AMENDMENT AGREEMENT NO. 2
Exhibit
10.3
EXECUTIVE
COPY
AMENDMENT AGREEMENT XX. 0
XXXXXXXXX XXXXXXXXX XX. 0, dated as of April 22, 2008 (this “Agreement”),
among LEAF III A SPE, LLC, a Delaware limited liability company (“Borrower”), LEAF
FINANCIAL CORPORATION, a Delaware corporation (“LEAF Financial”), as servicer (in such
capacity, together with its successors and assigns, the “Servicer”), LEAF FUNDING, INC., a
Delaware corporation (“LEAF Funding”), LEAF EQUIPMENT LEASING INCOME FUND III, L.P., a
Delaware limited partnership (“LEAF III”), the Required Lenders and XXXXXXX XXXXX BANK USA,
a Utah industrial bank (“MLBUSA”), as administrative agent (together with its permitted
successors in such capacity, the “Administrative Agent”).
WITNESSETH:
WHEREAS, capitalized terms used herein shall have the meanings ascribed thereto in the
Definitions and Rules of Construction attached as Appendix A to the Purchase and Sale Agreement,
dated as of July 2, 2007, between LEAF Funding and LEAF III, as amended, supplemented or otherwise
modified as of the date hereof;
WHEREAS, the parties hereto intend to amend the Definitions and Rules of Construction attached
to the Purchase and Sale Agreement as Appendix A (the “Definitions”) on the terms and subject to
the satisfaction of the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
contained herein, the parties hereto hereby agree as follows:
SECTION 1. Amendment.
(a) As of the Effective Date, certain of the Definitions are hereby amended as follows:
(i) The definition of “Advance Rate” is hereby amended in its entirety to read
as follows:
“Advance Rate” means, as of any date of determination, (a) if the aggregate amount
of the Contract Values of all Purchased Contracts as of such date is less than
$50,000,000, a percentage equal to the lowest of the following: (i) 90%; (ii) a
percentage equal to (x) 100%, less (y) an amount (expressed as a percentage) equal
to (A) $2,000,000, divided by (B) the aggregate amount of the Net Contract Values of
all Purchased Contracts as of such date; and (iii) a percentage equal to (x) 100%,
less (y) an amount (expressed as a percentage) equal to (A) the aggregate amount of
the Contract Values of all Purchased Contracts as of such date of the three (3)
largest Obligors, divided by (B) the aggregate amount of the Net Contract Values of
all Purchased Contracts as of such date; and (b) if the aggregate amount of the
Contract Values of all Purchased Contracts as of such date is greater than or equal
to $50,000,000, 90%.
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(ii) The definition of “Contract Value” is hereby amended in its entirety to
read as follows:
“Contract Value” means (i) with respect to any Contract that is 61 days or less
delinquent, as of any date of determination, the present value of the remaining
scheduled payments of such Contract, excluding any residual payment, discounted at
the Discount Rate and (ii) with respect to any Contract that is more than 61 days
delinquent, as of any date of determination, an amount equal to zero; provided,
however, that any Contract that is more than 61 days delinquent and which
subsequently is no longer delinquent without first having (x) the related obligor be
subject to an Insolvency Event, (y) been charged off by the Servicer in accordance
with the Policy and Procedures, or (z) become 121 or more days delinquent, and is
still a Contract comprising part of the Collateral, shall have a Contract Value as
provided in clause (i) hereof.
(iii) The definition of “Funded Rate” is hereby amended in its entirety to read
as follows:
“Funded Rate” means as of any date of determination, a rate equal to the sum of the
(a) Hedged Swap Rate as of such date and (b) the Alternate Fee Rate.
(iv) Clause (m) of the definition of “Servicer Default” is hereby amended in
its entirety to read as follows:
(m) Either (x) as of the last day of each fiscal quarter beginning with the fiscal
quarter ending September 30, 2007, LEAF III shall have failed to maintain minimum
“partners capital” (as reflected in its financial statements, but excluding any
xxxx-to-market gain or loss on any swap or other hedge transaction, “Partners
Capital”) of no less than 75.00% of Partners Capital reported on the corresponding
financial statements as of the immediately preceding calendar quarter, or (y) as of
September 30, 2008 or any later calendar quarter, LEAF III shall have failed to
maintain minimum Partners Capital of no less than 75.00% of Partners Capital as
reported in its June 30, 2008 financial statements; or
(v) Clause (n) of the definition of “Servicer Default” is hereby amended in its
entirety to read as follows:
(n) LEAF III, together with Borrower, shall have as of the last day of each fiscal
quarter thereof a ratio of Debt (as reflected in its financial statements, excluding
any applicable cash then on deposit in the Master DDA) as of such date to Partners
Capital as of such date (in each case determined on a consolidated basis in
accordance with GAAP) in excess of 8.5 to 1.0. For further clarification, when
calculating this ratio, the Borrower and LEAF III shall also include other entities
sponsored by LEAF III or the Borrower which are not required to be consolidated
under GAAP.
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(vi) The definition of “Static Pool Loss Ratio” is hereby amended in its
entirety to read as follows:
“Static Pool Loss Ratio” means, with respect to a Quarterly Origination Period, as
of any date of determination, an amount, expressed as a percentage, equal to (i) the
Cumulative Losses with respect to Contracts originated during such Quarterly
Origination Period divided by (ii) the original Contract Value of Contracts
originated during such Quarterly Origination Period, in each case, regardless of
whether such Contract still comprises part of the Collateral.
SECTION 2. Conditions Precedent to the Effectiveness of this Agreement. This
Agreement shall become effective as of the date hereof (the “Effective Date”) provided that
each of the following conditions precedent shall have been satisfied, or waived by the Required
Lenders, on or before such date:
(a) The Required Lenders shall have received this Agreement, executed and delivered by a duly
Authorized Officer of each party hereto.
(b) As of the date hereof, the representations and warranties made herein by LEAF Funding,
LEAF Financial, LEAF III and Borrower shall be true and correct in all material respects on and as
of such date as if made on and as of such date (except to the extent such representation or
warranty expressly relates to an earlier date, in which case such representation or warranty shall
be true and correct in all material respects as of such earlier date).
(c) No Potential Termination Event or Termination Event shall have occurred and be continuing
or shall occur as a result of this Agreement.
SECTION 3. Representations and Warranties. To induce the Required Lenders to enter
into this Agreement, each of LEAF Funding, LEAF Financial, LEAF III and Borrower hereby represent
and warrant to the Required Lenders as follows:
(a) Its execution, delivery and performance of this Agreement have been duly and validly
authorized by all necessary action on the part of it.
(b) No Potential Termination Event or Termination Event has occurred and is continuing or
shall occur as a result of this Agreement.
SECTION 4. Reference to and Effect on the Transaction Documents. As of the Effective
Date, any reference in any Transaction Document to the Definitions and Rules of Construction
attached to the Purchase and Sale Agreement as Appendix A shall be to such Definitions and Rules of
Construction as amended hereby.
SECTION 5. Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile transmission of
signature pages hereto), and all of said counterparts taken together shall be deemed to constitute
one and the same instrument.
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SECTION 6. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 7. GOVERNING LAW AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.
| LEAF III A SPE, LLC, as Borrower |
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| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | President, COO | |||
| LEAF FINANCIAL CORPORATION, as Servicer |
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| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | President, COO | |||
| LEAF FUNDING, INC. |
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| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | President, COO | |||
| LEAF EQUIPMENT LEASING INCOME FUND III, L.P. |
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| By: | LEAF Asset Management, LLC, its General Partner | |||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | President, COO | |||
| XXXX FUNDING, LLC, as a CP Rate
Lender and as Required Lender |
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| By: | /s/ Xxxx X. XxXxxx | |||
| Name: | Xxxx X. XxXxxx | |||
| Title: | Vice President | |||
| XXXXXXX XXXXX BANK USA, as the Administrative Agent |
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| By: | /s/ Aeneas X. Xxxxxxx | |||
| Name: | Aeneas X. Xxxxxxx | |||
| Title: | Director | |||
