Exhibit 10.6
EXECUTION COPY
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LOAN SALE AND EXCHANGE AGREEMENT
Dated as of September 13, 2002
Between
MEDALLION FUNDING CORP.
And
MEDALLION FINANCIAL CORP.
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TABLE OF CONTENTS
Section Page
ARTICLE I.
DEFINITIONS
Section 1.01. Certain Defined Terms...................................1
Section 1.02. Other Terms.............................................5
Section 1.03. Computation of Time Periods.............................5
ARTICLE II.
AMOUNTS AND TERMS OF THE PURCHASES
Section 2.01. Purchase Facility.......................................5
Section 2.02. Capital Contribution and Supplemental Purchase Price....6
Section 2.03. No Obligations or Taxes.................................7
Section 2.04. Collections.............................................7
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of Financial
and Funding.......................................7
ARTICLE IV.
GENERAL COVENANTS OF FINANCIAL AND FUNDING
Section 4.01. Affirmative Covenants of Financial and Funding.........10
Section 4.02. Negative Covenants of Financial and Funding............11
ARTICLE V.
ADMINISTRATION AND COLLECTION
Section 5.01. Rights of Funding.....................................12
Section 5.02. Rights of Financial...................................12
Section 5.03. Responsibilities of Financial and Funding.............13
Section 5.04. Financial: Lock-Box Accounts; Maintenance
of Perfection.....................................13
Section 5.05. Lock-Box Accounts; Maintenance of Perfection..........14
ARTICLE VI.
MISCELLANEOUS
Section 6.01. Amendments and Waivers...............................15
Section 6.02. Notices, Etc.........................................15
Section 6.03. No Waiver; Remedies..................................16
Section 6.04. Binding Effect; Assignability........................16
Section 6.05. Severability of Provisions...........................16
Section 6.06. Assignment...........................................16
Section 6.07. Costs, Expenses and Taxes............................17
Section 6.08. Governing Law; Jurisdiction; Consent to Service of
Process; Waiver of Jury Trial....................17
Section 6.09. Further Assurances...................................18
Section 6.10. No Waiver; Cumulative Remedies.......................18
Section 6.11. Counterparts.........................................18
Section 6.12. Merger and Integration...............................18
Section 6.13. Headings.............................................18
EXHIBITS
EXHIBIT A Transfer Agreement (Financial to Funding)
EXHIBIT B Transfer Agreement (Funding to Financial)
SCHEDULES
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SCHEDULE 1 Commercial Loans
SCHEDULE 2 Medallion Loans
LOAN EXCHANGE AND SALE AGREEMENT
Dated as of September 13, 2002
MEDALLION FUNDING CORP., a New York corporation ("Funding"),
and MEDALLION FINANCIAL CORP., a Delaware corporation ("Financial"), agree as
follows:
PRELIMINARY STATEMENTS. (1) Certain terms which are
capitalized and used throughout this Agreement (in addition to those defined
above) are defined in Article I of this Agreement.
(2) Funding wishes to acquire from Financial Medallion
Loans and Related Assets; and
(3) Financial wishes to acquire from Funding Commercial
Loans and Related Assets; and
(4) Funding expects that it will sell or contribute Medallion
Loans and Related Assets acquired hereunder to Taxi Medallion Loan Trust I (the
"SPV") and the SPV will finance any such purchase of such Medallion Loans and
Related Assets through a secured borrowing (the "SPV Borrowing").
NOW, THEREFORE, the parties agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined).
"Affiliate" shall mean, with reference to any specified
Person, any other Person controlling or controlled by or under common control
with such specified Person. For the purposes of this definition, "control" when
used with reference to any specified Person shall mean the power to direct the
management and policies of such specified Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Approved City" shall mean the City of New York, New York;
Newark, New Jersey; Chicago, Illinois; Boston, Massachusetts; Cambridge
Massachusetts; and Philadelphia, Pennsylvania.
"Business Day" shall mean any day other than a Saturday or
Sunday or any other day on which national banking associations or state banking
institutions in New York, New York, are authorized or obligated by law,
executive order or governmental decree to be closed.
"Closing Date" shall mean September 13, 2002.
"Collection Account" shall mean a segregated account created
and maintained under the Loan and Security Agreement, governed by the Collection
Account Control Agreement (as defined in the Loan and Security Agreement) into
which Collections of Medallion Loans and Related Assets are to be remitted.
"Collection Date" shall mean (A) for Funding and Medallion
Loans, the date on which (i) all Medallion Loans have been repaid in full,
together with interest thereon and other amounts owing in respect thereof and
(ii) all other amounts owing to Financial hereunder shall have been paid in
full; and (B) for Financial and all Commercial Loans, the date on which (x) all
Commercial Loans have been repaid in full, together with interest thereon and
other amounts owing in respect thereof and (y) all other amounts owing to
Funding hereunder shall have been paid in full.
"Collections" shall mean all cash payments by or on behalf of
the Obligors in respect of Medallion Loans or Related Assets, or Commercial
Loans or Related Assets, as the case may be, in the form of cash, checks, wire
transfers, electronic transfers or any other form of cash payment.
"Commercial Loan" means any of the loans identified on
Schedule 1 to this Agreement.
"Custodial Agreement" shall mean the Custodial Agreement,
dated as of the date hereof, among the Borrower, the Custodian, the Servicer and
the Lender, as the same shall be modified and supplemented and in effect from
time to time.
"Custodian" shall mean Wells Fargo Bank Minnesota, National
Association and its successors and permitted assigns, as custodian under the
Custodial Agreement.
"Debt" of any Person shall mean (i) indebtedness of such
Person for borrowed money, (ii) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) obligations of such Person
to pay the deferred purchase price of property or services, (iv) obligations of
such Person as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, (v) obligations of such Person in connection with any letter of credit
issued for the account of such Person, (vi) obligations of such Person under an
interest rate or currency swap, cap or similar agreement, (vii) obligations
secured by any lien or other charge upon property or assets owned by such
Person, even though such Person has not assumed or become liable for the payment
of such obligations, and (viii) obligations of such Person under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to in
clauses (i) through (vii).
"Financial" has the meaning assigned to that term in the
preamble hereto.
"Funding" has the meaning assigned to that term in the
preamble hereto.
"Governmental Authority" shall mean any country or nation, any
political subdivision of such country or nation, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government of any country or nation or political subdivision
thereof.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), preference,
participation interest, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, including, without limitation, any
conditional Exchange or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing and the
filing of any financing statement under the UCC or comparable law of any
jurisdiction to evidence any of the foregoing.
"Loan Documents" shall mean, with respect to any Medallion
Loan or Commercial Loan, the related Obligor Note and any related loan
agreement, security agreement, mortgage, assignment of indemnity, financing
statements and other documents, instruments, certificates or assignments
(including amendments or modifications thereof) executed by the Obligor thereof
or by another Person on the Obligor's behalf in respect of such Medallion Loan
or Commercial Loan and related Obligor Note, including, without limitation,
general or limited guaranties.
"Loan and Security Agreement" shall mean the agreement by that
name, dated as of September 13, 2002, by and among SPV and Merrill Lynch Bank
USA, as amended and supplemented.
"Loan Sale and Contribution Agreement" shall mean the
agreement by that name, dated as of September 13, 2002, by and between Funding
and the SPV, as amended and supplemented.
"Medallion" shall mean a medallion or other license (a) that
was issued by a municipality in an Approved City; (b) that gives its owner the
right to operate a taxicab in such municipality; (c) that is perpetually
renewable by the issuing municipality; and (d) that is readily transferable to
another person in the secondary market.
"Medallion Loan" means any of the loans described on Schedule
2 to this Agreement and shall include any additional loan that is a loan secured
by a collateral assignment of a Medallion and evidenced by an Obligor Note,
arising from the extension of credit to an Obligor by Financial or by another
party from which Financial acquired the loan in the ordinary course of its
business to finance Obligor's investment in a Medallion and that is purported to
be sold or paid as a dividend to and accepted by Funding that is in connection
with a conveyance pursuant to Section 2.01 and 2.02 and shall include, without
limitation, all monies due or owing and all Collections and other amounts
received from time to time with respect to such loan and all proceeds
(including, without limitation, "proceeds" as defined in the UCC of the
jurisdiction the law of which governs the perfection of the interest on the
Medallion Loans) thereof.
"Obligor" shall mean, with respect to any Medallion Loan or
Commercial Loan, the Person or Persons obligated to make payments with respect
to such Medallion Loan or Commercial Loan, including any co-signer or guarantor
for a Person so obligated.
"Obligor Note" shall mean any promissory note evidencing 100%
of the indebtedness of an Obligor under a Medallion Loan or Commercial Loan,
together with any modifications thereto.
"Operative Documents" shall mean this Agreement, the Loan and
Security Agreement, the Loan Sale and Contribution Agreement, Custodial
Agreement, Servicing Agreement, and the other agreements and instruments related
to any of the foregoing.
"Opinion of Counsel" shall mean a written opinion of counsel,
who, except as otherwise provided herein, may be counsel for the Person
providing the opinion.
"Originator" shall mean the original lender of a Medallion
Loan or a Commercial Loan.
"Permitted Participation Interest" shall mean a participation
interest in a Medallion Loan that is (i) subordinated to the rights of Funding
therein, as the case may be, on terms acceptable to Funding and pursuant to an
agreement in form and substance acceptable to Funding, in each case in its sole
and absolute discretion, and (ii) in the case of a Person that is not an
Affiliate of Funding, held by a holder that is acceptable to Funding in its sole
and absolute discretion.
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Authority or any other entity of similar nature.
"Purchase" shall mean a purchase by Funding of a Medallion
Loan and the Related Assets with respect thereto from Financial and a purchase
by Financial of a Commercial Loan and the Related Assets with respect thereto
from Funding, in either case pursuant to Article II.
"Records" shall mean all contracts and other documents, books,
records and other information (including without limitation, computer programs,
tapes, discs, punch cards, data processing software and related property and
rights), including, without limitation, all Loan Documents, maintained with
respect to Medallion Loans or Commercial Loans, as the case may be, and the
related Obligors.
"Related Assets" shall mean with respect to any Medallion Loan
or Commercial Loan: (a) all security interests or liens and property subject
thereto from time to time purporting to secure payment of such Medallion Loan or
Commercial Loan, whether pursuant to the Obligor Note related to such Medallion
Loan or Commercial Loan, any other Loan Document or otherwise, including,
without limitation, the applicable Medallion in the case of a Medallion Loan,
(b) all UCC financing statements covering any collateral securing payment of
such Medallion Loan or Commercial Loan, (c) all guarantees, indemnities,
warranties, insurance policies and proceeds and premium refunds thereof and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Medallion Loan or Commercial Loan whether
pursuant to the Obligor Note related to such Medallion Loan or Commercial Loan
or otherwise and (d) all Records and all other instruments and rights relating
to such Medallion Loan or Commercial Loan.
"Requirements of Law" shall mean any law, treaty, rule or
regulation, or final determination of an arbitrator or Governmental Authority,
and, when used with respect to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person.
"Servicer" shall mean Medallion Funding Corp. in its capacity
as servicer under the Servicing Agreement, or such successor Servicer appointed
pursuant to the terms of 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.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the specified jurisdiction.
SECTION 1.02. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles. All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.
SECTION 1.03. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
ARTICLE II.
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Purchase Facility. (a) On the terms and
conditions hereinafter set forth, Financial and Funding hereby exchange, without
recourse, the Medallion Loans and Related Assets for the Commercial Loans and
Related Assets, so that Funding acquires the Medallion Loans and Related Assets
and Financial acquires the Commercial Loans and Related Assets.
(b) It is the intention of the parties hereto that the
exchange of the Medallion Loans and Related Assets for the Commercial Loans
and Related Assets made hereunder shall in each case constitute a sale of such
assets, which sale is absolute and irrevocable and provides Funding with the
full benefits of ownership of the Medallion Loans and the Related Assets and
Financial with the full benefits of ownership of the Commercial Loans and
Related Assets.
(c) On the Closing Date Medallion shall transfer all
Medallion Loans and Related Assets to Funding by executing and delivering to
Funding a fully executed Transfer Agreement in the form included herein as
Exhibit A and endorsing in favor of Funding or its order each Obligor Note
evidences a Medallion Loan.
(d) On the Closing Date Funding shall transfer all Commercial
Loans and Related Assets to Financial by executing and delivering to Financial
a fully executed Transfer Agreement in the form included herein as Exhibit B and
endorsing in favor of Funding or its order each Obligor Note evidencing a
Commercial Loan.
(e) Neither Financial nor Funding intends the transactions
contemplated hereunder to be, or for any purpose to be characterized as, loans
from Funding to Financial, or vice versa, secured by the assets conveyed from
one party to the other. However, in the event that, notwithstanding the intent
of the parties, either or both parties shall be deemed to be a lender (the
"Lender") to the other party (the "Borrower"), then this Agreement shall be
deemed to be a security agreement, the conveyances provided for in Section
2.01(a) shall be deemed to be a grant by the Borrower to the Lender of a
security interest in all of the Borrower's right, title, and interest, whether
now owned or hereafter acquired, in and to the Medallion Loans and the Related
Assets or the Commercial Loans and Related Assets, as the case may be, and all
cash and non-cash proceeds of any of the foregoing. The possession by the Lender
or its transferee of Obligor Notes, other Loan Documents, and such other goods,
letters of credit, advices of credit, instruments, money, documents, chattel
paper or certificated securities shall be deemed to be "possession by the
secured party," for purposes of perfecting the security interest pursuant to the
UCC (including, without limitation, Section 9-305 thereof) as in force in the
relevant jurisdiction. Notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed to be notifications to, or acknowledgments, receipts or
confirmations from bailees or agents (as applicable) or the Borrower or its
transferee for the purpose of perfecting such security interest under applicable
law.
(f) In view of the intention of the parties hereto that the
Purchases of Medallion Loans and Related Assets made hereunder shall constitute
sales of such Medallion Loans and Related Assets rather than a loan secured by
such Medallion Loans and Related Assets, Financial agrees to note on its
financial statements that the Medallion Loans and Related Assets have been sold
to Funding. In view of the intention of the parties hereto that the Purchases of
Commercial Loans and Related Assets made hereunder shall constitute sales of
such Commercial Loans and Related Assets rather than a loan secured by such
Commercial Loans and Related Assets, Funding agrees to note on its financial
statements that the Commercial Loans and Related Assets have been sold to
Financial.
(g) The sale of any Medallion Loans hereto shall be sold, and
purchased, "servicer release."
SECTION 2.02. Capital Contribution and Supplemental Purchase
Price. If the fair market value of the Medallion Loans and Related Assets sold
by Financial to Funding hereunder exceeds the fair market value of the
Commercial Loans and Related Assets received by Financial from Funding, the
amount of such excess shall be either deemed to be a contribution by Financial
to the capital of Funding or Financial shall pay such difference to Funding on
the Closing Date as a Supplemental Purchase Price (as defined in the related
Transfer Agreement). Funding and Financial hereby agree to note any such Capital
Contribution on the respective financial statements.
SECTION 2.03. No Obligations or Taxes. Financial represents and
warrants that at the time of transfer hereunder (i) there will be no obligations
of Financial under the Medallion Loans remaining to be performed (and the
exercise by Funding of any of its rights thereunder or hereunder shall not
relieve Financial of such obligations if they do exist) and (ii) there will not
be payable any taxes, including without limitation, sales, excise and personal
property taxes in connection with the Medallion Loans. Funding represents and
warrants that at the time of transfer hereunder (i) there will be no obligations
of Funding under the Commercial Loans remaining to be performed (and the
exercise by Financial of any of its rights thereunder or hereunder shall not
relieve Funding of such obligations if they do exist) and (ii) there will not be
payable any taxes, including without limitation, sales, excise and personal
property taxes in connection with the Commercial Loans.
SECTION 2.04. Collections. Any Collections of Medallion Loans
received (or deemed to have been received) by Financial after the date of sale
hereunder shall not be commingled with other funds of Financial and shall be
remitted directly to Funding or upon its order. Any Collections of Commercial
Loans received (or deemed to have been received) by Funding after the date of
sale hereunder shall never be commingled with other funds of Funding and shall
be remitted directly to Financial or upon its order.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of Financial and
Funding. Each of Financial and Funding represents and warrants, for its own
part, as follows as of the Closing Date:
(a) Organization and Good Standing. It is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York, in the case of Funding, and Delaware in the case of Financial, and has
full power and authority to own its properties and conduct its business as
presently owned or conducted, to execute, deliver and perform its obligations
under this Agreement and the other Operative Documents.
(b) Due Qualification. It is duly qualified to do business and
is in good standing as a foreign corporation, and has obtained all
necessary licenses and approvals, in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals could have a material adverse
effect on its ability to perform its obligations under the Operative Documents.
(c) Due Authorization. The execution, delivery and performance
of this Agreement and the other Operative Documents by it and the consummation
by it of the transactions provided for in the Operative Documents, have been
duly authorized by all necessary corporate action on its part.
(d) No Conflict. Its execution and delivery of the Operative
Documents, performance of the transactions contemplated by the Operative
Documents, and fulfillment of the terms thereof applicable to it, do not
conflict with or violate any Requirements of Law applicable to it or conflict
with, result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, or require
any consent under, any indenture, contract, agreement, mortgage, deed of trust
or other instrument to which it is a party or by which it or its properties are
bound.
(e) No Proceedings. There are no proceedings or investigations
pending or, to the best of its knowledge threatened against it before any
Governmental Authority (i) asserting the illegality, invalidity or
unenforceability, or seeking any determination or ruling that would affect the
legality, binding effect, validity or enforceability, of any of the Operative
Documents, (ii) seeking to prevent the consummation of any of the transactions
contemplated by any of the Operative Documents or (iii) seeking any
determination or ruling that is reasonably likely to materially and adversely
affect its financial condition or operations or the performance by it of its
obligations under any of the Operative Documents.
(f) Consents. No authorization, consent, license, order or
approval of or registration or declaration with any Governmental Authority is
required to be obtained, effected or given by it in connection with the
execution and delivery of any of the Operative Documents by it or its
performance of its obligations under any of the Operative Documents or the other
transactions contemplated thereby except for (i) the filing of the financing
statements or other documents required to have been filed are in full force and
effect.
(g) Enforceability. This Agreement and the other Operative
Documents to which it is a party constitute the legal, valid and binding
obligations of it enforceable against it in accordance with their respective
terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect, affecting the
enforcement of creditors' rights generally and except as such enforceability may
be limited by general provisions of equity. This Agreement is in full force and
effect, and is not subject to any dispute, offset, counterclaim or defense and
no party thereto is in default thereunder.
(h) Medallion Loans. Funding shall have given reasonably
equivalent value to Financial in consideration for the transfer to Funding of
the Medallion Loans and Related Assets that are sold to Funding hereunder, and
neither any such transfer nor any transfer of Medallion Loans and Related Assets
that is a capital contribution to Funding shall have been made for or on account
of an antecedent debt owed by Financial to Funding or shall be voidable or
subject to avoidance under any provision of any applicable bankruptcy,
insolvency or other similar law. Financial shall have given at least reasonably
equivalent value to Funding in consideration for the transfer to Financial of
the Commercial Loans and Related Assets that are conveyed to Financial
hereunder, and such transfer of Commercial Loans and Related Assets by Funding
to Financial shall not have been made for or on account of an antecedent debt
owed by Funding to Financial and shall not be voidable or subject to avoidance
under any provision of any applicable bankruptcy, insolvency or other similar
law.
(i) Financial's Title; No Liens; No Other Filings. Financial has
good and marketable title to each Medallion Loan free and clear from Liens
except for Permitted Participation Interests or as created hereunder. Each
Medallion Loan has been the subject of either a valid transfer and assignment
from Financial to Funding of all Financial's right, title and interest therein
(and in the proceeds thereof), or the grant of a first priority perfected
"security interest" (within the meaning of the UCC of the jurisdiction the law
of which governs the perfection of the interest in such Medallion Loan created
hereunder) therein (and in the proceeds thereof). No effective financing
statement or other instrument similar in effect that covers all or part of any
Medallion Loan or any interest in any part thereof is on file in any recording
office except (i) such as may be filed in favor of Funding in accordance with
this Agreement, (ii) such as may be filed in favor of the SPV in accordance with
the Loan Sale and Contribution Agreement, (iii) such as may be filed in favor of
the Lender in accordance with the Loan and Security Agreement and (iv) filings
in respect of which a duly executed UCC-3 effective to terminate such filing
shall have been delivered to the Servicer or filings which exclude Medallion
Loans and Related Assets that are sold by Financial to Funding hereunder and
which are reasonably acceptable to Funding.
(j) Funding's Title; No Liens; No Other Filings. Funding has
good and marketable title to each Commercial Loan free and clear from Liens
except for Permitted Participation Interests or as created hereunder. Each
Commercial Loan has been the subject of either a valid transfer and assignment
from Funding to Financial of all Funding's right, title and interest
therein (and in the proceeds thereof), or the grant of a first priority
perfected "security interest" (within the meaning of the UCC of the
jurisdiction the law of which governs the perfection of the interest in such
Commercial Loan created hereunder) therein (and in the proceeds thereof).
No effective financing statement or other instrument similar in effect that
covers all or part of any Commercial Loan or any interest in any part thereof
is on file in any recording office except (i) such as may be filed in favor of
Financial in accordance with this Agreement, and (ii) filings in respect of
which a duly executed UCC-3 effective to terminate such filing shall have been
delivered to the Custodian or filings which exclude Commercial Loans and Related
Property that are sold by Funding to Financial hereunder and which are
reasonably acceptable to Financial.
(k) Loan Documents. Financial has heretofore caused all original
copies of all Obligor Notes related to the Medallion Loans to be delivered to or
upon the order of Funding or its assign. Funding has heretofore caused all
original copies of all Obligor Notes related to the Commercial Loans to be
delivered to or upon the order of Financial or its assign.
(l) Lock-Box Accounts. Financial has not established, and there
do not currently exist for the benefit of Financial or any of its creditors any
lock-box accounts for the receipt of payments from Obligors in respect of
Medallion Loans. All Obligors of the Medallion Loans transferred by Financial to
Funding hereunder have been, or upon transfer hereunder will be, instructed by
invoice to make payments only to Funding or its order, and such instructions are
or will be in full force and effect at the time of transfer hereunder. Funding
has not established, and there do not currently exist for the benefit of Funding
or any of its creditors any lock-box accounts for the receipt of payments from
Obligors in respect of Commercial Loans. All Obligors of the Commercial Loans
transferred by Funding to Financial hereunder have been, or upon transfer
hereunder will be, instructed by invoice to make payments only to Financial or
its order, and such instructions are or will be in full force and effect at the
time of transfer hereunder.
(m) Solvency. Both before and after giving effect to any of the
transactions contemplated by this Agreement: (i) the fair value and present fair
saleable value of Financial's assets exceeds the stated value of Financial's
liabilities (including all contingent liabilities), (ii) the present fair
saleable value of Financial's assets will exceed the probable liability on its
debts, including contingent liabilities, as such debts become absolute and
matured, (iii) Financial will not have an unreasonably small amount of capital
for the operation of the business in which it is engaged and is proposed to be
engaged, and (iv) Financial reasonably expects to be able to pay its debts,
including contingent liabilities, as such debts mature. Both before and after
giving effect to any of the transactions contemplated by this Agreement: (i) the
fair value and present fair saleable value of Funding's assets exceeds the
stated value of Funding's liabilities (including all contingent liabilities),
(ii) the present fair saleable value of Funding's assets will exceed the
probable liability on its debts, including contingent liabilities, as such debts
become absolute and matured, (iii) Funding will not have an unreasonably small
amount of capital for the operation of the business in which it is engaged and
is proposed to be engaged, and (iv) Funding reasonably expects to be able to pay
its debts, including contingent liabilities, as such debts mature.
(n) Financial has reviewed the Loan Sale and Contribution
Agreement and hereby represents and warrants that Financial can and hereby does
make as to each Medallion Loan conveyed hereunder each representation and
warranty made by Funding as to the Medallion Loans conveyed under the Loan Sale
and Contribution Agreement.
(o) Bulk Transfer. The sale of the Medallion Loans by Financial
to Funding pursuant to this Agreement is in the ordinary course of business for
Financial and is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction. The sale of the Commercial
Loans by Funding to Financial pursuant to this Agreement is in the ordinary
course of business for Funding and is not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction.
ARTICLE IV.
GENERAL COVENANTS OF FINANCIAL AND FUNDING
SECTION 4.01. Affirmative Covenants of Financial and Funding.
From the date hereof until the Collection Date, each of Financial and Funding
will, unless the other party shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders with respect to its
business and properties.
(b) Preservation of Corporate Existence. Observe all corporate
procedures required by its charter and By-Laws and preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals could have a material adverse effect on (i) the interests of the other
party hereto or in the property acquired hereunder, (ii) the collectibility of
any loan acquired hereunder or (iii) the ability of the other party hereto to
perform its obligations hereunder or under any other Operative Document.
(c) Collections. Instruct all Obligors to cause all Collections
in respect of Medallion Loans to be paid directly to Funding or its order and if
Financial shall receive any Collections, Financial shall hold such Collections
in trust, not commingle the same with any other funds and pay such Collections
to Funding or its order as soon as practicable, but in no event later than one
Business Day after receipt thereof. Instruct all Obligors to cause all
Collections in respect of Commercial Loans to be deposited directly to Financial
or its order and if Funding shall receive any Collections, Funding shall hold
such Collections in trust, not commingle the same with any other funds and pay
such Collections to Financial or its order as soon as practicable, but in no
event later than one Business Day after receipt thereof.
(d) Segregation of Collections. Take all necessary actions to
prevent the deposit of any funds other than Collections in respect of Medallion
Loans and the proceeds of permitted investments of such Collections into any
account in which such Collections and proceeds are deposited and, to the extent
that Financial has actual knowledge that any such funds are nevertheless
deposited into any of such account, promptly identify any such funds to Funding
for segregation. Take all necessary actions to prevent the deposit of any funds
other than Collections in respect of Commercial Loans and the proceeds of
permitted investments of such Collections into any account in which such
Collections and proceeds are deposited and, to the extent that Funding has
actual knowledge that any such funds are nevertheless deposited into any of such
account, promptly identify any such funds to Financial for segregation.
SECTION 4.02. Negative Covenants of Financial and Funding.
From the date hereof until the Collection Date, Financial and Funding will not
without the written consent of the other party:
(a) No Liens. Other than Permitted Participation Interests or
pursuant to a Purchase hereunder or as otherwise contemplated herein, sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume or
suffer to exist any Lien on, any Medallion Loan or Related Asset, whether now
existing or hereafter created, or any interest therein, and Financial shall
defend the right, title and interest of Funding in and to the Medallion Loans
and Related Assets, whether now existing or hereafter created, against all
claims of third parties claiming through or under Financial. Other than pursuant
to a Purchase hereunder or as otherwise contemplated herein, sell, pledge,
assign or transfer to any Person, or grant, create, incur, assume or suffer to
exist any Lien on, any Commercial Loan or Related Asset, whether now existing or
hereafter created, or any interest therein, and Funding shall defend the right,
title and interest of Financial in and to the Commercial Loans and Related
Assets, whether now existing or hereafter created, against all claims of third
parties claiming through or under Funding.
(b) Change in Corporate Name. (i) Make any change to its
corporate name or principal place of business or use any tradenames, fictitious
names, assumed names or "doing business as" names unless, at least 30 days prior
to the effective date of any such name change, change in principal place of
business, or use, the party delivers to the other party such financing
statements (Forms UCC-1 and UCC-3) executed by the party which the other party
may reasonably request to reflect such name change or use, together with such
other documents and instruments that the other party may reasonably request in
connection therewith or (ii) change its jurisdiction of incorporation unless the
other party shall have received (A) written notice of such change at least 30
days prior to the effective date thereof, and (B) prior to the effective date
thereof if the other party shall so request, an Opinion of Counsel, in form and
substance reasonably satisfactory to the other party, as to such incorporation
and the other party's valid existence and good standing.
(c) Accounting of Exchange. Prepare any financial statements or
other statements which shall account for the transactions contemplated hereby in
any manner other than a sale of the Medallion Loans and Related Assets by
Financial to Funding and a sale of the Commercial Loans and Related Assets by
Funding to Financial.
ARTICLE V.
ADMINISTRATION AND COLLECTION
SECTION 5.01. Rights of Funding. (a) At any time:
(i) Funding may notify the Obligors of Medallion
Loans, or any of them, of Funding's ownership interest in
Medallion Loans and direct such Obligors, or any of them, that
payment of all amounts payable under any Medallion Loans be made
directly to Funding or its order;
(ii) Financial shall give notice of Funding's
interest in Medallion Loans to each Obligor and direct that
payments be made directly to Funding or its order; and
(iii) Financial shall assemble all Records which
Funding reasonably believes are necessary or appropriate for the
administration and enforcement of the Medallion Loans, and shall
make the same available to Funding at a place selected by Funding
or its designee.
(b) Financial hereby authorizes Funding and the Servicer at any
time to take any and all steps in Financial's name and on behalf of Financial
necessary or desirable, in the determination of Funding and/or the Servicer, to
collect all amounts due under any and all Medallion Loans, including, without
limitation, endorsing Financial's name on checks and other instruments
representing Collections and enforcing such Medallion Loans.
SECTION 5.02. Rights of Financial. (a) At any time:
(i) Financial may notify the Obligors of Commercial
Loans, or any of them, of Funding's ownership interest in
Commercial Loans and direct such Obligors, or any of them, that
payment of all amounts payable under any Commercial Loans be made
directly to Financial or its order;
(ii) Funding shall give notice of Financial's interest
in Commercial Loans to each Obligor and direct that payments be
made directly to Financial or its order; and
(iii) Funding shall, at the Servicer's, Financial's or
the Custodian's request, assemble all Records which Financial
reasonably believes are necessary or appropriate for the
administration and enforcement of the Commercial Loans, and
shall make the same available to Financial at a place selected by
Financial or its designee.
(b) Funding hereby authorizes Financial and the Servicer at any
time to take any and all steps in Funding's name and on behalf of Funding
necessary or desirable, in the determination of Financial and/or the Servicer,
to collect all amounts due under any and all Commercial Loans, including,
without limitation, endorsing Funding's name on checks and other instruments
representing Collections and enforcing such Commercial Loans.
SECTION 5.03. Responsibilities of Financial and Funding. Anything
herein to the contrary notwithstanding: Financial represents that none of its
obligations under the Loan Documents related to the Medallion Loans remains
unperformed and in any event the exercise by Funding of its rights hereunder
shall not relieve Financial from such obligations if they do exist. Anything
herein to the contrary notwithstanding: Funding represents that none of its
obligations under the Loan Documents related to the Commercial Loans remains
unperformed and in any event the exercise by Financial of its rights hereunder
shall not relieve Funding from such obligations if they do exist.
SECTION 5.04. Financial: Lock-Box Accounts; Maintenance of
Perfection. (a)Financial hereby transfers to Funding the exclusive ownership and
control of any Lock-Box Accounts to which the Obligors of Medallion Loans shall
make payments, and Financial hereby agrees to take any further action necessary
that Funding may reasonably request to effect such transfer.
(b) Financial agrees to take all actions, including conducting
lien searches and filing UCC continuation statements, necessary or desirable to
ensure that the Liens arising pursuant to the Loan Documents and securing
repayment of any Obligor's indebtedness evidenced by an Obligor Note will be
maintained as continuously perfected (with the same level of priority as sold
and assigned hereunder) security interests (except as otherwise approved by
Funding) in all applicable jurisdictions up to and including the Closing Date.
To the extent that any Obligor Note with respect to a Medallion Loan or any
other "instrument" (as defined in the UCC of the jurisdiction the law of which
governs the perfection of the interest in such Medallion Loan created hereunder)
evidencing such Medallion Loan comes into the possession of Financial, Financial
agrees that it will promptly deliver such item to the Custodian, duly endorsed
in blank on or before the Purchase of the applicable Medallion Loan hereunder.
(c) Financial agrees from time to time, at Financial's expense,
promptly to execute and deliver, or cause to be executed and delivered, all
further instruments and documents, and take all further action (including the
making, or causing to be made, of notations on the records of Financial or the
Servicer) necessary or desirable or that Funding, the SPV, the Servicer or the
Custodian may reasonably request in order to perfect, maintain perfected,
protect or more fully evidence the Purchase of Medallion Loans by Funding
hereunder, or to enable Funding, the SPV, the Custodian or the Lender to
exercise or enforce any of their respective rights hereunder or under any other
Operative Document.
(d) To the fullest extent permitted by applicable law, Financial
hereby grants to the Servicer, the SPV and Funding, an irrevocable power of
attorney, with full power of substitution, coupled with an interest, to sign and
file in the name of Financial, or in its own name, such financing statements and
continuation statements and amendments thereto or assignments thereof as Funding
deems necessary to protect or perfect Funding's rights in the Medallion Loans.
(e) Without limiting the generality of the foregoing, Financial
will upon the request of the Servicer, Funding, the SPV or the Custodian: (i)
execute and file, or seek to cause the applicable Originator to execute and
file, such financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be necessary
or appropriate or as the Servicer, the Custodian, the SPV or Funding may request
and (ii) mark its master data processing records evidencing such Medallion Loans
and related Loan Documents, as the Servicer, the SPV, the Custodian or Funding
may request. Financial hereby authorizes the Servicer, the SPV, the Custodian or
Funding to file one or more financing or continuation statements, and amendments
thereto and assignments thereof, relative to all or any of the Medallion Loans
and the Related Assets now existing or hereafter arising without the signature
of Financial where permitted by law. A carbon, photographic or other
reproduction of this Agreement or of any financing statement covering the
Medallion Loans or any part thereof, shall be sufficient as a financing
statement.
(f) If Financial fails to perform any of its agreements or
obligations under this Agreement, Funding, the SPV, the Custodian or the
Servicer may (but shall not be required to) itself perform, or cause performance
of, such agreement or obligation, and the expenses of Funding, the SPV, the
Custodian or the Servicer incurred in connection therewith shall be payable by
Financial upon Funding's, the SPV's, the Custodian's or the Servicer's demand
therefor.
SECTION 5.05. Lock-Box Accounts; Maintenance of Perfection.
(a)Funding hereby transfers to Financial the exclusive ownership and control of
any Lock-Box Accounts to which the Obligors of Commercial Loans shall make
payments, and Funding hereby agrees to take any further action necessary that
may reasonably request to effect such transfer.
(b) Funding agrees to take all actions, including conducting
lien searches and filing UCC continuation statements, necessary or desirable to
ensure that the Liens arising pursuant to the Loan Documents and securing
repayment of any Obligor's indebtedness evidenced by an Obligor Note will be
maintained as continuously perfected (with the same level of priority as sold
and assigned hereunder) security interests (except as otherwise approved by
Financial) in all applicable jurisdictions. To the extent that any Obligor Note
with respect to a Commercial Loan or any other "instrument" (as defined in the
UCC of the jurisdiction the law of which governs the perfection of the interest
in such Commercial Loan created hereunder) evidencing such Commercial Loan comes
into the possession of Funding, Funding agrees that it will promptly deliver
such item to Financial, duly endorsed in blank on or before the Purchase of the
applicable Commercial Loan hereunder.
(c) Funding agrees from time to time, at Funding's expense,
promptly to execute and deliver, or cause to be executed and delivered, all
further instruments and documents, and take all further action (including the
making, or causing to be made, of notations on the records of Funding) necessary
or desirable or that Financial may reasonably request in order to perfect,
maintain perfected, protect or more fully evidence the Purchase of Commercial
Loans by Financial hereunder, or to enable Financial to exercise or enforce any
of their respective rights hereunder or under any other Operative Document.
(d) To the fullest extent permitted by applicable law,
Funding hereby grants to Financial an irrevocable power of attorney with full
power of substitution, coupled with an interest, to sign and file in the name of
Funding, or in its own name, such financing statements and continuation
statements and amendments thereto or assignments thereof as Financial deems
necessary to protect or perfect Financial's rights in the Commercial Loans.
(e) Without limiting the generality of the foregoing,
Funding will upon the request of Financial: (i) execute and file, or cause the
applicable Originator to execute and file, such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate or as Financial may
request and (ii) mark its master data processing records evidencing such
Commercial Loans and related Loan Documents, as Financial may request. Funding
hereby authorizes Financial to file one or more financing or continuation
statements, and amendments thereto and assignments thereof, relative to all or
any of the Commercial Loans and the Related Assets now existing or hereafter
arising without the signature of Funding where permitted by law. A carbon,
photographic or other reproduction of this Agreement or of any financing
statement covering the Commercial Loans or any part thereof, shall be sufficient
as a financing statement.
(f) If Funding fails to perform any of its agreements or
obligations under this Agreement, Financial may (but shall not be required to)
itself perform, or cause performance of, such agreement or obligation, and the
expenses of Financial incurred in connection therewith shall be payable by
Funding upon Financial's demand therefor.
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01. Amendments and Waivers. Notwithstanding
anything to the contrary in the Agreement, no term or condition of this
Agreement shall be amended, modified, waived or terminated without the prior
written consent of Funding and Financial.
SECTION 6.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and mailed, transmitted or delivered, as to
each party hereto, at its address set forth under its name below or at such
other address as shall be designated by such party in a written notice to the
other parties hereto. All such notices and communications shall be effective,
upon receipt, or in the case of delivery by mail, three Business Days after
being deposited in the mails, postage prepaid, or in the case of notice by
facsimile copy, when verbal confirmation of receipt is obtained, in each case
addressed as aforesaid.
Financial:
---------
Medallion Funding Corp.
437 Madison Avenue
New York, New York 10022
Telephone: 212-328-2100
Facsimile: 212 328-2155
Funding:
-------
Medallion Financial Corp.
437 Madison Avenue
New York, New York 10022
Telephone: 212-328-2100
Facsimile: 212 328-2155
SECTION 6.03. No Waiver; Remedies. No failure on the part of
a party hereto to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 6.04. Binding Effect; Assignability.
(a) This Agreement shall be binding upon Financial, Funding
and their respective successors and permitted assigns and shall inure to the
benefit of Financial, Funding, and their respective successors and permitted
assigns. This Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms, and shall remain in full
force and effect until such time, after the Termination Date until the
Collection Date; provided, however, that the rights and remedies with respect to
any breach of any representation and warranty made by Financial or Funding
pursuant to Article IV and the indemnification and payment provisions of Article
VIII and Section 9.06 shall be continuing and shall survive any termination of
this Agreement.
(b) Financial acknowledges that Funding will assign to the
SPV (pursuant to the Loan Sale and Contribution Agreement) and the SPV will
assign to the Lender (pursuant to the Loan Sale and Contribution Agreement) all
of its rights, remedies, powers and privileges hereunder. Financial agrees that
the Lender, as the assignee of the SPV, shall, subject to the terms of the Loan
Sale and Contribution Agreement, have the right to enforce this Agreement and to
exercise directly all of Funding's rights and remedies under this Agreement, and
Financial agrees to cooperate fully with the Lender and the SPV in the exercise
of such rights and remedies.
SECTION 6.05. Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall for
any reason whatsoever be hold invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other covenants, agreements, provisions or
terms of this Agreement.
SECTION 6.06. Assignment. Notwithstanding anything to the
contrary contained herein this Agreement may not be assigned by Financial.
SECTION 6.07. Costs, Expenses and Taxes. (a) Each of
Financial and Funding agrees to pay on demand (i) all reasonable costs and
expenses in connection with the preparation, execution, delivery and
administration of this Agreement, including, without limitation, the reasonable
fees and reasonable out-of-pocket expenses of counsel for each party with
respect thereto and with respect to advising the party as to its rights and
remedies under this Agreement, and the other agreements executed pursuant
hereto, and (ii) all costs and expenses, if any (including reasonable counsel
fees and expenses), in connection with the enforcement of this Agreement.
(b) In addition, the parties shall share the obligation to
pay any and all stamp, sales, excise and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement, the Medallion Loans, the Commercial Loans or the
other agreements and documents to be delivered hereunder.
SECTION 6.08. Governing Law; Jurisdiction; Consent to Service of
Process; Waiver of Jury Trial.
(a) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
(b) Jurisdiction. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT LOCATED WITHIN THE SOUTHERN DISTRICT OF THE STATE OF NEW YORK, AND
ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. WITH RESPECT TO THE FOREGOING CONSENT TO
JURISDICTION, EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON
FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY THE COURT.
(c) Consent to Service of Process. EACH OF THE PARTIES
HERETO WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED TO SUCH
PERSON AT THE ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN
DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID.
(d) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE PARTIES HERETO ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM
IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL
BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
NOTHING IN THIS SECTION 6.08 SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY
PARTY HERETO TO BRING ANY ACTION OR PROCEEDING AGAINST ANY PARTY HERETO OR ITS
RESPECTIVE PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 6.09. Further Assurances. Each party agrees to do
and perform, from time to time, any and all acts and to execute any and all
further instruments and documents required or reasonably requested by the other
party more fully to effect the purposes of this Agreement, including, without
limitation, the execution of any appropriate financing statements or
continuation statements relating to the Medallion Loans or the Commercial Loans,
as the case may be, for filing under the provisions of the UCC of any applicable
jurisdiction.
SECTION 6.10. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Person, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
under this Agreement preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
SECTION 6.11. Counterparts. This Agreement may be executed
in two or more counterparts and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall constitute
one and the same instrument.
SECTION 6.12. Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 6.13. Headings. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
MEDALLION FUNDING CORP.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
MEDALLION FINANCIAL CORP.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
EXHIBIT A
TRANSFER AGREEMENT
(Financial to Funding)
This TRANSFER AGREEMENT NO. 1 dated as of September [ ], 2002
(this "Transfer Agreement"), is made between MEDALLION FINANCIAL CORP., a
Delaware corporation ("Medallion Financial") on the one hand and MEDALLION
FUNDING CORP., a New York corporation ("Medallion Funding") on the other hand.
RECITALS
A. Medallion Financial and Medallion Funding have entered into
that certain Loan Exchange and Sale Agreement dated as of September 13, 2002
(the "Agreement"). Capitalized terms used herein without definition shall have
the meaning given such terms in the Agreement. Medallion Funding has agreed to
accept title to and possession of the Medallion Loans (identified on Schedule I
- - Loan Schedule attached hereto) and Related Assets in exchange for (i) the
transfer of the Commercial Loans and Related Assets to Medallion Financial and
(ii) payment of the Supplemental Purchase Price (as defined below) and in each
case as described in the Agreement.
B. Medallion Financial has agreed to transfer title of the
Medallion Loans and Related Assets to Medallion Funding under this Transfer
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Transfer of Medallion Loans and Related Assets. Pursuant to
the Agreement, Medallion Financial hereby assigns, transfers and conveys to
Medallion Funding, absolutely and unconditionally, and not as security, all of
Medallion Financial's right, title and interest in and to the Medallion Loans
and Related Assets, including, without limitation, all of Medallion Financial's
rights under the related Loan Documents, including, without limitation,
Medallion Financial's rights with respect to any Collections paid by any
Obligor. Medallion Financial does not hereby delegate, and Medallion Funding
does not hereby assume, any of Medallion Financial's obligations under any
agreement between Medallion Financial and any other person or entity.
Medallion Funding hereby accepts assignment, transfer and
conveyance by Medallion Financial of all of Medallion Financial's right, title
and interest in and to all of the Medallion Loans and Related Assets, as
aforesaid. In consideration thereof, Medallion Financial hereby acknowledges
receipt of the Commercial Loans and Related Assets and receipt of the payment
from Medallion Funding of $[ ] (the "Supplemental Purchase Price"), which amount
represents the positive excess of the fair market value of the Commercial Loans
over the Medallion Loans.
2. Governing Law. This Transfer Agreement is a contract made
under, governed by and construed in all respects in accordance with the laws of
the State of New York without regard to the conflicts of law rules of the State
of New York.
3. Construction and Interpretation. Whenever possible, each
provision of this Transfer Agreement shall be interpreted in such manner as to
be consistent with the terms of the Agreement and if any term of this Transfer
Agreement shall be inconsistent with the terms of the Agreement, the terms of
the Agreement shall control. Each provision of this Transfer Agreement is
intended to be effective and valid under applicable law, but if any provision of
this Transfer Agreement shall be prohibited by or invalid under any law, such
provision shall be ineffective only to the extent and duration of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Transfer Agreement.
4. Notices. Any notice required or given hereunder shall be
in writing and shall be given in accordance with the terms of the Agreement. The
effectiveness of any notice and the delivery of any notice shall be governed by
the terms of the Agreement.
5. Assignment. This Transfer Agreement shall inure to the
benefit of, and shall be binding upon the parties hereto and their respective
successors and assigns. Medallion Financial may assign or transfer its rights
and/or obligations under this Transfer Agreement, in whole or in part, without
limitation. Medallion Funding may assign and/or transfer its rights or
obligations under this Transfer Agreement, in whole or in part, without
limitation.
6. Counterparts. This Transfer Agreement may be executed in
two or more counterparts and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall constitute
one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have caused this Transfer
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
MEDALLION FUNDING CORP.
By: /s/ Andrew Murstein
------------------------------
Name: Andrew Murstein
Title: President
By: /s/ Alvin Murstein
------------------------------
Name: Alvin Murstein
Title: Chief Executive Officer
MEDALLION FINANCIAL CORP.
By: /s/ Andrew Murstein
------------------------------
Name: Andrew Murstein
Title: President
By: /s/ Alvin Murstein
------------------------------
Name: Alvin Murstein
Title: Chief Executive Officer
Attachments:
Schedule 1 - Loan Schedule
SCHEDULE 1
LOAN SCHEDULE
See Attached
EXHIBIT B
TRANSFER AGREEMENT
(Funding to Financial)
This TRANSFER AGREEMENT NO. 2 dated as of September [ ], 2002
(this "Transfer Agreement"), is made between MEDALLION FUNDING CORP., a New York
corporation ("Medallion Funding") on the one hand and MEDALLION FINANCIAL CORP.,
a Delaware corporation ("Medallion Financial") on the other hand.
RECITALS
A. Medallion Funding and Medallion Financial have entered into
that certain Loan Exchange and Sale Agreement dated as of September 13, 2002
(the "Agreement"). Capitalized terms used herein without definition shall have
the meaning given such terms in the Agreement. Medallion Financial has agreed to
accept title to and possession of the Commercial Loans (identified on Schedule I
- - Loan Schedule attached hereto) and Related Assets in exchange for (i) the
transfer of the Medallion Loans and Related Assets to Medallion Funding and (ii)
payment of the Supplemental Purchase Price (as defined below) and in each case
as described in the Agreement.
B. Medallion Funding has agreed to transfer title of the
Commercial Loans and Related Assets to Medallion Financial under this Transfer
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Transfer of Commercial Loans and Related Assets. Pursuant to
the Agreement, Medallion Funding hereby assigns, transfers and conveys to
Medallion Financial, absolutely and unconditionally, and not as security, all of
Medallion Funding's right, title and interest in and to the Commercial Loans and
Related Assets, including, without limitation, all of Medallion Funding's rights
under the related Loan Documents, including, without limitation, Medallion
Funding's rights with respect to any Collections paid by any Obligor. Medallion
Funding does not hereby delegate, and Medallion Financial does not hereby
assume, any of Medallion Funding's obligations under any agreement between
Medallion Funding and any other person or entity.
Medallion Financial hereby accepts assignment, transfer and
conveyance by Medallion Funding of all of Medallion Funding's right, title and
interest in and to all of the Commercial Loans and Related Assets, as aforesaid.
In consideration thereof, Medallion Funding hereby acknowledges receipt of the
Medallion Loans and Related Assets and Medallion Financial hereby acknowledges
receipt of the Commercial Loans and receipt of the payment from Medallion
Funding of $[ ] (the "Supplemental Purchase Price"), which amount represents the
positive excess of the fair market value of the Commercial Loans over the
Medallion Loans.
2. Governing Law. This Transfer Agreement is a contract made
under, governed by and construed in all respects in accordance with the laws of
the State of New York without regard to the conflicts of law rules of the State
of New York.
3. Construction and Interpretation. Whenever possible, each
provision of this Transfer Agreement shall be interpreted in such manner as to
be consistent with the terms of the Agreement and if any term of this Transfer
Agreement shall be inconsistent with the terms of the Agreement, the terms of
the Agreement shall control. Each provision of this Transfer Agreement is
intended to be effective and valid under applicable law, but if any provision of
this Transfer Agreement shall be prohibited by or invalid under any law, such
provision shall be ineffective only to the extent and duration of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Transfer Agreement.
4. Notices. Any notice required or given hereunder shall be in
writing and shall be given in accordance with the terms of the Agreement. The
effectiveness of any notice and the delivery of any notice shall be governed by
the terms of the Agreement.
5. Assignment. This Transfer Agreement shall inure to the
benefit of, and shall be binding upon the parties hereto and their respective
successors and assigns. Medallion Funding may assign or transfer its rights
and/or obligations under this Transfer Agreement, in whole or in part, without
limitation. Medallion Financial may assign and/or transfer its rights or
obligations under this Transfer Agreement, in whole or in part, without
limitation.
6. Counterparts. This Transfer Agreement may be executed in
two or more counterparts and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall constitute
one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have caused this Transfer
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
MEDALLION FUNDING CORP.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
MEDALLION FINANCIAL CORP.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
Attachments:
Schedule 1 - Loan Schedule
SCHEDULE 1
LOAN SCHEDULE
See Attached
SCHEDULE 1
COMMERCIAL LOANS
SCHEDULE 2
MEDALLION LOANS