 Subsidiaries of the Parent. Schedule 6.27 sets forth, as
of the Effective Date, the name of each direct or indirect subsidiary of the
Parent, its form of organization and its jurisdiction of organization.
ARTICLE VII
COVENANTS OF THE BORROWER
The Borrower covenants and agrees with the Lender that, so long as any
Advance is outstanding and until the later to occur of the payment in full of
all Secured Obligations and the termination of this Loan Agreement:
Section 7.01 Existence; etc.
(a) The Borrower is a Delaware business trust and will observe all
procedures required by its trust agreement (or equivalent document) and the laws
of its jurisdiction of formation. The Borrower will maintain its existence in
good standing under the laws of its jurisdiction of formation and will promptly
obtain and thereafter maintain qualifications to do business as a foreign
business trust in any other state in which it does business and in which it is
required to so qualify.
(b) The Borrower will comply with the requirements of all applicable
laws, rules, regulations and orders of Governmental Authorities (including,
without limitation, all environmental laws, all laws with respect to unfair and
deceptive lending practices and predatory lending practices), if failure to
comply with such requirements would be reasonably likely (either individually or
in the aggregate) to have a Material Adverse Effect.
(c) The Borrower will not move its chief executive office from the
address referred to in Section 6.12 or change its jurisdiction of organization
from the jurisdiction referred
-46-
to in Section 6.02 unless it shall have provided the Lender 30 days' prior
written notice of such change.
(d) The Borrower will pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or profits or on
any of its Property prior to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which adequate
reserves are being maintained.
(e) The Borrower will permit representatives of the Lender, during
normal business hours, to examine, copy and make extracts from its books and
records, to inspect any of its Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested by the Lender.
Section 7.02 Special Purpose Entity.
(a) The Borrower will at all times ensure that (i) its directors and
managers act independently and in its interests, (ii) it shall at all times
maintain at least two independent directors each of (x) whom is not currently
and has not been during the five years preceding the date of this Loan Agreement
an officer, director, manager or employee of the Borrower or an Affiliate
thereof (other than a limited purpose corporation, business trust, partnership
or other entity organized for the purpose of acquiring, financing or otherwise
investing, directly or indirectly, in assets or receivables originated, owned or
serviced by Medallion Funding or an Affiliate thereof), (y) whom is not a
current or former officer or employee of the Borrower and (z) whom is not a
manager of the Borrower or an Affiliate thereof, (iii) its assets are not
commingled with those of Medallion Funding or any other Affiliate of the
Borrower, (iv) its board of managers duly authorizes all of its corporate
actions, (v) it maintains separate and accurate records and books of account and
such books and records are kept separate from those of Medallion Funding and any
other Affiliate of the Borrower, and (vi) it maintains minutes of the meetings
and other proceedings of the members and the board of managers. Where necessary,
the Borrower will obtain proper authorization from its managers for business
trust action.
(b) The Borrower will pay its operating expenses and liabilities
(including, as applicable, shared personnel and overhead expenses) from its own
assets; provided, however, that the Borrower's organizational expenses and the
expenses incurred in connection with the negotiation and execution of this Loan
Agreement and the other Loan Documents may be paid by Medallion Funding;
(c) The Borrower will not have any of its indebtedness guaranteed by
Medallion Funding or any Affiliate of Medallion Funding. Furthermore, the
Borrower will not hold itself out, or permit itself to be held out, as having
agreed to pay or as being liable for the debts of any Person and the Borrower
will not engage in business transactions with any Affiliate of the Borrower,
except on an arm's-length basis. The Borrower will not hold Medallion Funding or
any Affiliate of the Borrower out to third parties as other than an entity with
assets and liabilities distinct from the Borrower. The Borrower will cause any
financial statements consolidated with those of Medallion Funding or any
Affiliate of the Borrower to state that the Borrower is a
-47-
separate corporate entity with its own separate creditors who, in any
liquidation of the Borrower, will be entitled to be satisfied out of the
Borrower's assets prior to any value in the Borrower becoming available to the
Borrower's equity holders. The Borrower will not act in any other matter that
could foreseeably mislead others with respect to the Borrower's separate
identity.
(d) The Borrower shall own no assets, and will not engage in any
business, other than the assets and transactions specifically contemplated by
this Loan Agreement and the Loan Documents.
(e) The Borrower shall be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any other entity
(including any Affiliate), shall correct any known misunderstanding regarding
the Borrower's status as a separate entity, shall conduct business in the
Borrower's own name, shall not identify itself or any of its Affiliates as a
division or part of the other and shall maintain and utilize a separate
telephone number and separate stationery, invoices and checks.
(f) The Borrower shall maintain the Borrower's assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify the
Borrower's individual assets from those of any Affiliate or any other Person.
(g) The Borrower shall, at all times, be a wholly-owned subsidiary of
Medallion Funding.
Section 7.03 Accuracy of Opinions. The Borrower shall take all other
actions necessary to maintain the accuracy of the factual assumptions set forth
in the legal opinion of Willkie Farr & Gallagher, counsel to Medallion Funding
and the Borrower, issued in connection with the Purchase Agreement and relating
to the issues of substantive consolidation and true sale of the Medallion Loans.
Section 7.04 Prohibition on Adverse Claims. Except as otherwise
provided herein or in any other Loan Document, the Borrower shall not (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Adverse Claim upon or with respect to, any Medallion Loan,
any Collections related thereto or any other Collateral related thereto, or upon
or with respect to any account to which any Collections of any Medallion Loan
are sent, or assign any right to receive income in respect thereof or (ii)
create or suffer to exist any Adverse Claim upon or with respect to any of the
Borrower's assets.
Section 7.05 Prohibition on Fundamental Change. The Borrower will not
engage in, or suffer any, change of ownership, dissolution, winding up,
liquidation, merger or consolidation with, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions), all or substantially all of its assets (whether now owned or
hereafter acquired), or acquire all or substantially all of the assets or
capital stock or other ownership interest of, any Person.
Section 7.06 Sale or Contribution Treatment. The Borrower will not
account for or treat (whether in financial statements or otherwise) the
transactions contemplated by the Purchase Agreement in any manner other than the
sale or contribution of Medallion Loans and other Collateral by Medallion
Funding to the Borrower.
-48-
Section 7.07 Prohibition on Modifications. The Borrower will not
amend, modify, waive or terminate any terms or conditions of the Purchase
Agreement, any Approved Purchase Agreement, the Servicing Agreement or, in any
material respect, the Standard Form Medallion Loan Documentation without the
written consent of the Lender (which consent shall not be unreasonably withheld
in the case of an amendment curing an ambiguity or correcting any inconsistent
provisions of the Purchase Agreement or any Approved Purchase Agreement), and
shall perform its obligations thereunder.
Section 7.08 Amendment to Organizational Documents. The Borrower will
not amend, modify or otherwise make any change (other than an inconsequential
change) to its organizational documents without the consent of the Lender.
Section 7.09 Remittance of Collections. If the Borrower receives any
Collections, the Borrower will remit such Collections to the Collection Account
within one (1) Business Days of the Borrower's receipt thereof.
Section 7.10 Hedging Strategy. The Borrower shall use its best efforts
to be in material compliance with the Hedging Strategy.
Section 7.11 Litigation. The Borrower will promptly, and in any event
within 10 days after service of process on any of the following, give to the
Lender notice of all litigation, actions, suits, arbitrations, investigations
(including, without limitation, any of the foregoing which are pending or
threatened) or other legal or arbitrable proceedings affecting the Borrower or
any of its Subsidiaries or affecting any of the Property of any of them before
any Governmental Authority that (i) questions or challenges the validity or
enforceability of any of the Loan Documents or any action to be taken in
connection with the transactions contemplated hereby, (ii) which, individually
or in the aggregate, if adversely determined, could be reasonably likely to have
a Material Adverse Effect, or (iii) requires filing with the Securities and
Exchange Commission in accordance with the Securities and Exchange Act of 1934
and any rules thereunder.
Section 7.12 Notices. The Borrower shall give notice to the Lender:
(a) promptly upon receipt of notice or knowledge of the occurrence of
any Default or Event of Default or a Rapid Amortization Event;
(b) promptly upon receipt of notice or knowledge of (i) any default
related to any Collateral, (ii) any Lien or security interest (other than
security interests created hereby or by the other Loan Documents) on, or claim
asserted against, any of the Collateral or (iii) any event or change in
circumstances which could reasonably be expected to have a Material Adverse
Effect;
(c) promptly upon any material change in the Medallion Value of any
Medallion Collateral;
(d) promptly upon receipt of notice or knowledge of any issuance, or
possible issuance, of additional Medallions by New York City, Chicago, Boston,
Cambridge, Newark, Philadelphia or any other jurisdiction for which the Lender
has financed the purchase of Medallion Loans by the Borrower; and
-49-
(e) promptly upon receipt of notice or knowledge that a Medallion Loan
is no longer an Eligible Medallion Loan.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken or
proposes to take with respect thereto.
Section 7.13 Additional Information. The Borrower shall, from time to
time, provide to the Lender such other information, reports, financial
statements and documents as the Lender may reasonably request.
Section 7.14 Transaction with Affiliates. The Borrower will not enter
into any transaction, including without limitation any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Loan Agreement, (b) in
the ordinary course of the Borrower's business and (c) upon fair and reasonable
terms no less favorable to the Borrower than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate, or make a
payment that is not otherwise permitted by this Section 7.14 to any Affiliate.
Section 7.15 Limitation on Liens. The Borrower will defend the
Collateral against, and will take such other action as is necessary to remove,
any Lien, security interest or claim on or to the Collateral, other than the
security interests created under this Loan Agreement or Permitted Participation
Interests, and the Borrower will defend the right, title and interest of the
Lenders in and to any of the Collateral against the claims and demands of all
persons whomsoever.
Section 7.16 Advertising, Origination and Servicing Activities. All
advertising, origination and servicing activities, procedures and materials used
with regard to any Medallion Loan made or accounts acquired, collected or
serviced by the Borrower comply with all applicable Federal, state and local
laws, ordinances, rules and regulations, including but not limited to those
related to usury, truth in lending, real estate settlement procedures, consumer
protection, equal credit opportunity, fair debt collection, rescission rights
and disclosures, except where failure to comply would not have a Material
Adverse Effect.
Section 7.17 Required Filings. The Borrower shall promptly provide the
Lender with copies of all documents which the Parent or any Affiliate of the
Parent is required to file with the Securities and Exchange Commission in
accordance with the Securities and Exchange Act of 1934 or any rules thereunder.
Section 7.18 Financial Statements. (a) The Borrower shall deliver to
the Lender within 30 days after the last day of each calendar month, (i)
unaudited balance sheets and statements of income and cash flows for the
Borrower for such month (including, if such calendar month is the last month of
a calendar quarter, consolidated statements of cash flows for such calendar
quarter) and (ii) a certificate of an officer of the Borrower, whose position is
vice president or higher, stating that such financial statements are presented
fairly in all material respects and in accordance with GAAP, subject to year-end
audit adjustments.
-50-
(b) The Borrower shall deliver to the Lender within 90 days after the
end of each fiscal year, the consolidated balance sheets of the Borrower as at
the end of such fiscal year and the related consolidated statements of income
and retained earnings and of cash flows for the Borrower for such year, setting
forth in each case in comparative form the figures for the previous year,
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall not be qualified as to scope
of audit or going concern and shall state that said consolidated financial
statements fairly present the consolidated financial condition and results of
operations of the Borrower as at the end of, and for, such fiscal year in
accordance with GAAP, and a certificate of such accountants stating that, in
making the examination necessary for their opinion, they obtained no knowledge,
except as specifically stated, of any Default or Event of Default.
The Borrower will furnish to the Lender, at the time it furnishes each
set of financial statements pursuant to paragraphs (a) and (b) above, a
certificate of a Responsible Officer of the Borrower stating that, to the best
of such Responsible Officer's knowledge, the Borrower during such fiscal period
or year has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Loan Agreement and the other Loan
Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate (and, if any Default or Event of Default
has occurred and is continuing, describing the same in reasonable detail and
describing the action the Borrower has taken or proposes to take with respect
thereto).
Section 7.19 Maintenance of Insurance. The Borrower will maintain at
all times in full force and effect with financially sound and reputable
insurance companies insurance covering such risks and liabilities and with such
deductibles or self-insured retentions as are in accordance with normal industry
practices for policies of insurance.
Section 7.20 Right of First Refusal Replacement Financing. The
Borrower shall give the Lender the right of first refusal with respect to any
replacement financing in connection with any Eligible Medallion Loans, as set
forth on Schedule 7.20 hereto, provided, however, that the Lender offers to
provide such replacement financing on terms comparable to but no less favorable
to the Borrower and its Affiliates than the terms for such replacement financing
offered in good faith by any other potential lender.
Section 7.21 Monthly Pricing Reports; Monthly Liquidation Reports. The
Borrower shall deliver to the Lender within 30 days after the last day of each
calendar month (i) a monthly report summarizing the pricing and sales of taxi
medallions in New York City, Boston, Chicago, Cambridge, Newark, Philadelphia
and any other location of an Other Acceptable Taxi Commission, meeting the
requirements set forth on Schedule 7.21 hereto, in form acceptable to the Lender
in its sole and absolute discretion, and (ii) a monthly report in each
jurisdiction of the cost of fully liquidating Medallions during the preceding
three months, and the average cost for such liquidations (or if fewer than ten
Medallions were liquidated during such three-month period, the cost of
liquidating the ten most recently liquidated Medallions, and the average cost
for such liquidations), in form and substance acceptable to the Lender in its
sole and absolute discretion.
-51-
Section 7.22 Underwriting Guidelines. The Borrower shall promptly
notify the Lender (i) if Medallion Funding amends, modifies or revises its
Underwriting Guidelines or (ii) if the Borrower has knowledge that any Approved
Seller has amended, modified or revised its Underwriting Guidelines (and the
Borrower shall require any Approved Seller to notify the Borrower of any such
amendment, modification or revision). If the Lender determines, in its sole
discretion, that a proposed change to Underwriting Guidelines is material, the
Lender will have no obligation to finance any Medallion Loans that are
originated pursuant to such new Underwriting Guidelines.
Section 7.23 Approved Purchase Agreement Sale or Contribution
Treatment. The Borrower will not account for or treat (whether in financial
statements or otherwise) the transactions contemplated by any Approved Purchase
Agreement in any manner other than the sale of Medallion Loans and other
Collateral by the applicable Approved Seller to the Borrower.
Section 7.24 "Warm" Backup Servicer. (a) In accordance with the
Servicing Agreement, in the event an Acceptable Refinancing does not occur
within 150 days after the Effective Date and there exists $20,000,000 or more in
the aggregate outstanding under the Medallion Credit Facilities or $12,000,000
or more outstanding under either Medallion Credit Facility (a "Warm Backup
Servicer Event"), the Backup Servicer, as promptly as practicable thereafter,
and in any event no later than 30 days after the occurrence of the Warm Backup
Servicer Event, shall become a "warm" backup servicer (i.e., shall have
completed a thorough review of Medallion Funding's servicing of Medallion Loans
and shall have been provided sufficient information and access to computer
programs to permit a prompt and orderly transition of servicing if the Backup
Servicer is instructed to become the Servicer upon the occurrence of a Servicer
Default). In accordance with the Servicing Agreement, following the occurrence
of a Warm Backup Servicer Event, the Servicer shall fully cooperate with the
Backup Servicer's review and due diligence of the Servicer's servicing
procedures in connection with the Medallion Loans, including the Backup
Servicer's ongoing monitoring of servicing.
(b) If the Backup Servicer shall not have become a "warm" backup
servicer within such 30-day period, as determined by the Lender in its
reasonable discretion, the interest rate payable on the Advances shall be
increased by 0.25% per annum until such time as the Lender shall determine, in
its reasonable discretion, that the Backup Servicer shall have become a "warm"
backup servicer. The fees and expenses of the Backup Servicer shall be for the
account of the Borrower.
Section 7.25 Allonge Identification. Within two (2) calendar days
after the Effective Date, the Borrower shall identify each allonge to each
Medallion Note pledged to the Lender by including the Medallion Loan account
number on the face of each such allonge.
ARTICLE VIII
EVENTS OF DEFAULT
Each of the following events shall constitute an event of default (an
"Event of Default") hereunder:
-52-
(a) the Borrower shall default in the payment of any principal of or
interest on any Advance when due (whether at stated maturity, upon acceleration
or at mandatory or optional prepayment); or
(b) the Borrower shall default in the payment of any other amount
payable by it hereunder or under any other Loan Document after notification by
the Lender of such default, and such default shall have continued unremedied for
five (5) consecutive Business Days; or
(c) The Borrower shall fail to comply with Section 2.07(a), and such
failure shall have continued unremedied for two (2) Business Days; or
(d) the Borrower shall fail to perform or observe any term, covenant
or agreement hereunder or under any other Loan Document in any material respect
which failure is (i) not curable or (ii) curable and continues unremedied for a
period of ten (10) consecutive Business Days (and written assurances of such
cure shall have been given within one Business Day of default); or
(e) the occurrence of any Bankruptcy Event with respect to the
Borrower; or
(f) any representation or warranty made or deemed to be made by the
Borrower (or any of its respective officers) under or in connection with this
Loan Agreement, any remittance report or other information or report delivered
pursuant hereto or any other Loan Document shall prove to have been false or
incorrect in any material respect when made (other than the representations and
warranties made in a Borrowing Base Certificate with respect to the inclusion of
Medallion Loans in the Borrowing Base as Eligible Medallion Loans, which shall
be considered solely for the purpose of determining the Collateral Value of the
Mortgage Loans, unless (i) the Borrower shall have included a Medallion Loan in
the Borrowing Base with knowledge that such Medallion Loan was not an Eligible
Medallion Loan or (ii) the Lender shall determine in its sole discretion
exercised in good faith that the Borrower shall have included Medallion Loans in
the Borrowing Base with that were not an Eligible Medallion Loans on a regular
basis); or
(g) (i) the Lender shall at any time fail to have a valid, perfected,
first priority security interest in a material portion of the Collateral (as
determined by the Lender in its sole discretion, exercised in good faith), free
of adverse claims, or (ii) the purchase by the Borrower of Medallion Loans under
the Purchase Agreement or any Approved Purchase Agreement with respect to a
material portion of the Collateral (as determined by the Lender in its sole
discretion, exercised in good faith) shall, for any reason, cease to create in
favor of the Borrower a perfected ownership interest in such Medallion Loans and
the other Medallion Collateral related thereto, free of adverse claims; or
(h) the Borrower shall have suffered any material adverse change, as
determined by the Lender in its sole discretion, to its financial condition or
operations which could reasonably be expected to affect the collectability of
the Medallion Loans or the Borrower's ability to conduct its business or perform
its obligations under the Loan Documents; or
-53-
(i) the Borrower's activities are terminated in whole or in part for
any reason, including any termination thereof by a Taxi Commission or other
regulatory, tax or accounting body; or
(j) the Purchase Agreement, any Approved Purchase Agreement, the
Custodial Agreement, the Servicing Agreement or any other Loan Documents shall
cease to be in full force and effect or the enforceability thereof shall be
contested by a party thereto; or
(k) the failure of the Borrower to cure a Borrowing Base Deficiency in
the manner, and within the time period, set forth in Section 2.07; or
(l) a final judgment or judgments for the payment of money in excess
of $500,000 in the aggregate shall be rendered against the Borrower by one or
more courts, administrative tribunals or other bodies having jurisdiction and
the same shall not be satisfied, discharged (or provision shall not be made for
such discharge) or bonded, or a stay of execution thereof shall not be procured,
within five (5) Business Days from the date of entry thereof, and the Borrower
or any such Affiliate shall not, within said period of five (5) Business Days,
or such longer period during which execution of the same shall have been stayed
or bonded, appeal therefrom and cause the execution thereof to be stayed during
such appeal; or
(m) the Borrower shall be in default under any note, indenture, loan
agreement, guaranty, swap agreement or any other contract to which it is a
party, which default (i) involves the failure to pay a matured obligation, or
(ii) permits the acceleration of the maturity of obligations by any other party
to or beneficiary of such note, indenture, loan agreement, guaranty, swap
agreement or other contract; or
(n) the Board of Managers of the Borrower (which shall consist of a
total of five managers, including two independent managers) shall not include at
least three of the following persons for a period of five (5) Business Days:
Alvin Murstein, Andrew Murstein, James Jack, Brian O'Leary, Larry Hall and
Michael Kowalsky; or
(o) both Alvin Murstein and Andrew Murstein shall fail to be on the
Board of Managers of the Borrower.
ARTICLE IX
REMEDIES UPON DEFAULT
(a) Upon the occurrence of one or more Events of Default hereunder,
the Lender's obligation to make additional Advances to the Borrower shall
automatically terminate without further action by any Person. Upon the
occurrence and continuation of one or more Events of Default other than those
referred to in Article VIII, paragraph (e) hereof, and in addition to the
remedies provided in Section 4.07 hereof and otherwise provided in this Loan
Agreement, the Lender may immediately declare the principal amount of the
Advances then outstanding under the Note to be immediately due and payable,
together with all interest thereon and fees and expenses accruing under this
Loan Agreement. Upon the occurrence of an Event of Default referred to in
Article VIII, paragraph (e), and in addition to the remedies provided in
-54-
Section 4.07 hereof and otherwise provided in this Loan Agreement, such amounts
referred to in the preceding sentence shall immediately and automatically become
due and payable without any further action by any Person. Upon such declaration
or such automatic acceleration, the balance then outstanding on the Note shall
become immediately due and payable, without presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower.
(b) The powers conferred on the Lender hereunder are solely to protect
the Lender's interests in the Collateral and shall not impose any duty upon it
to exercise any such powers. The Lender shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers, and
neither it nor any of its officers, directors, employees or agents shall be
responsible to the Related Parties for any act or failure to act hereunder,
except for its or their own gross negligence or willful misconduct.
ARTICLE X
MISCELLANEOUS
Section 10.01 Waiver. No failure on the part of the Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under any Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
Section 10.02 Notices. Except as otherwise expressly permitted by this
Loan Agreement, all notices, requests and other communications provided for
under the Loan Documents (including without limitation any modifications of, or
waivers, requests or consents under, this Loan Agreement) shall be given or made
in writing (including without limitation by telecopy) delivered to the intended
recipient at the address specified for each party hereto below; or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party:
The Borrower:
Taxi Medallion Loan Trust I
437 Madison Avenue
New York, New York 10022
Attention: President
Telecopier No.: 212-328-3654
Telephone No.: 212-328-3654
The Lender:
Merrill Lynch Bank USA
15 W. South Temple
Suite 300
-55-
Salt Lake City, Utah 84101
Attention: Louise Alder
Telecopier No.: 801-531-7470
Telephone No.: 801-526-8324
With a copy to:
Merrill Lynch Global Asset Based Finance
4 World Financial Center
New York, New York 10080
Attention: Joshua Green
Telecopier No.: 212-449-6673
Telephone No.: 212-449-7330
Except as otherwise provided in this Loan Agreement and except for notices given
under Section 2 (which shall be effective only on receipt), all such
communications shall be deemed to have been duly given when transmitted by
telecopy or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
Section 10.03 Indemnification and Expenses.
(a) The Borrower agrees to hold the Lender, the Custodian, the Backup
Servicer and each of their officers, directors, agents and employees (each, an
"Indemnified Party") harmless from and indemnify each Indemnified Party against
all liabilities, losses, damages, judgments, costs and expenses of any kind
which may be imposed on, incurred by or asserted against such Indemnified Party
in any suit, action, claim or proceeding relating to or arising out of this Loan
Agreement, the Note, any other Loan Document, any Collateral or any transaction
contemplated hereby or thereby, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Loan Agreement, the Note,
any other Loan Document, any Collateral or any transaction contemplated hereby
or thereby, including, without limitation, (i) any Medallion Loan pledged
hereunder not constituting an Eligible Medallion Loan, (ii) the offering or
effectuation of any securitization, or (iii) the commingling of the proceeds of
the Collateral at any time with other funds, except, in each case, to the extent
arising from such Indemnified Party's gross negligence or willful misconduct. In
any suit, proceeding or action brought by the Lender in connection with any
Collateral for any sum owing thereunder, or to enforce any provisions of such
Collateral, the Borrower will save, indemnify and hold the Lender harmless from
and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever of the
account debtor or obligor thereunder, arising out of a breach by the Borrower of
any obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from the Borrower. The Borrower also agrees to reimburse the
Lender as and when billed by the Lender for all the Lender's reasonable costs
and expenses incurred in connection with the enforcement or the preservation of
the Lender's rights under this Loan Agreement, the Note, any other Loan
Document, any Collateral or any transaction contemplated hereby or thereby,
including without limitation the reasonable fees and disbursements of its
counsel (including reasonable fees and disbursements incurred in any action or
proceeding between the Borrower and an Indemnified Party or between an
Indemnified Party
-56-
and any third party relating hereto). The Borrower hereby acknowledges that,
notwithstanding the fact that the Secured Obligations are secured by the
Collateral, each Secured Obligation is a recourse obligation of the Borrower.
(b) The Borrower agrees to pay as and when billed by the Lender all
reasonable costs and expenses incurred by the Lender in connection with the
development, preparation and execution of, this Loan Agreement, the Note, any
other Loan Document, any Collateral or any other documents prepared in
connection herewith or therewith, and any amendment, supplement or modification
thereto, and the consummation and administration of the transactions
contemplated hereby and thereby, including without limitation (i) all the
reasonable fees, disbursements and expenses of counsel to the Lender, and (ii)
all the reasonable due diligence, inspection, testing and review costs and
expenses incurred by the Lender with respect to Collateral under this Loan
Agreement.
Section 10.04 Amendments. Any provision of a Loan Document may be
modified or supplemented only by an instrument in writing signed by the
Borrower, the Lender and (to the extent any such modification or supplement
would have a material adverse effect on the interest of the Custodian) the
Custodian, and any provision of a Loan Document may be waived only by the
written agreement of the Lender. Any consent by the Lender to any amendment,
modification or supplement to the trust agreement of the Borrower or the
Purchase Agreement may be conditioned upon confirmation from Willkie Farr &
Gallagher, counsel to the Borrower, that the analysis and conclusions expressed
in the legal opinion delivered by them dated the Effective Date and addressing
issues of true sale and nonconsolidation remain unchanged.
Section 10.05 Successors and Assigns. This Loan Agreement shall be
binding upon and inure to the benefit of (i) the parties hereto and their
respective successors and permitted assigns and (ii) to the Custodian (and its
successors and assigns), to the extent of provisions herein that pertain to the
Custodian.
Section 10.06 Survival. The obligations of the Borrower under Sections
2.09, 2.11 and 10.03 and 10.16 hereof shall survive the repayment of the
Advances and the termination of this Loan Agreement. In addition, each
representation and warranty made or deemed to be made by a request for a
borrowing herein or pursuant hereto shall survive the making of such
representation and warranty, and the Lender shall not be deemed to have waived,
by reason of making any Advance, any Default that may arise because any such
representation or warranty shall have proved to be false or misleading,
notwithstanding that the Lender may have had notice or knowledge or reason to
believe that such representation or warranty was false or misleading at the time
such Advance was made.
Section 10.07 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this Loan
Agreement.
Section 10.08 Counterparts. This Loan Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Loan Agreement
by signing any such counterpart.
-57-
Section 10.09 GOVERNING LAW; ETC. THIS LOAN AGREEMENT SHALL BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF LAW
DOCTRINE (BUT WITH REFERENCE TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, WHICH BY ITS TERMS APPLIES TO THIS LOAN AGREEMENT), AND SHALL
CONSTITUTE A SECURITY AGREEMENT WITHIN THE MEANING OF THE UNIFORM COMMERCIAL
CODE.
Section 10.10 SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE
BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS LOAN AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF
WHICH THE LENDER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO SUE IN ANY OTHER JURISDICTION.
(E) AGREES THAT THE LENDER SHALL HAVE NO LIABILITY FOR ANY PUNITIVE
DAMAGES IN ANY SUCH ACTION OR PROCEEDING.
Section 10.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE
LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
-58-
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS LOAN AGREEMENT, ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 10.12 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Loan Agreement, the Note and the other Loan Documents;
(b) the Lender has no fiduciary relationship to the Borrower, and the
relationship between the Borrower and the Lender is solely that of debtor and
creditor; and
(c) no joint venture exists between the Lender and the Borrower.
Section 10.13 Hypothecation and Pledge of Collateral. The Lender shall
have free and unrestricted use of all Collateral and nothing in this Loan
Agreement shall preclude the Lender from engaging in repurchase transactions
with the Collateral or otherwise pledging, repledging, transferring,
hypothecating, or rehypothecating the Collateral. Nothing contained in this Loan
Agreement shall obligate the Lender to segregate any Collateral delivered to the
Lender by the Borrower.
Section 10.14 Assignments; Participations. (a) The Lender may assign
to one or more Qualified Institutional Buyers (or, if an Event of Default has
occurred and is continuing, to any Person who is not a Qualified Institutional
Buyer, provided that prior to such assignment the Lender delivers to the
Borrower an opinion of experienced securities law counsel to the Lender to the
effect that such assignment will not cause the Borrower to be required to
register as an investment company under the Investment Company Act) all or a
portion of its rights and obligations under this Loan Agreement; provided, that
if no Event of Default has occurred and is continuing, the Lender may not assign
to a Person that competes with Medallion Funding in the origination and
servicing of Medallion Loans; provided, however, that the parties to each such
assignment shall execute and deliver an Assignment and Acceptance substantially
in the form of Exhibit J, with appropriate completions (an "Assignment and
Acceptance"), along with replacement Notes executed and delivered by the
Borrower.
(b) Upon such execution and delivery, from and after the effective
date specified in such Assignment and Acceptance, (i) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of the Lender hereunder, and (ii) the Lender assignor
thereunder shall, to the extent that any rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Loan Agreement.
(c) The Lender may sell participations to one or more Qualified
Institutional Buyers (or, if an Event of Default has occurred and is continuing,
to any Person who is not a Qualified Institutional Buyer, provided that prior to
such assignment the Lender delivers to the Borrower an opinion of experienced
securities law counsel to the Lender to the effect that such assignment will not
cause the Borrower to be required to register as an investment company under the
Investment Company Act) all or a portion of its rights and obligations under
this Loan
-59-
Agreement; provided, however, that (i) the Lender's obligations under this Loan
Agreement shall remain unchanged, (ii) the Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the Lender shall remain the holder of any such Note for all purposes of
this Loan Agreement, and (iv) the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and obligations
under and in respect of this Loan Agreement and the other Loan Documents.
Notwithstanding the terms of Section 2.09, each participant of the Lender shall
be entitled to the additional compensation and other rights and protections
afforded the Lender under Sections 2.09 or 2.16 to the same extent as the Lender
would have been entitled to receive them with respect to the participation sold
to such participant but not in excess of amounts to which the Lender would have
been entitled hereunder.
(d) The Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 12.14, disclose
to the assignee or participant or proposed assignee or participant, as the case
may be, any information relating to the Borrower or any of its Subsidiaries or
to any aspect of the Loans that has been furnished to the Lender by or on behalf
of the Borrower or any of its Subsidiaries.
(e) The Lender may at any time create a security interest in all or
any portion of its rights under this Loan Agreement (including, without
limitation, the Loans owing to it and the Note held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(f) Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default, Lender may assign all or any portion of its
rights and obligations hereunder to any Person, provided that upon the effective
date of such assignment such Person shall become a party hereto and a Lender
hereunder and shall be (A) entitled to all the rights, benefits and privileges
accorded Lender under the Loan Documents, and (B) subject to all the duties and
obligations of Lender under the Loan Documents.
(g) The Borrower agrees to cooperate with the Lender in connection
with any such assignment or transfer, to execute and deliver such replacement
notes, and to enter into such restatements of, and amendments, supplements and
other modifications to, this Loan Agreement and the other Loan Documents in
order to give effect to such assignment or transfer.
(h) The Borrower may not assign any of its rights or obligations
hereunder or under any Loan Document without the prior written consent of the
Lender.
Section 10.15 Alteration of Medallion Loan Documents. After the
Funding Documentation Receipt Date, until the pledge of any Medallion Loan is
relinquished by the Lender, the Borrower will have no right to modify or alter
the terms of the related Medallion Loan Documents except in accordance with the
applicable Seller's written Underwriting Guidelines and the Credit and
Collection Policy.
Section 10.16 Periodic Due Diligence Review. (a) The Borrower
acknowledges that the Lender has the right to perform continuing due diligence
reviews with respect to the
-60-
Medallion Loans, for purposes of verifying compliance with the representations,
warranties and specifications made hereunder, or otherwise, and the Borrower
agrees that upon reasonable (but no less than one (1) Business Day's) prior
notice to the Borrower (which prior notice shall not be required after the
occurrence and during the continuation of a Default), the Lender or its
authorized representatives will be permitted during normal business hours to
examine, inspect, and make copies and extracts of, the Medallion Loan Files and
any and all documents, records, agreements, instruments or information relating
to such Medallion Loans in the possession or under the control of the Borrower
and/or the Custodian. The Borrower also shall make available to the Lender a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Medallion Loan Files, the Medallion Loans, the
Borrowing Base or other related matters. Without limiting the generality of the
foregoing, the Borrower acknowledges that the Lender may make Advances to the
Borrower based solely upon the information provided by the Borrower to the
Lender and the representations, warranties and covenants contained herein, and
that the Lender, at its option, has the right at any time to conduct a partial
or complete due diligence review on some or all of the Medallion Loans securing
such Advance, including without limitation ordering new credit reports and
otherwise re-generating the information used to originate such Medallion Loans.
The Lender may underwrite such Medallion Loans itself or engage a mutually
agreed upon third party underwriter to perform such underwriting, provided that
such third party underwriter shall agree in writing with the Borrower to
maintain the confidentiality of the information reviewed and only to use such
information in connection with its engagement by the Lender in connection with
this Loan Agreement. The Borrower agrees to cooperate with the Lender and any
third party underwriter in connection with such underwriting, including, but not
limited to, providing the Lender and any third party underwriter with access to
any and all documents, records, agreements, instruments or information relating
to such Medallion Loans in the possession, or under the control, of the
Borrower. The Borrower shall reimburse the Lender for all reasonable
out-of-pocket costs and expenses incurred by the Lender in connection with the
Lender's activities pursuant to this Section 10.16 and Section 9.09 of the
Servicing Agreement; provided, however that, except if a Servicer Default or
Event of Default has occurred and is continuing, the Borrower shall not be
required to reimburse the Lender for ongoing due diligence and monitoring costs
and expenses in excess of $20,000 for any calendar year.
(b) The Borrower shall reimburse the Lender for all reasonable
out-of-pocket costs and expenses incurred by the Lender in connection with any
due diligence review of a proposed Approved Seller or a proposed Approved
Purchase Agreement. Amounts reimbursed pursuant to this Section 10.16(b) shall
not be subject to or applied toward the reimbursement cap set forth in Section
10.16(a) hereof.
Section 10.17 Usury Savings Clause. Anything in this Loan Agreement or
the Note to the contrary notwithstanding, the obligation of the Borrower to make
payments of interest shall be subject to the limitation that payments of
interest shall not be required to be made to the extent that a Lender's receipt
thereof would not be permissible under the law or laws applicable to it limiting
rates of interest which may be charged or collected by it. Any such amount of
interest which is not paid as a result of the limitation referred to in the
preceding sentence shall be carried forward and paid by the Borrower to the
Lender on the earliest date or dates on which any interest is payable under this
Loan Agreement and on which the receipt
-61-
thereof is permissible under the laws applicable to the Lender limiting rates of
interest which may be charged or collected by the Lender. Such payment shall be
made as additional interest for the month preceding such interest payment date.
Such deferred payments shall not bear interest.
Section 10.18 Pledge of Ownership Interest in the Borrower.
Notwithstanding anything in this Loan Agreement to the contrary, the Lender
hereby consents to a silent pledge of Medallion Funding's ownership interest in
the Borrower in favor of the lenders and noteholders under the Medallion Credit
Facilities (i) on customary terms or on other terms reasonably acceptable to the
Lender, and (ii) in any event, providing for the ability of such lenders and
noteholders to exercise remedies only upon acceleration of the indebtedness
under this Loan Agreement.
[SIGNATURE PAGE FOLLOWS]
-61-
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be duly executed and delivered as of the day and year first above written.
BORROWER:
TAXI MEDALLION LOAN TRUST I
By: /s/ Andrew Murstein
------------------------------
Name: Andrew Murstein
Title: President
LENDER:
MERRILL LYNCH BANK USA
By: /s/ David L. Millett
------------------------------------
Name: David L. Millett
Title: Vice President
Schedule 1.01(a)
CREDIT AND COLLECTION POLICY
[To Be Added]
Schedule 1.01(b)
FORMER FSP MEDALLION LOANS
[To Be Added]
Schedule 1.01(c)
EXISTING PERMITTED JOINT PARTICIPANTS
1. Atlantic Bank of New York
2. The Merchants Bank of New York
3. North Fork Bank
(i)
Schedule 1.01(d)
EXISTING PERMITTED JUNIOR PARTICIPANTS
1. E.J.T. Management, Inc.
2. Elk Associates Funding Corporation
3. Susil Cab, Inc.
4. The OSG Corporation
Schedule 1.01(e)
SPECIFIED 90% LTV MEDALLION LOANS
[To Be Added]
Schedule 1.01(f)
UNDERWRITING GUIDELINES
[To Be Added]
Schedule 1
----------
Eligibility Criteria
To be an Eligible Medallion Loan, a Medallion Loan (and the related
Medallion) must satisfy, and maintain at all times, the following eligibility
characteristics, subject to any exceptions thereto approved in writing by the
Lender in its sole discretion:
(a) In the case of Medallion Loans other than Former FSP Medallion
Loans and Specified 90% LTV Medallion Loans, at the time of origination or of
acquisition by the Borrower, the Medallion Loan has a Loan-to-Value Ratio less
than or equal to 80% (for purposes of calculating the Loan-to-Value Ratio, the
maximum Medallion Valuation Amount attributed to any Medallion Loan shall not
exceed $325,000).
(b) In the case of Former FSP Medallion Loans, at the time of
origination or of acquisition by the Borrower, the Former FSP Medallion Loan has
a Loan-to-Value Ratio less than or equal to 92% (for purposes of calculating the
Loan-to-Value Ratio, the maximum Medallion Valuation Amount attributed to any
Former FSP Medallion Loan shall not exceed $325,000).
(c) In the case of Specified 90% LTV Medallion Loans, at the time of
origination or of acquisition by the Borrower, the Specified 90% LTV Medallion
Loan has a Loan-to-Value Ratio less than or equal to 90% but greater than 80%
(for purposes of calculating the Loan-to-Value Ratio, the maximum Medallion
Valuation Amount attributed to any Specified 90% LTV Medallion Loan shall not
exceed $325,000).
(d) The Medallion Loan provides for not less frequently than monthly
payments of interest.
(e) The Medallion Loan and other Medallion Loan Documents have not
been extended, waived, amended or modified except in accordance with the Credit
and Collection Policy. The Lender shall be notified of any material change to
the Credit and Collection Policy and shall have the right to declare ineligible
any Medallion Loans originated or modified under such revised Credit and
Collection Policy.
(f) The Medallion Loan does not contravene any Requirements of Law
applicable thereto.
(g) All required consents, approvals and authorizations in connection
with the Medallion Loan have been obtained.
(h) The Medallion Loan is in full force and effect, no provision of
which has been modified, waived or amended (in the case of a Medallion Loan
acquired from an Approved Seller, since the date of acquisition of such
Medallion Loan), except in accordance with the Credit and Collection Policy, and
constitutes the legal, valid and binding obligation of the Obligor in accordance
with its terms.
Schedule 1-1
(i) The Medallion Loan is (i) payable in Dollars, (ii) denominated in
Dollars and (iii) originated in the United States.
(j) Immediately prior to the sale, assignment and transfer thereof,
the Medallion Loan is secured by a valid first perfected security interest in
the related Medallion Collateral in favor of the Seller or the Borrower, as
secured party.
(k) No right of rescission, setoff, counterclaim or defense has been
asserted in connection with the Medallion Loan.
(l) The related Obligor is an individual, corporation or partnership.
(m) If the Obligor is an individual, such individual is either a
United States citizen or a resident alien with a "Green Card", has a social
security number, a drivers license, and does not have a criminal record or
otherwise complies with all requirements of the applicable Taxi Commission.
(n) The Seller originated the Medallion Loan for the purpose of
financing an Obligor's Medallion, and the Medallion Loan was made in the
ordinary course of such Seller's business in accordance in all material respects
with the Underwriting Guidelines.
(o) The Medallion Loan Documents were fully and properly executed by
the parties thereto.
(p) The Medallion Loan is not more than 360 days delinquent (without
regard to any applicable grace periods).
(q) The Medallion Loan (i) has been sold by Medallion Funding, as
Seller, to the Borrower pursuant to the Purchase Agreement, or (ii) has been
sold by an Approved Seller to the Borrower pursuant to an Approved Purchase
Agreement.
(r) The related Obligor (i) is not currently the subject of a judgment
in favor of the Borrower, or the applicable Seller and (ii) did not have its
related Medallion foreclosed (or subject to foreclosure).
(s) There exists a Medallion Loan File with respect to the Medallion
Loan that has been delivered to the Custodian in accordance with the Loan
Documents. The related Medallion Loan File for the Medallion Loan contains the
documents and instruments specified to be included therein in the form specified
in the definition of "Medallion Loan File."
(t) The information with respect to the Medallion Loan and the related
Medallion Loan Documents and Medallion Collateral set forth in the Medallion
Loan Schedule is true, correct and complete in all material respects.
(u) No adverse selection procedures have been utilized in selecting
the Medallion Loan as one meeting the selection criteria contained in the Loan
Agreement.
Schedule 1-2
(v) The origination and servicing of the Medallion Loan, and the sale
of the Medallion Loan did not contravene in any material respect any
requirements of applicable federal, state and local laws, and regulations
thereunder including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldiers' and Sailors' Civil Relief Act of 1940, each
applicable state Motor Vehicle Retail Installment Sales Act, and state
adaptations of the National Consumer Act and of the Uniform Consumer Credit
Code, and other consumer credit laws and equal credit opportunity and disclosure
laws.
(w) The Medallion Loan is not due from the United States of America or
any state or from any other Governmental Authority.
(x) The Medallion Loan has created a valid, subsisting and enforceable
first priority perfected security interest in the related Medallion Collateral
in favor of the applicable Seller as secured party, and such security interest
is prior to all other liens (other than liens described in the next sentence, as
to which the Borrower has no knowledge) upon and security interests in such
Medallion Collateral that now exist or may hereafter arise or be created. To the
best of the Borrower's knowledge, there are no Liens or claims existing or that
have been filed for work, labor, storage or materials relating to the related
Medallion that are prior to the security interest in the related Medallion
granted by such Medallion Loan. There is no Lien against the Medallion related
to such Medallion Loan for delinquent taxes, except where an adequate escrow for
such taxes has been established and funded.
(y) The Medallion Loan is the legal, valid and binding obligation of
the Obligor thereunder and is enforceable in accordance with its terms, except
only as such enforcement may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally; all parties to
the Medallion Loan had full legal capacity to execute and deliver such Medallion
Loan and all other documents related thereto and to grant the security interest
purported to be granted thereby. The Medallion Loan has not been satisfied,
subordinated or rescinded, nor has any Medallion been released from the lien
granted by such Medallion Loan in whole or in part.
(z) The Medallion Loan has not been modified as a result of
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
(aa) No right of rescission, setoff, counterclaim, or defense exists
with respect to the Medallion Loan. The operation of the terms of the Medallion
Loan or the exercise of any right thereunder will not render such Medallion Loan
unenforceable in whole or in part or subject to any such right of rescission,
setoff, counterclaim or defense.
(bb) As of the Funding Documentation Receipt Date for the Medallion
Loan, except for Permitted Delinquencies, no default, breach, violation or event
permitting acceleration under the terms of the Medallion Loan has occurred; no
continuing condition that with notice or the lapse of time would constitute a
default, breach, violation, or event permitting acceleration under the terms of
such Medallion Loan has arisen; the applicable Seller has not waived any of the
foregoing; and the Medallion related to the Medallion Loan has not been
repossessed under
Schedule 1-3
the Medallion Loan. To the best of the Borrower's knowledge, the related Obligor
is not in default on any other debt obligation owed or owing to the Borrower or
any Affiliate of the Borrower. "Permitted Delinquency" means a delinquency of no
more than 360 days.
(cc) The Medallion Loan has not been sold, transferred, assigned or
pledged by the applicable Seller to any Person other than the Borrower, and
immediately prior to the sole of the Medallion Loan to the Lender, such Seller
had good and marketable title to the Medallion Loan, and was sole owner thereof,
free and clear of all Liens, except for Permitted Participation Interests. Such
Seller has not taken any action to convey any right to any Person that would
result in such Person having a right to payments received under the related
insurance policies, except in connection with Permitted Junior Participation
Interests or Permitted Joint Participation Interests.
(dd) On the Effective Date and each Funding Documentation Receipt
Date, the Borrower and the Servicer will have each caused the portions of its
master computer records relating to the Medallion Loan to be clearly and
unambiguously marked to show that the Medallion Loans has been pledged to the
Lender in accordance with the terms of this Loan Agreement.
(ee) Each Medallion Loan Schedule made available by the Borrower to
the Lender was complete and accurate in all material respects as of the
Effective Date (in the case of the first such tape) and the Funding
Documentation Receipt Date with respect to which such tape was delivered.
(ff) The Medallion Loan was not originated in, and is not subject to
the laws of, any jurisdiction under which the pledge, sale, contribution,
transfer and assignment of such Medallion Loan shall be unlawful, void or
voidable, except as set forth in the opinions of local counsel delivered
pursuant to Section 5.01(j)(ii) of the Loan Agreement. The applicable Seller has
not entered into any agreement with any Obligor or other Person that prohibits,
restricts or conditions the pledge, sale, contribution, transfer or assignment
of any portion of such Medallion Loan or the related Collateral or that is
otherwise inconsistent with the terms of such Medallion Loan or this Loan
Agreement.
(gg) The Lender has a first priority perfected Lien in the Medallion
Loan and the Medallion Collateral related thereto. All filings (including,
without limitation, Uniform Commercial Code filings) necessary in any
jurisdiction to give the Lender a first priority perfected Lien in the Medallion
Loan and the other Medallion Collateral have been made.
(hh) There is only one original executed copy of the Medallion Note
for the Medallion Loan, including any assumptions, amendments or modifications
thereto.
(ii) No further action is required under the Uniform Commercial Code
or any titling statute or act to continue the perfected status of the first
priority security interest of the Borrower in the Medallion against creditors of
and transferees of the Obligor, except for the filing of continuation
statements.
(jj) The Medallion Loan constitutes "chattel paper", an "instrument"
or a "general intangible" under the Uniform Commercial Code.
Schedule 1-4
(kk) Each related Medallion Loan Document contains customary and
enforceable provisions so as to render the rights and remedies of the holder
thereof adequate for the practical realization of the benefits of the security
interests intended to be provided thereby, subject to the limitations described
in the next succeeding sentence. There is no exemption under existing law
available to the related Obligor which would interfere with secured party's
right to foreclose or to realize upon the related Medallion Loan Document, other
than that which may be available under the insolvency laws, other laws of
general application relating to or affecting the enforcement of creditors'
rights generally, applicable debt relief or homestead statutes or general
principles of equity. No representations have been made to the related Obligor
by the applicable Seller or the Borrower that are inconsistent with the
Medallion Loan Documents. The Medallion Loan contains an enforceable provision
for the acceleration of the payment of the principal balance of the Medallion
Loan in the event that the Medallion is sold or transferred without the prior
written consent of the Borrower.
(ll) Any applicable intangible taxes and documentary stamp taxes were
paid as to the Medallion Loan and each related Medallion Loan Document.
(mm) The Medallion Loan Documents for the Medallion Loan are in
substantially the form of the Standard Form Medallion Loan Documentation with
the exceptions, if any, listed on the Notice of Borrowing and Pledge and
approved in writing by the Lender.
(nn) The Borrower has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than an Obligor on such
Medallion Loan, directly or indirectly, for the payment of any amount required
by such Medallion Loan.
(oo) The proceeds of such Medallion Loan have been fully disbursed,
there is no obligation or requirement for future advances thereunder, and all
costs, fees and expenses incurred in making or closing the Medallion Loan have
been paid. The Borrower has duly fulfilled in all material respects all
obligations on its part to be fulfilled under or in connection with the related
Medallion Loan Documents and has done nothing to impair the rights of the
applicable Seller, the Borrower or the Lender in such Medallion Loan Documents
or payments with respect thereto.
(pp) As of the applicable date of transfer thereunder, no Obligor on
the Medallion Loan is bankrupt, is the debtor in a voluntary or involuntary
bankruptcy proceeding, or is the subject of a comparable receivership or
insolvency proceeding, other than Obligors under the protection of a bankruptcy
court or receivership which has approved payment by any such Obligor of the
Medallion Loan.
(qq) To the best of the Borrower's knowledge, there are no proceedings
or investigations pending or, threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (a)
asserting the invalidity of the related Medallion Loan Documents, (b) seeking to
prevent payment and performance of such Medallion Loan Documents, or (c) seeking
any determination or ruling that might materially and adversely affect the
validity, enforceability or collectability of the Medallion Loan or the related
Medallion Loan Documents.
Schedule 1-5
(rr) The Borrower has no knowledge of any circumstance or condition
with respect to the Medallion Loan, the Medallion Collateral with respect
thereto or the related Obligors' credit standing that could reasonably be
expected to cause the Lender to regard the Medallion Loan as unacceptable
security, cause the Medallion Loan to become delinquent or adversely affect the
value or marketability of such Medallion Loan.
(ss) The Medallion Loan is a Boston Medallion Loan, Chicago Medallion
Loan, New York City Medallion Loan, Cambridge Medallion Loan, Newark Medallion
Loan, Philadelphia Medallion Loan or Other Permitted Medallion Loan. The
Medallion securing such Medallion is valid and subsisting and in full force and
effect.
(tt) The applicable Seller and related Obligor shall have complied in
all material respects with all the requirements of the applicable Taxi
Commission.
(uu) In the case of a New York Medallion Loan, the underlying
Medallion is either an Individual Medallion or a Corporate Medallion.
(vv) The Medallion Loan and other Medallion Loan Documents have not
been extended, waived, amended or modified except in accordance with the
applicable Seller's written Underwriting Guidelines and the Credit and
Collection Policy.
(ww) The Medallion Loans shall have been originated in a manner which
is consistent with the applicable Seller's Underwriting Guidelines, and in
compliance with applicable federal and state consumer protection laws,
including, without limitation, all laws with respect to unfair or deceptive
practices and all laws relating to predatory lending practices.
(xx) In the case of a Medallion Loan that is subject to a Joint
Participation Interest or a Junior Participation Interest, the applicable
participation agreement is an Approved Joint Participation Agreement or an
Approved Junior Participation Agreement, as applicable, and constitutes the
legal, valid and binding obligation of the applicable Permitted Joint
Participant or Permitted Junior Participant and is enforceable against such
Permitted Joint Participant or Permitted Junior Participant in accordance with
the respective terms and conditions of such participation agreement.
(yy) In the case of a Former FSP Medallion Loan, the participation
formerly held by Freshstart was sold to Medallion Funding in a "true sale"
transaction.
(zz) In the case of a Newark Medallion Loan, the Lender shall have
received evidence, in form and substance satisfactory to the Lender in the
Lender's sole and absolute discretion, that the Newark Taxi Commission has
approved (i) the sale of Medallion Loans from Medallion Funding to the Borrower
pursuant to the Purchase Agreement and, (ii) the Borrower's grant of security
interest to the Lender in the Newark Medallion Loans pursuant to this Loan
Agreement.
Schedule 1-6
Schedule 6.25
-------------
FILING JURISDICTIONS
Taxi Medallion Loan Trust I
- ---------------------------
Delaware Secretary of State
Medallion Funding Corp.
- -----------------------
New York Secretary of State
Medallion Financial Corp.
- -------------------------
Delaware Secretary of State
Schedule 6.27
-------------
PARENT SUBSIDIARIES
- -------------------------- ----------------------------- ------------------
Jurisdiction
Subsidiary Form of Organization of Organization
- -------------------------- ----------------------------- ------------------
Medallion Funding Corp. Corporation New York
Business Lenders, LLC Limited Liability Corporation Delaware
Medallion Taxi Media, Inc. Corporation New York
Medallion Capital Corp. Corporation New York
Medallion Business
Credit, LLC Limited Liability Corporation Delaware
Freshstart Venture
Capital Corp. Corporation New York
Medallion Funding
Chicago Corp. Corporation Delaware
- -------------------------- ----------------------------- ------------------
Schedule 7.20
-------------
RIGHT OF FIRST REFUSAL
From the date hereof until and including the later of (i) the Termination Date
and (ii) the date of repayment to the Lender of all Secured Obligations and the
performance of all other obligations under the Loan Documents, the Lender shall
have a right of first refusal with respect to each financing of Eligible
Medallion Loans and the Borrower shall not, and shall not permit any of its
Affiliates to, effect any financing of Eligible Medallion Loans with any Person
who is not an Affiliate of the Borrower, except pursuant to the procedures set
forth below.
1. If a party other than the Lender or an Affiliate of the Borrower (a "Third
Party") has provided a good faith proposal, terms sheet, indication or
commitment to provide financing of Eligible Medallion Loans (a "Third Party
Proposal"), the Borrower shall provide written notice (a "Match Notice")
thereof to the Lender together with a copy of the Third Party Proposal.
2. At the request of the Lender, the Borrower shall cooperate fully with the
Lender in good faith for a period of twenty Business Days, to negotiate the
details of the terms of the proposed financing and to reach agreement with
the Lender to obtain from the Lender or one of its Affiliates, financing on
terms substantially as beneficial to the Borrower as that contained in the
Third Party Proposal; provided, however, in any event, upon notice to the
Borrower, the Lender or one of its Affiliates shall have the right to
provide the financing pursuant to the terms of the Third Party Proposal.
3. The Lender or one of its Affiliates may elect to provide the proposed
financing by delivering to the Borrower on or before the date which is
twenty Business Days after the Match Notice has been received by the
Lender, or, if the Borrower and Lender agree in good faith to extend
negotiations referred to in paragraph 2, such later date as the
negotiations are finalized or terminated, a terms sheet setting forth the
terms and conditions of the its proposal, such terms and conditions to be
either (i) as agreed by the parties pursuant to paragraph 2 above, or (ii)
on the same terms and conditions as those contained in the Third Party
Proposal. In such event, the Borrower shall not proceed with the Third
Party Proposal.
4. If (i) the Lender or one of its Affiliates gives notice to the Borrower
that it elects not to provide the financing set forth in the Third Party
Proposal or to negotiate with the Borrower pursuant to paragraph 2, or (ii)
Lender or one of its Affiliates does not, within the time period specified
above, provide the term sheet referred to in paragraph 2, the Borrower may
close the financing on the terms specified in the Third Party Proposal.
5. If the Borrower proposes to close a transaction on terms more favorable to
the Third Party or any of the Third Party's Affiliates than those included
in the Third Party Proposal accompanying the most recent Match Notice
delivered to the Lender, than such financing shall be deemed a new Third
Party Proposal and the Borrower shall provide a new Match Notice to the
Lender and comply with the provisions of this Schedule 7.20 with respect to
such financing terms.
6. If the financing is being provided by a Third Party, then (i) one Business
Day after receipt thereof, the Borrower shall provide to the Lender an
initial draft of the credit agreement or similar document and all material
related documentation with the Third Party (collectively, the "Third Party
Credit Documents"), the terms of which must be consistent with the
applicable Third Party Proposal accompanying a Match Notice; and (ii) three
Business Days prior to the execution of any Third Party Credit Documents,
the Borrower shall provide to the Lender the then current drafts of the
Third Party Credit Documents, which shall be substantially in the form to
be executed by the parties thereto. Within one Business Day following
execution thereof, the Borrower shall provide to the Lender copies of the
final Third Party Credit Documents.
7. Section 7.20 to the Loan Agreement and this Schedule 7.20 are not intended
to be and do not constitute a commitment or obligation by the Lender or any
of its Affiliates to provide or arrange for any financing by the Borrower
or any of its Affiliates, and no liability or obligation on the part of the
Lender or any of its Affiliates to proceed with or participate in any
financing by the Borrower or any of its Affiliates shall be created or
exist unless or until the Lender, or such Affiliate, as the case may be,
has executed and delivered definitive documentation containing such
obligation.
Schedule 7.21
-------------
MONTHLY PRICING REPORTS
- ---------------------- --------------------------------------------------------
JURISDICTION DESCRIPTION OF REPORT
- ---------------------- --------------------------------------------------------
Boston, Massachusetts Pricing and sales report from the Boston Police
Department setting forth, among other things, the
medallion numbers, sellers, buyers, sales price,
transaction dates, and purchase dates (or such other
information as shall then be included in such report),
or if for any month such pricing and sales report is
not available after reasonable attempts to obtain the
same, a letter from Robert Kline, Esq. or another
attorney acceptable to the Lender in its sole
discretion, (i) setting forth, that based upon the
sales of taxi medallions during the applicable month in
which such counsel participated in or of which such
counsel is otherwise aware, the average price at which
taxi medallions were sold during the applicable month,
and (ii) attaching to such letter a schedule of the
sales of taxi medallions during such applicable month
which such counsel participated in or of which such
counsel is otherwise aware.
- ---------------------- --------------------------------------------------------
Cambridge, Pricing and sales report from the City of Cambridge,
Massachusetts Hackney Carriage Division setting forth, among other
things, the medallion numbers, dates of transfer and
sales price (or such other information as shall then be
included in such report), or if for any month such
pricing and sales report is not available after
reasonable attempts to obtain the same, a letter from
Robert Kline, Esq. or another attorney acceptable to
the Lender in its sole discretion, (i) setting forth,
that based upon the sales of taxi medallions during the
applicable month in which such counsel participated in
or of which such counsel is otherwise aware, the
average price at which taxi medallions were sold during
the applicable month, and (ii) attaching to such letter
a schedule of the sales
of taxi medallions during such applicable month which
such counsel participated in or of which such counsel is
otherwise aware.
- ---------------------- --------------------------------------------------------
Chicago, Illinois Pricing and sales report from the Commissioner of the
Department of Consumer Services setting forth, among
other things, the medallion numbers, transaction dates
and sales price (or such other information as shall
then be included in such report), or if for any month
such pricing and sales report is not available after
reasonable attempts to obtain the same, a letter from
Bernie Block, Esq. or another attorney acceptable to
the Lender in its sole discretion, (i) setting forth,
that based upon the sales of taxi medallions during the
applicable month in which such counsel participated in
or of which such counsel is otherwise aware, the
average price at which taxi medallions were sold during
the applicable month, and (ii) attaching to such letter
a schedule of the sales of taxi medallions during such
applicable month which such counsel participated in or
of which such counsel is otherwise aware.
- ---------------------- --------------------------------------------------------
Newark, New Jersey A pricing and sales report from the Division of
Taxicabs, Newark Police Department (or such other
information as shall then be included in such report),
or if for any month such pricing and sales report is not
available after reasonable attempts to obtain the same,
a letter from Alan Decker, Esq. or another attorney
acceptable to the Lender in its sole discretion, (i)
setting forth, that based upon the sales of taxi
medallions during the applicable month in which such
counsel participated in or of which such counsel is
otherwise aware, the average price at which taxi
medallions were sold during the applicable month, and
(ii) attaching to such letter a schedule of the sales of
taxi medallions during such applicable month which such
counsel participated in or of which such counsel is
otherwise aware.
- ---------------------- --------------------------------------------------------
New York, New York Pricing and sales report from the New York City Taxi &
Limousine Commission setting forth, among other things,
the average price
and number of medallion loan transfers for the six prior
months (or such other information as shall then be
included in such report), or if for any month such
pricing and sales report is not available after
reasonable attempts to obtain the same, a letter from
Lance Kuba, Esq., Roger Davis, Esq. or another attorney
acceptable to the Lender in its sole discretion, (i)
setting forth, that based upon the sales of taxi
medallions during the applicable month in which such
counsel participated in or of which such counsel is
otherwise aware, the average price at which taxi
medallions were sold during the applicable month, and
(ii) attaching to such letter a schedule of the sales of
taxi medallions during such applicable month which such
counsel participated in or of which such counsel is
otherwise aware.
- ---------------------- --------------------------------------------------------
Philadelphia, A pricing and sales report from the Pennsylvania Public
Pennsylvania Utilities Commission, or if for any month such pricing
and sales report is not available after reasonable
attempts to obtain the same, a letter from John
Gallagher, Esq. or another attorney acceptable to the
Lender in its sole discretion, (i) setting forth, that
based upon the sales of taxi medallions during the
applicable month in which such counsel participated in
or of which such counsel is otherwise aware, the
average price at which taxi medallions were sold during
the applicable month, and (ii) attaching to such letter
a schedule of the sales of taxi medallions during such
applicable month which such counsel participated in or
of which such counsel is otherwise aware.
- ---------------------- --------------------------------------------------------
Exhibit A
---------
FORM OF NOTE
[To Be Added]
Exhibit B
---------
FORM OF BORROWING BASE CERTIFICATE
[To Be Added]
Exhibit C
---------
FORM OF COLLECTION ACCOUNT CONTROL AGREEMENT
[To Be Added]
Exhibit D
---------
FORM OF CUSTODIAL AGREEMENT
[To Be Added]
Exhibit E-1
-----------
RESERVED
Exhibit E-2
-----------
RESERVED
Exhibit E-3
-----------
RESERVED
Exhibit F-1
-----------
FORM OF JUNIOR PARTICIPATION SUPPLEMENTAL AGREEMENT
(E.J.T.)
[To Be Added]
Exhibit F-2
-----------
FORM OF JUNIOR PARTICIPATION SUPPLEMENTAL AGREEMENT
(ELK)
[To Be Added]
Exhibit F-3
-----------
FORM OF JUNIOR PARTICIPATION SUPPLEMENTAL AGREEMENT
(SUSIL CAB, INC.)
[To Be Added]
Exhibit F-4
-----------
FORM OF JUNIOR PARTICIPATION SUPPLEMENTAL AGREEMENT
(THE OSG CORPORATION)
[To Be Added]
Exhibit G
---------
FORM OF INTEREST RESERVE DEPOSIT ACCOUNT CONTROL AGREEMENT
[To Be Added]
Exhibit H
---------
FORM OF NOTICE OF BORROWING AND PLEDGE
[To Be Added]
Exhibit I
---------
FORM OF TAX CERTIFICATE
[To Be Added]
Exhibit J
---------
FORM OF ASSIGNMENT AND ACCEPTANCE
[To Be Added]
Exhibit K-1
-----------
RESERVED
Exhibit K-2
-----------
RESERVED
Exhibit K-3
-----------
RESERVED
Exhibit L-1
-----------
FORM OF APPROVED JUNIOR PARTICIPATION AGREEMENT
(E.J.T.)
Each Approved Junior Participation Agreement shall be substantially in
the form of the Participation Agreement, dated September 5, 2001, by and between
Medallion Funding Corp. ("Medallion Funding") and E.J.T. Management, Inc.
("EJT"), attached hereto, as modified by the Junior Participation Supplemental
Agreement, dated September 13, 2002, by and among EJT, Medallion Funding, Taxi
Medallion Loan Trust I and Merrill Lynch Bank USA, subject to the following
modifications:
1. Changing the date of the of the Participation Agreement (paragraph
1);
2. Changing the dates, parties and terms of the underlying loan (first
and second Whereas Clauses);
3. Changing the dollar amount of the participation, participation
percentage, dollar amount of the unparticipated share, lender percentage and
participation interest rate (Section 1.A);
4. Changing the lender interest rate (Section 1.B);
5. Changing the description of the Loan Documents and principal
balance thereunder (Section 1.C); and
6. Such other changes that are incidental to the forgoing changes and
otherwise such other changes reasonably approved by Lender.
Exhibit L-2
-----------
FORM OF APPROVED JUNIOR PARTICIPATION AGREEMENT
(ELK)
Each approved Junior participation Agreement shall be substantially in
the form of the Participation Agreement, dated April 19, 1999, by and between
Elk Associates Funding Corporation ("Elk") and Medallion Funding Corp.
("Medallion Funding"), attached hereto, as modified by the Junior Participation
Supplemental Agreement, dated September 13, 2002, by and among Elk, Medallion
Funding, Taxi Medallion Loan Trust I and Merrill Lynch Bank USA, subject to the
following modifications:
1. Changing the date of the Participation Agreement (paragraph 1);
2. Changing the parties, dollar amount of underlying loan,
participation percentage, dollar amount of the participation, lender percentage
and dollar amount of unparticipated share (Whereas clause);
3. Changing the term of the loan, timing of balloon payment, interest
rate, participation interest rate and lender interest rate (Section 1);
4. Changing the description of the loan documents and principal
balance thereunder (Section 2);
5. Changing the lender interest rate and participation interest rate
(Section 4); and
6. Such other changes that are incidental to the foregoing changes and
otherwise such other changes reasonably approved by Lender.
Exhibit L-3
-----------
FORM OF APPROVED JUNIOR PARTICIPATION AGREEMENT
(SUSIL CAB, INC.)
Each Approved Junior Participation Agreement shall be substantially in
the form of the Participation Agreement, dated September 22, 2000, by and
between Susil Cab, Inc. ("Susil") and Medallion Funding Corp. ("Medallion
Funding"), attached hereto, as modified by the Junior Participation Supplemental
Agreement, dated September 13, 2002, by and among Susil, Medallion Funding, Taxi
Medallion Loan Trust I and Merrill Lynch Bank USA, subject to the following
modifications:
1. Changing the date of the Participation Agreement (paragraph 1);
2. Changing the dates, parties and terms of the underlying loan (first
and second Whereas clauses);
3. Changing the dollar amount of the participation, participation
percentage, dollar amount of the unparticipated share, lender percentage and
participation interest rate (Section 1.A);
4. Changing the lender interest rate (Section 1.B);
5. Changing the description of the Loan Documents and principal
balance thereunder (Section 1.C); and
6. Such other changes that are incidental to the forgoing changes and
otherwise such other changes reasonably approved by Lender.
Exhibit L-4
-----------
FORM OF APPROVED JUNIOR PARTICIPATION AGREEMENT
(THE OSG CORPORATION)
Each Approved Junior Participation Agreement shall be substantially in
the form of the Participation Agreement dated August 14, 2002, by and between
The OSG Corp. ("OSG") and Medallion Funding Corp. ("Medallion Funding"),
attached hereto, as modified by the Junior Participation Supplemental Agreement,
dated September 13, 2002, by and among OSG, Medallion Funding, Taxi Medallion
Loan Trust I and Merrill Lynch Bank USA, subject to the following modifications:
1. Changing the date of the Participation Agreement (paragraph 1);
2. Changing the dates, parties and amount of the underlying loan
(Whereas clause);
3. Changing the dollar amount of the participation, participation
percentage, dollar amount of the unparticipated share, lender percentage and
participation interest rate (Section 1.A); and
4. Such other changes that are incidental to the forgoing changes and
otherwise such other changes reasonably approved by the Lender.