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EXHIBIT 10.3
Second Amendment Agreement
Dated as of June 29, 2001
to Note Purchase Agreements dated as of June 1, 1999
Re: $22,500,000 7.20% Senior Secured Notes, Series A
due June 1, 2004
and
Re: $22,500,000 7.20% Senior Secured Notes, Series B
due September 1, 2004
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Table of Contents
Section Heading Page
Section 1. Amendments to Existing Note Purchase Agreements...................... 2
Section 1.1. New Section 7.1(g)................................................... 2
Section 1.2. New Section 8.8...................................................... 2
Section 1.3. Amendment to Section 9.5............................................. 4
Section 1.4. Amendment to Section 10.4............................................ 4
Section 1.5. Amendment to Section 1.2(a).......................................... 4
Section 1.6. Amendment to Section 10.10........................................... 4
Section 1.7. New Section 10.7..................................................... 4
Section 1.8. New Section 10.14.................................................... 4
Section 1.9. New Section 10.15.................................................... 5
Section 1.10. Amendment to Section 11(c)(i)........................................ 5
Section 1.11. Amendments to Definitions............................................ 5
Section 1.12. Addition of Definitions.............................................. 6
Section 2. Waiver of Event of Default........................................... 8
Section 3. Amendment No. 1 to the Security Agreement............................ 8
Section 4. Amendment No. 1 to the Parent Pledge Agreement....................... 11
Section 5. Consent to Amendment of Bank Loan Agreement, etc..................... 11
Section 6. Representations and Warranties....................................... 12
Section 6.1. Organization; Power and Authority.................................... 12
Section 6.2. Authorization, Etc................................................... 12
Section 6.3. Compliance with Laws, Other Instruments, Etc......................... 12
Section 6.4. No Default or Event of Default....................................... 12
Section 6.5. Compliance........................................................... 12
Section 6.6. No Consents.......................................................... 13
Section 6.7. Representations in Note Purchase Agreements.......................... 13
Section 6.8. Priority; Continued Effectiveness.................................... 13
Section 6.9. Investment Company Act............................................... 14
Section 6. Conditions Precedent................................................. 14
Section 7.1. Execution............................................................ 14
Section 7.2. Representations and Warranties....................................... 14
Section 7.3. Related Transactions................................................. 14
Section 7.4. Amendment Fee........................................................ 14
Section 7.5. Payment of Fees...................................................... 14
Section 8. Miscellaneous........................................................ 14
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Section 8.1. Governing Law............................................................. 14
Section 8.2. Counterparts.............................................................. 14
Section 8.3. Captions.................................................................. 15
Section 8.4. References to Existing Note Purchase Agreements or Security Agreement..... 15
Section 8.5. Expenses.................................................................. 15
Section 8.6. Ratification.............................................................. 15
Section 9. Release................................................................... 15
Section 9.1. Release................................................................... 15
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Medallion Funding Corp.
Second Amendment Agreement
Re: Note Purchase Agreements
dated as of June 1, 1999
and
$22,500,000 7.20% Senior Secured Notes, Series A
due June 1, 2004
and
$22,500,000 7.20% Senior Notes, Series B
due September 1, 2004
To each of the institutional investors
named on Schedule 1
attached hereto (the "Holders")
Ladies and Gentlemen:
Reference is made to the separate Note Purchase Agreements each dated as of
June 1, 1999, as amended by that certain First Amendment Agreement dated March
30, 2001 (the "Existing Note Purchase Agreements") between Medallion Funding
Corp., a New York corporation (the "Company") and each of the Purchasers named
on Schedule A attached thereto (the "Purchasers"), respectively, pursuant to
which the Company issued and sold (i) $22,500,000 aggregate principal amount of
its 7.20% Senior Secured Notes, Series A, due June 1, 2004 and (ii) $22,500,000
aggregate principal amount of its 7.20% Senior Secured Notes, Series B, due
September 1, 2004, all of which are currently outstanding (collectively, the
"Outstanding Notes"). The Existing Note Purchase Agreements, as amended
hereby, are hereinafter referred to as the "Note Purchase Agreements."
Recitals
Whereas, the Company desires to make certain amendments to the Existing
Note Purchase Agreements. Capitalized terms not otherwise defined herein shall
have the meaning set forth for such terms set forth in the Note Purchase
Agreements.
For good and valuable consideration, the Company hereby requests the
amendment of certain provisions of the Existing Note Purchase Agreements, as
hereinafter provided.
Upon the acceptance of the Required Holders and satisfaction of the
conditions precedent set forth in Section 4 hereof, this Amendment shall
constitute a contract between the Company and the Holders, but only in the
respects hereinafter set forth:
Medallion Funding Corp. Second Amendment Agreement
Section 1. Amendments to Existing Note Purchase Agreements.
The Existing Note Purchase Agreements are hereby amended as of the
Effective Date (as defined herein) as follows:
Section 1.1. New Section 7.1(g). Section 7 of the Existing Note Purchase
Agreements is hereby amended by adding in the proper alphabetical order the
following new Section 7.1(g):
"(g) Borrowing Base Reporting -
(i) a Borrowing Base Certificate indicating a computation of the
Borrowing Base (i) as of the last day of each month commencing with the
month ending May 31, 2001 (to be delivered not later than 15 Business Days
after the last day of such month), and (ii) promptly following any other
date such a certificate is requested by the Agent;"
(ii) to be delivered not later than 10 days after the last day of
any month, a delinquency report listing the Loans delinquent over 60 days
and detailing the top ten delinquent Loans;
(iii) to be delivered not later than thirty (30) days after the
last day of any calendar month, monthly underwater reports with respect to
all Medallion Loans, monthly loan loss reserve reports, monthly delinquency
reports monthly portfolio aging reports, and monthly charge off reports, in
each case, in form and substance acceptable to the Agent;
(iv) no later than December 15, 2001, the Company's strategic
financing plan detailing how the Company will achieve its financing
strategy goals as presented at its May 17, 2001 meeting with the Agent;
(v) no later than October 1, 2001, income and outflow quarterly
cash projections for the Company and its Parent for October 1, 2001 through
December 31, 2002; and
(vi) to be delivered not later than 60 days after the last day of
any fiscal quarter, quarterly reports detailing Total Intercompany
Receivables.
Section 1.2. New Section 8.8. Section 8 of the Existing Note Purchase
Agreements is hereby amended by adding in the following new Section 8.8:
"Section 8.8. Additional Mandatory Prepayments.
(a) Promptly following the occurrence of any Equity Offering or
Debt Offering of the Company or any of its Subsidiaries (following the
obtaining of any necessary consents or approvals hereunder or under any
other applicable agreements) which results in a Bank Debt Prepayment, the
Company shall prepay (or cause any of its applicable Subsidiaries to
prepay) the Notes in an amount equal to the holders' Pro Rata
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Medallion Funding Corp. Second Amendment Agreement
Share (as defined in the Intercreditor Agreement) of one hundred percent
(100%) of the Net Cash Proceeds of any such Equity Offering or Debt
Offering, in accordance with the provisions of Section 5 of the
Intercreditor Agreement.
(b) Promptly following the occurrence of any sale, transfer or
disposition of the Guarantor's Capital Stock by the Parent (following the
obtaining of any necessary consents or approvals hereunder or under any
other applicable agreements for such sale, transfer or disposition) which
results in a Bank Debt Prepayment, the Company shall cause the Parent to
transfer to the Company in order to enable the Company to prepay, if and to
the extent permitted by the Collateral Agency Agreement, 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, in accordance with the provisions of 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 the Company or any of its
Subsidiaries (following the obtaining of any necessary consents or
approvals hereunder or under any other applicable agreements for such sale,
transfer or disposition) which results in a Bank Debt Prepayment, 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 of any such sale, transfer or disposition,
in accordance with the provisions of Section 5 of the Intercreditor
Agreement. With respect to Section 10.3, prepayment by the Company of the
Notes under this Section 8.8(c) shall satisfy the obligation to prepay the
Notes under the definition of "Debt Prepayment Application."
(d) In the event that the Company pays Dividends in excess of 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 (the amount of such excess Dividends is hereafter referred to as
the "Excess Dividends"), upon 30 days prior written notice to the holders
of the Notes from the Company and concurrently with the payment of such
Excess Dividends, the Company shall prepay the Notes in an amount equal to
the holders' of the Notes pro rata share of the greater of Payment Amount
One or Payment Amount Two; such pro rata share to be determined by dividing
the principal amount of the Notes then outstanding by the sum of (i) the
outstanding Term Loans (as defined in the Bank Loan Agreement, plus (ii)
the Aggregate Revolving Credit Commitment, plus (iii) the aggregate
principal amount of the outstanding Swing Line Loans (as defined in the
Bank Loan Agreement, plus (iv) the aggregate principal amount of the Notes,
plus (v) the aggregate principal amount of all Additional Senior
Obligations (as defined in the Intercreditor Agreement).
(e) Prepayment of the Notes to be prepaid 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 plus
the Make-Whole Amount. On the Business Day preceding the date of
prepayment, the Company shall deliver to each holder of Notes being prepaid
a statement showing the amount due in connection with such prepayment and
setting forth the details of the computation of such amount. Any and all
prepayments
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Medallion Funding Corp. Second Amendment Agreement
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."
Section 1.3. Amendment to Section 9.5. Section 9.5 of the Existing Note
Purchase Agreements shall be and is hereby amended to read as follows:
"Section 9.5. Corporate Existence, etc. The Company will at all
times preserve and keep in full force and effect its corporate
existence. The Company will not at any time form, create, own,
acquire or allow to exist any Subsidiary. The Company will at all
times preserve and keep in full force and effect all rights and
franchises of the Company unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full
force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse
Effect."
Section 1.4. Amendment to Section 10.4. Section 10.4 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to read as
follows:
"The Company will not suffer or permit the sum of Tangible Net Worth
minus up to $15,000,000 of the principal amount of Total Intercompany
Receivables of the Company, to be less than $56,000,000 at any time."
Section 1.5. Amendment to Section 10.5. Section 10.5 of each of the
Existing Note Purchase Agreements shall be and is hereby amended to read as
follows:
"The Company will not suffer or permit the ratio of (a) Total
Liabilities to (b) the sum of Tangible Net Worth minus Total Intercompany
Receivables of the Company to be more than 4.85:1 at any time."
Section 1.6. Amendment to Section 10.10. Section 10.10 of each of the
Existing Note Purchase Agreements shall be and is hereby amended in its entirety
to read as follows:
"Section 10.10. Portfolio Purchases. The Company will not make, or
obligate itself to make, any Portfolio Purchase.
Section 1.7. New Section 10.13. Section 10 of the Existing Note Purchase
Agreements is hereby amended by adding the following new Section 10.13:
"Section 10.13. Net Finance Assets. The Company shall not suffer
or permit at any time the aggregate unpaid balance of all Senior Debt to
exceed the Net Finance Assets."
Section 1.8. New Section 10.14. Section 10 of the Existing Note Purchase
Agreements is hereby amended by adding the following new Section 10.14:
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Medallion Funding Corp. Second Amendment Agreement
"Section 10.14. Minimum EBIT to Interest Expense Ratio. The
Company shall not suffer or permit the ratio, at the end of each fiscal
quarter of the Company set forth in the table below, of (a) for the fiscal
quarter ending June 30, 2001 ("Second FQ01"), EBIT for such fiscal quarter;
for the fiscal quarter ending September 30, 2001, the sum of EBIT for the
Second FQ01 plus EBIT for the fiscal quarter ending September 30, 2001
("Third FQ01"); for the fiscal quarter ending December 31, 2001, the sum of
EBIT for the Second FQ01 plus EBIT for the Third FQ01 plus EBIT for the
fiscal quarter ending December 31, 2001; and, thereafter, EBIT for four (4)
consecutive fiscal quarters then ended, to (b) the sum of Interest Expense
for such four (4) fiscal quarters or lesser period as described above to be
less than the ratio set forth opposite such fiscal quarter in the table
below:
Fiscal Quarter
Ending Ratio
June 30, 2001 1.15:1
September 30, 2001 1.20:1
December 31, 2001 1.25:1
March 31, 2002 and
thereafter" 1.30:1
Section 1.9. New Section 10.15. Section 10 of the Existing Note Purchase
Agreement is hereby amended by adding the following new Section 10.15:
"Section 10.15. Intercompany Receivables. Suffer or permit the
aggregate principal amount of Total Intercompany Receivables to exceed
$15,000,000 at any time."
Section 1.10. Amendment to Section 11(c)(i). Section 11(c)(i) of each of
the Existing Note Purchase Agreements shall be and is hereby amended in its
entirety to read as follows:
"(i) the Company defaults in the performance of or compliance with any
term contained in Section 7.1(d), 9.8, 10.4 through 10.8, 10.12 through
10.14 or"
Section 1.11. Amendments to Definitions. The following definitions of
terms set forth in Schedule B to each of the Existing Note Purchase Agreements
shall be and are hereby amended by (a) deleting and restating in their entirety
the following definitions:
"Net Finance Assets" shall mean, as of any date of calculation, an
amount equal to the sum of:
(i) cash of up to $5,000,000 and Short Term Investments shown
on the Company's balance sheet as of such date, plus
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Medallion Funding Corp. Second Amendment Agreement
(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 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
(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, plus
(v) through August 31, 2001, 83.33% of up to $4,000,000 of the
Advance Amounts of Eligible Yellow Cab Loans;
provided, that if all or any part of any 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
Loan shall be excluded."
"Senior Debt" shall mean the sum of (a) all Indebtedness of the
Company under this Agreement, plus (b) all CP Debt of the Company, plus (c)
all Indebtedness of the Company under the Bank Loan Agreement, plus (d) any
other Indebtedness of the Company secured by a Lien on any assets of the
Company.";
and (b) deleting the first parenthetical clause (i) of the definition of
"Restricted Payment" in its entirety and substituting in lieu thereof the
following new parenthetical:
"(other than the payment of (i) the sum of (a) 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 (b) the payment of Dividends required to be paid in order
to avoid the imposition of income taxes pursuant to the Code".
Section 1.12. Addition of Definitions. The following definitions of terms
shall be and are hereby added to Schedule B to each of the Existing Note
Purchase Agreements to read as follows:
"Adjusted Net Investment Income" shall mean, with respect to the
Company, the aggregate income (or loss), after realized gains on
investments have been added thereto and realized losses on investments have
been subtracted therefrom and net of unrealized
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Medallion Funding Corp. Second Amendment Agreement
appreciation or depreciation on investments, of the Company for such
period, which shall be an amount equal to net revenues and other proper
items of income less than aggregate for the Company of any and all items
that are treated as expenses under GAAP and, to the extent applicable
thereto, the regulations of the SEC applicable to investment companies,
after realized gains on investments have been added thereto and realized
losses on investments have been subtracted therefrom and net of unrealized
appreciation or depreciation on investments.
"Agent" shall have the meaning set forth for such term in the Bank
Loan Agreement.
"Bank Debt Prepayment" means any payment or prepayment of any (i)
Senior Obligations (as defined in the Intercreditor Agreement and
Collateral Agency Agreement) provided, however, in the case of a payment or
prepayment of the revolving credit under the Bank Loan Agreement, only to
the extent that such payment or prepayment results in a permanent reduction
of the availability thereunder, or (ii) any other Additional Senior
Obligations (as defined in the Intercreditor Agreement and the Collateral
Agency Agreement).
"Borrowing Base" shall have the meaning set forth for such term in the
Bank Loan Agreement.
"Borrowing Base Certificate" shall have the meaning set forth for such
term in the Bank Loan Agreement.
"Debt Offering" shall mean the sale or issuance by the Company or any
of its Subsidiaries of any Indebtedness.
"EBIT" shall mean, with respect to the Company for any period, the sum
of (i) Adjusted Net Investment Income, plus (ii) Interest Expense, plus
(iii) federal, state and local income taxes, if any, of the Company for
such period, computed in accordance with GAAP.
"Equity Offering" shall mean the sale or issuance by the Company or
any of its 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
the Company to any of its Subsidiaries).
"Excess Dividends" shall have the meaning set forth for such term in
Section 8.8(d).
"Net Cash Proceeds" shall mean, with respect to (a) any Debt Offering
or Equity Offering, the excess of the gross cash proceeds received by the
Company or any of its Subsidiaries from such Debt Offering or Equity
Offering after deduction of reasonable
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Medallion Funding Corp. Second Amendment Agreement
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 the Company or any of its Subsidiaries or of any of
the Capital Stock of the Guarantor by the Parent, the net cash proceeds
received by the Company or any of its Subsidiaries or, in the case of any
of the Capital Stock of the Guarantor, by the Parent in respect thereof,
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 the Company, such Subsidiary or the Parent in
connection with such sale, disposition or transfer.
"Payment Amount One" shall mean the sum of (a) $2,000,000, plus (b)
$400,000, plus (c) the sum of 0.90% multiplied by the principal amount of
Additional Senior Obligations (as defined in the Intercreditor Agreement)
outstanding at the time of determination.
"Payment Amount Two" shall mean the sum of (a) four multiplied by the
amount of the Excess Dividends, plus (b) .8 multiplied by the amount of the
Excess Dividends, plus (c) the product of the principal amount of
Additional Senior Obligations (as defined in the Intercreditor Agreement)
outstanding at the time of determination divided by $220,000,000 multiplied
by four multiplied by the amount of the Excess Dividends.
"Total Intercompany Receivables" shall mean, with respect to the
Company, the sum of (a) the amount listed as "Intercompany Receivables" on
the Company's balance sheet delivered to each holder of Notes pursuant to
Section 7.1(a) or (b) as the case may be, plus (b) to the extent not
otherwise included, all amounts owed to the Company by its Affiliates, plus
(c) to the extent not otherwise included, Investments by the Company in its
Affiliates.
Section 2. Waiver of Event of Default
Each of the Holders hereby waives the Event of Default under Section 11(f)
of the Existing Note Purchase Agreements, which arises due to the Company's
failure to comply with the covenant set forth in Section 7.4 of the Bank Loan
Agreement, provided, however, that such waiver shall only be effective to the
extent that the ratio of the sum of Net Income (as defined in the Bank Loan
Agreement) plus Interest Expense (as defined in the Bank Loan Agreement) to
Interest Expense for the fiscal quarter ended March 31, 2001 shall not be less
than 1.28:1.
Section 3. Amendment No. 1 to the Security Agreement.
Section 3.1. Amendments to Security Agreement. The Security Agreement
dated as of June 1, 1999, between the Company and Fleet Bank, N.A., as the
Collateral Agent for the benefit of those named therein, is hereby amended by
(a) in the definition of "Collateral", (i) deleting the word "and" at the end of
subsection (q) thereof, (ii) relettering subsection (r) as subsection (v), and
(iii) adding the following new subsections (r), (s), (t) and (u) in proper
alphabetical order therein:
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Medallion Funding Corp. Second Amendment Agreement
"(r) all Receivables;
(s) all Documents;
(t) all Depository Accounts;
(u) rights to the payment of money, insurance refund claims and all
other insurance claims and proceeds, tort claims and rights to the proceeds
of letters of credit, and";
(b) inserting in Section 1.1, in the places required by alphabetical
order, the following new definitions:
"Documents" shall have the meaning assigned to it in Section
9-105(1)(i) of the UCC.
"Receivables" shall mean, with respect to any Person, all present
and future rights to payment for goods sold or leased or for services
rendered by such Person whether or not evidenced by an instrument or
chattel paper.
(c) amending Section 2.3 by adding the following new subsection (d) in
proper alphabetical order therein:
"(d) Upon the effectiveness of certain revisions to Article 9 of
the UCC described in Section 6.14 hereof, comply with all of the
requirements of and its agreements contained within such Section 6.13."
and (d) adding the following new Sections 6.15 and 6.16 in proper numerical
order therein:
Section 6.15. Concerning Revised Article 9 of the Uniform Commercial
Code. The parties acknowledge and agree to the following provisions of this
Agreement in anticipation of the possible application, in one or more
jurisdictions to the transactions contemplated hereby, of the revised
Article 9 of the UCC in the form or substantially in the form approved by
the American Law Institute and the National Conference of Commissioners on
Uniform State Law and contained in the 1999 official text of Revised
Article 9 ("Revised Article 9").
Section 6.15.1. Attachment.
In applying the law of any jurisdiction in which Revised Article 9
is in effect, the Collateral is all assets of the Company, whether or not
within the scope of Revised Article 9. The Collateral shall include,
without limitation, the following categories of assets as defined in
Revised Article 9: goods (including inventory, equipment and any accessions
thereto), instruments (including promissory notes), documents, accounts
(including health-care-insurance receivables), chattel paper (whether
tangible or electronic), deposit accounts, letter-of-credit rights (whether
or not the letter of credit is
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Medallion Funding Corp. Second Amendment Agreement
evidenced by a writing), commercial tort claims, securities and all other
investment property, general intangibles (including payment intangibles and
software), supporting obligations and any and all proceeds of any thereof,
wherever located, whether now owned or hereafter acquired. If the Company
shall at any time, whether or not Revised Article 9 is in effect in any
particular jurisdiction, acquire a commercial tort claim, as defined in
Revised Article 9, the Company shall immediately notify the Agent in a
writing signed by the Company of the brief details thereof and grant to the
Agent for the benefit of the Noteholders in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to
the Noteholders.
Section 6.15.2. Perfection by Filing.
The Collateral Agent may at any time and from time to time, pursuant
to the provisions of Sections 2.3(d) or 2.6 hereof, file financing
statements, continuation statements and amendments thereto that describe
the Collateral as all assets of the Company or words of similar effect and
which contain any other information required by Part 5 of Revised Article 9
for the sufficiency or filing office acceptance of any financing statement,
continuation statement or amendment, including whether the Company is an
organization, the type of organization and any organization identification
number issued to the Company. The Company agrees to furnish any such
information to the Collateral Agent promptly upon request. Any such
financing statements, continuation statements or amendments may be signed
by the Collateral Agent on behalf of the Company, as provided in Section
2.6 hereof, and may be filed at any time in any jurisdiction whether or not
Revised Article 9 is then in effect in that jurisdiction.
Section 6.15.3. Other Perfection, etc.
The Company shall at any time and from time to time, whether or not
Revised Article 9 is in effect in any particular jurisdiction, take such
steps as the Collateral Agent may reasonably request for the Collateral
Agent (a) to obtain an acknowledgement, in form and substance satisfactory
to the Collateral Agent, of any bailee having possession of any of the
Collateral that the bailee holds such Collateral for the Collateral Agent
for the benefit of itself and the Noteholders, (b) to obtain "control" of
any investment property, deposit accounts, letter-of-credit rights or
electronic chattel paper (as such terms are defined in Revised Article 9
with corresponding provisions in Rev. (S)(S) 9-104, 9-105, 9-106 and 9-107
relating to what constitutes "control" for such items of Collateral), with
any agreements establishing control to be in form and substance
satisfactory to the Collateral Agent, and (c) otherwise to insure the
continued perfection and priority of the Collateral Agent's security
interest for the benefit of itself and the Noteholders in any of the
Collateral and of the preservation of its rights therein, whether in
anticipation and following the effectiveness of Revised Article 9 in any
jurisdiction.
Section 6.15.4. Provisions.
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Medallion Funding Corp. Second Amendment Agreement
In applying the law of any jurisdiction in which Revised Article 9 is
in effect, the following references to sections in this Agreement to
existing Article 9 of that jurisdiction shall be to the Revised Article 9
Section of that jurisdiction indicated below:
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Agreement Section Existing Article 9 Revised Article 9
--------------------------------------------------------------------------------
1.1 (S) 9-105(1)(b) Rev. (S) 9-102(a)(11)
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1.1 (S) 9-105(1)(i) Rev. (S) 9-102(a)(47)
--------------------------------------------------------------------------------
1.1 (S) 9-106 Rev. (S) 9-102(a)(2) (for
the definition of
"accounts") or Rev. (S)
9-102(a)(46) (for the
definition of general
intangibles)
--------------------------------------------------------------------------------
1.1 (S) 9-109(2) Rev. (S) 9-102(a)(33)
--------------------------------------------------------------------------------
1.1 (S) 9-109(4) Rev. (S) 9-102(a)(48)
--------------------------------------------------------------------------------
1.1 (S) 9-115 Rev. (S) 9-102(a)(49)
--------------------------------------------------------------------------------
1.1 (S) 9-306(1) Rev. (S) 9-102(a)(64)
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6.15.5 Savings Clause. Nothing contained in this Section 6.15 shall
be construed to narrow the scope of the Collateral Agent's security
interest hereunder in any of the Collateral or the perfection or priority
thereof or to impair or otherwise limit any of the rights, powers,
privileges or remedies of the Agent or any Noteholders hereunder except
(and then only to the extent) mandated by Revised Article 9 to the extent
then applicable.
Section 6.16. Transitional Arrangements.
The Company hereby (a) confirms its prior grant to the Collateral
Agent in favor of the Noteholders of a security interest in the
"Collateral" (as defined herein), and (b) grants a continuing lien on such
"Collateral" (as defined herein)."
Section 4. Amendment No. 1 to the Parent Pledge Agreement .
Section 23 of the Parent Pledge 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 Section
8.8 of the Note Agreements, including 8.8(b) of the Note Agreements, and".
Section 5. Consent to Amendment of Bank Loan Agreement, etc.
Each of the Holders hereby consents to the amendment of the Bank Loan
Agreement in the form and substance satisfactory to the Holders and attached
hereto as Exhibit B for purposes of Section 2 of the Intercreditor Agreement and
Section 10.11 of the Existing Note Purchase Agreements.
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Medallion Funding Corp. Second Amendment Agreement
Section 6. Representations and Warranties.
The Company represents and warrants to the Holders as of the date hereof,
and as of any date on which the conditions set forth in Section 6 below are met,
that:
Section 6.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and the corporate authority to own or hold under lease
the Properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, and to execute, deliver and perform this
Amendment and the Note Documents.
Section 6.2. Authorization, Etc. The execution and delivery by the Company
of this Amendment and all other instruments and agreements required to be
executed and delivered by the Company in connection with the transactions
contemplated hereby or referred to herein (collectively, the "Amendment
Documents"), and the performance by the Company of any of its obligations and
agreements under the Amendment Documents and the Note Purchase Agreements and
the other Note Documents, as amended hereby, have been duly authorized by all
necessary corporate action on the part of the Company, each of the Amendment
Documents has been duly executed and delivered by the Company. Each of the
Amendment Documents, the Existing Note Purchase Agreements and the other Note
Documents, as amended hereby, constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 6.3. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Amendment and the other Note
Documents do not and will not (a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority known to be applicable to the Company or any Subsidiary.
Section 6.4. No Default or Event of Default. After giving effect to this
Amendment, no Default or Event of Default shall have occurred and be continuing.
Section 6.5. Compliance. The Company has performed and complied in all
material respects with all terms and conditions herein required to be performed
or complied with by it prior to or at the time hereof.
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Medallion Funding Corp. Second Amendment Agreement
Section 6.6. No Consents. 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 the Company of the Amendment Documents or
the Note Purchase Agreements or other Note Documents, as amended hereby, or the
consummation by the Company of the transactions among the parties contemplated
hereby and thereby or referred to herein.
Section 6.7. Representations in Note Purchase Agreements. The
representations and warranties contained in Section 5 of the Note Purchase
Agreements were true and correct at and as of the date made. Except (i) 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), (ii) to the extent that such representations
and warranties relate expressly to an earlier date, and (iii) 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.
The Company 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.
Section 6.8. Priority; Continued Effectiveness. Except as otherwise
permitted under the Note Purchase Agreements, the Collateral Agent, for the
ratable benefit of the holders of the Notes, has a valid and perfected 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 and,
after the execution and delivery thereof, the Parent Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the holders of the Notes, a valid and perfected first priority security interest
(subject to the terms of the Intercreditor Agreement and the Collateral Agency
Agreement and except as otherwise permitted hereunder) 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, whether incurred prior to or
after the Effective Date. No additional Company Financing Statements are
required to be filed in order to maintain the perfection and priority of the
security interests created pursuant to the Company Security Agreement and the
Parent Pledge Agreement.
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Medallion Funding Corp. Second Amendment Agreement
Section 6.9. Investment Company Act. 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 the 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.
Section 7. Conditions Precedent.
This Second Amendment Agreement shall be effective when each of the
following conditions shall have been satisfied (the "Effective Date"):
Section 7.1. Execution. Each of the Holders shall have received this
Amendment, duly executed by the Company. The Holders shall have consented to
this Amendment as evidenced by their execution thereof.
Section 7.2. Representations and Warranties. The representations and
warranties of the Company set forth in Section 6 hereof are true and correct as
of the Effective Date.
Section 7.3. Related Transactions. (a) The Holders shall have received an
executed copy of the amendment of the Financial Agreement in the form attached
hereto as Exhibit A.
(b) The Holders shall have received an executed copy of the Amendment No.
5 to the Bank Loan Agreement in the form attached hereto as Exhibit B.
Section 7.4. Amendment Fee. The Holders shall have received by wire
transfer to each Holder's account specified in Schedule A to the Existing Note
Purchase Agreements their pro rata portion of an amendment fee equal .15%.
Section 7.5. Payment of Fees. The Company shall have paid the fees and
disbursements of the Holders' special counsel, Chapman and Cutler, incurred in
connection with the negotiation, preparation, execution and delivery of this
Amendment.
Upon receipt of all of the foregoing, this Amendment shall become effective.
Section 8. Miscellaneous.
Section 8.1. Governing Law. This Amendment 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.
Section 8.2. Counterparts. This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one Amendment.
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Medallion Funding Corp. Second Amendment Agreement
Section 8.3. Captions. The descriptive headings of the various Sections or
parts of this Amendment are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
Section 8.4. References to Existing Note Purchase Agreements or Security
Agreement. Any and all notices, requests, certificates and other instruments
executed and delivered concurrently with or after the effectiveness of this
Amendment may refer to the Existing Note Purchase Agreements and the Outstanding
Notes or the Security Agreement without making specific reference to this
Amendment but nevertheless all such references shall be deemed to include this
Amendment unless the context shall otherwise require.
Section 8.5. Expenses. Whether or not the transactions herein contemplated
shall be consummated, the Company agrees to pay all expenses relating to the
subject matter of this Amendment, including but not limited to the reasonable
out-of-pocket expenses of the Holders and the reasonable fees and expenses of
Chapman and Cutler, special counsel for the Holders.
Section 8.6. Ratification. Except to the extent hereby modified or amended,
the Existing Note Purchase Agreements, the Security Agreement as amended hereby
and the other Note Documents are in all respects hereby ratified, confirmed and
approved by the parties hereto.
Section 9. Release.
Section 9.1. Release. In order to induce the holders of the Notes to enter
into this Amendment, the Company, on behalf of itself and its Subsidiaries,
acknowledges and agrees that: (a) such Person does not have any claim or cause
of action against any holder of Notes (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 their respective obligations,
indebtedness or liabilities to any holder; and (c) each of the holders of the
Notes has heretofore properly performed and satisfied in a timely manner all of
its obligations to such Person. 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 of Notes to such Person, except the obligations to be performed by
any holder on or after the date hereof as expressly stated in this Amendment,
the Note Purchase Agreements 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 such Person
might otherwise have against any holder of Notes 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.
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Medallion Funding Corp. Second Amendment Agreement
Medallion Funding Corp.
By /s/ Alvin M. Murstein
-----------------------
Name: Alvin M. Murstein
Title: Chief Executive Officer
By /s/ James Jack
----------------
Name: James E. Jack
Title: Chief Financial Officer
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Medallion Funding Corp. Second Amendment Agreement
The foregoing Second Amendment Agreement is hereby accepted and agreed to
as of the date aforesaid.
The Travelers Insurance Company
By /s/ A. William Carnduff
-------------------------
Name: A. William Carnduff
Title: Second Vice President
First Citicorp Life Insurance Company
By Travelers Asset Management
International Company LLC
By /s/ A. William Carnduff
-------------------------
Name: A. William Carnduff
Title: Second Vice President
Citicorp Life Insurance Company
By Travelers Asset Management
International Company LLC
By /s/ A. William Carnduff
-------------------------
Name: A. William Carnduff
Title: Second Vice President
United of Omaha Life Insurance Company
By /s/ Edwin H. Garrison, Jr.
----------------------------
Name: Edwin H. Garrison, Jr.
Title: First Vice President
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Medallion Funding Corp. Second Amendment Agreement
Companion Life Insurance Company
By /s/ Edwin H. Garrison, Jr.
----------------------------
Name: Edwin H. Garrison, Jr.
Title: First Vice President
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Medallion Funding Corp. Second Amendment Agreement
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
By /s/ Andrew M. Murstein
------------------------
Name: Andrew M. Murstein
Title: Chief Executive Officer and Director
By /s/ Michael Leible
--------------------
Name: Michael Leible
Title: President
Medallion Financial Corp.
By /s/ Andrew M. Murstein
------------------------
Name: Andrew M. Murstein
Title: President and Director
By /s/ Brian S. O'Leary
----------------------
Name: Brian O'Leary
Title: Chief Operating Officer
-19-
Schedule 1
Principal Amount and Series of
Name of Holder of Outstanding Notes Held as of
Outstanding Notes June 29, 2001
The Travelers Insurance Company $10,000,000 Series A
$10,000,000 Series B
First Citicorp Life Insurance Company $ 1,000,000 Series A
$ 1,000,000 Series B
Citicorp Life Insurance Company $ 1,000,000 Series A
$ 1,000,000 Series B
$ 500,000 Series A
$ 500,000 Series B
United of Omaha Life Insurance Company $ 8,500,000 Series A
$ 8,500,000 Series B
Companion Life Insurance Company $ 1,500,000 Series A
$ 1,500,000 Series B
Schedule 1
(to First Amendment Agreement)
Form of Amendment to Financial Agreement
Exhibit A
(to First Amendment Agreement)
Form of Amendment to Bank Loan Agreement
Exhibit B
(to First Amendment Agreement)