Exhibit 10.3
FOURTH AMENDMENT TO THE NOTE PURCHASE
AGREEMENTS, LIMITED WAIVER AND CONSENT
This Fourth Amendment to the Note Purchase Agreements, Limited Waiver and
Consent dated as of September 11, 2002 (this "Amendment") is entered by and
among Medallion Funding Corp., a New York corporation (the "Company") and each
of the institutional investors named on Schedule A hereto (collectively, the
"Holders"). Capitalized terms used but not defined herein shall have the
meanings specified in the Existing Note Purchase Agreements (as defined below).
WHEREAS, the Company is a party to a separate Note Purchase Agreement dated
as of June 1, 1999, with each of the Holders (collectively, as amended on March
30, 2001, June 29, 2001, and April 1, 2002, the "Existing Note Purchase
Agreements" and, as amended hereby, the "Note Purchase Agreements"), pursuant to
which the Company issued and sold $22,500,000 aggregate principal amount of
7.20% Senior Secured Notes, Series A, due June 1, 2004, and $22,500,000
aggregate principal amount of 7.20% Senior Secured Notes, Series B, due
September 1, 2004 (collectively, as amended and restated on April 1, 2002, the
"Outstanding Notes" and, as amended and restated in connection with this
Amendment, the "Notes").
WHEREAS, the Company has requested certain amendments to the Existing Note
Purchase Agreements and waivers of certain provisions thereof and, subject to
the terms and conditions set forth herein, the Company and the Holders have
agreed to amend the Existing Note Purchase Agreements and waive certain
provisions thereof; and
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree to amend the Existing Note Purchase
Agreements as follows:
1. Amendments to Definitions. Schedule B to the Existing Note Purchase
Agreements is hereby amended by:
(a) deleting the following definitions in their entirety:
"Permitted Commercial Sale"
"Permitted Sales"
"Monthly Permitted Asset Sales"
(b) in the definition of "Eligibility Requirements," (i) deleting the
semicolon at the end of subsection (f) and inserting a comma in lieu thereof,
(ii) deleting the text "and" at the end of subsection (g), (iii) deleting the
period at the end of subsection (h) and inserting a comma in lieu thereof, and
(iv) inserting the following new subsection (i) in proper alphabetical order:
"(i) such Loan, if a Specified Loan, is a Permitted Specified Loan."
(c) deleting the following definitions in their entirety and substituting
in lieu thereof the following new definitions:
"Collateral" shall mean and include all existing and after-acquired
interests in the assets and property of whatever nature whatsoever, real,
personal or mixed, tangible or intangible, of the Company and MFCC. The
term shall include the stock of Media pledged by the Parent pursuant to the
terms of the Parent Pledge Agreement, the stock of MFCC pledged by the
Company pursuant to the terms of the MFCC Pledge Agreement and the
beneficial and ownership interests in the SPV pledged by the Company
pursuant to the terms of the SPV Pledge Agreement, securing the Notes and
all other property and interests in personal property that shall, from time
to time, secure the Notes.
"Collateral Agent" shall have the meaning specified in the Company
Security Agreement as well as, when the context requires, the Intercreditor
Agreement.
"Dividends" shall mean for both the most recently completed fiscal
quarter of the Company and its Subsidiaries and the most recently completed
four fiscal quarters of the Company and its Subsidiaries, the sum of all
(a) paid cash dividends on Capital Stock of the Company and its
Subsidiaries, plus (b) accrued and unpaid cash dividends on Capital Stock
of the Company and its Subsidiaries.
"Existing Note Purchase Agreements" shall have the meaning specified
in the recitals of the Fourth Amendment.
"Guaranty" or "Guaranties" shall mean, in the singular or the plural
as the context requires, the separate Guaranties from each of the
Guarantors in favor of the Holders guaranteeing the payment and performance
of the Company Obligations.
"Maturity Date" shall mean the earlier of (i) August 31, 2003, and
(ii) the date that all of the Notes shall become due and payable pursuant
to Section 12.
"Net Finance Assets" shall mean, as of any date of calculation, an
amount equal to the sum of:
(i) (A) cash of up to $5,000,000, plus (B) cash pledged to the
Intercreditor Collateral Agent, for the ratable benefit of the Holders
and the Funding Banks, pursuant to a cash collateral security
agreement in form and substance satisfactory to the Required Holders
plus (C) Short Term Investments shown on the Company's balance sheet
as of such date, plus
(ii) 83.33% of the sum, without duplication, of (A) the aggregate
outstanding principal balances of, plus accrued interest (excluding
deferred interest) on, all Eligible Medallion Loans and Eligible
Commercial Loans shown on the Company's balance sheet as of the last
day of the most recent month, minus (B) the portion, if any, of the
Loans, plus accrued interest (excluding deferred interest) thereon,
that the Company, in its reasonable business judgment, deems to be
uncollectible or subject to classification as non-accruing, minus (C)
the Eligible Loans, plus accrued interest (excluding deferred
interest) thereon, which are more than 60 days past due, plus
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(iii) 83.33% of 75% of the Eligible Medallion Loans and accrued
interest (excluding deferred interest) thereon which are more than 60
days past due, but are less than 91 days past due, plus
(iv) 83.33% of 65% of the Eligible Medallion Loans and accrued
interest (excluding deferred interest) thereon which are more than 90
days past due, but are less than 121 days past due;
provided, that if all or any part of any Medallion Loan or Commercial Loan
would be excluded under any of the provisions set forth above, then the
entire outstanding principal amount of, plus accrued interest (including
deferred interest) on, such Medallion Loan or Commercial Loan shall be
excluded.
"Note Documents" shall mean the Note Purchase Agreements, the Other
Agreements, the Notes, the Security Documents, the Intercreditor Agreement,
the Collateral Agency Agreement, and all other documents, instruments,
certificates and notices at any time delivered in connection with the
foregoing, in each case as amended modified or restated from time to time.
"Note Purchase Agreements" shall have the meaning specified in the
recitals of the Fourth Amendment.
"Notes" shall have the meaning specified in the recitals of the Fourth
Amendment.
"Outstanding Notes" shall have the meaning specified in the recitals
of the Fourth Amendment.
"Restricted Payment" shall mean, with respect to the Company and its
Subsidiaries, any of the following: (i) the payment of any dividend on or
any distribution in respect of any Capital Stock, (ii) any defeasance,
redemption, repurchase or other acquisition or retirement for value prior
to the scheduled maturity of any Indebtedness ranked pari passu or
subordinate in right of payment to the Notes or of any Indebtedness having
a maturity date prior to the maturity of the Notes (other than Permitted
Debt); (iii) when paid (or when the proceeds of which are paid) to any
Person during the continuance of any Default or Event of Default, any
defeasance, redemption, repurchase or other acquisition or retirement for
value prior to the scheduled maturity of any Indebtedness permitted by
Section 10.18 hereof; (iv) the redemption, repurchase, retirement or other
acquisition of any Capital Stock of the Company or its Subsidiaries or of
any warrants, rights or options to purchase or acquire any Capital Stock of
the Company or its Subsidiaries (other than pursuant to and in accordance
with stock option plans and other benefit plans for management or employees
of the Company and its Subsidiaries, in an aggregate amount not in excess
of $500,000 during any 12 month period, provided that any such redemption,
repurchase, retirement or other acquisition of any Capital Stock of the
Company or its Subsidiaries or of any warrants, rights or options to
purchase or acquire any Capital Stock of the Company or its Subsidiaries
otherwise permitted this parenthetical clause shall not be permitted
following the occurrence and during the
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continuance of any Default or Event of Default); (v) any expenditure or the
incurrence of any liability to make any expenditure for any Investment not
permitted by Section 10.8 hereof; (vi) when incurred during the continuance
of a Default or Event of Default, any expenditure or the incurrence of any
liability to make any expenditure for any Investment permitted by Section
10.8 hereof; (vii) the payment of any principal of, interest on, or any
amounts due in respect of, any Indebtedness not permitted by Section 10.18
hereof; (viii) the payment of any principal of, or interest on, or any
other amounts due in respect of, any Subordinated Debt; and (ix) the
setting aside of any amount or property for payment of Indebtedness
described above, by means of a sinking fund, defeasance or otherwise.
"Security Documents" shall mean the Company Security Agreement,
Company Financing Statements, any Mortgage Assignment, the Parent Pledge
Agreement, the MFCC Pledge Agreement, the SPV Pledge Agreement, the
Guaranties, the Lockbox Agreements (as defined in the Bank Loan Agreement)
and any other instruments, documents or agreements referred to herein or
related hereto pursuant to which the Company or any of its Subsidiaries
agrees to grant Liens in favor of the Holders.
(d) inserting the following new definitions in proper alphabetical order
therein:
"Documentation Punch List Letter" shall mean that certain letter
agreement dated on or before the Fourth Amendment Effective Date, among the
Company, the Intercreditor Collateral Agent, the Agent and the Holders,
which sets forth those items that are required to be completed by the
Company within the applicable required periods specified therein.
"Fourth Amendment" shall mean the Fourth Amendment to the Note
Purchase Agreements, Limited Waiver and Consent dated as of September 11,
2002, by and between the Company, MFCC, Media and each of the Holders.
"Fourth Amendment Effective Date" shall mean the date on which the
Company has satisfied, to the satisfaction of each of the Holders, each of
the conditions listed in Section 34 of the Fourth Amendment, as evidenced
by the notice given pursuant to Section 34(c) therein.
"Guarantor/Guarantors" Media and/or MFCC, as the context requires.
"Media" shall mean Medallion Taxi Media, Inc., a New York corporation.
"Merrill Lynch" shall mean Merrill Lynch Bank USA or an affiliate
thereof, including any permitted assignee under the Merrill Lynch Facility.
"Merrill Lynch Facility" shall mean the financing transaction to close
on or about the Fourth Amendment Effective Date, pursuant to which the SPV
will from time to time borrow money from Merrill Lynch and the SPV will
from time to time use the proceeds to purchase Medallion Loans from the
Company.
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"Merrill Lynch Loan Agreement" shall mean the Loan and Security
Agreement dated on or about the Fourth Amendment Effective Date, by and
among the SPV and Merrill Lynch.
"Permitted Specified Loans" shall mean Specified Loans that do not
exceed (A) $12,000,000 for the period from and including the Fourth
Amendment Effective Date to but not including the date which is ninety (90)
days after the Fourth Amendment Effective Date, (B) $6,000,000 for the
period from and including the date which is ninety (90) days after the
Fourth Amendment Effective Date to but not including February 1, 2003, and
(C) $0 thereafter.
"Shared Services Agreement" shall mean that certain Shared Services
Agreement dated on or about the Fourth Amendment Effective Date, between
the Parent and the SPV.
"Specified Loans" shall mean Medallion Loans existing on the Fourth
Amendment Effective Date and made to borrowers that were organizations
dissolved at or before the time when such Medallion Loans were made, if, at
the time of reference thereto, the dissolved borrowers have not been
reinstated to entity existence with the applicable department of state or
secretary of state as if such dissolution had not occurred.
"SPV" shall mean Taxi Medallion Loan Trust I, a special purpose,
bankruptcy remote, Delaware business trust, established by the Company in
connection with the Merrill Lynch Facility.
"SPV Pledge Agreement" shall mean that certain Collateral Assignment
of Ownership Interests dated as of September 11, 2002, by the Company in
favor of the Agent and the Holders and relating to the beneficial and
ownership interests in the SPV.
"Term Loans" shall have the meaning specified in the Bank Loan
Agreement, as in effect on the Fourth Amendment Effective Date.
2. Amendment of Section 1.2 of the Existing Note Purchase Agreements.
Section 1.2 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 1.2 in its entirety and substituting the following new Section
1.2 in lieu thereof:
"Section 1.2. Security for Notes. The Notes will be entitled to the
benefit of the Security Documents. The Company Obligations shall be secured
by a perfected first priority security interest (subject only to the
Permitted Liens, if and to the extent the Permitted Liens are entitled to
priority under applicable law, and to the requirements of the Intercreditor
Agreement and the Collateral Agency Agreement) in substantially all of the
assets of the Company and MFCC, whether now owned or hereafter acquired and
wherever located, pursuant to the terms of the Security Documents,
including a pledge by the Company of one hundred percent (100%) of the
Capital Stock owned by the Company of each of its Subsidiaries, subject to
limitations imposed by applicable law with respect to any particular
Subsidiary, and to the receipt of consents (including lender consents) as
may be required under other loan documents for any particular Subsidiary,
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provided that the Company shall have used its best efforts to obtain such
consents, with the Company acknowledging that the pledge of (and subsequent
enforcement of the security interest in) the stock of Media requires no
such consent. In addition, the Company Obligations shall be secured by a
first priority perfected pledge by the Company in favor of the
Intercreditor Collateral Agent of its beneficial and ownership interests in
the SPV, for the benefit of the Holders, the Agent and the Funding Banks,
together with the granting by the Company of a first priority perfected
security interest in favor of the Intercreditor Collateral Agent, for the
benefit of the Holders, the Agent and the Funding Banks, in any claims the
Company may now or hereafter have against the SPV, pursuant to the SPV
Pledge Agreement, provided that, notwithstanding any provision to the
contrary contained herein or in any of the Note Documents, voting,
disposition or other remedies may not be exercised against such pledge or
security interest until such time as the loans under the Merrill Lynch
Facility have been paid or have been declared to be due and payable prior
to their scheduled maturity (which for clarity shall not include rapid
amortization under the Merrill Lynch Facility). The Company Obligations
shall also be guaranteed by the Guarantors pursuant to the terms of the
Guaranties (subject, in the case of Media, to the terms of the Collateral
Agency Agreement and, in the case of MFCC, to the terms of the
Intercreditor Agreement); provided, however, that the Guaranty with respect
to Media shall provide that, with the prior written consent of the Agent
and the Holders, which consent shall not be conditioned on any requirement
to repay Indebtedness, such Guaranty of Media shall be released upon any
sale, transfer, public offering, merger, consolidation or other similar
event involving the change of at least 33% of the legal and beneficial
ownership of Media.
3. Amendment of Section 5.5 of the Existing Note Purchase Agreements.
Section 5.5 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 5.5 in its entirety and substituting the following new Section
5.5 in lieu thereof:
"Section 5.5. Financial Condition. The consolidated balance sheets of
the Company for the fiscal year ended December 31, 2001, and the related
consolidated statements of income, retained earnings and cash flow for such
fiscal year, as certified by the Company's Independent Public Accountants,
fairly present the consolidated financial position of the Company as of the
date of each such financial statement and the consolidated results of the
Company's operations and cash flows for the respective periods so
specified. All such financial statements have been prepared in accordance
with GAAP consistently applied on a basis consistent with that of the
comparable preceding period except as set forth in the notes thereto, and
since the dates of such financial statements, there has been no material
adverse change in the consolidated condition, financial or otherwise, of
the Company."
4. Amendment of Section 5.22 of the Existing Note Purchase Agreements.
Section 5.22 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 5.22 in its entirety and substituting the following new Section
5.22 in lieu thereof:
"Section 5.22. Priority; Continued Effectiveness. Except as otherwise
permitted hereunder, the Collateral Agent, for the benefit of the Holders,
has a valid and perfected
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first priority security interest (subject to the terms of the Intercreditor
Agreement and the Collateral Agency Agreement) in and to all Collateral,
enforceable against the Company and all third parties in all relevant
jurisdictions and securing the payment of the Notes and all other sums
payable under or in connection with the Note Documents. Each of the Company
Security Agreement, the Lockbox Agreements (as defined in the Bank Loan
Agreement), the Parent Pledge Agreement and, after the execution and
delivery thereof, the SPV Pledge Agreement is effective to create in favor
of the Collateral Agent, for the benefit of the Holders, a valid and
perfected first priority (subject to the terms of the Intercreditor
Agreement and the Collateral Agency Agreement and except as otherwise
permitted hereunder) security interest in and to the Collateral described
therein securing the payment of the Notes and all other sums payable under
or in connection with the Note Documents. No additional Company Financing
Statements are required to be filed in order to maintain the perfection and
priority of the security interests created in favor of the Holders or the
Collateral Agent, for the benefit of the Holders, pursuant to the Company
Security Agreement, the Lockbox Agreements (as defined in the Bank Loan
Agreement) the Parent Pledge Agreement and the SPV Pledge Agreement."
5. Amendment of Section 7.1 of the Existing Note Purchase Agreements.
Section 7.1 of the Existing Note Purchase Agreements is hereby amended by:
(a) deleting Section 7.1(h)(i) in its entirety and substituting the
following new Section 7.1(h)(i) in lieu thereof:
"(i) (A) on the Fourth Amendment Effective Date (based upon July 31,
2002 information adjusted to give effect to (1) the repayment of Loans, (2)
transfers of Loans to the SPV, and (3) the transactions contemplated by
Sections 10.1(a)(4)(B) and (F)), and within fifteen (15) Business Days
after the end of every calendar month thereafter or at any other time upon
the Holders' request, a Borrowing Base Certificate, signed by each of the
chief financial officer of the Company and M.R. Weiser, Inc. ("M.R.
Weiser") or another consultant satisfactory to the Company and the Holders,
covering the period commencing with the first day following the last day of
the period covered by the preceding Borrowing Base Certificate; and (B)
concurrently with any contribution by the Company of cash or Medallion
Loans to, or repurchases of Medallion Loans from, the Merrill Lynch
Facility, as permitted by Section 10.1(a)(4)(D) hereof, a pro forma
Borrowing Base Certificate, signed by each of the chief financial officer
or the Company and M.R. Weiser or another consultant satisfactory to the
Company and the Holders, demonstrating the Borrowing Base after giving
effect to such contribution;"
(b) deleting Sections 7.1(j)(iv) and (v) in their entirety and substituting
in the following new Sections 7.1(j)(iv) and (v) in proper numerical order in
lieu thereof:
"(iv) Intentionally Omitted.
(v) Intentionally Omitted."
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6. Amendment of Section 7.3 of the Existing Note Purchase Agreements.
Section 7.3 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 7.3(c) in its entirety and substituting the following new
Section 7.3(c) in lieu thereof:
"(c) Independent Firm. The Holders shall have access to M.R. Weiser at
all times for, among other things, updates on the status of M.R. Weiser's
work and questions about the scope and substance thereof. Kaye Scholer LLC
on behalf of the Holders shall have the right to employ Nightingale &
Associates LLC (or a similar consulting firm) as their financial advisors,
with the expenses of such consulting firm to be for the account of the
Company. Such consulting firm shall provide copies of detailed monthly
bills to the Company. Such consulting firm shall have access at all times
to the officers, employees, records and other information of the Company
and its Subsidiaries; provided, however, that absent a Default or Event of
Default, the fees and expenses thereof, together with all fees and expenses
of Argus Management Corporation or any other consulting firm that may be
hired by the Agent or its counsel in connection with the Bank Loan
Agreement, shall not exceed, in the aggregate, (1) $75,000 per month for
the period commencing on the Fourth Amendment Effective Date through the
earlier to occur of the month in which the outstanding principal amount of
Term Loans and Notes is less than $36,000,000 and November 30, 2002 (it
being understood that such amount shall be pro rated for any partial
calendar months) and (2) $37,500 per month thereafter. However, the
foregoing fee limitations shall not be imposed in the event the Company
fails to provide to the Holders (i) on the Fourth Amendment Effective Date
and by Thursday of each calendar week thereafter, a 13-week statement of
cash flows in the form being provided to the Agent and the Holders
immediately prior to the Fourth Amendment Effective Date, (ii) on the
Fourth Amendment Effective Date and on the 10th and 25th of each calendar
month thereafter, monitoring reports (including without limitation the form
of monitoring report attached hereto as Annex A), in form and substance
satisfactory to the Holders, concerning the various actions proposed by the
Company to comply with the schedule of Principal Payments set forth in
Section 14.3 hereof, (iii) daily reports regarding the cash balances of the
Company and its Affiliates, which reports shall be in a form reasonably
acceptable to the Holders and (iv) evidence, in form and substance
satisfactory to the Holders, that each of the items set forth in the
Documentation Punch List Letter to be completed after the Fourth Amendment
Effective Date has been completed in a manner satisfactory to the Holders
on or before November 15, 2002."
7. Amendment of Section 8.8 of the Existing Note Purchase Agreements.
Section 8.8 of the Existing Note Purchase Agreements is hereby amended by:
(a) deleting Sections 8.8(c), (d), (e) and (f) and substituting the
following new Sections 8.8(c), (d), (e) and (f) in proper alphabetical order in
lieu thereof:
"(c) Other than sales permitted pursuant to Section 10.3(b) hereof,
promptly following the occurrence of any sale, transfer or other
disposition of Loans, Collateral or other assets of the Company or any of
its Subsidiaries (following the obtaining of any necessary consents or
approvals hereunder or under any other applicable agreements, including the
Bank Loan Agreement, Intercreditor Agreement and Collateral Agency
Agreement), the Company shall prepay or cause its applicable Subsidiary to
prepay the
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Notes in an amount equal to the Holders' Pro Rata Share (as defined in the
Intercreditor Agreement) of one hundred percent (100%) of the Net Cash
Proceeds thereof, in accordance with Section 5 of the Intercreditor
Agreement.
(d) Intentionally Omitted.
(e) Intentionally Omitted.
(f) On or before the Fourth Amendment Effective Date, upon the
Company's receipt of the cash payment necessary to reduce the intercompany
balance due and owing from Freshstart Venture Capital Corp. to $0, the
Company shall prepay the Notes in an amount equal to the Holders' Pro Rata
Share (as defined in the Intercreditor Agreement) of one hundred percent
(100%) of the Net Cash Proceeds thereof, in accordance with Section 5 of
the Intercreditor Agreement."
(b) deleting Section 8.8(h) and substituting the following new Section
8.8(h) in lieu thereof:
"(h) Prepayment of the Notes pursuant to this Section 8.8 shall be at
100% of the principal amount of such Notes, together with interest on such
Notes accrued to the date of prepayment. Payment of the Make-Whole Amount
due with respect to such prepayment shall be deferred until the earlier of
(x) the Maturity Date and (y) the payment in full of all amounts due and
payable under the Notes, provided that any amounts so deferred shall accrue
interest at the same rate as the Notes during such deferral period. Any and
all prepayments made pursuant to this Section 8.8 shall be allocated among
all Notes of each series at the time outstanding in proportion, as nearly
as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment. Any and all prepayments made pursuant to
Sections 8.2 or 8.8 hereof on or after August 1, 2002, shall be applied
against the monthly Principal Payments (as defined in Section 14.03) in
chronological order of the dates on which such Principal Payments are
required to be made pursuant to the terms of Section 14.03 hereof."
8. Amendment of Section 9.9 of the Existing Note Purchase Agreements.
Section 9.9 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 9.9 in its entirety and substituting the following new Section
9.9 in lieu thereof:
"Section 9.9. Intentionally Omitted."
9. Amendment of Section 9.13 of the Existing Note Purchase Agreements.
Section 9.13 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 9.13 in its entirety and substituting the following new Section
9.13 in lieu thereof:
"Section 9.13. Intentionally Omitted."
10. Amendment of Section 9.14 of the Existing Note Purchase Agreements.
Section 9.14 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 9.14 in its entirety and substituting the following new Section
9.14 in lieu thereof:
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"Section 9.14. Intentionally Omitted."
11. New Section 9.15 of the Existing Note Purchase Agreements. Section 9 of
the Existing Note Purchase Agreements is hereby amended by inserting, in proper
numerical order, the following new Sections 9.15 and 9.16:
"Section 9.15. Replacement of Servicer.
(a) In the event that Merrill Lynch, at any time under the Merrill
Lynch Facility, has exercised its right or has given notice that it will
exercise its right to terminate the rights and obligations of the Company
(or any permitted successor or assignee of the Company) as servicer under
the Merrill Lynch Facility, the Company shall promptly notify the
Collateral Agent and the Holders of such termination or notice to terminate
and, upon such termination or in the event a notice to terminate has not
been rescinded within seven (7) Business Days after the Company's receipt
thereof, the Intercreditor Collateral Agent shall have the right to replace
the Company as servicer with respect to the Collateral granted pursuant to
the Note Documents. The Intercreditor Collateral Agent may exercise such
right by giving written notice to the Company.
(b) In the event of such replacement of the Company as servicer of the
Collateral, the Company covenants (i) to safeguard the servicing records
and (ii) that all funds and loan documents relating to the Collateral
(collectively, the "Medallion Loan Records") shall, at the option of the
Intercreditor Collateral Agent, promptly upon receipt of notice of the
Intercreditor Collateral Agent's intent to appoint a new servicer for the
Collateral, be submitted to the control of the Intercreditor Collateral
Agent or its designee and that, on the date such notice is received, they
will be transferred to the Intercreditor Collateral Agent or its designee,
without prejudice to the rights, if any, of either party against the other.
(c) Prior to the replacement of the Company as servicer of the
Collateral, the Intercreditor Collateral Agent may establish with the Agent
a segregated account on behalf of the Company (the "Alternate Collection
Account"). From and after receipt of such notice, all collections arising
with respect to the Collateral shall, whether credited to the Fleet
Concentration Account (as defined in the Bank Loan Agreement) or otherwise
received by the Company, the Intercreditor Collateral Agent, the Agent, any
replacement servicer appointed by the Agent or any other Person, be
deposited in the Alternate Collection Account. The Intercreditor Collateral
Agent shall distribute the funds on deposit in the Alternate Collection
Account in accordance with the terms of the Intercreditor Agreement on each
date a Principal Payment is required under Section 14.3 hereof and each
date interest is payable on the Notes. The Company hereby pledges to the
Intercreditor Collateral Agent, for itself, the Agent, the Funding Banks
and the Holders, and grants the Intercreditor Collateral Agent a security
interest, in the Alternate Collection Account and all funds that may be on
deposit there from time to time. The Company further covenants and agrees
(i) to provide notification to the obligors in respect of any Medallion
Loan, Commercial Loan or other Collateral to make all payments in respect
of such Collateral directly to the Alternate Collection Account and
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(ii) to otherwise cooperate with the Intercreditor Collateral Agent in
ensuring that such payments are made directly to the Alternate Collection
Account.
(d) Notwithstanding any appointment of a new servicer hereunder, the
Company shall not be relieved of liability for all amounts due, or
responsibilities owed the Holders hereunder. The Company forthwith upon
receipt of notice of the Intercreditor Collateral Agent's appointment of a
new servicer for the Collateral shall (i) pay over to the Collateral Agent
or its designee all amounts held by it or subsequently received by it with
respect to the affected Collateral or the proceeds thereof, (ii) deliver to
the Intercreditor Collateral Agent a full accounting in respect of the
affected Collateral, including a statement showing the monthly payments and
other amounts collected by or with respect to such Collateral and a
statement of moneys held in trust by or on behalf of it for the payment of
taxes, insurance premiums or other charges with respect to the affected
Collateral, (iii) otherwise use its best efforts to effect the orderly and
efficient transfer of servicing of the affected Collateral to the designee
selected by the Intercreditor Collateral Agent, and (iv) arrange for the
physical transfer and delivery to designee selected by the Intercreditor
Collateral Agent of all Collateral and copies thereof in its possession,
and all Medallion Loan Records.
Section 9.16. Deferred Amendment Fee. In the event the Term Loans have
not been paid in full and all obligations outstanding under the Note
Purchase Agreements (including without limitation principal, accrued
interest and any Make-Whole Amounts) have not been paid in full on or
before the Maturity Date, the Company agrees to pay to the Intercreditor
Collateral Agent, for the pro rata account of the Funding Banks and the
Holders, a deferred fee in the amount of $500,000. Such deferred fee shall
be fully earned on the due date therefor and non-refundable when paid."
12. Amendment of Section 10.1 of the Existing Note Purchase Agreements.
Section 10.1 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.1 in its entirety and substituting the following new Section
10.1 in lieu thereof:
"Section 10.1. Transactions with Affiliates.
(a) Subject to any additional requirements under Section 10.3 hereof,
without the prior written consent of the Required Holders, the Company will
not, and will not permit any of its Subsidiaries to:
(1) enter into, or cause, suffer, or permit to exist, any
transactions, including without limitation the purchase, sale, lease
or exchange of any property or the rendering of any service, with any
Affiliate except in the ordinary course of business, pursuant to the
reasonable requirements of the Company's or such Subsidiary's business
and upon fair and reasonable terms no less favorable to the Company
than those that would be obtainable at the time in a comparable
arm's-length transaction from any Person who is not an Affiliate;
(2) become an Affiliate of any Holder or any Affiliate of any
Holder known to the Company; and the Company shall use its best
efforts to ensure that
11
none of its Affiliates is or becomes an Affiliate of any Holder or an
Affiliate of any Holder known to the Company;
(3) sell, discount or otherwise dispose of Loans or any
Collateral to any Affiliate, or sell, discount or otherwise dispose of
other Receivables or obligations owing to the Company or any of its
Subsidiaries to any Affiliate, with or without recourse, other than to
the extent permitted by Section 10.1(a)(4), Section 10.3(b) or Section
10.3(c)(2) hereof;
(4) transfer any assets or cash to any Affiliate, other than -
(A) the payment to an Affiliate of such amounts as may be
received on account of Loans serviced by the Company on such
Affiliate's behalf, after deduction of management fees provided
under the respective sale, transfer or participation agreement,
(B) on or prior to the Fourth Amendment Effective Date, the
transfer of $4,100,000 to the Parent as reimbursement for
allocable overhead and expenses incurred by the Parent for
services rendered to or on behalf of the Company prior to July 1,
2002, provided, that arrangements satisfactory to the Agent and
the Holders have been made for (i) the Parent, upon receipt of
such proceeds, to make a capital contribution in the amount of
$5,000,000 to Freshstart Venture Capital Corp., (ii) Freshstart
Venture Capital Corp. to purchase from the Company for cash, at
the outstanding principal amount thereof plus any accrued and
unpaid interest and without discount thereon and pursuant to
documentation all as reasonably acceptable to the Agent and the
Holders, Medallion Loans that do not satisfy the Eligibility
Requirements and (iii) the proceeds received by the Company to be
applied pro rata to repay the Notes and the Term Loans in
accordance with Section 5 of the Intercreditor Agreement within
two (2) Business Days following the $4,100,000 transfer to the
Parent referred to above,
(C) after the Fourth Amendment Effective Date, the transfer
of cash reimbursements to the Parent for all allocable overhead
and expenses (including salary and other usual and customary
intercompany charges) incurred by the Parent for services
rendered to or on behalf of the Company after July 1, 2002, in a
manner consistent with the Company's existing method of
allocation as of July 1, 2002,
(D) contributions from the Company of cash or additional
Medallion Loans to, and/or repurchases at fair value by the
Company of Medallion Loans from the SPV in connection with the
Merrill Lynch Facility in order (x) to cure or prevent any
borrowing base defaults or rapid amortization event under the
Merrill Lynch Facility and (y) to reacquire any Medallion Loans
sold to the SPV which did not at the time of such sale meet the
"eligibility criteria" for sale under the terms of the
12
Merrill Lynch Facility, provided, in each case, that no Event of
Default shall exist with respect to the Senior Facilities and no
Event of Default shall exist with respect to the Senior
Facilities after giving effect to such transactions and provided
further that the Company provides prior written notice to the
Agent and the Holders of any such contributions and/or
repurchases pursuant to this Section 10.1(a)(4)(D),
(E) any other transaction permitted or required under the
Merrill Lynch Facility or the Shared Services Agreement,
including without limitation additional sales of Medallion Loans
by the Company to the SPV made on or after the Fourth Amendment
Effective Date,
(F) the repurchase, at the outstanding principal amount
thereof plus any accrued and unpaid interest and without discount
thereon, of (x) participations in Medallion Loans from Freshstart
Venture Capital Corp. on or prior to the Fourth Amendment
Effective Date and (y) participations in Medallion Loans from
Atlantic Bank as permitted by Section 10.3(b)(5) hereof, in each
case solely in connection with a concurrent transfer of such
Medallion Loans to the SPV in connection with the Merrill Lynch
Facility so long as (i) the net proceeds from such transfer are,
upon receipt, applied to repay the Term Loans and the Notes in
accordance with Section 5 of the Intercreditor Agreement, (ii)
after giving effect to such repurchase and application of net
proceeds, no Event of Default is continuing with respect to the
Bank Loan Agreement or the Note Purchase Agreements and (iii)
unless otherwise approved by the Holders, the aggregate amount
transferred by the Company in connection with any such
repurchases does not exceed $500,000, and
(G) on or prior to the Fourth Amendment Effective Date, the
transfer of Commercial Loans in an aggregate principal amount not
to exceed $10,000,000, including any accrued and unpaid interest
and without discount thereon, to the Parent in exchange for
Medallion Loans of equivalent value (which determination of
equivalency shall take into account any cash payment from the
Company, in such amount as approved by the Holders but in no
event to exceed $200,000, to achieve such equivalency and shall
be satisfactory to the Holders), all pursuant to documentation
reasonably acceptable to the Holders.
(b) After the Fourth Amendment Effective Date, all intercompany
transactions concerning loans serviced by the Company for any Affiliate or
by any Affiliate for the Company, including, without limitation, sales,
payoffs, prepayments, amortization and interest, shall be paid by the
Company, and to the extent the Company has the right to do so, shall be
caused by the Company to be paid by any such Affiliate, in cash on a
monthly basis. In the event funds received on account of any such
intercompany transaction exceed $250,000 with respect to any particular
loan, settlement of such transaction shall be made in cash and shall occur
no later than five (5) Business Days after such funds are received by the
Company, as servicer."
13
13. Amendment of Section 10.2 of the Existing Note Purchase Agreements.
Section 10.2 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.2 in its entirety and substituting the following new Section
10.2 in lieu thereof:
"Section 10.2. Merger, Consolidation, etc. The Company shall not, and
shall not permit any of its Subsidiaries to, consolidate with or merge with
any other corporation or, except to the extent permitted by Section
10.1(a)(4)(D) and (E) hereof, convey, transfer or lease substantially all
of its assets in a single transaction or series of transactions to any one
or more Persons, without the express written consent of the Holders, and no
such conveyance, transfer or lease shall have the effect of releasing the
Company or any Successor Corporation from its liability under the Note
Purchase Agreements, Notes or other Note Documents."
14. Amendment of Section 10.3 of the Existing Note Purchase Agreements.
Section 10.3 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.3 in its entirety and substituting the following new Section
10.3 in lieu thereof:
"Section 10.3. Sale of Assets.
Subject to any additional requirements under Section 10.1 hereof,
without the prior written consent of the Required Holders, the Company will
not, and will not permit any of its Subsidiaries to:
(a) sell, discount or otherwise dispose of Loans or any Collateral, or
sell discount or otherwise dispose of other Receivables or obligations
owing to the Company or any of its Subsidiaries with or without recourse,
if a Default or Event of Default has occurred and is continuing or if the
effect of such sale, discount or disposal would be to put the Company in
violation of any of the covenants and agreements in this Agreement or any
other of the Note Documents;
(b) excluding for purposes hereof any sale, discounting or disposition
permitted by Section 10.3(c) hereof, sell, discount or otherwise dispose of
Loans or any Collateral, or sell discount or otherwise dispose of other
Receivables or obligations owing to the Company or any of its Subsidiaries,
with or without recourse, other than (1) to the Holders or the Collateral
Agent, for the benefit of the Holders and, with respect to the pledged
shares of Media and for so long as the Collateral Agency Agreement is in
effect, to the Collateral Agent (as defined in the Collateral Agency
Agreement), for the benefit of the Holders, (2) on or about the Fourth
Amendment Effective Date, the transfer of Commercial Loans to the Parent to
the extent permitted by Section 10.1(a)(4)(G) hereof, (3) contributions
from the Company of cash or Medallion Loans to, and/or repurchases by the
Company of Medallion Loans from, the SPV in connection with the Merrill
Lynch Facility, to the extent permitted by Section 10.1(a)(4)(D) hereof,
(4) the sales of Loans as permitted or required by the Merrill Lynch
Facility, including additional sales of Medallion Loans by the Company to
the SPV made on or after the Fourth Amendment Effective Date, and (5) after
the Fourth Amendment Effective Date, participations in Medallion Loans in
an
14
aggregate principal amount not to exceed $5,000,000, including any accrued
and unpaid interest and without discount thereon, to Atlantic Bank, as the
lead lender, in exchange for a 100% interest in approximately $4,750,000 of
Medallion Loans with respect to which Atlantic Bank was the lead lender and
a 5% interest in approximately $5,000,000 of Medallion Loans with respect
to which Atlantic Bank is the lead lender, all pursuant to documentation
reasonably acceptable to the Agent and the Holders; provided that, in each
such case referred to in this Section 10.3(b), no Default or Event of
Default has occurred or is continuing, or would result therefrom;
(c) excluding for purposes hereof any sale, discounting or disposition
permitted by Section 10.3(b) hereof, sell, discount or otherwise dispose of
Loans or any Collateral, or sell discount or otherwise dispose of other
Receivables or obligations owing to the Company or any of its Subsidiaries,
with or without recourse, other than (1) the sale of Loans to any Person
who is not an Affiliate for a cash price not less than the than the
outstanding principal amount thereof plus any accrued and unpaid interest
and without discount thereon, provided such sale is an arm's length
transaction made pursuant to the reasonable requirements of the Company's
or such Subsidiary's business, (2) the sale of Loans to an Affiliate for a
cash price not less than the sum of the outstanding principal amount
thereof, plus any accrued interest and without discount thereon, (3) to a
non-Affiliate for collection in the ordinary course of business, and (4) in
connection with the grant of any participation in accordance with and to
the extent permitted by Section 2.14 of the Bank Loan Agreement (as in
effect on the Fourth Amendment Effective Date), and consistent in any event
with past practices; provided that, in each such case referred to in this
Section 10.3(c), (x) no Default or Event of Default has occurred or is
continuing, or would result therefrom and (y) immediately upon receipt of
the proceeds thereof, the Company makes the mandatory prepayment required
with respect thereto under Section 8.8(c) hereof."
15. Amendment of Section 10.4 of the Existing Note Purchase Agreements.
Section 10.4 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.4 in its entirety and substituting the following new Section
10.4 in lieu thereof:
"Section 10.4. Intentionally Omitted."
16. Amendment of Section 10.5 of the Existing Note Purchase Agreements.
Section 10.5 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.5 in its entirety and substituting the following new Section
10.5 in lieu thereof:
"Section 10.5. Intentionally Omitted."
17. Amendment of Section 10.8 of the Existing Note Purchase Agreements.
Section 10.8 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.8(e) in its entirety and substituting the following new
Section 10.8(e) in lieu thereof:
15
"(e) make or maintain any Investment (including by way of the
acquisition of any Person) in any Subsidiary or Affiliate, or any Person
that after taking into account such Investment would become a Subsidiary or
Affiliate, other than (1) Investments in the Parent arising in relation to
the intercompany account between the Company and the Parent in an aggregate
amount not to exceed $8,598,828 through the Maturity Date, (2) Investments
in MFCC existing as of the Effective Date of the Third Amendment in an
amount not to exceed $8,951,000, provided that the underlying transfers of
Yellow Cab Loans were subject to the Liens of the Holders or the Collateral
Agent, for the benefit of the Holders; (3) Investments in Medallion
Business Credit, LLC existing as of the Effective Date of the Third
Amendment in an amount not to exceed $7,274; and (4) Investments in the SPV
made (A) in connection with the formation and capitalization of the SPV as
required under or in connection with the Merrill Lynch Facility and (B) in
order to cure or prevent any borrowing base default or rapid amortization
event under the Merrill Lynch Facility, provided that no Event of Default
shall exist with respect to the Bank Loan Agreement or the Note Purchase
Agreements and no Event of Default shall exist with respect to the Bank
Loan Agreement or the Note Purchase Agreements after giving effect to such
transactions. For the avoidance of doubt, the Company shall not make, nor
shall it permit any of its Subsidiaries to make, any Investment in Media or
Business Lenders, LLC following the Effective Date of the Third Amendment."
18. Amendment of Section 10.9 of the Existing Note Purchase Agreements.
Section 10.9 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.9 in its entirety and substituting the following new Section
10.9 in lieu thereof:
"Section 10.9. Restricted Payments. The Company will not, and will not
permit any Subsidiary to, make, or obligate itself to make, any Restricted
Payment, provided that (a) after the Fourth Amendment Effective Date, the
Company may make quarterly payments of the sum of (1) the minimum amount of
Dividends required to be paid for the Company to retain its status as a
regulated investment company pursuant to Section 851(a) of the Code, plus
(2) the payment of Dividends required to be paid in order to avoid the
imposition of excise taxes pursuant to the Code, as determined by the
Company's Independent Public Accountants on the basis of good faith
estimates provided by the Company, provided that any such amount to be paid
under this Section 10.9 shall be quantified by the Company and in
connection therewith, the Company authorizes the Agent and the Holders to
communicate directly with the Company's Independent Public Accountants and
authorizes such accountants to disclose to the Agent and the Holders any
and all financial statements and other supporting financial documents and
schedules including copies of any management letter with respect to the
business, financial condition and other affairs of the Company and its
Subsidiaries and, provided further that five (5) days prior to any such
payment, the Company shall deliver a certificate demonstrating pro forma
compliance after making such payment with respect to any Principal Payments
to be made with respect to Senior Debt, (b) after the Fourth Amendment
Effective Date, the Company may contribute additional Medallion Loans or
cash to, and/or repurchase Medallion Loans from the SPV in connection with
the Merrill Lynch Facility at fair value in order to (1) cure any borrowing
base defaults under the Merrill Lynch Facility and (2) to reacquire any
Medallion Loans sold to the SPV which did not at the time of such sale meet
the "eligibility criteria" for sale under the terms of
16
the Merrill Lynch Facility, provided, in each case, that no Event of
Default shall exist with respect to the Senior Facilities and no Event of
Default shall exist with respect to the Senior Facilities after giving
effect to such transactions and provided further that the Company provides
prior written notice to the Agent and the Holders of any such contributions
and/or repurchases to be made pursuant to this Section 10.9, and (c) on the
date any Principal Payment or other prepayment (whether voluntary or
otherwise) is made hereunder, the Company may prepay outstanding principal
amounts of the Term Loans in an aggregate amount not to exceed the result
of 82.74773% multiplied by the sum of the amount of such payment plus the
aggregate amount of the Principal Payment or other repayment, as
applicable, on such date. Any such Restricted Payments permitted under
Section 10.9(a) above that are made to the Parent shall be paid as a credit
to the intercompany balance owing from the Parent to the Company."
Amendment of Section 10.10 of the Existing Note Purchase Agreements.
Section 10.10 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.10 in its entirety and substituting the following new
Section 10.10 in lieu thereof:
"Section 10.10. Portfolio Purchases and Acquisitions. Without the
prior written consent of the Required Holders, the Company will not make or
effect, or obligate itself to make or effect, any Portfolio Purchase or
other asset acquisition (other than the acquisition of assets in the
ordinary course of business consistent with past practices) or stock (or
other equity interest) acquisition, other than (a) the repurchase of
Medallion Loans from the SPV in connection with the Merrill Lynch Facility
to the extent permitted by Section 10.1(a)(4)(D) hereof, (b) the repurchase
of participations in Medallion Loans from Freshstart Venture Capital Corp.
or Atlantic Bank to the extent permitted by Section 10.1(a)(4)(F) hereof,
and (c) the exchange of Commercial Loans for Medallion Loans to the extent
permitted by Section 10.1(a)(4)(G) hereof."
19. Amendment of Section 10.14 of the Existing Note Purchase Agreements.
Section 10.14 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.14 in its entirety and substituting the following new
Section 10.14 in lieu thereof:
"Section 10.14. Intentionally Omitted."
20. Amendment of Section 10.15 of the Existing Note Purchase Agreements.
Section 10.15 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.15 in its entirety and substituting the following new
Section 10.15 in lieu thereof:
"Section 10.15. Intentionally Omitted."
21. Amendment of Section 10.18 of the Existing Note Purchase Agreements.
Section 10.18 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.18 in its entirety and substituting the following new
Section 10.18 in lieu thereof:
"Section 10.18. Additional Indebtedness. The Company shall not, and
shall not permit any Subsidiary to, create, incur, assume or suffer to
exist, contingently or otherwise, any Indebtedness without the prior
written consent of the Required Holders, excluding for purposes hereof: (a)
Indebtedness arising under the Note Documents; (b)
17
Indebtedness to the Agent or the Funding Banks arising under the Bank Loan
Agreement, subject to the terms and conditions of the Intercreditor
Agreement; (c) Indebtedness secured by Liens permitted by Section 10.19(b),
(c) or (g); and (d) unsecured current liabilities incurred in the ordinary
course and paid within ninety (90) days after the due date thereof (unless
diligently contested in good faith by appropriate proceedings and, if
required by the Holders, reserved against in conformity with GAAP) other
than liabilities for money borrowed or evidenced by bonds, debentures,
notes or similar instruments, including unsecured liabilities (other than
Indebtedness for money borrowed or that is evidenced by bonds, debentures,
notes or other similar instruments) incurred by the Company in favor of the
SPV in connection with the Merrill Lynch Facility."
22. Amendment of Section 10.19 of the Existing Note Purchase Agreements.
Section 10.19 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.19(a) in its entirety and substituting the following new
Section 10.19(a) in lieu thereof:
"(a) Liens created under the Company Security Agreement, MFCC Security
Agreement and SPV Pledge Agreement, and any other Liens in favor of the
Holders or the Collateral Agent, for the benefit of the Holders (including
without limitation any Liens in favor of the Holders or the Collateral
Agent, for the benefit of the Holders, on Yellow Cab Loans transferred to
MFCC, which transfers were subject to such Liens);"
23. Amendment of Section 10.20 of the Existing Note Purchase Agreements.
Section 10.20 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.20 in its entirety and substituting the following new
Section 10.20 in lieu thereof:
"Section 10.20. Securitizations, etc. The Company shall not enter into
any securitization or similar transaction (i.e., any transfer of its assets
in connection with any sale, assignment or other transfer of any
receivables, including accounts receivable, loan receivables, lease
receivables or other payment obligations or any interest in any of the
foregoing, which may in each case include any collections and other
proceeds thereof, any collection or deposit accounts related thereto, or
any collateral, guarantees or other property or claims supporting or
securing payment by the obligor thereon of, or otherwise related to, any
such receivables) other than the Merrill Lynch Facility without the prior
written consent of the Holders or as otherwise permitted by Section
10.3(b)(1), (3) and (4) and Section 10.3(c)(4) hereof."
24. Amendment of Section 10.21 of the Existing Note Purchase Agreements.
Section 10.21 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.21 in its entirety and substituting the following new
Section 10.21 in lieu thereof:
"Section 10.21. Intentionally Omitted."
25. Amendment of Section 10.22 of the Existing Note Purchase Agreements.
Section 10.22 of the Existing Note Purchase Agreements is hereby amended by
deleting Section 10.22 in its entirety and substituting the following new
Section 10.22 in lieu thereof:
"Section 10.22. Subsidiaries. The Company shall not at any time form,
create, own, acquire or allow to exist any Subsidiary other than MFCC and
the SPV."
18
26. New Section 10.23 of the Existing Note Purchase Agreements. Section 10
of the Existing Note Purchase Agreements is hereby amended by inserting, in
proper numerical order, the following new Section 10.23:
"Section 10.23. Executive Compensation. The Company shall not pay, or
obligate itself to pay, directly or indirectly, any executive bonuses to,
or otherwise increase the compensation in effect on the Fourth Amendment
Effective Date of, either Alvin Murstein or Andrew Murstein until payment
in full of the Senior Obligations (as defined in the Intercreditor
Agreement, and inclusive of the Make-Whole Amount)."
27. Amendment of Section 11 of the Existing Note Purchase Agreements.
Section 11 of the Existing Note Purchase Agreements is hereby amended by:
(a) deleting Section 11(c)(i) in its entirety and substituting the
following new Section 11(c)(i) in lieu thereof:
"(i) the Company defaults in the performance of or compliance with any
term in Sections 7.1(d), 8.8, 9.6, 9.8, 9.10, 9.12, 9.15, 10.1 through
10.23, and 14.3 hereof, provided that if, within five (5) days of a Default
under Section 10.13 hereof, the Company cures such Default, no such default
shall have occurred for purposes hereof, or"
(b) inserting the following parenthetical immediately before the semicolon
at the end of Section 11(c)(iii):
"(it being understood by the parties hereto that the provisions of
this Section 11(c)(iii) shall not apply to the Documentation Punch List
Letter)"
(c) replacing the periods at the end of Sections 11(j) and (l) with the
words "; or"
(d) inserting the following new Sections 11(m) and (n) in proper
alphabetical order:
"(m) if loans made to the SPV under the Merrill Lynch Loan Agreement
shall have become due and payable in full (whether at maturity or by
acceleration) and shall not have been paid in full; and
(n) if the Intercreditor Collateral Agent shall not have received
$5,000,000 in proceeds from the Company on account of the sale of Medallion
Loans to Freshstart Venture Capital Corp. within two (2) Business Days
following the transfer of $4,100,000 by the Company to the Parent in
connection with the transaction permitted and as required by Section
10.1(a)(4)(B) hereof."
28. New Section 12.4 of the Existing Note Purchase Agreements. Section 12
of the Existing Note Purchase Agreements is hereby amended by inserting, in
proper numerical order, the following new Section 12.4:
"Section 12.4. Application of Further Payments. Subject to the terms
of the Intercreditor Agreement, and notwithstanding anything to the
contrary in the Notes, in the event that the Notes and all other amounts
owing under the Note Documents shall have
19
been declared due and payable or that all Notes shall not have been paid in
full as of the Maturity Date, any funds received in respect of the Notes
shall be applied by the Holders in the following manner and order of
priority: (a) first, to the payment of fees, expenses or amounts (other
than principal, interest or Make-Whole Amounts due in respect of the Notes)
payable under the Note Documents, (b) second, to the payment of interest
accrued in respect of any Make-Whole Amounts for which payment was deferred
pursuant to Section 8.8(h) hereof, (c) third, to the payment of accrued and
unpaid interest on the Notes, (d) fourth, to the payment of any Make-Whole
Amounts, (e) fifth, to the payment of outstanding principal on the Notes
and (f) sixth, any remaining funds shall be paid to whomsoever shall be
entitled thereto or as a court of competent jurisdiction shall direct."
29. Amendment of Section 14 of the Existing Note Purchase Agreements.
Section 14 of the Existing Note Purchase Agreements is hereby amended by adding,
in proper numerical order, the following new Section 14.3:
"Section 14.3. Amortization Schedule. Principal on the Notes shall be
repaid by the Company in accordance with the amortization schedule set
forth below. Such payments (the "Principal Payments") shall be paid on or
before the dates specified below and shall be applied pro rata to repay the
Notes and the Term Loans in accordance with Section 5 of the Intercreditor
Agreement. Any prepayments on the Notes made pursuant to Sections 8.2 or
8.8 hereof on or after August 1, 2002, shall be applied against the monthly
Principal Payments in chronological order of the dates on which such
Principal Payments are to be made.
---------------------------------------- ----------------------------------
Date of Principal Payment Amount of Principal Payment
---------------------------------------- ----------------------------------
Within two (2) Business Days following $104,000,000
the Fourth Amendment Effective Date
---------------------------------------- ----------------------------------
September 30, 2002 $2,000,000
---------------------------------------- ----------------------------------
October 31, 2002 $2,000,000
---------------------------------------- ----------------------------------
November 30, 2002 $17,000,000
---------------------------------------- ----------------------------------
December 31, 2002 $5,500,000
---------------------------------------- ----------------------------------
January 31, 2003 $21,500,000
---------------------------------------- ----------------------------------
February 28, 2003 $2,000,000
---------------------------------------- ----------------------------------
March 31, 2003 $2,000,000
---------------------------------------- ----------------------------------
April 30, 2003 $1,000,000
---------------------------------------- ----------------------------------
May 31, 2003 $1,000,000
---------------------------------------- ----------------------------------
20
---------------------------------------- ----------------------------------
June 30, 2003 $1,000,000
---------------------------------------- ----------------------------------
July 31, 2003 $1,000,000
---------------------------------------- ----------------------------------
All outstanding amounts under
August 31, 2003 the Notes and the Term Loans
---------------------------------------- ----------------------------------
30. Waivers.
(a) Subject to the terms and conditions hereof, each of the Holders hereby
waives (i) the Company's compliance with the requirement of Section 10.8(e) of
the Existing Note Purchase Agreements; provided that Investments in the Parent
with respect to the intercompany account between the Company and the Parent in
an aggregate amount do not to exceed $8,598,828 through August 31, 2003, and
(ii) the Events of Default set forth on Annex B hereto.
(b) The Company hereby acknowledges that (i) one or more Events of Default
have occurred since May 15, 2002, (ii) the waivers contained in this Amendment
shall not become effective until the Fourth Amendment Effective Date and (iii)
the Holders have been collecting and will continue to collect until the Fourth
Amendment Effective Date, and the Holders shall be entitled to retain, interest
on all outstanding Notes at the Default Rate in the Outstanding Notes.
(c) The Company has reported certain violations of the Bank Loan Agreement.
Subject to the terms and conditions hereof, each of the Holders, following the
effectiveness of the waivers required by Section 34(a)(iv) and (v) of this
Amendment, hereby waives any Default or Event of Default which may have occurred
or may occur under Section 11(l) of the Existing Note Purchase Agreements to the
extent such defaults are described in such waivers, provided that such defaults
do not exceed the thresholds required by the Agent and the Funding Banks in any
such waiver of the defaults and events of default under the Bank Loan Agreement.
31. Amendments to Company Security Agreement.
(a) Section 2.1 of the Company Security Agreement is hereby amended by
inserting the following new paragraph at the end of such section:
"Notwithstanding the foregoing, to the extent any Investments are made
in the SPV as permitted by Section 10.8(e)(4) of the Note Purchase
Agreements, the SPV shall acquire the assets comprising such Investments
free and clear of the liens created by this Agreement and the other Note
Documents. To the extent that any Medallion Loan, Commercial Loan or other
asset is sold, transferred or disposed of and the sale, transfer or
disposition is permitted under the Note Purchase Agreements, the sale,
transfer or disposition of the asset shall be free and clear of the liens
created by this Agreement and the other Note Documents. However, in the
case of any such permitted Investment, sale, transfer or disposition, the
liens created by this Agreement and the other Note Documents shall attach
to the proceeds of the Investment, sale, transfer of disposition. In the
case of an Investment, sale, transfer or disposition free and clear of the
liens created by this Agreement and the other Note Documents, the
Collateral Agent is authorized to provide to the transferee appropriate
evidences of release of the liens. If the Investment, sale,
21
transfer or disposition is permitted under the Note Purchase Agreements
only in the absence of a Default or Event of Default, the Collateral Agent
shall be fully protected in providing such evidence of release so long as
the officers of the Collateral Agent active on the Company's account have
no actual knowledge of the existence of a Default or Event of Default.
Nothing in this Section 2.1 shall result in a lien on or a security
interest in the Capital Stock of Freshstart Venture Capital Corp in favor
of the Holders."
(b) Section 4.1 of the Company Security Agreement is hereby amended by:
(i) deleting the third paragraph thereof in its entirety and inserting
the following new paragraph in lieu thereof:
"To the best of the Company's knowledge, each outstanding Loan
does, and each future Loan will, represent a bona fide, valid and
legally enforceable indebtedness according to its terms (excluding,
for purposes of such representation, Specified Loans (as defined in
the Note Purchase Agreements) which do not comply with such
requirement solely on account of such Loans' status as Specified
Loans), and each Loan, at the time of creation thereof, except with
the consent of the Collateral Agent and the Noteholders, will be
subject to no offsets, discounts, counterclaims, contra-accounts or
any other defense of any kind or character that materially adversely
affects the value of the Loan (excluding, for purposes of such
representation, Specified Loans (as defined in the Note Purchase
Agreements) which do not comply with such requirement solely on
account of such Loans' status as Specified Loans);"
(ii) inserting the following parenthetical prior to the semicolon at
the end of the fourth paragraph thereof:
"(excluding, for purposes of such representation, Specified Loans
(as defined in the Note Purchase Agreements) which do not comply with
such requirement solely on account of such Loans' status as Specified
Loans)" and
(iii) inserting the following parenthetical prior to the semicolon at
the end of the final paragraph thereof:
"(excluding, for purposes of such representation, Specified Loans
(as defined in the Note Purchase Agreements) which do not comply with
such requirement solely on account of such Loans' status as Specified
Loans)".
(c) Section 7 of the Company Security Agreement is hereby amended by
inserting, in proper numerical order, the following new Section 7.14:
"Section 7.14. Inconsistent Provisions. If any provision of this
Agreement relating to any lien on or security interest in any Investment by
the Company in Taxi Medallion Loan Trust I, a special purpose, bankruptcy
remote, Delaware business trust, shall be inconsistent with, or contrary
to, any provision in the Collateral Assignment of Ownership Interests dated
as of September 11, 2002 (the "Assignment"), from the Company in favor of
the Holders, the provision in the Assignment shall be controlling
22
and shall supersede such inconsistent provision in this Agreement to the
extent necessary to give full effect to all provisions contained in the
Assignment; provided, however, that but for the limitations imposed on
account of the Standback Termination Date (as such term is defined in the
Assignment), nothing contained in the Assignment shall derogate from any of
the rights or remedies of the Agent contained in this Agreement or such
document."
32. Irrevocable Payment Instructions.
(a) Prior to the Fourth Amendment Effective Date, the Company shall enter
into a funds transfer agreement with the Collateral Agent on the Collateral
Agent's customary form, which funds transfer agreement shall be in form and
substance satisfactory to the Holders and shall, in addition to its usual and
customary terms, provide as follows:
(i) The Company submits to the Collateral Agent a standing payment
order to pay from the Company's operating account the amount set forth at
any time or from time to time in any written notification received by the
Collateral Agent from the Holders (A) stating that the transfer is being
requested to pay the outstanding fees and expenses of counsel to the
Holders, Nightingale & Associates LLC or any other financial consultants
hired by the Holders or their counsel and (B) containing funds transfer
instructions.
(ii) The Collateral Agent shall be fully protected in relying on any
such notification and complying with the funds transfer instructions
contained therein and shall not be responsible for the truth, accuracy,
authenticity or genuineness of the notification or of any information
contained therein. The Company agrees to indemnify and to hold the
Collateral Agent harmless from and against any losses, costs or expenses
sustained or incurred by the Collateral Agent in accepting a payment order
and complying with the funds transfer instructions. Such indemnity
obligations shall constitute obligations under the Bank Loan Agreement
secured by the Collateral.
(iii) The standing payment order set forth in this Section 32(a) shall
not be cancelled, and the Company and the Collateral Agent agree that the
funds transfer agreement shall not be amended so as to derogate from the
provisions in favor of the Holders contained in this Section 32(a), without
the prior written consent of the Holders.
(b) Subject to the provisions of Section 7.3(c) of the Note Purchase
Amendments, if the Holders should at any time or from time to time determine
that the unpaid reimbursements due and owing from the Company on account of
invoices for the fees and expenses of counsel to the Holders, Nightingale &
Associates LLC and any other financial consultants hired by the Holders or their
counsel, equal or exceed $150,000 in the aggregate, the Holders shall be
entitled to provide written notification thereof to the Collateral Agent, which
notification shall (i) state that a funds transfer is being requested to pay in
full the outstanding fees and expenses of counsel to the Holders, Nightingale &
Associates LLC and any other financial consultants hired by the Holders or their
counsel and (ii) contain funds transfer instructions. Upon receipt of such
notification, (x) the Collateral Agent shall debit the Company's operating
account in an amount equal to such unpaid fees and expenses and transfer such
amount to the Holders or as otherwise directed in such notification and (y) the
Company and its Subsidiaries shall be deemed to have
23
unconditionally released, waived and forever discharged all claims, offsets,
causes of action, suits or defenses of any kind whatsoever (other than claims by
the Company against any agent of the Holders to recover fees or expenses paid to
such agent pursuant to this Section 32(b) if and to the extent such payment was
caused by or resulted from such agent's gross negligence or willful misconduct,
as determined by a court of competent jurisdiction in a final, non-appealable
judgment or order), whether arising at law or in equity, whether known or
unknown, which the Company or any Subsidiary might otherwise have against the
Collateral Agent, any Holder or any directors, officers, employees or agents of
any Holder, including without limitation counsel to the Holders, Nightingale &
Associates LLC and any other financial consultants hired by the Holders or their
counsel, arising in connection with, concerning or relating in any way to any
payment or request for payment made pursuant to this Section 32(b) or any fees
or expenses for which reimbursement may be sought pursuant to this Section
32(b).
33. Representations and Warranties, Etc.
(a) Each of the Company and the Guarantors hereby represents and warrants
to the Holders as of the date hereof, and as of any date on which the conditions
set forth in Section 34 of this Amendment are met, as follows:
(i) The execution and delivery by each of the Company and the
Guarantors of this Amendment and all other instruments and agreements
required to be executed and delivered by each of the Company and the
Guarantors in connection with the transactions contemplated hereby and
thereby or referred to herein or therein (collectively, the "Amendment
Documents"), and the performance by each of the Company and the Guarantors
of any of their respective obligations and agreements under the Amendment
Documents, the Note Purchase Agreements and the other Note Documents, as
amended hereby, are within the corporate or other authority of each of the
Company and the Guarantors, as the case may be, have been duly authorized
by all necessary proceedings on behalf of each of the Company and the
Guarantors, as the case may be, and do not and will not contravene any
provision of law or of any judgment, order or decree applicable to or
binding on the Company or the Guarantors, or of the Company's or either
Guarantor's charter, other incorporation or organizational papers, or
by-laws or any stock provision or any amendment thereof or of any
indenture, agreement, instrument or undertaking binding upon the Company or
the Guarantors.
(ii) Each of the Amendment Documents, the Note Purchase Agreements and
the other Note Documents, as amended hereby, to which the Company or a
Guarantor is a party constitutes a legal, valid and binding obligation,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting generally the enforcement of creditors' rights.
(iii) No approval or consent of, or filing with, any Governmental
Authority is required to make valid and legally binding the execution,
delivery or performance by each of the Company and the Guarantors of the
Amendment Documents, the Note Purchase Agreements or any other Note
Document, as amended hereby, or the consummation by each of the Company and
the Guarantors of the transactions among the parties contemplated hereby
and thereby or referred to herein or therein.
24
(iv) The representations and warranties contained in Section 5 of the
Existing Note Purchase Agreements and in the other Note Documents were true
and correct at and as of the date made. Except to the extent of changes
resulting from transactions contemplated or permitted by the Note Purchase
Agreements and the other Note Documents, changes occurring in the ordinary
course of business (which changes, either singly or in the aggregate, have
not been materially adverse to the interests of the Funding Banks or the
Holders) and to the extent that such representations and warranties relate
expressly to an earlier date and after giving effect to the provisions
hereof, such representations and warranties, after giving effect to this
Amendment, also are correct at and as of the date hereof.
(v) Each of the Company and the Guarantors has performed and complied
in all material respects with all terms and conditions herein and in the
Note Documents required to be performed or complied with by it prior to or
at the time hereof, and as of the date hereof, after giving effect to the
provisions of this Amendment and the other Amendment Documents, there
exists no Default or Event of Default.
(vi) The Company is a closed end management investment company
registered under the 1940 Act. The Company is an "investment company," as
such term is defined in the 1940 Act. The Company is not a "business
development company," as such term is defined in the 1940 Act. The purchase
of the Notes by the Holders, the application of the proceeds and repayment
thereof by the Company and the performance of the transactions contemplated
by this Agreement and other Note Documents did not and will not violate any
provision of said Act, or any rule, regulation or order issued by the SEC
thereunder.
(b) Each of the Company and the Guarantors acknowledges and agrees that the
representations and warranties contained in this Amendment shall constitute
representations and warranties referred to in Section 5 of the Note Purchase
Agreements, a breach of which shall constitute an Event of Default under the
Note Purchase Agreements.
34. Effectiveness.
(a) Except as set forth in Section 34(b) below, this Amendment shall become
effective as of the date first written above (the "Fourth Amendment Effective
Date") upon the satisfaction of each of the following conditions, in each case
in a manner satisfactory to, and in form and substance satisfactory to, the
Holders on or before September 13, 2002:
(i) This Amendment shall have been duly executed and delivered by each
of the Company, the Guarantors and the Holders and shall be in full force
and effect.
(ii) The Holders shall have received amended and restated Notes
executed by the Company and issued pursuant to Section 13.2 of the Existing
Note Purchase Agreements, in the forms attached hereto as Annex C (Series A
Notes) and Annex D (Series B Notes), respectively.
(iii) The Holders shall have received evidence that the SPV Pledge
Agreement shall have been duly executed, in full force and effect and
delivered to the Collateral Agent, together with (A) all trust certificates
or other certificates evidencing the
25
Company's beneficial and ownership interests in the SPV, (B) a dated
instruction letter to the trustee, advising the trustee of the transfer of
the trust certificate, (C) instruments of assignment duly executed in
blank, and (D) an undated consent from the management board of the SPV,
consenting to the transfer, each in form and substance satisfactory to the
Holders.
(iv) The Holders shall have received (A) evidence of the effectiveness
of an amendment to the Bank Loan Agreement, in form and substance
satisfactory to the Holders, and (B) evidence of the waiver of any defaults
existing immediately prior to the Fourth Amendment Effective Date under the
Bank Loan Agreement, each in form and substance satisfactory to the
Holders.
(v) The Holders shall have received (A) evidence of the effectiveness
of an amendment to the Financial Agreement, in form and substance
satisfactory to the Holders, together with all requisite consents from the
Financial Banks, in form and substance satisfactory to the Holders,
including consent for the $5,000,000 capital contribution by the Parent to
Freshstart Venture Capital Corp and (B) evidence of the waiver of any
defaults existing immediately prior to the Fourth Amendment Effective Date
under the Financial Agreement.
(vi) The Holders shall have received copies of all documentation
executed and delivered in connection with the Merrill Lynch Facility,
together with evidence of consummation of the Merrill Lynch Facility upon
terms and conditions satisfactory to the Holders.
(vii) The Holders and the Agent shall have received a payment of not
less than $99,000,000 from the proceeds of the consummation of the Merrill
Lynch Facility and cash on hand of the Company, which payment (A) when
added to the proceeds to be received on account of the transaction
permitted pursuant to Section 10.1(a)(4)(B) of the Note Purchase
Agreements, shall total no less than $104,000,000 and (B) shall be applied
to repay outstanding Term Loans and the principal amounts outstanding under
the Notes, in an amount equal to one hundred percent (100%) of such
payment, with such payment being allocated among the Agent, the Funding
Banks, and the Holders on a pro rata basis in accordance with the
provisions of Section 5 of the Intercreditor Agreement.
(viii) The Holders shall have received all accrued and unpaid interest
on the Outstanding Notes due and owing immediately prior to the Fourth
Amendment Effective Date.
(ix) The Holders shall have received a fee equal, in the aggregate, to
0.25% of the outstanding principal of the Notes after giving effect to
payment of the Principal Payment due on the Fourth Amendment Effective
Date. Such fee shall be fully earned as of the Fourth Amendment Effective
Date and non-refundable when paid.
(x) The Holders shall have received evidence that the $854,000
intercompany balance between the Company and Freshstart Venture Capital
Corp. has been reduced to $0.
26
(xi) All reports, statements, schedules, certificates and other
documents required to be delivered to the Holders pursuant to Section 7.1
of the Note Purchase Agreements, as amended by this Amendment, shall have
been so delivered.
(xii) The Holders shall have received a copy of a fully executed
letter between the Company and a document imaging company, such letter to
be in form and substance reasonably satisfactory to the Collateral Agent,
which letter sets forth rates for such document imaging company to produce
compact discs containing imaged copies of all of the promissory notes,
security agreements and financing statements related to the Loans
constituting Collateral, with such descriptive data items attached to each
such promissory note, security agreement and financing statement as may be
required by the Collateral Agent to permit sorting and indexing.
(xiii) Except as specified in the Documentation Punch List Letter, the
Collateral Agent shall have received (A) copies of appropriate assignment
documents for intercompany loan transfers identified by M.R. Weiser as
necessary or desirable including, without limitation, all promissory notes
owned by the Company marked to reflect any chain of assignment thereof to
the Company and (B) satisfactory evidence that all necessary steps to
rectify any material deficiencies noted by M.R. Weiser in its review of the
Collateral have been performed.
(xiv) The Holders shall have received from the Secretary of the
Company a copy, certified by such Secretary to be true and complete as of
such date, of the resolutions of its Board of Directors or other management
authorizing, to the extent it is a party thereto, the execution, delivery
and performance of the Fourth Amendment.
(xv) The Holders shall have received favorable legal opinions, dated
as of the date hereof, in form and substance satisfactory to the Holders,
from counsel to the Company and the Guarantors and Delaware counsel to the
Company, concerning corporate or other applicable entity authority matters
and the enforceability of each of the Amendment Documents and the SPV
Pledge Agreement, and the Note Purchase Agreements and the other Note
Documents as amended thereby, and concerning such other matters as the
Holders may request.
(xvi) The Holders shall have received the funds transfer agreement
required by Section 32(a) of this Amendment, signed by the Company and the
Collateral Agent.
(xvii) Kaye Scholer LLC shall have received payment of all fees and
expenses outstanding as of the date hereof, including, but not limited to,
fees and expenses occurred in connection with the preparation of this
Amendment and ancillary documentation and all fees and expenses incurred in
connection with the employment of Nightingale & Associates LLC.
(xviii) Kaye Scholer LLC shall have received payment of an additional
retainer in the amount of $100,000 from the Company, which amount shall
include a retainer on account of the continued employment of Nightingale &
Associates LLC.
27
(xix) The Holders shall have received such other items, documents,
agreements or actions as they may reasonably request in order to effectuate
the transactions contemplated hereby.
(b) The amendments set forth in (i) Section 10.1(a)(4)(G) (sale of up to
$10,000,000 of Commercial Loans to the Parent in exchange for Medallion Loans of
equivalent value), (ii) Section 10.1(a)(4)(B) (transfer of $4,100,000 to the
Parent as reimbursement for allocable overhead and expenses) and (iii) Section
10.1(a)(4)(F) (repurchase of participations in Medallion Loans from Freshstart
Venture Capital Corp.) shall become effective as of the date hereof. In the
event that either of the transactions described in Sections 34(b)(i) and (ii)
above occur on or after the date hereof and prior to the Fourth Amendment
Effective Date, the requirement that no Default or Event of Default shall have
occurred or be continuing, or would result therefrom, shall not apply thereto.
(c) The Holders agree to provide notice to the Company of the occurrence
and date of the Fourth Amendment Effective Date promptly upon satisfaction of
each of the foregoing conditions. Such notice shall be conclusive and binding on
all parties hereto.
28
35. Release. In order to induce the Holders to enter into this Amendment,
the Company, on behalf of itself and its Subsidiaries, acknowledges and agrees
that: (a) none of the Company nor such Subsidiaries has any claim or cause of
action against any Holder (or any of their respective directors, officers,
employees or agents); (b) none of the Company nor such Subsidiaries has any
offset rights, counterclaims or defenses of any kind against any of its
respective obligations, indebtedness or liabilities to any Holder; and (c) each
of the Holders has heretofore properly performed and satisfied in a timely
manner all of its obligations to the Company and each such Subsidiary. The
Company, on behalf of itself and its Subsidiaries, wishes to eliminate any
possibility that any past conditions, acts, omissions, events, circumstances or
matters would impair or otherwise adversely affect any of the Holders' rights,
interests, contracts, collateral security or remedies. Therefore, the Company,
on behalf of itself and its Subsidiaries, unconditionally releases, waives and
forever discharges (x) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of any Holder to the Company or any of its
Subsidiaries, except the obligations to be performed by any Holder on or after
the date hereof as expressly stated in this Amendment, the Note Purchase
Agreement and the other Note Documents, and (y) all claims, offsets, causes of
action, suits or defenses of any kind whatsoever (if any), whether arising at
law or in equity, whether known or unknown, which the Company or any such
Subsidiary might otherwise have against any Holder or any of its directors,
officers, employees or agents, in either case (x) or (y), on account of any past
or presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.
36. Intercompany Allocation of Fees/Expenses. On or before October 15,
2002, the Company shall cause all fees and expenses incurred by the Company on
behalf of the Parent or any Affiliate in connection with the negotiation and
preparation of this Amendment, the amendments required by Sections 34(a)(iv) and
(v) hereof or the Merrill Lynch Facility, to be paid by the Parent or such
Affiliate, as the case may be, in accordance with the Company's existing method
of allocation.
37. Miscellaneous Provisions.
(a) The Company hereby ratifies and confirms all of its obligations to the
Holders under the Note Purchase Agreements and the other Note Documents, in each
case as amended hereby, including, without limitation, the Notes, and the
Company hereby affirms its absolute and unconditional promise to pay to the
Holders amounts owed in connection with the Notes, reimbursement obligations and
all other amounts due or to become due and payable to the Holders under the Note
Purchase Agreements and other Note Documents, as amended hereby. Except as
expressly amended hereby, each of the Existing Note Purchase Agreements and the
other Note Documents shall continue in full force and effect. This Amendment and
each Note Purchase Agreement shall hereafter be read and construed together as a
single document.
(b) No consent or waiver herein granted shall extend to or affect any
obligations not expressly herein consented to or waived or shall impair any
right of the Holders consequent thereon. No consent or waiver herein granted
shall extend beyond the term expressly set forth herein for such consent or
waiver, nor shall anything contained herein be deemed to imply any willingness
of the Holders to agree to, or otherwise prejudice any rights of the Holders
with respect to, any similar or dissimilar consents or waivers that may be
requested in the future.
29
(c) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO CONFLICT OF LAWS).
(d) This Amendment may be executed in any number of counterparts, and all
such counterparts shall together constitute but one instrument. In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
Signature pages immediately follow
30
This Fourth Amendment is hereby accepted and agreed to as of the date
aforesaid.
MEDALLION FUNDING CORP.
By: /s/ Alvin Murstein
------------------------------
Name: Alvin Murstein
Title: CEO
By: /s/ James E. Jack
------------------------------
Name: James E. Jack
Title: CFO and EVP
This Fourth Amendment is hereby accepted and agreed to as of the date
aforesaid.
THE TRAVELERS INSURANCE COMPANY
By: /s/ Denise T. Duffee
------------------------------
Name: Denise T. Duffee
Title: Investment Officer
FIRST CITICORP LIFE INSURANCE COMPANY
By: Travelers Asset Management
International Company LLC
By: /s/ Denise T. Duffee
------------------------------
Name: Denise T. Duffee
Title: Investment Officer
CITICORP LIFE INSURANCE COMPANY
By: Travelers Asset Management
International Company LLC
By: /s/ Denise T. Duffee
------------------------------
Name: Denise T. Duffee
Title: Investment Officer
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: /s/ Curtis R. Caldwell
------------------------------
Name: Curtis R. Caldwell
Title: Vice President
COMPANION LIFE INSURANCE COMPANY
By: /s/ Curtis R. Caldwell
------------------------------
Name: Curtis R. Caldwell
Title: Authorized Signer
This Fourth Amendment is hereby accepted and agreed to as of the date
aforesaid.
FLEET NATIONAL BANK (f/k/a FLEET BANK,
N.A.), in its separate capacities as
Collateral Agent under the Company
Security Agreement, the Intercreditor
Agreement and the Collateral Agency
Agreement
By: /s/ Mark A. Van Osdol
------------------------------
Name: Mark A. Van Osdol
Title: Senior Vice President
Each of the undersigned hereby reaffirms and ratifies all of its agreements
and obligations under the Note Documents which such Person is party to, and
confirms that it consents to the amendment of the Existing Note Purchase
Agreements as set forth above.
MEDALLION TAXI MEDIA, INC.
By: /s/ Andrew Murstein
------------------------------
Name: Andrew Murstein
Title: CEO
By: /s/ Michael Leible
------------------------------
Name: Michael Leible
Title: President
MEDALLION FINANCIAL CORP.
By: /s/ Alvin Murstein
------------------------------
Name: Alvin Murstein
Title: President
By: /s/ James E. Jack
------------------------------
Name: James E. Jack
Title: CFO and EVP
MEDALLION FUNDING CHICAGO CORP.
By: /s/ Alvin Murstein
------------------------------
Name: Alvin Murstein
Title: CEO
By: /s/ James E. Jack
------------------------------
Name: James E. Jack
Title: CFO
Schedule A
----------
PRINCIPAL AMOUNT OF THE
NAME OF HOLDER OF NOTES HELD AS OF FOURTH
OUTSTANDING NOTES AMENDMENT EFFECTIVE DATE
THE TRAVELERS INSURANCE COMPANY $2,192,424.65 Series A
$2,192,424.65 Series B
FIRST CITICORP LIFE INSURANCE COMPANY $219,242.47 Series A
$219,242.47Series B
CITICORP LIFE INSURANCE COMPANY $219,242.47 Series A
$219,242.47 Series B
$109,621.23 Series A
$109,621.23 Series B
UNITED OF OMAHA LIFE INSURANCE COMPANY $1,863,560.95 Series A
$1,863,560.95 Series B
COMPANION LIFE INSURANCE COMPANY $328,863.70 Series A
$328,863.70 Series B
Annex A
-------
Monitoring Reports
------------------
[To be agreed upon]
Annex B
-------
Waived Defaults or Events of Default
------------------------------------
1. Section 7.1(i)
2. Section 10.3*
3. Section 10.8(e)*
4. Section 10.11*
5. Section 10.14
6. Section 10.15
7. Section 10.18
8. Section 10.20*
9. Section 10.22*
* The Company is in default of these covenants due to closing of the Merrill
Lynch Facility.
Annex C
-------
Form of Series A Note
---------------------
MEDALLION FUNDING CORP.
8.85% SENIOR SECURED NOTE, SERIES A, DUE AUGUST 31, 2003
No. RA-____ September 13, 2002
$__________ PPN 58403# AC 1
FOR VALUE RECEIVED, the undersigned, MEDALLION FUNDING CORP. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of New York, hereby promises to pay to _____________________, or registered
assigns, the principal sum of _________________________________________ DOLLARS,
pursuant to the terms of the Note Purchase Agreements (as hereinafter defined)
but in any event not later than August 31, 2003, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof, together with any Make-Whole Amount for which payment has been deferred
by agreement of the Company and the holder hereof (as set forth in the Note
Purchase Agreements), at the rate of (i) 8.85% per annum for the period from and
including the date hereof through and including January 11, 2003, (ii) 9.35% per
annum for the period from and including January 12, 2003, through and including
May 11, 2003; and (iii) 9.85% per annum from and including May 12, 2003 and
thereafter, payable monthly in arrears, on the first Business Day of each month,
commencing with the first Business Day in the month of October 2002, until the
principal hereof shall have become due and payable, and (b) without duplication
of amounts under clause (a), to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
interest and during the continuance of an Event of Default (as defined in the
Note Purchase Agreements), payable monthly in arrears as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) the rate otherwise borne hereunder plus
2% or (ii) 2% over the rate of interest publicly announced by Citibank, N.A.
from time to time in New York, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of 8.85% Senior Secured Notes, Series A, due
August 31, 2003, issued, together with the Company's 8.85% Senior Secured Notes,
Series B, due August 31, 2003 (herein called the "Notes"), pursuant to the
separate Note Purchase Agreements, each dated as of June 1, 1999 (as from time
to time amended, the "Note Purchase Agreements"), between the Company and the
respective Purchasers named therein and is entitled to the benefits thereof.
Each holder of this Note will be deemed, by its acceptance hereof, (i) to have
agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements and (ii) to have made the representation set forth in
Section 6.2 of the Note Purchase Agreements.
This Note is secured by, and this Note and the holder hereof are also
entitled equally and ratably with the holders of all other Notes to the rights
and benefits provided pursuant to the terms and provisions of the Security
Documents (as such term is defined in the Note Purchase Agreements). Reference
is hereby made to each of the foregoing for a statement of the nature and extent
of the benefits afforded thereby and the rights of the holders in respect
thereof.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreements.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
This Note amends and restates in its entirety that certain 8.35% Senior
Secured Note, Series A, due June 1, 2003, number RA-___, in the aggregate
principal amount of $_________________ pursuant to that certain "Fourth
Amendment to the Note Purchase Agreements, Limited Waiver and Consent" dated as
of September 11, 2002.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
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MEDALLION FUNDING CORP.
By:
------------------------------
Name: Alvin Murstein
Title: Chief Executive Officer
By:
------------------------------
Name: James E. Jack
Title: Chief Financial Officer
Annex D
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Form of Series B Note
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MEDALLION FUNDING CORP.
8.85% SENIOR SECURED NOTE, SERIES B, DUE AUGUST 31, 2003
No. RB-____ September 13, 2002
$__________ PPN 58403# AD 9
FOR VALUE RECEIVED, the undersigned, MEDALLION FUNDING CORP. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of New York, hereby promises to pay to _____________________, or registered
assigns, the principal sum of _______________________________________ DOLLARS on
August 31, 2003, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof, together with any
Make-Whole Amount for which payment has been deferred by agreement of the
Company and the holder hereof (as set forth in the Note Purchase Agreements
referred to below), at the rate of (i) 8.85% per annum for the period from and
including the date hereof through and including January 11, 2003, (ii) 9.35% per
annum for the period from and including January 12, 2003, through and including
May 11, 2003; and (iii) 9.85% per annum from and including May 12, 2003 and
thereafter, payable monthly in arrears, on the first Business Day of each month,
commencing with the first Business Day in the month of October 2002, until the
principal hereof shall have become due and payable, and (b) without duplication
of amounts under clause (a), to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
interest and during the continuance of an Event of Default (as defined in the
Note Purchase Agreements referred to below), payable monthly in arrears as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum from time to time equal to the greater of (i) the rate otherwise
borne hereunder plus 2% or (ii) 2% over the rate of interest publicly announced
by Citibank, N.A. from time to time in New York, New York as its "base" or
"prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of the Company or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Secured Notes, Series B, due August
31, 2003, issued, together with the Company's 8.85% Senior Secured Notes, Series
A, due August 31, 2003 (herein called the "Notes"), pursuant to separate Note
Purchase Agreements, dated as of June 1, 1999 (as from time to time amended, the
"Note Purchase Agreements"), between the Company and the respective Purchasers
named therein and is entitled to the benefits thereof. Each holder of this Note
will be deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreements and (ii) to have made the representation set forth in Section 6.2 of
the Note Purchase Agreements.
This Note is secured by, and this Note and the holder hereof are also
entitled equally and ratably with the holders of all other Notes to the rights
and benefits provided pursuant to the terms and provisions of the Security
Documents (as such term is defined in the Note Purchase Agreements). Reference
is hereby made to each of the foregoing for a statement of the nature and extent
of the benefits afforded thereby and the rights of the holders in respect
thereof.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreements.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
This Note amends and restates in its entirety that certain 8.35% Senior
Secured Note, Series B, due June 1, 2003, number RB-___, in the aggregate
principal amount of $_________________ pursuant to that certain Fourth Amendment
to the Note Purchase Agreements, Limited Waiver and Consent dated as of
September 11, 2002.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
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MEDALLION FUNDING CORP.
By:
------------------------------
Name: Alvin Murstein
Title: Chief Executive Officer
By:
------------------------------
Name: James E. Jack
Title: Chief Financial Officer