MEDALLION LOAN SALE AND CONTRIBUTION AGREEMENT

Exhibit 10.4

EXECUTION COPY

 

MEDALLION LOAN SALE AND CONTRIBUTION AGREEMENT

Dated as of December 19, 2006

between

MEDALLION FUNDING CORP.,

as Transferor,

and

TAXI MEDALLION LOAN TRUST II,

as Transferee

 

TABLE OF CONTENTS

 

 

i

 

ii

 

iii

EXHIBITS

 

 

iv

MEDALLION LOAN SALE AND CONTRIBUTION AGREEMENT

Dated as of December 19, 2006

MEDALLION FUNDING CORP., a New York corporation (the “ Transferor ”), and TAXI MEDALLION TRUST II, a Delaware statutory trust (the “ Transferee ”), agree as follows:

PRELIMINARY STATEMENTS

(1) The Transferor originates Medallion Loans and, in addition, from time to time may purchase Medallion Loans and Related Assets from Medallion Financial, Freshstart, Medallion Capital and other Affiliates;

(2) The Transferee is a special-purpose entity that is 100% beneficially owned by the Transferor and has been established to purchase and otherwise acquire Medallion Loans and Related Assets;

(3) The Transferor wishes from time to time to offer to sell Medallion Loans and Related Assets to the Transferee;

(4) The Transferee desires to procure such Medallion Loans and Related Assets from the Transferor; and

(5) The Transferee intends to finance the cost of purchasing Medallion Loans and Related Assets from the Transferor through borrowings under a Loan and Security Agreement dated as of December 19, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan and Security Agreement ”), by and among the Transferee, the Lenders from time to time party thereto (collectively, the “ Lenders ”), the Managing Agents from time to time party thereto and Citicorp North America, Inc., as Administrative Agent (the “ Administrative Agent ”);

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). Unless otherwise defined in this Agreement, terms defined in the Loan and Security Agreement are used herein as therein defined.

“ Administrative Agent ” shall have the meaning set forth in the Preliminary Statements.

 

1

“ 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.

“ Affiliated Loan Sale Agreement ” and “ Affiliated Loan Sale Agreements ” shall have the meaning set forth in Section 5.01(i) .

“ Agreement ” shall mean this Medallion Loan Sale and Contribution Agreement, including any schedules or exhibits attached hereto, as the same may be amended or restated from time to time pursuant to the terms of this Agreement.

“ 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.

“ Capital Medallion Loans ” shall mean Medallion Loans and Related Assets conveyed by Medallion Capital to the Transferor through the Medallion Capital Loan Sale Agreement.

“ Closing Date ” shall mean December 19, 2006

“ Collection Account ” shall mean a segregated account created and maintained under the Loan and Security Agreement, governed by the Collection Account Control Agreement, into which Collections of Medallion Loans or Related Assets are remitted.

“ Collection Date ” shall mean 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 the Transferee hereunder shall have been paid in full.

“ Collections ” shall mean all payments by or on behalf of the Obligors in respect of Medallion Loans or Related Assets, including payments that are received or deemed to have been received from an Obligor in connection with any refinancing of or modification to any Medallion Loan, in the form of cash, checks, wire transfers, electronic transfers or any other form of cash payment.

“ Custodial Agreement ” shall mean the Custodial Agreement, dated as of the date hereof, among the Transferee, the Custodian, the Servicer and the Administrative Agent, as the same shall be modified and supplemented and in effect from time to time.

“ Custodian ” shall mean Wells Fargo Bank, 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

 

2

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) .

“ Eligible Medallion Loan ” shall mean a Medallion Loan that satisfies all of the criteria set forth on Exhibit D to this Agreement.

“ Financial Medallion Loans ” shall mean Medallion Loans and Related Assets conveyed by Medallion Financial to the Transferor through the Medallion Financial Loan Sale Agreement.

“ Freshstart ” shall mean Freshstart Venture Capital Corp., a New York corporation.

“ Freshstart Loan Sale Agreement ” shall mean the Freshstart Loan Sale Agreement dated as of the date hereof between Freshstart and the Transferor, as amended and supplemented from time to time, governing the terms and conditions upon which the Transferor shall acquire from Freshstart certain Medallion Loans and Related Assets.

“ Freshstart Medallion Loans ” shall mean Medallion Loans and Related Assets conveyed by Freshstart to the Transferor through the Freshstart Loan Sale Agreement.

“ 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.

“ Ineligible Medallion Loan ” shall have the meaning set forth in Section 8.02(a) of this Agreement.

“ Insolvency Event ” shall mean with respect to a specified Person, (i) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, administrator, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding up or liquidation of such Person’s affairs, (ii) the commencement against such Person of an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or selling appointment of a receiver, liquidator, assignee, custodian, administrator, sequestrator or similar official for such Person or for any substantial portion of its property, or ordering the winding up or liquidation of such Person’s affairs, which case shall remain undismissed for a period of thirty (30) days or

 

3

more, or (iii) the commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, administrator, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due or the admission by such Person in writing (of which a Responsible Officer of the Custodian shall have written notice) of its inability to pay its debts generally, or the adoption by the board of directors of such Person of a resolution (of which a Responsible Officer of the Custodian shall have written notice) which authorizes action by such Person in furtherance of any of the foregoing.

“ 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 sale 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 and Security Agreement ” shall have the meaning set forth in the Preliminary Statements.

“ Loan Documents ” shall mean, with respect to any Medallion 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 and related Obligor Note, including, without limitation, general or limited guaranties.

“ Medallion ” shall mean a medallion or other license (i) that was issued by a municipality in New York, New York, Chicago, Illinois, Boston, Massachusetts, Cambridge, Massachusetts, Newark, New Jersey, Philadelphia, Pennsylvania or another location which the Administrative Agent has approved in writing, (ii) that gives its owner the right to operate a taxicab in such municipality, (iii) that is perpetually renewable by the issuing municipality and (iv) that is readily transferable to another person in the secondary market, subject to applicable rules and regulations.

“ Medallion Capital ” shall mean Medallion Capital, Inc., a Minnesota corporation.

“ Medallion Capital Loan Sale Agreement ” shall mean the Medallion Capital Loan Sale Agreement dated as of the date hereof between the Transferor and Medallion Capital, as amended and supplemented from time to time, governing the terms and conditions upon which the Transferor shall acquire from Medallion Capital certain Medallion Loans and Related Assets.

 

4

“ Medallion Financial ” shall mean Medallion Financial Corp., a Delaware corporation.

“ Medallion Financial Loan Sale Agreement ” shall mean the Medallion Financial Loan Sale Agreement dated as of the date hereof between the Transferor and Medallion Financial, as amended and supplemented from time to time, governing the terms and conditions upon which the Transferor shall acquire from Medallion Financial certain Medallion Loans and Related Assets.

“ Medallion Loan ” shall mean a loan purported to be sold or contributed hereunder to the Transferee 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 an Originator in the ordinary course of its business and appearing on a Medallion Loan Schedule at any time hereafter submitted to and accepted by the Transferee in connection with a conveyance pursuant to Section 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 Medallion Loans) thereof; provided , however , that any Medallion Loan retransferred by the Transferor pursuant to Section 8.02 of this Agreement shall cease to be a Medallion Loan as of the date of such retransfer.

“ Obligor ” shall mean, with respect to any Medallion Loan, the Person or Persons obligated to make payments with respect to such Medallion Loan, including any co-signer or guarantor for a Person so obligated.

“ Obligor Note ” shall mean any promissory note evidencing the indebtedness of an Obligor under a Medallion Loan, together with any modifications thereto.

“ Operative Documents ” shall mean this Agreement, the Loan and Security Agreement, the Affiliated Loan Sale Agreements, the Servicing Agreement, the Custodial 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, or an employee of, the Person providing the opinion and who shall be reasonably acceptable to the Transferee.

“ Originator ” shall mean an originator of Medallion Loans in its capacity as such.

“ Outstanding Balance ” of any Medallion Loan at any time shall mean the then outstanding principal balance thereof.

“ Payment Date ” shall mean the date on which the Loan and Security Agreement shall have terminated and all amounts owing to all parties providing financing, liquidity support, credit enhancement or other financial accommodations to the Transferee thereunder shall have been paid in full.

“ Permitted Participation Interest ” shall mean a participation interest in a Medallion Loan that is (i) subordinated to the rights of the Transferee therein, as the case may

 

5

be, on terms acceptable to the Transferee and pursuant to an agreement in form and substance acceptable to the Transferee, in each case in its sole and absolute discretion, and (ii) in the case of a Person that is not an Affiliate of the Transferee, held by a holder that is acceptable to the Transferee in its sole and absolute discretion.

“ Person ” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Authority or any other entity of similar nature.

“ Purchase ” shall mean any purchase by the Transferee of Medallion Loans and Related Assets from the Transferor pursuant to Article II .

“ Purchase Price ” shall have the meaning set forth in Section 2.02(b) .

“ 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 Assets and rights), including, without limitation, all Loan Documents, maintained with respect to Medallion Loans and the related Obligors.

“ Related Assets ” shall mean with respect to any Medallion Loan: (i) if the Medallion Loan was transferred by Medallion Financial, Freshstart or Medallion Capital to the Transferor under the respective Affiliated Loan Sale Agreement, all of the Transferor’s rights, remedies, powers and privileges under any of the Affiliated Loan Sale Agreements; (ii) all security interests or liens and property subject thereto from time to time purporting to secure payment of such Medallion Loan, whether pursuant to the Obligor Note related to such Medallion Loan, any other Loan Document or otherwise, including, without limitation, the applicable Medallion; (iii) all UCC financing statements covering any collateral securing payment of such Medallion Loan; (iv) 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 whether pursuant to the Obligor Note related to such Medallion Loan or otherwise; (v) all Records and all other instruments and rights relating to such Medallion Loan; and (vi) if such Medallion Loan is subject to a Permitted Participation Interest, all rights, remedies, powers and privileges of the Transferor under the related participation agreement.

“ 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 the Transferor in its capacity as servicer under the Servicing Agreement, or such successor Servicer appointed pursuant to the terms of the Servicing Agreement.

“ Subsidiary ” shall mean, as to any Person, any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person.

 

6

“ Termination Date ” shall mean the earlier of (i) the date of the declaration or automatic occurrence of the Termination Date pursuant to Section 7.01 and (ii) the date specified by the Transferor or the Transferee in a written notice to the other party given at least thirty (30) days prior to such specified date.

“ Termination Event ” shall have the meaning set forth in Section 7.01 .

“ Transfer Agreement ” shall mean an agreement in the form of the agreement included herein as Exhibit A .

“ Transfer Date ” shall mean any day on which Medallion Loans are to be transferred from the Transferor to the Transferee hereunder, whether by sale or contribution of capital.

“ Transferee ” shall have the meaning set forth in the preamble hereto.

“ Transferor ” shall have the meaning set forth in the preamble hereto.

“ UCC ” shall mean the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

“ Weekly Settlement Date ” shall mean the second Business Day of each calendar week.

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 PURCHASES

SECTION 2.01. Purchase Facility .

(a) From time to time the Transferor may make available to the Transferee its inventory of Eligible Medallion Loans for the purpose of the Transferee’s considering whether it wishes to purchase any such loans. On the terms and conditions hereinafter set forth, the Transferee may in its sole discretion purchase Medallion Loans and Related Assets with respect thereto from the Transferor from time to time during the period from the date the conditions precedent to the initial Purchase in Section 3.01 are satisfied to the Termination Date. Nothing in this Agreement shall be deemed to be or construed as a commitment by the Transferee to purchase any Medallion Loans or Related Assets at any time.

 

7

(b) It is the intention of the parties hereto that each Purchase or contribution made hereunder shall constitute a sale or contribution of such assets, which transfer is absolute and irrevocable and provides the Transferee with the full benefits of ownership of the purchased Medallion Loans and Related Assets. Neither the Transferor nor the Transferee intends the transfers contemplated hereunder to be, or for any purpose to be characterized as, loans from the Transferee to the Transferor secured by such transferred assets.

(c) In the event that, notwithstanding the intent of the parties, any Medallion Loans are held to be the property of the Transferor, or if for any other reason this Agreement is held or deemed to create a security interest in such Medallion Loans, then this Agreement shall be deemed to be a security agreement, the conveyance provided for in Section 2.01(a) shall be deemed to be a grant by the Transferor to the Transferee of a security interest in all of the Transferor’s right, title and interest, whether now owned or hereafter acquired, in and to (i) all accounts, contract rights, general intangibles, chattel paper, instruments, documents, money, deposit accounts, certificates of deposit, goods, letters of credit, advices of credit and uncertificated securities consisting of, arising from or relating to (a) the Medallion Loans, (b) the Related Assets with respect to such Medallion Loans, including the Obligor Notes, related security agreements and all other Loan Documents, (c) all Collections with respect to such Medallion Loans, including all cash collections and other cash proceeds of Medallion Loans, as well as other proceeds of such Medallion Loans or (d) all monies from time to time on deposit in, and all securities, instruments and other investments purchased from time to time with monies on deposit in, any Lock-Box Account or the Collection Account (whether or not allocated to any sub-account thereof) and (ii) all cash and non-cash proceeds of any of the foregoing.

(d) In view of the intention of the parties hereto that the Purchases made hereunder shall constitute sales of such Medallion Loans rather than a loan secured by such Medallion Loans, the Transferor agrees to note on its financial statements that such Medallion Loans and Related Assets have been sold to the Transferee.

(e) In furtherance of each Purchase, the Transferor shall execute and deliver to the Transferee a fully executed Transfer Agreement in the form included herein as Exhibit A in which the Medallion Loans being transferred by the Transferor to the Transferee by such Purchase shall be identified.

SECTION 2.02. Purchases from the Transferor .

(a) The initial Purchase shall be made on the Closing Date, provided that a notice requesting such Purchase (such notice to be in substantially the form of Exhibit C hereto) is received by the Transferee on or before the date of such initial Purchase. Each subsequent Purchase shall be made on a Business Day following the receipt by the Transferee of a written notice from the Transferor (such notice to be in substantially the form of Exhibit C hereto), with a copy sent to the Administrative Agent, at least one (1) Business Day before such subsequent purchase date. The Transferee shall promptly, after the receipt of such notice, notify the Transferor whether the Transferee has determined to make such Purchase.

(b) The purchase price (the “ Purchase Price ”) for Medallion Loans (together with Related Assets) shall be the Outstanding Balance of such Medallion Loans on the Transfer

 

8

Date (after giving effect to the scheduled payments due (whether or not received) on such Medallion Loans on or before the Transfer Date) plus accrued interest to but not including the Transfer Date, except that the Transferor may treat a portion of the Medallion Loans as a contribution to the capital of the Transferee in accordance with Section 2.02(d) . No offset of any kind by the Transferee with respect to any Purchase shall be permitted against the Purchase Price.

(c) The Transferee shall pay the Purchase Price for Medallion Loans (together with Related Assets) sold by the Transferor under this Agreement after the Closing Date on the Transfer Date on which such Medallion Loans are purchased, such payment to be made in cash, subject to Section 2.02(d) . On the date of each Purchase, the Transferee shall, upon satisfaction of the applicable conditions set forth in Article III , make available to the Transferor the Purchase Price in same day funds.

(d) Notwithstanding any provision herein to the contrary, if the Transferor and the Transferee so elect, on any such Transfer Date the Transferor may designate in writing pursuant to the Form of Purchase Notice attached hereto as Exhibit C , all or a portion of the Medallion Loans (but not a portion of any individual Medallion Loan) proposed to be transferred to the Transferee on such Transfer Date as a capital contribution to the Transferee. In such an event, the Purchase Price payable with respect to such Purchase shall be reduced by the aggregate amount of the Purchase Price that would be attributable to the contributed Medallion Loans if such Medallion Loans were sold, rather than contributed, to the Transferee hereunder; provided , however , that Medallion Loans contributed to the Transferee as capital shall otherwise constitute Medallion Loans for purposes of this Agreement. The Transferor and the Transferee hereby agree to note any such capital contribution on their respective financial statements.

SECTION 2.03. No Obligations or Taxes . The Transferor represents and warrants that (i) there will be no obligations of the Transferor under any Medallion Loans conveyed to the Transferee hereunder after the Closing Date remaining to be performed (and the exercise by the Transferee of any of its rights thereunder or hereunder shall not relieve the Transferor 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 any Medallion Loans conveyed to the Transferee hereunder after the Closing Date, except for income and similar taxes in connection with any Medallion Loans payable by the Transferor for periods on and prior to the Closing Date and payable by the Transferee for periods after the Closing Date.

SECTION 2.04. Collections .

(a) Any Collections of Medallion Loans received (or deemed to have been received) by the Transferor after the applicable Transfer Date shall not be commingled with other funds and shall be remitted directly to the Transferee by depositing such Collections in the Collection Account within one (1) Business Day of the Transferor’s receipt thereof.

(b) If, after the Transfer Date with respect to a Medallion Loan, the Transferee receives any amounts in respect of a scheduled payment due on or before the Transfer Date of such Medallion Loan, the Transferee shall remit such amounts to the Transferor within one (1) Business Day of the Transferee’s receipt thereof.

 

9

ARTICLE III.

CONDITIONS OF PURCHASES

SECTION 3.01. Conditions Precedent to Initial Purchase . The initial Purchase hereunder is subject to the condition precedent that the Transferee shall have received on or before the date of such Purchase the following, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Transferee:

(a) a copy of the resolutions of the Board of Directors of the Transferor approving this Agreement and the other Operative Documents to be delivered by it hereunder and the transactions contemplated hereby, certified by its secretary or assistant secretary;

(b) (i) a certificate of the secretary or assistant secretary of the Transferor certifying the names and true signatures of the officers authorized on its behalf to sign this Agreement and the other documents to be delivered by it hereunder (on which certificate the Transferee may conclusively rely until such time as the Transferee shall receive from the Transferor a revised certificate meeting the requirements of this subsection (b)) , (ii) a copy of the certificate of incorporation of the Transferor and (iii) a copy of the Transferor’s by-laws;

(c) financing statements (Form UCC 1), in proper form for filing, naming Medallion Financial as the debtor/seller of the Financial Medallion Loans and Related Assets, the Transferor as secured party/buyer/assignor and the Transferee as assignee thereof, or other documents, as may be necessary or, in the opinion of the Transferee, desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Transferor’s, and therefore, the Transferee’s, interests in the Financial Medallion Loans;

(d) financing statements (Form UCC 1), in proper form for filing, naming Freshstart as the debtor/seller of the Freshstart Medallion Loans and Related Assets, the Transferor as secured party/buyer/assignor and the Transferee as assignee thereof, or other documents, as may be necessary or, in the opinion of the Transferee, desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Transferor’s, and therefore, the Transferee’s, interests in the Freshstart Medallion Loans;

(e) financing statements (Form UCC 1), in proper form for filing, naming Medallion Capital as the debtor/seller of the Capital Medallion Loans and Related Assets, the Transferor as secured party/buyer/assignor and the Transferee as assignee thereof, or other documents, as may be necessary or, in the opinion of the Transferee, desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Transferor’s, and therefore, the Transferee’s, interests in the Capital Medallion Loans;

(f) financing statements (Form UCC 1), in proper form for filing, naming the Transferor as the debtor/seller of the Medallion Loans and Related Assets and the Transferee as secured party/buyer/assignor and the Administrative Agent as assignee thereof, or other documents, as may be necessary or, in the opinion of the Transferee, desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Transferee’s interests in the Medallion Loans and Related Assets;

 

10

(g) receipt-stamped copies of proper financing statements (Form UCC 3), if any, necessary to release all security interests and other rights of any Person in any Medallion Loans and Related Assets previously granted by the Transferor, Medallion Financial, Freshstart or Medallion Capital;

(h) an opinion of Willkie Farr & Gallagher LLP, counsel to the Transferor, the Transferee, Medallion Financial, regarding the characterization of the Financial Medallion Loans sold by Medallion Financial to the Transferor pursuant to the Medallion Financial Loan Sale Agreement, the Freshstart Medallion Loans sold by Freshstart to The Transferor pursuant to the Freshstart Loan Sale Agreement, the Capital Medallion Loans sold by Medallion Capital to the Transferor pursuant to the Medallion Capital Loan Sale Agreement and the Medallion Loans sold or contributed by the Transferor to the Transferee hereunder as true sales or contributions of, and not loans secured by, the Financial Medallion Loans, the Freshstart Medallion Loans, the Capital Medallion Loans or the Medallion Loans, as applicable, and as to the substantive nonconsolidation of either the Transferor or Medallion Financial with the Transferee in a bankruptcy of the Transferor and/or the Transferee; and

(i) an opinion of Willkie Farr & Gallagher LLP, counsel to the Transferor, as to perfection, priority, certain corporate matters and such other matters as the Transferee may reasonably request.

SECTION 3.02. Conditions Precedent to All Purchases . Each Purchase (including the initial Purchase) from the Transferor by the Transferee shall be subject to the further conditions precedent that on the date of such Purchase, the following statements shall be true and the Transferor, by accepting the amount of such Purchase, shall be deemed to have certified that:

(a) the representations and warranties contained in Section 4.01 are correct on and as of such day as though made on and as of such date;

(b) no event has occurred and is continuing, or would result from such Purchase, which constitutes a Termination Event or would constitute a Termination Event but for the requirement that notice be given or time elapse or both;

(c) the Custodian shall have (i) received, in each case, with respect to each Medallion Loan that is not a Wet Loan, (a) each Obligor Note with respect to each Medallion Loan purchased by the Transferee, together with each 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, duly endorsed in blank, (b) executed originals of each of the other Loan Documents related to the Medallion Loan included in such Purchase and (c) all Records related to such Medallion Loan and (ii) delivered to the Transferee a “Trust Receipt” (as defined in the Custodial Agreement) for each Medallion Loan; and

 

11

(d) the Transferee shall have received, in each case, with respect to each Medallion Loan that is a Wet Loan, a “Wet Loan Schedule” (as defined in the Servicing Agreement) with respect to such Wet Loan.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Transferor . The Transferor represents and warrants as follows as of the Closing Date and the date of each Purchase:

(a) Eligibility . As of the date on which a Medallion Loan is sold hereunder, such Medallion Loan is an Eligible Medallion Loan.

(b) Existence; Qualification . The Transferor is a corporation duly organized, validly existing and in good standing under the laws of the State of New York and has full power and authority to own its properties and conduct its business as presently owned or conducted and to execute, deliver and perform its obligations under this Agreement and the other Operative Documents to which it is party. The Transferor is duly qualified to do