Document:

exv10w2

 

Exhibit 10.2

AMENDMENT No. 2 TO SECURED LOAN AGREEMENT

     AMENDMENT TO SECURED LOAN AGREEMENT (this “Amendment”) dated as of December 21, 2007 among
WESTLB AG, NEW YORK BRANCH (the “Lender”), U.S. BANK NATIONAL ASSOCIATION, a national banking
association (the “Collateral Agent” and “Securities Intermediary”). LEAF EQUIPMENT LEASING INCOME
FUND III, L.P., a Delaware limited partnership
(“LEAF” or the “Seller”), LEAF FINANCIAL
CORPORATION, a Delaware corporation (the “Servicer”), LEAF FUNDING INC., a Delaware corporation
(the “Originator”) and LEAF FUND III, LLC, a Delaware limited liability company (the “Borrower”).

W
I T N E S S E
T H:

     WHEREAS, the parties hereto are parties to the Secured Loan Agreement, dated as of June 19,
2007 (as modified, amended or supplemented from time to time, the “Secured Loan Agreement”);

     WHEREAS, pursuant to Section 14.04 of the Secured Loan Agreement, the parties hereto wish to
amend the Secured Loan Agreement and hereby agree that the Secured Loan Agreement is hereby
amended; and

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

     SECTION 1. Definitions.

     (a) Whenever
used in this Amendment, capitalized terms used and not otherwise
defined herein shall have the meanings set forth in Appendix A to the Secured Loan Agreement.

     (b) Any
term that relates to a document or a statute, rule, or regulation includes any
amendments, modifications, supplements, or any other changes that may have occurred since the
document, statute, rule, or regulation came into being, including changes that occur after the
date of this Amendment.

     SECTION 2. Amendments. The parties hereto hereby agree, pursuant to Section 14.04
of the Secured Loan Agreement, to amend the Secured Loan Agreement as follows:

     (a) The definition of Senior Leverage Ratio in Appendix A shall be struck in its
entirety and replaced with:

          “Senior Leverage Ratio” means, with respect to LEAF, the result obtained by dividing
LEAF’S Combined Recourse Debt by LEAF’s Adjusted Partner’s Capital. For such determination,
“Combined Recourse Debt” means all of LEAF’s debts and liabilities, but excluding third party
accounts payable, accrued expenses, non-recourse debt and intercompany obligations, and “Adjusted
Partner’s Capital” means partner’s capital (in accordance with GAAP

 

 

with no adjustment for other comprehensive income accounted for pursuant to SFAS 133/138) plus
“Due to General Partner” plus subordinated debt, if any. For such determination (including Section
7.02(jj)), “Due to General Partner” means amounts, as set forth in the financial statements of
LEAF, that are due to LEAF Financial Corporation and its affiliates, as general partner of LEAF,
for management fees and expenses due for servicing the Securitized Portfolio in addition to
amounts LEAF Financial Corporation has paid for property taxes due on the Securitized Portfolio
that have been billed to Customers.

     (b) Subsection (jj) of Section 7.02 shall be struck in its entirety and replaced with:

          “(jj) As of the last day of each fiscal quarter commencing March 31, 2009, LEAF shall
maintain “Adjusted Partner’s Capital” of no less than 75.00% of “partner’s equity” (as reflected
in its financial statements) as of February 7, 2009 (the last day of its offering period pursuant
to its Prospectus dated February 7, 2007) as reported in its March 31, 2009 financial statements.”

     (c) The effective date of this amendment shall be the date hereof.

     SECTION 3. Representations and Warranties.

     Borrower, LEAF and Servicer each hereby severally certifies as to itself that its respective
representations and warranties set forth in Article VI of the Secured Loan Agreement (and any other
representations and warranties made by Borrower, LEAF or Servicer in the Secured Loan Agreement)
are true and correct on the date hereof with the same force and effect as if made on the date
hereof, except to the extent such representations and warranties speak specifically to an earlier
date in which case they shall have been true and correct on such date. In addition, Borrower, LEAF
and Servicer each severally represents and warrants (which representations and warranties shall
survive the execution and delivery hereof) that (a) no unwaived Facility Termination Event or Event
of Default (nor any event that but for notice or lapse of time or both would constitute an unwaived
Facility Termination Event or Event of Default) shall have occurred and be continuing as of the
date hereof nor shall any unwaived Facility Termination Event or Event of Default (nor any event
that but for notice or lapse of time or both would constitute an unwaived Facility Termination
Event or Event of Default) occur due to this Amendment becoming effective, (b) Borrower, LEAF and
Servicer each has the power and authority to execute and deliver this Amendment and has taken or
caused to be taken all necessary actions to authorize the execution and delivery of this Amendment,
(c) no consent of any other person (including, without limitation, members or creditors of
Borrower, LEAF or Servicer), and no action of, or filing with any governmental or public body or
authority is required to authorize, or is otherwise required in connection with the execution and
performance of this Amendment, other than such that have been obtained, (d) the Secured Loan
Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of
Servicer, LEAF and the Borrower, enforceable against them in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization and
other similar laws of general application affecting creditors’ rights generally and by general
principles of equity (whether such enforceability is considered in a proceeding in equity or law),
and (e) the execution, delivery and performance of this Amendment will not violate any provision of
any existing law or regulation or any order or decree of any court, regulatory body

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or administrative agency or the certificate of formation or the limited liability company agreement
of Servicer, LEAF or Borrower or any material indenture, agreement, mortgage, deed of trust or
other instrument to which Servicer, LEAF or the Borrower is a party or by which it is bound.

     SECTION 4. Ratification. Upon execution of this Amendment, the Secured Loan Agreement
shall be amended in accordance herewith, and the respective rights, limitations, obligations,
duties, liabilities and immunities of the parties shall hereafter be determined, exercised and
enforced subject in all respects to such amendments, and the terms of this Amendment shall be a
part of the Secured Loan Agreement for any and all purposes. Except as modified and expressly
amended by this Amendment, the Amendment is in all respects ratified and confirmed, and all the
terms, provisions and conditions thereof shall be and remain in full force and effect.

     SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL, IN
ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW
PRINCIPLES THEREOF.

     SECTION 6. Counterparts. For the purpose of facilitating the execution of this
Amendment and for other purposes, this Amendment may be executed simultaneously in any number of
counterparts, each of which shall be deemed to be an original and together shall constitute and be
one and the same instrument.

     SECTION 7. Severability of Provisions. If any one or more of the provisions or terms
of this Amendment shall be for any reason whatsoever held invalid, then such provisions or terms
shall be deemed severable from the remaining provisions or terms of this Amendment and shall in no
way affect the validity or enforceability of the other provisions or terms of this Amendment.

     SECTION 8. Amendment. This Amendment may be amended or modified from time to time by
the parties hereto, but only by an instrument in writing signed by each of the parties hereto.

     SECTION 9. Headings. The Section headings are not part of this Amendment and shall
not be used in its interpretation.

[REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK]

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          IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first
above written.

	 	 	 	 	 
	 	LEAF FUND III, LLC,

      as Borrower

 	 
	 	     By:	 /s/ Miles Herman
 	 
	 	 	Name:  	Miles Herman 	 
	 	 	Title:  	President and COO 	 
	 

	 	 	 	 	 	 
	 	LEAF EQUIPMENT LEASING INCOME FUND

     III, L.P., as Seller	 	 
	 
	 	 	 	 	 
	 	     By: 	 LEAF ASSET MANAGEMENT LLC,

as General Partner	 	 
	 
	 	 	 	 	 
	 

	     By:	 /s/ Miles Herman
 

	 	 
	 

	 	Name:	Miles Herman	 	 
	 

	 	Title:	 President and COO	 	 

	 	 	 	 	 
	 	LEAF FINANCIAL CORPORATION, as Servicer

 	 
	 	       By:	 /s/ Miles Herman	 
	 	 	Name:  	Miles Herman 	 
	 	 	Title:  	President and COO 	 
	 
	 	LEAF FUNDING, INC., as Originator

 	 
	 	By:	 /s/ Miles Herman	 
	 	 	Name:  	Miles Herman 	 
	 	 	Title:  	President and COO 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION, as

Collateral Agent and Securities Intermediary

 
	 
	 	By:  	/s/ Diane L. Reynolds 	 
	 	 	Name:  	 Diane L. Reynolds 	 
	 	 	Title:  	Vice President	 
	 

	 	 	 	 	 
	WESTLB
AG, NEW YORK BRANCH, as Lender
 
	 
	 	By:  	/s/ Matthew Tallo 	 
	 	 	Name:  	Matthew Tallo 	 
	 	 	Title:  	Director 	 

	 	 	 	 	 
	 	By:  	/s/ Vesselina Koleva
 	 
	 	 	Name:  	Vessselina Koleva 	 
	 	 	Title:  	Directorexv10w3

 

Exhibit 10.3

SECOND AMENDMENT TO CREDIT DOCUMENTS

          This SECOND AMENDMENT TO CREDIT DOCUMENTS (the “Second Amendment”) dated November 30, 2007, is
by and between LEAF EQUIPMENT LEASING INCOME FUND III, L.P., a Delaware limited partnership (the
“Borrower”), and National City Bank, as the sole Lender on the date hereof (the “Lender”), and as
administrative agent and collateral agent (in such capacity, the “Agent”) for the Lender and other
lenders from time to time (the “Lenders”).

BACKGROUND

          A. Pursuant to that certain Credit Agreement dated March 30, 2007, by and among the Borrower,
the Lenders and the Agent (as the same may be modified, supplemented and amended from time to time,
including by a First Amendment to Credit Agreement, dated May 16, 2007, an extension letter dated
September 30, 2007, and this Second Amendment, the “Credit Agreement”), the Lenders agreed, inter
alia, to extend to the Borrower a revolving credit facility, in the maximum outstanding principal
amount of $50,000,000.

          B. The Borrower has requested an increase of $110,000,000 to the facility, to which the
Lenders are willing to agree, on the terms and subject to the conditions set forth herein.

          NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:

          1. Definitions.

               (a) General Rule. Except as expressly set forth herein, all capitalized terms used
and not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement.

               (b) Additional Definitions. The following additional definitions shall be added to
Article 1 of the Credit Agreement to read in their entirety as follows:

“Purchase Agreement” means (a) that certain Acquisition Agreement, dated as
of June 19, 2007, between Borrower and LEAF Fund, III, LLC, (b) that certain
Purchase and Contribution Agreement, dated as of July 2, 2007, between Borrower and
LEAF III A SPE, LLC, and (c) any agreement pursuant to which a LEAF SPE purchases
Contracts and/or Equipment directly or indirectly from the Borrower, on a
non-recourse basis, and which have been approved by the Agent (such approval not to
be unreasonably withheld, delayed or conditioned).

“Second Amendment” means the Second Amendment to Credit Documents, dated
November 30, 2007.

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               (c) Amended Definitions. The following definitions in Article 1 of the Credit
Agreement shall be amended and restated to read in their entirety as follows:

“Aggregate Commitment” means the aggregate amount of the Lenders’
Commitments hereunder, as such amount may be reduced or modified at any time or from
time to time pursuant to the terms hereof. On the date of the Second Amendment, the
Aggregate Commitment is One Hundred Sixty Million Dollars ($160,000,000).

“Monthly Payment Date” means the twenty-first (21st) day of each
month, commencing January 21, 2008, or, if any such day is not a Business Day, the
next succeeding Business Day.

“Subsidiary” means, with respect to any Person, any other Person of which
more than 50% of the Voting Securities of such other Person (irrespective of whether
at the time Capital Securities of any other class or classes of such other Person
shall or might have voting power upon the occurrence of any contingency) is at the
time directly or indirectly owned or controlled by such Person, by such Person and
one or more other Subsidiaries of such Person, or by one or more other Subsidiaries
of such Person. Notwithstanding the foregoing, the term “Subsidiary” shall not
include any LEAF SPE (provided that any LEAF SPE shall still be deemed an
“Affiliate” of the Borrower for purposes of Section 10.9 hereof). Unless the
context otherwise specifically requires, the term “Subsidiary” shall be a reference
to a Subsidiary of the Borrower.

          2. Amendment to Schedule I. Schedule I to the Credit Agreement is hereby amended and
restated in its entirety with Schedule I attached hereto.

          3. Amendment to Note. The existing Note issued in favor of the Lender is hereby
amended and restated in its entirety with the Note from the Borrower, dated the date hereof (the
“Restated Note”), in the amount of One Hundred Sixty Million Dollars ($160,000,000).

          4. Addition of Section 2.10. A new Section 2.10 is hereby added to the Credit
Agreement as set forth below.

2.10 Partial Releases. The Security Agreement shall provide that the
Agent’s lien and security interest in certain Contracts granted thereunder, shall be
released automatically and with no further action by Agent upon a sale of such
Contracts pursuant to a Purchase Agreement and receipt by the Borrower of the
proceeds of such sale. The Agent from time to time shall confirm such release if
requested by a Borrower, and shall promptly release such Contracts and other
Collateral from the liens and security interests granted under the Credit Documents
in connection with any other sale of such Collateral by a Borrower, and the Agent
agrees, in either case, promptly to execute and deliver such documentation as is
reasonably required to evidence each such release (in such form and substance as may
be

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acceptable to the Agent), and shall promptly return the applicable instruments and
other documents to the Borrower or their designee, in each case subject to receipt
of evidence and documentation in such form and substance as may be acceptable to the
Agent that those terms and conditions have been satisfied; provided that no Event of
Default or Default then exists or could result therefrom. Any and all actions under
this Section shall be without any recourse to or representation or warranty by the
Agent and shall be at the sole cost and expense of the Borrower.

          5. Amendment of Section 9.1. Section 9.1 of the Credit Agreement is hereby amended
and restated in its entirety as set forth below.

9.1 Maximum Leverage Ratio. The Borrower will not permit the Leverage Ratio
as of the last day of any Fiscal Quarter, commencing December 31, 2007, to be
greater than 8.00 to 1.00.

          6. Amendment of Section 9.2. Section 9.2 of the Credit Agreement is hereby amended
and restated in its entirety as set forth below.

9.2 Minimum Tangible Net Worth. The Borrower will not permit Tangible Net
Worth as of the last day of any Fiscal Quarter, commencing December 31, 2007, to be
less than $5,000,000.

          7. Addition of Section 2.1(d). A new Section 2.1(d) is hereby added to the Security
Agreement as set forth below.

(d) Notwithstanding anything to the contrary contained herein or in any other
Secured Debt Agreement, the Collateral shall not include Released Property, but
shall include the Proceeds of Released Property. For purposes hereof, “Released
Property” means, collectively, any Contract, Inventory or related asset of a
Borrower which has been sold pursuant to a Purchase Agreement.

          8. Addition of Section 10.12. A new Section 10.12 is hereby added to the Security
Agreement as set forth below.

10.12 Release. The Secured Parties’ lien and security interest in certain
Contracts and related Equipment granted hereunder, shall be released automatically
and with no further action by Agent upon a sale of such Contracts pursuant to a
Purchase Agreement and receipt by the Borrower of the proceeds of such sale. The
Agent from time to time shall confirm such release if requested by the Borrower, and
shall promptly release such Contracts and related Equipment and other Collateral
from the liens and security interests granted hereunder in connection with any other
sale of such Collateral by the Borrower, and the Agent agrees, in either case,
promptly to execute and deliver such documentation as is reasonably required to
evidence each such release (in such form and substance as may be acceptable to the
Agent), and shall promptly return the applicable instruments and other documents to
the Borrower or its designee, in each case

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subject to receipt of evidence and documentation in such form and substance as may
be acceptable to the Agent that those terms and conditions have been satisfied;
provided that no Event of Default or Default then exists or could result therefrom.
Any and all actions under this Section shall be without any recourse to or
representation or warranty by the Agent and shall be at the sole cost and expense of
the Borrower.

     9. Representations and Warranties. The Borrower hereby represents and warrants to the
Agent and each Lender that:

          (a) Representations. Each of the representations and warranties contained in the
Credit Agreement and/or the other Credit Documents are true, accurate and correct in all material
respects on and as of the date hereof as if made on and as of the date hereof, except to the extent
such representation or warranty was made as of a specific date;

          (b) Power and Authority. (i) The Borrower has the power and authority under the laws
of its jurisdiction of organization and under its organizational documents to enter into and
perform this Second Amendment and any other documents which the Agent requires the Borrower to
deliver hereunder (this Second Amendment, the Restated Note and any such additional documents
delivered in connection with the Second Amendment are herein referred to as the “Amendment
Documents”); and (ii) all actions, corporate or otherwise, necessary or appropriate for the due
execution and full performance by the Borrower of the Second Amendment have been adopted and taken
and, upon their execution, the Credit Agreement, as amended by this Second Amendment will
constitute the valid and binding obligations of the Borrower enforceable in accordance with their
respective terms (except as may be limited by applicable insolvency, bankruptcy, moratorium,
reorganization, or other similar laws affecting enforceability of creditors’ rights generally and
the availability of equitable remedies);

          (c) No Violations of Law or Agreements. The making and performance of the Second
Amendment will not violate any provisions of any law or regulation, federal, state, local, or
foreign, or the organizational documents of the Borrower, or result in any breach or violation of,
or constitute a default or require the obtaining of any consent under, any agreement or instrument
by which the Borrower or its property may be bound;

          (d) No Default. No Default or Event of Default has occurred and is continuing; and

          (e) No Material Adverse Effect. No Material Adverse Effect has occurred since March
30, 2007.

     10. Conditions to Effectiveness of Amendment. This Second Amendment shall be
effective upon the Agent’s receipt of the following, each in form and substance reasonably
satisfactory to the Lenders:

          (a) Amendment Documents. This Second Amendment and the Restated Note, each duly
executed by the Borrower;

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          (b) Consent and Waivers. Copies of any consents or waivers necessary in order for the
Borrower to comply with or perform any of its covenants, agreements or obligations contained in any
agreement, which are required as a result of the Borrower’s execution of this Second Amendment, if
any;

          (c) Secretary’s Certificate. A certificate, dated the date hereof, duly executed and
delivered by the Borrower’s secretary as to: (i) attached resolutions approved by Asset
Management’s board of directors then in full force and effect authorizing the execution, delivery
and performance by the Borrower of each Credit Document to be executed by the Borrower, and the
transactions contemplated hereby and thereby; (ii) as to the incumbency and attached signatures of
its Authorized Officers, authorized to act with respect to each Amendment Document to be executed
by the Borrower; (iii) the full force and validity of each Organizational Document of the Borrower
delivered as of March 30, 2007, pursuant to the Credit Agreement; and (iv) the good standing of the
Borrower in its state of organization;

          (d) Opinion of Counsel. An opinion, dated the date hereof, and addressed to the Agent
and all Lenders, from Ledgewood, counsel to the Borrower, in form and substance reasonably
satisfactory to the Agent;

          (e) Lien Searches. Current UCC lien searches in the state of organization of the
Borrower;

          (f) Fees and Expenses. Payment of a $25,000 upfront fee together with any other fees
and expenses of the Agent incurred in preparation and negotiation of the Amendment Documents; and

          (g) Other Documents and Actions. Such additional agreements, instruments, documents,
writings and actions as the Lenders may reasonably request.

     11. No Waiver; Ratification. The execution, delivery and performance of this Second
Amendment shall not operate as a waiver of any right, power or remedy of the Agent or the Lenders
under the Credit Agreement or any Credit Document, or constitute a waiver of any provision thereof.
Except as expressly modified hereby, all terms, conditions and provisions of the Credit Agreement
and the other Credit Documents shall remain in full force and effect and are hereby ratified and
confirmed by the Borrower. Nothing contained herein constitutes an agreement or obligation by the
Agent or any Lender to grant any further amendments to any of the Credit Documents.

     12. Acknowledgments. To induce the Lenders to enter into this Second Amendment, the
Borrower acknowledges, agrees, warrants, and represents that:

          (a) Acknowledgment of Obligations; Collateral; Waiver of Claims. (i) The Credit
Documents are valid and enforceable against, and all of the terms and conditions of the Credit
Documents are binding on, the Borrower; (ii) the liens and security interests granted to the Agent
by the Borrower pursuant to the Credit Documents are valid, legal and binding, properly

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recorded or filed and first priority perfected liens and security interests; and (iii) the
Borrower hereby waives any and all defenses, set-offs and counterclaims which they, whether jointly
or severally, may have or claim to have against the Agent or any Lender as of the date hereof.

          (b) No Waiver of Existing Defaults. No Default or Event of Default exists immediately
before or immediately after giving effect to this Second Amendment. Nothing in this Second
Amendment nor any communication between the Agent, any Lender, the Borrower or any of their
respective officers, agents, employees or representatives shall be deemed to constitute a waiver of
(i) any Default or Event of Default arising as a result of the foregoing representation proving to
be false or incorrect in any material respect; or (ii) any rights or remedies which the Agent or
any Lender has against the Borrower under the Credit Agreement or any other Credit Document and/or
applicable law, with respect to any such Default or Event of Default arising as a result of the
foregoing representation proving to be false or incorrect in any material respect.

     13. Binding Effect. This Second Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

     14. Governing Law. This Second Amendment and all rights and obligations of the
parties hereunder shall be governed by and be construed and enforced in accordance with the laws of
the internal laws of the Commonwealth of Pennsylvania.

     15. Headings. The headings of the sections of this Second Amendment are inserted for
convenience only and shall not be deemed to constitute a part of this Second Amendment.

     16. Counterparts. This Second Amendment may be executed in any number of counterparts
with the same affect as if all of the signatures on such counterparts appeared on one document and
each counterpart shall be deemed an original.

[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Credit Documents
to be executed under seal by their duly authorized officers, all as of the day and year first
written above.

	 	 	 	 	 
	 	LEAF EQUIPMENT LEASING INCOME

FUND III, L.P., by its general partner

LEAF ASSET MANAGEMENT, LLC

 	 
	 	By:  	 	 
	 	Miles Herman 	 
	 	President 	 
	 

	 	 	 	 	 
	 	NATIONAL CITY BANK,

as Agent and as the Lender

 	 
	 	By:  	 	 
	 	Michael J. Labrum 	 
	 	Senior Vice President 	 
	 

Second
Amendment to Credit Agreement

 

 

SCHEDULE I

INITIAL COMMITMENTS

	 	 	 	 	 	 	 	 	 
	Lender Name	 	Loan Commitment	 	Loan Percentages
	National City Bank
	 	$	160,000,000	 	 	 	100	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	160,000,000	 	 	 	100	%
	 
	 	 	 	 	 	 	 	 

Second
Amendment to Credit Agreement

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