SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 13, 2002
MEDALLION FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
Delaware 000-27812 04-3291176
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(State or other
jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No)
437 Madison Avenue
New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 328-2100
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(Registrant's telephone number, including area code)
Item 5. Other Events.
On September 13, 2002, Medallion Financial Corp. (the "Company") and
Medallion Business Credit, LLC ("MBC") amended the Second Amended and Restated
Loan Agreement, dated as of September 22, 2000 (as amended by Amendments 1
through 5 the "Parent Credit Agreement"), by and among the Company and MBC, as
borrowers thereunder, each of the lenders therein named (the "Lenders") and
Fleet National Bank ("Fleet") as agent for the Lenders.
There is presently approximately $52,800,000 outstanding under the Parent
Credit Agreement. There are monthly mandatory amortization payments until the
facility matures on August 31, 2003. There are no financial covenants other than
the borrowing base covenant.
On September 13, 2002, Medallion Funding Corp., ("Funding") a wholly owned
subsidiary of the Company, amended the (i) Amended and Restated Loan Agreement,
dated as of December 24, 1997 (as amended by Amendments 1 through 8, the
"Funding Credit Agreement") by and among Funding, the lenders party thereto (the
"Funding Lenders") and Fleet as agent for the Funding Lenders; and (ii) the Note
Purchase Agreement, dated as of June 1, 1999 (as amended by Amendments 1 through
4, the "Amended Note Purchase Agreement"), between Funding and each of the
purchasers named therein (the "Note Purchasers").
There is presently approximately $57,200,000 outstanding under the Funding
Credit Agreement and the Amended Note Purchase Agreement. There are monthly
mandatory amortization payments until the facilities mature on August 31, 2003.
There are no financial covenants in either facility other than the borrowing
base covenant.
On September 13, 2002, a substantial part of the Company's medallion loan
portfolio was financed by Taxi Medallion Loan Trust I (the "Trust"), a
special-purpose entity that is 100% beneficially owned by Funding (the
"Financing"). In connection with the Financing, Funding sold and contributed
medallion loans held by it to the Trust. The Trust entered into a Loan and
Security Agreement (the "Loan Agreement") with Merrill Lynch Bank USA (the
"Bank"), as lender, under which the Bank provided a $250 million revolving
credit facility with available borrowings to be based upon a specified
percentage of the aggregate outstanding principal of medallion loans held by the
Trust. At closing, the Trust borrowed $101,329,934.60 and paid an aggregate
amount of $94,329,934.60 after reserves, fees and expenses to Funding as payment
for the medallion loans sold to it by Funding. Funding used this and other
amounts to repay a portion of the outstanding principal under its existing
credit facilities with the Funding Lenders and the Note Purchasers. Funding
obtained some of the medallion loans by exchanging commercial loans for
medallion loans with the Company. Funding will act as servicer for the loans
held by the Trust.
Borrowings under the Loan Agreement bear interest at a floating interest
rate that is based on a spread over LIBOR.
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The obligations of the Trust under the Loan Agreement are collateralized by
a pledge of the medallion loans held by the Trust. The agreements evidencing and
relating to the Loan Agreement contain customary representations, warranties and
covenants. The maturity date under the Loan Agreement is September 12, 2003,
although it may extend to September 12, 2004, under certain circumstances.
The Company, Funding and the Trust entered into the following additional
agreements in connection with the Financing:
o Loan Sale and Contribution Agreement (the "Contribution Agreement"),
dated as of September 13, 2002, between the Company and the Trust,
whereby Funding sold and contributed a substantial part of its
medallion loan portfolio to the Trust;
o Loan Sale and Exchange Agreement (the "Exchange Agreement"), dated as
of September 13, 2002, between the Company and Funding, whereby
Funding exchanged certain secured commercial loans with the Company in
exchange for certain loans secured by medallion loans;
o Servicing Agreement (the "Servicing Agreement"), among Funding, the
Trust and the Bank, dated as of September 13, 2002, whereby Funding
shall service and administer the medallion loans held by the Trust;
o Custodial Agreement (the "Custodial Agreement"), dated as of September
13, 2002, among the Bank, the Trust, Funding and Wells Fargo Bank
Minnesota, National Association ("Wells Fargo"), whereby Wells Fargo
took possession of certain documents as custodian for the Bank, lender
under the Loan Agreement; and
o Amended and Restated Trust Agreement (the "Trust Agreement"), dated as
of September 13, 2002, amending and restating the Trust
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Agreement, dated as of August 2, 2002, which was entered into for
purpose of forming the Trust as a statutory trust.
A copy of (i) Amendment No. 5 to the Parent Credit Agreement, (ii)
Amendment No. 8 to the Funding Credit Agreement, (iii) Fourth Amendment to the
Amended Note Purchase Agreement, (iv) the Contribution Agreement, (v) the
Exchange Agreement, (vi) the Servicing Agreement, (vii) the Custodial Agreement,
(viii) the Trust Agreement and (ix) the press release issued by the Company on
September 18, 2002 are included as exhibits to this filing and are incorporated
herein by reference.
Item 7. Financial Statements and Exhibits.
10.1 Amendment No. 5 to Second Amended and Restated Loan Agreement and
Limited Waiver, dated as of September 11, 2002, by and among the
Company, MBC, the Lenders and Fleet.
10.2 Amendment No. 8 to Amended and Restated Loan Agreement, Limited
Waiver and Consent, dated as of September 11, 2002, by and among
Funding, the Funding Lenders and Fleet.
10.3 Fourth Amendment to the Note Purchase Agreements, Limited Waiver and
Consent, dated as of September 11, 2002, by and among Funding and
the Note Purchasers.
10.4 Loan and Security Agreement, dated as of September 13, 2002, between
the Trust and the Bank.
10.5 Loan Sale and Contribution Agreement, dated as of September 13,
2002, between the Company and the Trust.
10.6 Loan Sale and Exchange Agreement, dated as of September 13, 2002,
between the Company and Funding.
10.7 Servicing Agreement, among Funding, the Trust and the Bank, dated as
of September 13, 2002.
10.8 Custodial Agreement, dated as of September 13, 2002, among the Bank,
the Trust, Funding and Wells Fargo.
10.9 Amended and Restated Trust Agreement, dated as of September 13,
2002, by and between Funding and Wachovia Trust Company, National
Association.
99.1 Press Release dated September 18, 2002.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: September 18, 2002 MEDALLION FINANCIAL CORP.
(Registrant)
By: /s/ James E. Jack
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Name: James E. Jack
Title: Chief Financial Officer
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EXHIBIT INDEX
10.1 Amendment No. 5 to Second Amended and Restated Loan Agreement and
Limited Waiver, dated as of September 11, 2002, by and among, the
Company, MBC, the Lenders and Fleet.
10.2 Amendment No. 8 to Amended and Restated Loan Agreement, Limited
Waiver and Consent, dated as of September 11, 2002, by and among
Funding, the Funding Lenders and Fleet.
10.3 Fourth Amendment to the Note Purchase Agreements, Limited Waiver and
Consent, dated as of September 11, 2002, by and among Funding and
The Notes Purchasers.
10.4 Loan and Security Agreement, dated as of September 13, 2002, between
the Trust and the Bank.
10.5 Loan Sale and Contribution Agreement, dated as of September 13,
2002, between the Company and the Trust.
10.6 Loan Sale and Exchange Agreement, dated as of September 13, 2002,
between the Company and Funding.
10.7 Servicing Agreement, among Funding, the Trust and the Bank, dated as
of September 13, 2002.
10.8 Custodial Agreement, dated as of September 13, 2002, among the Bank,
the Trust, Funding and Wells Fargo.
10.9 Amended and Restated Trust Agreement, dated as of September 13,
2002, by and between Funding and Wachovia Trust Company, National
Association.
99.1 Press Release dated September 18, 2002.
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