EXHIBIT 10.2
AMENDMENT NO. 2 TO SECOND AMENDED AND
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RESTATED LOAN AGREEMENT, LIMITED WAIVER AND CONSENT
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AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED LOAN AGREEMENT, LIMITED
WAIVER AND CONSENT dated as of June 29, 2001 (this "Amendment"), by and among
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MEDALLION FINANCIAL CORP., a Delaware corporation ("MFC"), MEDALLION BUSINESS
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CREDIT, LLC, a Delaware limited liability company ("MBC"; MBC and MFC are
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sometimes hereinafter referred to individually as a "Borrower" and together as
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the "Borrowers"), the lending institutions that are listed on the signature
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pages hereto, FLEET NATIONAL BANK (f/k/a Fleet Bank, National Association), as a
Bank ("Fleet"), as Swing Line Lender (the "Swing Line Lender"), as Arranger and
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as Agent for the Banks (including any successor, the "Agent"), amending the Loan
Agreement (as defined below).
WHEREAS, the Borrowers, the banks and other lending institutions that from
time to time are signatories thereto (including Assignees, collectively, the
"Banks" and individually, a "Bank"), the Agent and the Swing Line Lender are
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parties to a Second Amended and Restated Loan Agreement dated as of September
22, 2000 (as amended and in effect from time to time, the "Loan Agreement",
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capitalized terms defined therein having the same meanings herein as therein),
pursuant to which the Banks have extended credit to the Borrowers on the terms
and subject to the conditions set forth therein; and
WHEREAS, the Borrowers have requested an amendment of, and, subject to the
terms and conditions set forth herein, the Borrowers, the Banks, the Agent and
the Swing Line Lender have agreed to amend, the Loan Agreement as set forth
herein;
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 agree to amend the Loan Agreement as follows:
1. Amendments to Definitions. Section 1.1 of the Loan Agreement is hereby
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amended by (a) deleting the following definition in its entirety, and
substituting in lieu thereof the following new definition:
"Senior Debt" shall mean the sum of (a) all Indebtedness of either or
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both of the Borrowers under this Agreement, plus (b) all Indebtedness of
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either or both of the Borrowers consisting of or with respect to Commercial
Paper, plus (c) all Indebtedness of the Borrowers incurred in accordance
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with Section 8.2(i).
(b) deleting the first parenthetical of clause (i) of the definition of
"Restricted Payment" in its entirety, and substituting in lieu thereof the
following new parenthetical:
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"(other than the payment of the sum of (a) the minimum amount of
Dividends required to be paid for such Borrower to retain its status as a
regulated investment company pursuant to Section 851(a) of the Code, plus
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(b) the payment of Dividends required to be paid in order to avoid the
imposition of income taxes pursuant to the Code)".
and (c) inserting, in the places required by alphabetical order, the
following new definitions:
"Amendment No. 2" shall mean Amendment No. 2 to Second Amended and
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Restated Loan Agreement, Limited Waiver and Consent dated as of June 29,
2001 among the Borrowers, the Agent, the Swing Line Lender and the Banks.
"Amendment No. 2 Effective Date" shall mean the "Effective Date", as
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defined in Amendment No. 2.
"Bank Loans" shall mean, collectively, the Revolving Credit Loans, the
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Swingline Loans and the Term Loan.
"Debt Offering" shall mean the sale or issuance by either Borrower or
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any of their Subsidiaries of any Indebtedness.
"Equity Offering" shall mean the sale or issuance by either Borrower
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or any of their Subsidiaries of any of its Capital Stock or other equity
interests or any warrants, rights or options to acquire its Capital Stock
or other equity interests (including any debt securities that are
convertible into, or exchangeable for, capital stock or equity interests,
but excluding any capital contributions permitted by this Agreement made by
a Borrower to any of its Subsidiaries).
"Net Cash Proceeds" shall mean, with respect to (a) any Debt Offering
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or Equity Offering, the excess of the gross cash proceeds received by
either Borrower or any of their Subsidiaries from such Debt Offering or
Equity Offering after deduction of reasonable and customary transaction
expenses actually incurred in connection with such Debt Offering or Equity
Offering, and (b) any sale, disposition or transfer of assets by either
Borrower or any of their Subsidiaries, the net cash proceeds received by
either Borrower or any of their Subsidiaries, less all reasonable out-of-
pocket fees, commissions and other reasonable and customary expenses
actually incurred in connection with such asset sale, including the amount
of income, franchise, sales and other applicable taxes required to be paid
by such Borrower or such Subsidiary in connection with such sale,
disposition or transfer.
"Operating Account" shall mean the Borrowers' Account No. 2173008218
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with Fleet, or any successor account.
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"Payment Amount One" shall mean the sum of (a) $2,000,000, plus (b)
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the sum of 1.8% multiplied by the principal amount of Indebtedness of the
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Borrowers incurred pursuant to Section 8.2(i) outstanding at any time of
reference.
"Payment Amount Two" shall mean the sum of (a) four multiplied by the
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amount of the Excess Dividends (as defined in Section 2B(d)), plus (b) the
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product of the principal amount of Indebtedness of the Borrowers incurred
pursuant to Section 8.2(i) outstanding at any time of reference divided by
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$110,000,000 multiplied by four multiplied by the amount of the Excess
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Dividends.
2. Addition of Article 2B to the Loan Agreement. The Loan Agreement is
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hereby amended by adding the following new Article 2B:
"ARTICLE 2B. ADDITIONAL PAYMENTS AND MANDATORY REDUCTIONS OF
OUTSTANDING BANK LOANS.
(a) Promptly following the occurrence of any Equity Offering or
Debt Offering (other than of the Guarantor and following the obtaining
of any necessary consents or approvals hereunder or under any other
applicable agreements, including the Funding Agreement, for such
Equity Offering or Debt Offering), (i) when no Term Loan is
outstanding, the Borrowers shall repay (or cause any of their
applicable Subsidiaries to repay) outstanding Bank Loans in an amount
equal to one hundred percent (100%) of the Net Cash Proceeds of such
Equity Offering or Debt Offering; and (ii) when any Term Loan is
outstanding (regardless of whether there are any Revolving Credit
Loans or Swing Line Loans outstanding), the Borrowers shall repay (or
cause any of their applicable Subsidiaries to repay) (A) outstanding
Bank Loans (with the Revolving Credit Commitment of any Bank whose
Revolving Credit Commitment is not $0 being irrevocably reduced in an
amount equal to the amount of the repayment to be made to it pursuant
to this Section 2B(a)(ii) and in accordance with the terms of Section
2B(e), and the Aggregate Revolving Credit Commitment being irrevocably
reduced by an aggregate amount equal to the sum of the reductions of
individual Revolving Credit Commitments (if any) required to be made
by this parenthetical), and (B) Indebtedness of the Borrowers incurred
pursuant to Section 8.2(i), in an amount equal to one hundred percent
(100%) of the Net Cash Proceeds of such Equity Offering or Debt
Offering, with such Net Cash Proceeds being allocated among the Banks,
the Agent and the holders of the Indebtedness described in clause (B)
of this paragraph (a)(ii) on a pro rata basis in accordance with the
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percentage interest that each Person holds of the sum of the
outstanding Term Loans, plus the sum of the Revolving Credit
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Commitment for each Bank whose Revolving Credit Commitment is not $0,
plus the outstanding principal
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amount of Indebtedness of the Borrowers incurred pursuant to Section
8.2(i). In the event that any Net Cash Proceeds remain after applying
the Net Cash Proceeds as contemplated above ("Excess Financial
Proceeds"), such Excess Financial Proceeds shall be transferred to the
Operating Account.
(b) Promptly following the occurrence of any sale, transfer or
disposition of the Guarantor's Capital Stock (following the obtaining
of any necessary consents or approvals hereunder or under any other
applicable agreements, for such sale, transfer or disposition), (i)
when no Term Loan is outstanding, MFC shall repay outstanding Bank
Loans in an amount equal to one hundred percent (100%) of the Net Cash
Proceeds of such sale, transfer or disposition; and (ii) when any Term
Loan is outstanding (regardless of whether there are any Revolving
Credit Loans or Swing Line Loans outstanding), MFC shall repay (A)
outstanding Bank Loans (with the Revolving Credit Commitment of any
Bank whose Revolving Credit Commitment is not $0 being irrevocably
reduced in an amount equal to the amount of the repayment to be made
to it pursuant to this Section 2B(b)(ii) and in accordance with the
terms of Section 2B(e), and the Aggregate Revolving Credit Commitment
being irrevocably reduced by an aggregate amount equal to the sum of
the reductions of individual Revolving Credit Commitments (if any)
required to be made by this parenthetical), (B) outstanding loans
under the Funding Agreement, (C) the amounts outstanding under the
Senior Notes, (D) the principal amounts outstanding with respect to
the CP Debt, and (E) Indebtedness of the Borrowers incurred pursuant
to Section 8.2(i), in an amount equal to one hundred percent (100%) of
the Net Cash Proceeds of such sale, transfer or disposition, with such
Net Cash Proceeds being allocated among the Banks, the Agent, the
Funding Banks, the holders of the Senior Notes, the CP Holders and the
holders of the Indebtedness described in clause (E) of this paragraph
(b)(ii) on a pro rata basis in accordance with the provisions of
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Section 5.3 of the Collateral Agency Agreement.
(c) Promptly following the occurrence of any sale, transfer or
disposition of Loans or other assets of either Borrower or any of
their Subsidiaries (other than of the Capital Stock of the Guarantor
and following the obtaining of any necessary consents or approvals
hereunder or under any other applicable agreements, for such sale,
transfer or disposition), (i) when no Term Loan is outstanding, such
Borrower shall repay outstanding Bank Loans in an amount equal to one
hundred percent (100%) of the Net Cash Proceeds of such sale, transfer
or disposition; and (ii) when any Term Loan is outstanding (regardless
of whether there are any Revolving Credit Loans or Swing Line Loans
outstanding), such Borrower shall repay (A) outstanding Bank Loans
(with the Revolving Credit Commitment of any Bank whose Revolving
Credit
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Commitment is not $0 being irrevocably reduced in an amount equal to
the amount of the repayment to be made to it pursuant to this Section
2B(c)(ii) and in accordance with the terms of Section 2B(e), and the
Aggregate Revolving Credit Commitment being irrevocably reduced by an
aggregate amount equal to the sum of the reductions of individual
Revolving Credit Commitments (if any) required to be made by this
parenthetical), and (B) Indebtedness of the Borrowers incurred
pursuant to Section 8.2(i), in an amount equal to one hundred percent
(100%) of the Net Cash Proceeds of such sale, transfer or disposition,
with such Net Cash Proceeds being allocated among the Banks, the Agent
and the holders of the Indebtedness described in clause (B) of this
paragraph (c)(ii) on a pro rata basis in accordance with the
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percentage interest that each Person holds of the sum of the
outstanding Term Loans, plus the sum of the Revolving Credit
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Commitment for each Bank whose Revolving Credit Commitment is not $0,
plus the outstanding principal amount of Indebtedness of the Borrowers
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incurred pursuant to Section 8.2(i). In the event that any Net Cash
Proceeds remain after applying the Net Cash Proceeds as contemplated
above ("Excess Asset Proceeds"), such Excess Asset Proceeds shall be
transferred to the Operating Account.
(d) In the event that either Borrower pays Dividends in excess of
the minimum amount of Dividends required to be paid for such Borrower
to retain its status as a regulated investment company pursuant to
Section 851(a) of the Code (the amount of such excess Dividends is
hereafter referred to as the "Excess Dividends"), upon 30 days prior
written notice to the Agent from such Borrower and concurrently with
the payment of such Excess Dividends, such Borrower shall repay (A)
outstanding Bank Loans (with the Revolving Credit Commitment of any
Bank whose Revolving Credit Commitment is not $0 being irrevocably
reduced in an amount equal to the amount of any repayment to be made
to it pursuant to this Section 2B(d) and in accordance with the terms
of Section 2B(e), and the Aggregate Revolving Credit Commitment being
irrevocably reduced by an aggregate amount equal to the sum of the
reductions of individual Revolving Credit Commitments (if any)
required to be made by this parenthetical), and (B) Indebtedness of
the Borrower incurred pursuant to Section 8.2(i), in an amount equal
to the greater of Payment Amount One or Payment Amount Two (the
"Dividend Prepayment"), with such Dividend Prepayment being allocated
among the Banks, the Agent and the holders of the Indebtedness
described in clause (B) of this paragraph (d) on a pro rata basis in
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accordance with the percentage interest that each such Person holds of
the sum of the outstanding Term Loans, plus the Swing Line Commitment,
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plus the sum of the Revolving Credit Commitment for each Bank whose
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Revolving Credit Commitment is not $0, plus the outstanding
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principal amount of Indebtedness of the Borrowers incurred pursuant to
Section 8.2(i).
(e) With respect to all payments pursuant to subsections (a)
through (d) above, each such payment shall be applied first, to
outstanding Swing Line Loans, and second, to outstanding Revolving
Credit Loans and Term Loans in accordance with the provisions of
Section 2.5(d). Each payment pursuant to this Article 2B shall be
applied pro rata among the Banks in proportion to their Percentages,
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and, with respect to payments made pursuant to Section 2B(a)(ii),
Section 2B(b)(ii), Section 2B(c)(ii), and Section 2B(d), with the
Revolving Credit Commitment of any Bank whose Revolving Credit
Commitment is not $0 being irrevocably reduced in an amount equal to
the amount of the repayment made to it pursuant to this Article 2B and
the Aggregate Revolving Credit Commitment being irrevocably reduced by
an aggregate amount equal to the sum of the reductions of individual
Revolving Credit Commitments (if any) being made in accordance with
the requirements of this Article 2B."
3. Amendment of Article 8 of the Loan Agreement. The first paragraph of
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Article 8 of the Loan Agreement is hereby deleted in its entirety and the
following new paragraph is hereby substituted in lieu thereof:
"Each Borrower covenants and agrees that until the Notes together with
interest and all other Indebtedness of the Borrowers to the Agent, the
Swing Line Lender and the Banks under this Agreement are paid in full and
the Aggregate Revolving Credit Commitment, the Swing Line Commitment and
all Term Loan Commitments are terminated, neither Borrower shall, and with
respect to Section 8.2, neither Borrower shall permit the Guarantor to:"
4. Amendment of Section 8.2 of the Loan Agreement. Section 8.2 of the
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Loan Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (f) thereof; (b) deleting the period at the end of subsection (g) and
substituting in lieu thereof a semicolon (";"); and (c) adding the following new
subsections (h) and (i) in proper alphabetical order therein:
"(h) Indebtedness of the Guarantor in an aggregate amount not to
exceed $10,000,000 at any time; and
(i) other pari passu Indebtedness of the Borrowers, secured ratably by
the Collateral, on terms and conditions acceptable to the Agent, provided
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that (i) the Borrowers shall notify the Agent in writing three (3) weeks
(or such lesser period as the Agent in its sole discretion shall agree to)
prior to the incurrence of any such Indebtedness, (ii) no Default or Event
of Default exists on the day any such Indebtedness is incurred, or would
exist as a result thereof, and the Borrowers shall deliver to the Agent and
each of the Banks pro forma financial statements and a pro forma
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certificate of the chief financial officer of the Borrowers evidencing the
Borrowers' computation of compliance with each of the financial ratios,
tests or covenants specified in Article VII, including the MFC Borrowing
Base or the MBC Borrowing Base, as applicable, after giving effect to the
incurrence of any such Indebtedness, and (iii) the Person extending such
Indebtedness shall become a party to the Collateral Agency Agreement."
5. Amendment of Section 8.3 of the Loan Agreement. Section 8.3(e) of the
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Loan Agreement is hereby deleted in its entirety and the following new Section
8.3(e) is hereby substituted in lieu thereof:
"(e) Make 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 (i) Investments of MFC in MBC or of MBC in MFC, (ii) Investments
existing on the Second Restatement Effective Date and listed on Schedule
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III hereto, (iii) (A) Investments by MFC in BL of up to $10,000,000 arising
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from the conversion of accounts receivable owed by BL to MFC into an equity
contribution into BL, and (B) other Investments by MFC in BL shall not
exceed an aggregate amount of $1,000,000, (iv) Investments by MFC in
Freshstart Venture Capital Corp. and Medallion Capital, Inc., which shall
not exceed an aggregate amount of $19,000,000 for both such Investments,
(v) Investments by MFC in the Guarantor which shall not exceed an aggregate
amount of $4,000,000, and (vi) Investments by MFC in other Subsidiaries and
Affiliates which shall not exceed an aggregate amount of $3,725,856."
6. Amendment of Section 8.16 of the Loan Agreement. Section 8.16 of the
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Loan Agreement is hereby deleted in its entirety and the following new Section
8.16 is hereby substituted in lieu thereof:
"8.16. Portfolio Purchases. Make, or obligate itself to make, any
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Portfolio Purchase without the consent of each Bank."
7. Amendment of Section 10.2 of the Loan Agreement. Section 10.2 of the
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Loan Agreement 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. Modification and Waiver.
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Any consent or approval required or permitted by this Loan Agreement
to be given by the Banks may be given, and any term of this Loan Agreement,
the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrowers of any terms of this Loan Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of
the Borrowers
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and the written consent of the Required Banks. Notwithstanding the
foregoing, no amendment, modification or waiver shall:
(a) without the written consent of the Borrowers and each Bank
directly affected thereby:
(i) reduce or forgive the principal amount of any
Revolving Credit Loans, Swing Line Loans or Term Loan, or reduce
the rate of interest on the Notes or the amount of the Commitment
Fee;
(ii) increase the amount of such Bank's Revolving Credit
Commitment or extend the expiration date of such Bank's Revolving
Credit Commitment;
(iii) postpone or extend the Termination Date or the Term
Out Date or any other regularly scheduled dates for payments of
principal of, or interest on, the Revolving Credit Loans, Swing
Line Loans or Term Loan or any Fees or other amounts payable to
such Bank (it being understood that (A) a waiver of the
application of the default rate of interest, and (B) any vote to
rescind any acceleration made pursuant to Section 9.1 of amounts
owing with respect to the Revolving Credit Loans, Swing Line
Loans and Term Loan shall require only the approval of the
Required Banks); and
(iv) other than pursuant to a transaction permitted by the
terms of this Loan Agreement, release all or substantially all of
the Collateral or release the Guarantor from its guaranty
obligations under the Guaranty, other than in accordance with the
terms thereof or the terms of the Collateral Agency Agreement
(excluding, if the Borrower becomes a debtor under the federal
Bankruptcy Code, the release of "cash collateral", as defined in
Section 363(a) of the federal Bankruptcy Code pursuant to a cash
collateral stipulation with the debtor approved by the Required
Banks);
(b) without the written consent of all of the Banks, amend or
waive Section 8.16, this Section 10.2 or the definition of Required
Banks (it being understood that the addition of one or more additional
credit facilities, the allowance of the credit extensions, interest
and fees thereunder to share ratably or on a subordinated basis with
the Revolving Credit Loans, Swing Line Loans, Term Loan, interest and
Fees in the benefits of the Loan Documents and the inclusion of the
holders of such facilities in the determination of Required Banks
shall require only the approval of the Required Banks); and
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(c) without the written consent of the Agent, amend or waive
provisions with respect to Swing Line Loans, Article 11, the amount or
time of payment of the Agent's Fee payable for the Agent's account or
any other provision applicable to the Agent.
No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Agent or any Bank in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial
thereto. No notice to or demand upon the Borrowers (or either of them)
shall entitle the Borrowers (or either of them) to any other or further
notice or demand in similar or other circumstances."
8. Waiver of Section 9.1(e) of the Funding Agreement. The Funding
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Agreement requires Medallion Funding to ensure that the ratio of the sum of Net
Income plus Interest Expense (each as defined in the Funding Agreement) to
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Interest Expense (as defined in the Funding Agreement) is not less than 1.35:1.
Medallion Funding has reported that as of March 31, 2001, the ratio of the sum
of Net Income plus Interest Expense (each as defined in the Funding Agreement)
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to Interest Expense (as defined in the Funding Agreement) was 1.28:1. Each of
the Agent and the Banks hereby waives (without changing the provisions of
Section 9.1 of the Loan Agreement or the definition of Event of Default therein)
any Default or Event of Default which may have occurred or may occur under
Section 9.1(e) of the Loan Agreement as a result of Medallion Funding's non-
compliance with Section 7.4 of the Funding Agreement, provided that, as of March
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31, 2001, the ratio of the sum of Net Income plus Interest Expense (each as
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defined in the Funding Agreement) to Interest Expense (as defined in the Funding
Agreement) was no less than 1.28:1.
9. Consent to Funding Amendment, etc. Each of the Required Banks hereby
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consents to (a) the amendment of the Funding Agreement in form and substance
satisfactory to the Agent for purposes of Section 2 of the Collateral Agency
Agreement and Section 8.17 of the Loan Agreement, and (b) the amendment of the
Note Purchase Agreement in form and substance satisfactory to the Agent for
purposes of Section 2 of the Collateral Agency Agreement and Section 8.17 of the
Loan Agreement.
10. Amendment No. 2 to the Security Agreement. Section 6.4 of the Security
Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (b) thereof, (b) relettering subsection (c) as subsection (d), and
(c) adding the following new subsection (c) in proper alphabetical order
therein:
"(c) consented to and agreed to be bound by the terms of Article 2B
of the Loan Agreement, including Section 2B(b) of the Loan Agreement, and".
11. Representations and Warranties. Each of the Borrowers hereby
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represents and warrants to the Agent and the Banks as of the date hereof, and as
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of any date on which the conditions set forth in Section 12 below are met, as
follows:
(a) The execution and delivery by each of the Borrowers of this
Amendment and all other instruments and agreements required to be executed
and delivered by each of the Borrowers in connection with the transactions
contemplated hereby or referred to herein (collectively, the "Amendment
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Documents"), and the performance by each of the Borrowers of any of its
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obligations and agreements under the Amendment Documents and the Loan
Agreement and the other Loan Documents, as amended hereby, are within the
corporate or other authority of each of the Borrowers, as the case may be,
have been duly authorized by all necessary corporate proceedings on behalf
of each of the Borrowers, as the case may be, and do not and will not
contravene any provision of law or of the Borrowers' 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 Borrowers (or either of them).
(b) Each of the Amendment Documents and the Loan Agreement and other
Loan Documents, as amended hereby, to which any of the Borrowers is a party
constitutes a legal, valid and binding obligation of such Person,
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.
(c) No approval or consent of, or filing with, any governmental
agency or authority is required to make valid and legally binding the
execution, delivery or performance by each of the Borrowers of the
Amendment Documents or the Loan Agreement or other Loan Documents, as
amended hereby, or the consummation by each of the Borrowers of the
transactions among the parties contemplated hereby and thereby or referred
to herein.
(d) The representations and warranties contained in Article 4 of the
Loan Agreement and in the other Loan 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 Loan Agreement and the other
Loan Documents, changes occurring in the ordinary course of business (which
changes, either singly or in the aggregate, have not been materially
adverse) 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.
(e) Each of the Borrowers has performed and complied in all material
respects with all terms and conditions herein and in the Loan 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
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this Amendment and the other Amendment Documents, there exists no Event of
Default or Default.
(f) Each of the Borrowers acknowledges and agrees that the
representations and warranties contained in this Amendment shall constitute
representations and warranties referred to in Section 4 of the Loan
Agreement, a breach of which shall constitute an Event of Default.
12. Effectiveness. This Amendment shall become effective as of the date
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first written above (the "Effective Date"), in the case of Sections 1 through 6
of this Amendment and Section 8 of this Amendment, 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 Agent; provided that Section 7 shall
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become effective 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 Agent and as of the date that this Amendment shall have been duly
executed and delivered by each of the Borrowers and one hundred percent (100%)
of the Banks:
(a) This Amendment shall have been duly executed and delivered by each of
the Borrowers and the Required Banks and shall be in full force and effect.
(b) The Agent shall have received evidence of the effectiveness of an
amendment of the Funding Agreement, in the form attached hereto as Exhibit A.
(c) The Agent shall have received evidence of the effectiveness of an
amendment of the Collateral Agency Agreement.
(d) Bingham Dana LLP shall have received payment of all fees and expenses
outstanding as of the date hereof, including, but not limited to, fees and
expenses in the connection with the preparation of this Amendment and ancillary
documentation.
(e) The Agent shall have received such other items, documents, agreements
or actions as the Agent may reasonably request in order to effectuate the
transactions contemplated hereby.
13. Release. In order to induce the Agent and the Banks to enter into
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this Amendment, each of the Borrowers, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against the Agent or any Bank (or any of its respective directors,
officers, employees or agents); (b) such Person does not have any offset right,
counterclaim or defense of any kind against any of its respective obligations,
indebtedness or liabilities to the Agent or any Bank; and (c) each of the Agent
and the Banks has heretofore properly performed and satisfied in a timely manner
all of its obligations to such Person. Each of the Borrowers, on behalf of
itself and its Subsidiaries, wishes to eliminate any possibility that any past
conditions, acts, omissions, events, circumstances or matters would
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impair or otherwise adversely affect any of the Agent's and the Banks' rights,
interests, contracts, collateral security or remedies. Therefore, each of the
Borrowers, 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 the Agent or any Bank to such Person,
except the obligations to be performed by the Agent or any Bank on or after the
date hereof as expressly stated in this Amendment, the Loan Agreement and the
other Loan 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 such Person might otherwise have against the
Agent, any Bank 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.
14. Miscellaneous Provisions.
------------------------
(a) Each of the Borrowers hereby ratifies and confirms all of its
obligations to the Agent and the Banks under the Loan Agreement, as amended
hereby, and the other Loan Documents, including, without limitation, the Loans,
and each of the Borrowers hereby affirms its absolute and unconditional promise
to pay to the Banks and the Agent the Revolving Credit Loans, the Term Loans,
the Swing Line Loans, reimbursement obligations and all other amounts due or to
become due and payable to the Banks and the Agent under the Loan Agreement and
the other Loan Documents, as amended hereby. Except as expressly amended
hereby, each of the Loan Agreement and the other Loan Documents shall continue
in full force and effect. This Amendment and the Loan Agreement shall hereafter
be read and construed together as a single document, and all references to the
Loan Agreement in the Loan Agreement, any other Loan Document or any agreement
or instrument related to the Loan Agreement shall hereafter refer to the Loan
Agreement as amended by this Amendment.
(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 Agent or the Banks 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 Agent or the Banks to agree to, or otherwise prejudice any
rights of the Agent and the Banks with respect to, any similar or dissimilar
consents or waivers that may be requested for any future period.
(c) Without limiting the expense reimbursement requirements set forth in
Section 10.6 of the Loan Agreement, each of the Borrowers agree to pay on demand
all costs and expenses, including reasonable attorneys' fees, of the Agent
incurred in connection with this Amendment.
-13-
(d) 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).
(e) 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.
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Amendment to be executed on its behalf by its officer thereunto
duly authorized, as of the date first above written.
MEDALLION FINANCIAL CORP.
By: /s/ Alvin Murstein
--------------------
Name: Alvin Murstein
Title: Chief Executive Officer
By: /s/ James Jack
----------------
Name: James E. Jack
Title: Executive Vice President & Chief
Financial Officer
MEDALLION BUSINESS CREDIT, LLC
By: /s/ Alvin Murstein
--------------------
Name: Alvin Murstein
Title: Chief Executive Officer
By: /s/ James Jack
----------------
Name: James E. Jack
Title: Executive Vice President & Chief
Financial Officer
FLEET NATIONAL BANK (f/k/a Fleet Bank, National
Association), as Agent, as Swing Line Lender and
as one of the Banks
By: /s/ Kevin J. Foley
--------------------
Name: Kevin J. Foley
Title: Sr. VP
HSBC BANK USA
By: /s/ Bruce Wicks
-----------------
Name: Bruce Wicks
Title: Vice President
CITIZENS BANK
By: /s/ Thomas D. Opie
--------------------
Name: Thomas D. Opie
Title: VP
THE BANK OF NEW YORK
By: /s/ Gordon Smith
------------------
Name: Gordon Smith
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/ Carol A. Kornbluth
------------------------
Name: Carol A. Kornbluth
Title: Vice President
ISRAEL DISCOUNT BANK OF NEW YORK
By: /s/ Robert J. Fainelli
------------------------
Name: Robert J. Fainelli
Title: First Vice President
By: /s/ Howard Weinberg
---------------------
Name: Howard Weinberg
Title: Senior Vice President
EUROPEAN AMERICAN BANK
By: /s/ George L. Stirling
------------------------
Name: George L. Stirling
Title: VP
BANK LEUMI
By: /s/ Paul Tine /s/ John Koenigsberg
--------------- ----------------------
Name: Paul Tine John Koenigsberg
Title: V.P. First Vice President
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ Jeffrey Millar
--------------------
Name: J. Millar
Title: Vice President
ACKNOWLEDGED AND AGREED:
- ------------------------
MEDALLION TAXI MEDIA, INC.
By: /s/ Andrew M. Murstein
------------------------
Name: Andrew M. Murstein
Title: Chief Executive Officer& Director
By: /s/ Michael Leible
--------------------
Name: Michael Leible
Title: President