LIMITED RECOURSE AGREEMENT
This LIMITED RECOURSE AGREEMENT ("Limited Recourse
Agreement") dated as of November 28, 1995 is made by TRANS LEASING
INTERNATIONAL, INC., a Delaware corporation ("Trans Leasing"), in
favor of FIRST UNION NATIONAL BANK OF NORTH CAROLINA ("Lender").
RECITALS
A. Lender has entered into a Revolving Credit and Term Loan
and Security Agreement dated as of the date hereof (as the same may
from time to time be amended, modified, supplemented or restated, the
"Credit Agreement") with TL Lease Funding Corp. IV, a Delaware
corporation ("Borrower"), pursuant to which Lender shall, from time to
time, make loans (the "Loan") to the Borrower. The Loan will
initially be made on a revolving basis, and on or prior to the
Transition Date, will convert to a term loan.
B. Trans Leasing is the sole shareholder of Transferor.
Trans Leasing will obtain substantial direct and indirect benefit from
the making of the Loan.
C. In consideration of the agreement of Lender to make the
Loan to Borrower, Trans Leasing is willing to agree, under
circumstances set forth herein, to contribute to Borrower either
Eligible Leases or cash; provided that in no event shall Trans Leasing
be required to contribute an aggregate amount in excess of $1,750,000
hereunder, all as further set forth herein.
D. Capitalized terms used but not otherwise defined herein
shall have the meaning given to them in the Credit Agreement.
AGREEMENT
NOW, THEREFORE, In consideration of the foregoing Recitals
and other good consideration, the receipt and adequacy is hereby
acknowledged, and intending to be legally bound, the parties hereto do
hereby agree as follows:
Section 1. Acknowledgment. Trans Leasing hereby consents
to Borrower's issuance of the Note and entry into the Credit
Agreement. Trans Leasing acknowledges that Lender has agreed to make
the Loan at the request of, and as an accommodation to, Borrower.
Section 2. Agreement. Trans Leasing hereby
unconditionally, absolutely and irrevocably agrees, on the Transition
Date, to contribute to Borrower Additional Leases and/or immediately
available funds, such that the sum of (i) the Discounted Lease
Balances of the Additional Leases contributed hereunder, plus (ii) the
amount of any such immediately available funds shall equal any
Transition Date Covered Asset Base Shortfall (as defined below);
provided, that Trans Leasing shall not be required to pay or
contribute an aggregate amount under this Limited Recourse Agreement
of more than the lesser of $1,750,000 or five percent (5%) of the
outstanding principal amount of the Loan as of the Transition Date,
taking into account the Revolving Loan made pursuant to Section 3.1(f)
of the Credit Agreement, together with, without limitation, the prompt
payment of all expenses, including, without limitation, reasonable
attorneys' fees and legal expenses, incidental to the collection of
such amounts. Such amounts and all other obligations and covenants to
be performed by Trans Leasing under this Limited Recourse Agreement
shall hereinafter from time to time be collectively referred to as the
"Limited Recourse Obligations".
For purposes of this Limited Recourse Agreement:
"Transition Date Covered Asset Base Shortfall" means the amount
calculated as (i) the amount by which (A) the outstanding principal
amount of the Loan as of the Transition Date, taking into account the
Revolving Loan made on the Transition Date pursuant to Section 3.1(f)
of the Credit Agreement, exceeds (B) the Asset Base reflected on the
Asset Base Certificate delivered pursuant to Section 3.2(b) of the
Credit Agreement, minus (ii) the Discounted Lease Balance of any
Leases that became a Defaulted Lease after (x) if the Conversion Date
has occurred as a result of the occurrence of an Early Amortization
Event pursuant to clause (2) of the definition thereof, the second
Determination Date preceding the Conversion Date or (y) in all other
cases, the Determination Date immediately preceding the Conversion Date.
Section 3. Agreement Unconditional. The obligations of
Trans Leasing hereunder are irrevocable, absolute and unconditional,
irrespective of the value, genuineness, regularity, validity or
enforceability of the Obligations or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense
of a surety or guarantor.
Section 4. Contribution of Additional Leases; Payments.
Any contribution of Additional Leases pursuant to Section 2 shall be
made pursuant to an Assignment for Additional Leases substantially in
the form of Exhibit C to the Contribution and Sale Agreement. All
payments of cash to be made by Trans Leasing hereunder shall be made
by deposit into the Collection Account.
Section 5. Representations and Warranties. Trans Leasing
hereby represents and warrants to Lender that:
(a) Trans Leasing is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, is duly qualified to do business and is in good
standing in every jurisdiction where the nature of its business
requires it to be so qualified (except where the failure to so
qualify would not have a material adverse effect on Trans
Leasing's condition, financial or otherwise), and has the
requisite power and authority to execute and deliver this Limited
Recourse Agreement and to perform its obligations (including,
without limitation, payment of the Limited Recourse Obligations)
hereunder.
(b) The execution, delivery and performance by Trans
Leasing of this Limited Recourse Agreement (i) are within Trans
Leasing's corporate powers and have been duly authorized by all
necessary corporate action; (ii) do not contravene Trans
Leasing's charter documents or any law or any contractual
restriction binding on or affecting Trans Leasing or by which
Trans Leasing's Property may be affected, (iii) do not require
any authorization or approval or other action by, or any notice
to or filing, registration or recording with, any Governmental
Authority or any other Person, except such as have already been
obtained or made and (iv) do not, except as contemplated by the
Credit Agreement or this Limited Recourse Agreement, result in the
imposition or creation of any Lien on any Property of Trans Leasing.
(c) This Limited Recourse Agreement constitutes the legal,
valid and binding obligation of Trans Leasing, enforceable in
accordance with its terms, except as the enforceability thereof
may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws
relating to or affecting the rights of creditors and by general
principles of equity.
(d) To the best of Trans Leasing's knowledge, there is no
action, suit or proceeding affecting Trans Leasing pending or
threatened before any court, arbitrator or Governmental Agency
which is reasonably likely to materially adversely affect the
ability of Trans Leasing to perform its obligations under this
Limited Recourse Agreement.
(e) The financial statements of Trans Leasing dated as of
June 30, 1995 (audited) copies of which have been furnished to
Lender, fairly present the financial position and results of
operations for Trans Leasing for the dates and periods purported
to be covered thereby, all in accordance with GAAP.
(f) Trans Leasing is not insolvent as of the Closing Date
and the incurrence of Trans Leasing's obligations under this
Limited Recourse Agreement will not cause Trans Leasing: (i) to
become insolvent; (ii) to be left with unreasonably small capital
for any business or transaction in which Trans Leasing is
presently engaged or plans to be engaged; or (iii) to be unable
to pay its debts as such debts mature.
Section 6. Consents. Trans Leasing hereby agrees that any
or all of the following actions may be taken or things done without
notice to Trans Leasing and without affecting the liability of Trans
Leasing under this Limited Recourse Agreement:
(a) The time for Borrower's performance of or compliance
with any of the Obligations may be accelerated or extended or
such performance or compliance may be waived by Lender
(including, without limitation, the renewal, extension,
acceleration or other change in the time of payment, or other
terms of, the indebtedness, such as an increase or decrease in
the rate of interest thereon);
(b) Any of the acts referred to in the terms of the Loan
Documents may be performed, upon default thereunder, by or on
behalf of Lender; and
(c) The terms of any of the Obligations or any term or
condition in the Loan Documents may be amended as provided for
therein by Borrower, or Lender, as the case may be, for the
purpose of adding any provisions thereto or changing in any
manner the rights or obligations of Borrower, or Lender
thereunder.
Section 7. Due Diligence. Trans Leasing acknowledges that
it has, independently of and without reliance on Lender, made its own
credit analysis of Borrower and the Collateral and performed its own
legal review of this Limited Recourse Agreement, the Loan Documents
and all related filings, and Trans Leasing is not relying on Lender
with respect to any of the aforesaid items. Trans Leasing further
agrees that Lender shall have no obligation to disclose to Trans
Leasing information or material with respect to Borrower acquired in
the course of Lender's relationship with Borrower.
Section 8. Waiver. Trans Leasing hereby expressly waives
discharge due to any disability of Borrower, any defenses of Borrower
to its obligations under the Loan Documents not arising under the
express terms of the Loan Documents or from a material breach thereof
by Lender which under the law has the effect of discharging Borrower
from any of the Obligations, the benefit of any act or omission by
Lender which directly or indirectly results in or aids the discharge
of Borrower from any of the Obligations by operation of law or
otherwise, and any requirement that Lender exhaust any right, power or
remedy or proceed against Borrower or any other Person liable for, any
of the Obligations, or any portion thereof. Trans Leasing
specifically agrees that it will not be necessary or required, and
Trans Leasing shall not be entitled to require, that Lender file suit
or proceed to assert or obtain a claim for personal judgment against
Borrower for the Obligations or to make any effort at collection or
enforcement of the Obligations from Borrower or file suit or proceed
to obtain or assert a claim for personal judgment against Borrower or
make any effort at collection of the Obligations from Borrower or
exercise or assert any other right or remedy to which Lender is or may
be entitled in connection with the Obligations or assert or file any
claim against the assets of Borrower, before or as a condition of enforcing
the liability of Trans Leasing under this Limited Recourse Agreement.
Section 9. Certain Rights. Lender may pursue its rights
and remedies under this Limited Recourse Agreement against Trans
Leasing notwithstanding (a) any action taken by Lender to enforce any
rights or remedies under the Credit Agreement or (b) unless all
Obligations have been paid in full, any payment received under the
Credit Agreement. In pursuing its rights under this Limited Recourse
Agreement, Lender need not join Trans Leasing in any suit against
Borrower or join Borrower in any suit against Trans Leasing.
Section 10. Notice. Lender shall provide Trans Leasing
with a copy of any notice of default to Borrower as provided under the
Credit Agreement, provided, however, the failure of Lender to provide
such notice to Trans Leasing will not exonerate Trans Leasing of any
obligations under this Limited Recourse Agreement. Any notice or
other communication herein required or permitted to be given shall be
in writing and may be delivered in person, with receipt acknowledged,
or sent by telecopy or by United States mail, registered or certified,
return receipt requested, or by Federal Express or other nationally
recognized overnight courier service, postage prepaid and confirmation
of receipt requested: if to Trans Leasing, at its address at 0000
Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Chief Financial
Officer; and if to Lender, at its address at One First Union Center
TW-19, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
Attention: Xxxxxxxxxxx X. Xxxxxx, Asset Securitization Division
(Facsimile No. (000) 000-0000) or, as to each party, at such other
address as shall be designated by such party in a written notice to
the other party complying as to delivery with the terms of this
Section 10. Every notice, demand, request, consent, approval,
declaration or other communication hereunder shall be deemed to have
been duly given or served on the date on which the same shall have
been personally delivered, with receipt acknowledged, or sent by
telecopy, three (3) Business Days after the same shall have been
deposited in the United States mail or on the next succeeding Business
Day if the same has been sent by Federal Express or other nationally
recognized overnight courier service. Failure or delay in delivering
copies of any notice, demand, request, consent, approval, declaration
or other communication to the persons designated above to receive
copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other
communication.
Section 11. Reinstatement. Notwithstanding any provision
in any Loan Document to the contrary, the liability of Trans Leasing
hereunder shall be reinstated and revived and the rights of Lender
shall continue if and to the extent that for any reason any payment by
or on behalf of Borrower is rescinded or must be otherwise restored by
Lender, which rescission or required restoration results in the
occurrence of a Transition Date Covered Asset Base Shortfall as of the
Transition Date, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, all as though such amount had not been
paid. The determination as to whether any such payment must be
rescinded or restored shall be made by Lender in its sole discretion;
provided, however, that if Lender chooses to contest any such matter
at the request of Trans Leasing, Trans Leasing agrees to indemnify and
hold harmless Lender from all costs and expenses (including, without
limitation, reasonable attorneys' fees) reasonably related to such request.
Section 12. No Waiver, Amendments, Etc. No failure on the
part of Lender to exercise, no delay in exercising and no course of
dealing with respect to, 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. This
Limited Recourse Agreement may not be amended or modified except by
written agreement, executed in accordance with the provisions of the
Credit Agreement and no consent or waiver hereunder shall be valid
unless in writing and executed in accordance with the provisions of
the Credit Agreement.
Section 13. Compromise and Settlement. No compromise,
settlement, release, renewal, extension, indulgence, change in, waiver
or modification of any of the Obligations or the release or discharge
of Borrower from the performance of any of the Obligations (other than
payment in full of all Obligations) shall release or discharge Trans
Leasing from this Limited Recourse Agreement.
Section 14. Insolvency. The voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or
substantially all the assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, or other proceeding affecting Borrower or the
disaffirmance of any of the Loan Documents shall not release or
discharge Trans Leasing from this Limited Recourse Agreement.
Section 15. Expenses. In addition to its Limited Recourse
Obligations, Trans Leasing hereby agrees to pay all reasonable costs
and expenses, including, without limitation, reasonable attorneys'
fees, reasonably paid or incurred by Lender in collecting or enforcing
any or all of the Limited Recourse Obligations or in connection with
the enforcement of this Limited Recourse Agreement and in which Lender
is the prevailing party.
Section 16. Entire Agreement. This Limited Recourse
Agreement and all documents mentioned or contemplated herein constitute and
contain the entire agreement of the parties and supersede any and all prior
and contemporaneous agreements, negotiations, correspondence,
understandings and communications between the parties, whether written or
oral, respecting the subject matter hereof.
Section 17. Severability. If any provision of this Limited
Recourse Agreement is held to be unenforceable for any reason, it
shall be adjusted, if possible, rather than voided in order to achieve
the intent of the parties to the extent possible. In any event, all
other provisions of this Limited Recourse Agreement shall be deemed
valid and enforceable to the full extent possible.
Section 18. Assignment; Governing Law. Neither Trans
Leasing nor the Lender shall have the right to assign its rights
hereunder or any interest herein. This Limited Recourse Agreement
shall be governed by, and construed in accordance with, the laws of
the State of Illinois as applied to contracts made and performed
entirely within the State of Illinois by residents of such State.
Section 19. Actions by Lender. Lender shall have the power
to enforce this Limited Recourse Agreement against Trans Leasing to
the full extent of Trans Leasing's obligations hereunder.
Section 20. Consent to Jurisdiction. Trans Leasing and Lender
each hereby irrevocably consents to the personal jurisdiction of the state
and federal courts located in Mecklenburg County, North Carolina, and in
Xxxx County, Illinois, in any action, claim or other proceeding arising out
of any dispute in connection with this Limited Recourse Agreement. Trans
Leasing and Lender each hereby irrevocably consents to the service of a
summons and complaint and other process in any action, claim or proceeding
brought by Trans Leasing or Lender in connection with this Limited Recourse
Agreement, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations, on behalf of itself or its
Property by registered mail or personal delivery to the address set forth
in Section 10.
Section 21. Waiver of Jury Trial. TRANS LEASING AND LENDER
HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH
RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS LIMITED RECOURSE AGREEMENT, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OF THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
SECTION 22. General Interpretive Principles. For purposes
of this Limited Recourse Agreement except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Limited Recourse Agreement
have the meanings assigned to them in this Limited Recourse Agreement
and include the plural as well as the singular, and the use of any
gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections",
"Subsections", "paragraphs", and other subdivisions without reference
to a document are to designated Articles, Sections, Subsections,
paragraphs and other subdivisions of this Limited Recourse Agreement;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section
in which the reference appears, and this rule shall also apply to
paragraphs and other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other
words of similar import refer to this Limited Recourse Agreement as a
whole and not to any particular provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 23. Termination. Subject to Section 11, this Limited
Recourse Agreement shall terminate (a) if there is no Transition Date
Asset Base Shortfall on the Transition Date, on the Transition Date,
and (b) if there is a Transition Date Asset Base Shortfall on the
Transition Date, upon the payment and contribution of the amount
required under Section 2.
IN WITNESS WHEREOF, Trans Leasing has executed and delivered
this Limited Recourse Agreement as of the date first written above.
TRANS LEASING INTERNATIONAL, INC.
By:_____________________________
Name: Xxxxxx Xxxxxxx
Title: Vice President-Finance
APPROVED AND ACCEPTED
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By:____________________________
Name: Xxxx X. Xxxxxxx, Xx.
Title: Vice President
