EXHIBIT 10.1
COMMERCIAL PAPER DEALER AGREEMENT
[4(2) Program]
This Commercial Paper Dealer Agreement (the "Agreement") dated as of July 30,
1999 between Medallion Funding Corp.as Issuer and U.S. Bancorp Investments,
Inc., as Dealer, concerning short-term promissory notes (the "Notes") to be
issued pursuant to an Issuing and Paying Agency Agreement dated as of March 13,
1998 between the Issuer and Bank of Montreal Trust Company, as Issuing and
Paying Agent. This Agreement sets forth the understandings between the Issuer
and the Dealer in connection with the sale by the Issuer of the Notes through
the Dealer.
Certain terms used in this Agreement are defined in Section 6 hereof.
The Addendum to this Agreement, and any Annexes or Exhibits described in this
Agreement or such Addendum, are hereby incorporated into this Agreement and made
fully a part hereof.
1. Offers, Sales and Resales of Notes.
1.1 While (i) the Issuer has and shall have no obligation to sell the
Notes to the Dealer or to permit the Dealer to arrange any sale of the
Notes for the account of the Issuer, and (ii) the Dealer has and shall
have no obligation to purchase the Notes from the Issuer or to arrange
any sale of the Notes for the account of the Issuer, the parties
hereto agree that in any case where the Dealer purchases Notes from
the Issuer, or arranges for the sale of Notes by the Issuer, such
Notes will be purchased or sold by the Dealer in reliance on the
representations, warranties, covenants and agreements of the Issuer
contained herein or made pursuant hereto and on the terms and
conditions and in the manner provided herein.
1.2 So long as this Agreement shall remain in effect, and in addition to
the limitations contained in Section 1.7 hereof, the Issuer shall not,
without the consent of the Dealer, offer, solicit or accept offers to
purchase, or sell, any Notes except (a) in transactions with one or
more dealers which may from time to time after the date hereof become
dealers with respect to the Notes by executing with the Issuer one or
more agreements which contain provisions substantially identical to
those contained in Section 1 of this Agreement, of which the Issuer
hereby undertakes to provide the Dealer prompt notice or (b) in
transactions with the other dealers listed on the Addendum hereto,
which are executing agreements with the Issuer which contain
provisions substantially identical to Section 1 of this Agreement
contemporaneously herewith or (c) with Smith Barney Inc. pursuant to
the Commercial Paper Dealer Agreement by and between Smith Barney
Inc. and the issuer dated March 13, 1998. In no event shall the
Issuer offer, solicit or accept offers to purchase, or sell, any Notes
directly on its own behalf in transactions with persons other than
broker-dealers as specifically permitted in this Section 1.2.
1.3 The Notes shall be in a minimum denomination of $100,000 or integral
multiples of $1,000 in excess thereof, will bear such interest rates,
if interest bearing, or will be sold at such discount from their face
amounts, as shall be agreed upon by the Dealer and the Issuer, shall
have a maturity not exceeding 270 days from the date of issuance
(exclusive of days of grace) and shall not contain any provision for
extension, renewal or automatic "rollover."
1.4 The authentication and issuance of, and payment for, the Notes shall
be effected in accordance with the Issuing and Paying Agency
Agreement, and the Notes shall be either individual physical
certificates or book-entry notes evidenced by a Master Note registered
in the name of DTC or its nominee, in the form or forms annexed to the
Issuing and Paying Agency Agreement.
1.5 If the Issuer and the Dealer shall agree on the terms of the purchase
of any Note by the Dealer or the sale of any Notes arranged by the
Dealer (including, but not limited to, agreement with respect to the
date of issue, purchase price, principal amount, maturity and interest
rate (in the case of interest-bearing Notes) or discount thereof (in
the case of Notes issued on a discount basis), and appropriate
compensation for the Dealer's services hereunder) pursuant to this
Agreement, the Issuer shall cause such Note to be issued and delivered
in accordance with the terms of the Issuing and Paying Agency
Agreement and payment for such Note shall be made by the purchaser
thereof, either directly or through the Dealer, to the Issuing and
Paying Agent, for the account of the Issuer. Except as otherwise
agreed, in the event that the Dealer is acting as an agent and a
purchaser shall either fail to accept delivery of or make payment for
a Note on the date fixed for settlement, the Dealer shall promptly
notify the Issuer, and if the Dealer has theretofore paid the Issuer
for the Note, the Issuer will promptly return such funds to the Dealer
against its return of the Note to the Issuer, in the case of a
certificated Note, and upon notice of such failure in the case of a
book-entry Note. If such failure occurred for any reason other than
default by the Dealer, the Issuer shall reimburse the Dealer on an
equitable basis for the Dealer's loss of the use of such funds for the
period such funds were credited to the Issuer's account.
1.6 The Dealer and the Issuer hereby establish and agree to observe the
following procedures in connection with offers, sales and subsequent
resales or other transfers of the Notes;
(a) Offers and sales of the Notes by or through the Dealer shall be
made only to: (i) investors reasonably believed by the Dealer to
be Qualified Institutional Buyers, Institutional Accredited
Investors or Sophisticated Individual Accredited Investors and
(ii) non-bank fiduciaries or agents that will be purchasing Notes
for one or more accounts, each of which is reasonably believed by
the Dealer to be an Institutional Accredited Investor or
Sophisticated Individual Accredited Investor.
(b) Resales and other transfers of the Notes by the holders thereof
shall be made only in accordance with the restrictions in the
legend described in clause (e) below.
(c) No general solicitation or general advertising shall be used in
connection with the offering of the Notes. Without limiting the
generality of the foregoing, without the prior written approval
of the Dealer, the Issuer shall not issue any press release or
place or publish any "tombstone" or other advertisement relating
to the Notes.
(d) No sale of Notes to any one purchaser shall be for less than
$250,000 principal or face amount, and no Note shall be issued in
a smaller principal or face amount. If the purchaser is a non-
bank fiduciary acting on behalf of others, each person for whom
such purchaser is acting must purchase at least $250,000
principal or face amount of Notes.
(e) Offers and sales of the Notes by the Issuer through the Dealer
acting as agent for the Issuer shall be made in accordance with
Rule 506 under the Securities Act, and shall be subject to the
restrictions described in the legend appearing on Exhibit A
hereto. A legend substantially to the effect of such Exhibit A
shall appear as part of the CP Memorandum used in connection with
offers and sales of Notes hereunder, as well as on each
individual certificate representing a Note and each Master Note
representing book-entry Notes offered and sold pursuant to this
Agreement.
(f) The Dealer shall furnish or shall have furnished to each
purchaser of Notes for which it has acted as the Dealer a copy of
the then-current CP Memorandum unless such purchaser has
previously received a copy of the CP Memorandum as then in
effect. The CP Memorandum shall expressly state that any person
to whom Notes are offered shall have an opportunity to ask
questions of, and receive information from, the Issuer and the
Dealer and shall provide the names, addresses and telephone
numbers of the persons from whom information regarding the Issuer
may be obtained.
(g) The Issuer agrees, for the benefit of the Dealer and each of the
holders and prospective purchasers from time to time of the Notes
that, if at any time the Issuer shall not be subject to Section
13 or 15(d) of the Exchange Act, the Issuer will furnish, upon
request and at its expense, to the Dealer and to holders and
prospective purchasers of Notes information required by Rule
144A(d)(4)(ii) in compliance with Rule 144A(d).
(h) In the event that any Note offered or to be offered by the Dealer
would be ineligible for resale under Rule 144A, the Issuer shall
immediately notify
the Dealer (by telephone, confirmed in writing) of such fact and
shall promptly prepare and deliver to the Dealer an amendment or
supplement to the CP Memorandum describing the Notes that are
ineligible, the reason for such ineligibility and any other
relevant information relating thereto.
(i) The Issuer hereby agrees that, not later than 15 days after the
first sale of Notes as contemplated by this Agreement, it will
file with the SEC a notice on Form D in accordance with Rule 503
under the Securities Act and that it will thereafter file such
amendments to such notice as Rule 503 may require.
1.7 The Issuer hereby represents and warrants to the Dealer, in connection
with offers, sales and resales of Notes, as follows:
(a) Issuer hereby confirms to the Dealer that (except as permitted by
Section 1.6(i)) within the preceding six months neither the
Issuer nor any person other than the Dealer or the other dealers
referred to in Section 1.2 hereof acting on behalf of the Issuer
has offered or sold any Notes, or any substantially similar
security of the Issuer (including, without limitation, medium-
term notes issued by the Issuer), to or solicited offers to buy
any such security form, any person other than the Dealer or the
other dealers referred to in Section 1.2 hereof. The Issuer also
agrees that (except as permitted by Section 1.6(i)), as long as
the Notes are being offered for sale by the Dealer and the other
dealers referred to in Section 1.2 hereof as contemplated hereby
and until at least six months after the offer of Notes hereunder
has been terminated, neither the Issuer nor any person other than
the Dealer or the other dealers referred to in Section 1.2 hereof
(except as contemplated by Section 1.2 hereof) will offer the
Notes or any substantially similar security of the Issuer for
sale to, or solicit offers to buy any such security from, any
person other than the Dealer or the other dealers referred to in
Section 1.2 hereof, it being understood that such agreement is
made with a view to bringing the offer and sale of the Notes
within the exemption provided by Section 4(2) of the Securities
Act and Rule 506 thereunder and shall survive any termination of
this Agreement. The Issuer hereby represents and warrants that
it has not taken or omitted to take, and will not take or omit to
take, any action that would cause the offering and sale of Notes
hereunder to be integrated with any other offering of securities,
whether such offering is made by the Issuer or some other party
or parties.
(b) The Issuer represents and agrees that the proceeds of the sale of
the Notes are not currently contemplated to be used for the
purpose of buying, carrying or trading securities within the
meaning of Regulation T and the interpretations thereunder by the
Board of Governors of the Federal Reserve System. In the event
that the Issuer determines to use such
proceeds for the purpose of buying, carrying or trading
securities, whether in connection with an acquisition of another
company or otherwise, the Issuer shall give the Dealer at least
five business days' prior written notice to that effect. The
Issuer shall also give the Dealer prompt notice of the actual
date that it commences to purchase securities with the proceeds
of the Notes. Thereafter, in the event that the Dealer purchases
Notes as principal and does not resell such Notes on the day of
such purchase, to the extent necessary to comply with Regulation
T and the interpretations thereunder, the Dealer will sell such
Notes either (i) only to offerees it reasonably believes to be
QIBs or to QIBs it reasonably believes are acting for other QIBs,
in each case in accordance with Rule 144A or (ii) in a manner
which would not cause a violation of Regulation T and the
interpretations thereunder.
2. Representations and Warranties of Issuer.
The Issuer represents and warrants that:
2.1 The Issuer is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation and has all the requisite power and authority to
execute, deliver and perform its obligations under the Notes,
this Agreement and the Issuing and Paying Agency Agreement.
2.2 This Agreement and the Issuing and Paying Agency Agreement have
been duly authorized, executed and delivered by the Issuer and
constitute legal, valid and binding obligations of the Issuer
enforceable against the Issuer in accordance with their terms,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law).
2.3 The Notes have been duly authorized, and when issued as provided
in the Issuing and Paying Agency Agreement, will be duly and
validly issued and will constitute legal, valid and binding
obligations of the Issuer enforceable against the Issuer in
accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
2.4 The offer and sale of Notes in the manner contemplated hereby do
not require registration of the Notes under the Securities Act,
pursuant to the exemption from registration contained in Section
4(2) thereof and Regulation D thereunder, and no indenture in
respect of the Notes is
required to be qualified under the Trust Indenture Act of 1939,
as amended.
2.5 The Notes will rank at least pari passu with all other unsecured
and unsubordinated indebtedness of the Issuer.
2.6 No consent or action of, or filing or registration with, any
governmental or public regulatory body or authority, including
the SEC, is required to authorize, or is otherwise required in
connection with the execution, delivery or performance of, this
Agreement, the Notes or the Issuing and Paying Agency Agreement,
except as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the
Notes.
2.7 Neither the execution and delivery of this Agreement and the
Issuing and Paying Agency Agreement, nor the issuance of the
Notes in accordance with the Issuing and Paying Agency Agreement,
nor the fulfillment of or compliance with the terms and
provisions hereof or thereof by the Issuer, will (i) result in
the creation or imposition of any mortgage, lien, charge or
encumbrance of any nature whatsoever upon any of the properties
or assets of the Issuer other than in favor the holders of the
Notes and other persons secured by such lien, or (ii) violate or
result in a breach or a default under any of the terms of the
Issuer's charter documents or by-laws, any contract or instrument
to which the Issuer is a party or by which it or its property is
bound, or any law or regulation, or any order, writ, injunction
or decree of any court or government instrumentality, to which
the Issuer is subject or by which it or its property is bound,
which breach or default might have a material adverse effect on
the condition (financial or otherwise), operations or business
prospects of the Issuer or the ability of the Issuer to perform
its obligations under this Agreement, the Notes or the Issuing
and Paying Agency Agreement.
2.8 There is no litigation or governmental proceeding pending, or to
the knowledge of the Issuer threatened, against or affecting the
Issuer or any of its subsidiaries which might result in a
material adverse change in the condition (financial or
otherwise), operations or business prospects of the Issuer or the
ability of the Issuer to perform its obligations under this
Agreement, the Notes or the Issuing and Paying Agency Agreement.
2.9 Neither the CP Memorandum nor the Company Information contains
any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
2.10 Each (a) issuance of Notes by the Issuer hereunder and (b)
amendment or supplement of the CP Memorandum shall be deemed a
representation and warranty by the Issuer to the Dealer, as of
the date thereof, that, both before and after giving effect to
such issuance and after giving effect to such amendment or
supplement, (i) the representations and warranties given by the
Issuer set forth above in this Section 2 remain true and correct
on and as of such date as if made on and as of such date, (ii) in
the case of an issuance of Notes, the Notes being issued on such
date have been duly and validly issued and constitute legal,
valid and binding obligations of the Issuer, enforceable against
the Issuer in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and (iii) in the case of an
issuance of Notes, since the date of the most recent CP
Memorandum, there has been no material adverse change in the
condition (financial or otherwise), operations or business
prospects of the Issuer which has not been disclosed to the
Dealer in writing.
3. Covenants and Agreements of Issuer.
The Issuer covenants and agrees that:
3.1 The Issuer will provide the Dealer written notice of any
amendment to, modification of or waivers with respect to, the
Notes or the Issuing and Paying Agency Agreement, including a
complete copy of any such amendment, modification or waiver.
3.2 The Issuer shall, whenever there shall occur any change in the
Issuer's condition (financial or otherwise), operations or
business prospects or any development or occurrence in relation
to the Issuer that would be material to holders of the Notes or
potential holders of the Notes (including any downgrading or
receipt of any notice of intended or potential downgrading or any
review for potential change in the rating accorded any of the
Issuer's securities by any nationally recognized statistical
rating organization which has published a rating of the Notes),
promptly, and in any event prior to any subsequent issuance of
Notes hereunder, notify the Dealer (by telephone, confirmed in
writing) of such change, development or occurrence.
3.3 The Issuer shall from time to time furnish to the Dealer such
information as the Dealer may reasonably request, including,
without limitation, any press releases or material provided by
the Issuer to any national securities exchange or rating agency,
regarding (i) the Issuer's operations and financial condition,
(ii) the due authorization and execution of the Notes and (iii)
the Issuer's ability to pay the Notes as they mature.
3.4 The Issuer will take all such action as the Dealer may reasonably
request to ensure that each offer and each sale of the Notes will
comply with any applicable state Blue Sky laws; provided,
however, that the Issuer shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified
or subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
3.5 The Issuer will not be in default of any of its obligations
hereunder, under the Notes or under the Issuing and Paying Agency
Agreement, at any time that any of the Notes are outstanding.
3.6 The Issuer shall not issue Notes hereunder until the Dealer shall
have received (a) an opinion of counsel to the Issuer, addressed
to the Dealer, satisfactory in form and substance to the Dealer,
(b) a copy of the executed Issuing and Paying Agency Agreement as
then in effect, (c) a copy of resolutions adopted by the Board of
Directors of the Issuer, satisfactory in form and substance to
the Dealer and certified by the Secretary or similar officer of
the Issuer, authorizing execution and delivery by the Issuer of
this Agreement, the Issuing and Paying Agency Agreement and the
Notes and consummation by the Issuer of the transactions
contemplated hereby and thereby, (d) prior to the issuance of any
Notes represented by a book-entry note registered in the name of
DTC or its nominee, a copy of the executed Letter of
Representations among the Issuer, the Issuing and Paying Agent
and DTC and (e) such other certificates, opinions, letters and
documents as the Dealer shall have reasonably requested.
3.7 The Issuer shall reimburse the Dealer for all of the Dealer's
out-of-pocket expenses related to this Agreement, including
expenses incurred in connection with its preparation and
negotiation, and the transactions contemplated hereby (including,
but not limited to, the printing and distribution of the CP
Memorandum), and, if applicable, for the reasonable fees and
out-of-pocket expenses of the Dealer's counsel.
3.8 Without limiting any obligation of the Issuer pursuant to this
Agreement to provide the Dealer with credit and financial
information, the Issuer hereby acknowledges and agrees that the
Dealer may share the Company Information and any other
information or matters relating to the Issuer or the transactions
contemplated hereby with affiliates of the Dealer, including, but
not limited, to U.S. Bank, National Association, and that such
affiliates may likewise share information relating to the Issuer
or such transactions with the Dealer.
3.9 The Issuer shall maintain one or more legally committed,
immediately available, unrestricted credit facilities, acceptable
to the Dealer, in an aggregate amount equal to or greater than
the aggregate amount of the Notes outstanding and having an
expiration date later than the last maturity date of any of the
Notes issued and outstanding.
4. Disclosure.
4.1 The CP Memorandum and its contents (other than the Dealer
Information) shall be the sole responsibility of the Issuer. The
CP Memorandum shall contain a statement expressly offering an
opportunity for each prospective purchaser to ask questions of,
and receive answers from, the Issuer concerning the offering of
Notes and to obtain relevant additional information which the
Issuer possesses or can acquire without unreasonable effort or
expense.
4.2 The Issuer agrees to promptly furnish the Dealer the Company
Information as it becomes available.
4.3 (a) The Issuer further agrees to notify the Dealer promptly upon
the occurrence of any event relating to or affecting the Issuer
that would cause the Company Information then in existence to
include an untrue statement of a material fact or to omit to
state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they
are made, not misleading.
(b) In the event that the Issuer gives the Dealer notice pursuant
to Section 4.3(a) and the Dealer notifies the Issuer that it then
has Notes it is holding in inventory, the Issuer agrees promptly
to supplement or amend the CP Memorandum so that the CP
Memorandum, as amended or supplemented, shall not contain an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading,
and the Issuer shall make such supplement or amendment available
to the Dealer.
(c) In the event that (i) the Issuer gives the Dealer notice
pursuant to Section 4.3(a), (ii) the Dealer does not notify the
Issuer that it is then holding Notes in inventory and (iii) the
Issuer chooses not to promptly amend or supplement the CP
Memorandum in the manner described in clause (b) above, then all
solicitations and sales of Notes shall be suspended until such
time as the Issuer has so amended or supplemented the CP
Memorandum, and made such amendment or supplement available to
the Dealer.
5. Indemnification and Contribution.
5.1 The Issuer will indemnify and hold harmless the Dealer, each
individual, corporation, partnership, trust, association or other
entity controlling the Dealer, any affiliate of the Dealer or any
such controlling entity and their respective directors, officers,
employees, partners, incorporators, shareholders, servants,
trustees and agents (hereinafter the "Indemnitees") against any
and all liabilities, penalties, suits, causes of action, losses,
damages, claims, costs and expenses (including, without
limitation, fees and disbursements of counsel) or judgments of
whatever kind or nature (each a "Claim"), imposed upon, incurred
by or asserted against the Indemnitees arising out of or based
upon (i) any allegation that the CP Memorandum, the Company
Information or any information provided by the Issuer to the
Dealer included (as of any relevant time) or includes an untrue
statement of a material fact or omitted (as of any relevant time)
or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading or (ii) arising out of or based
upon the breach by the Issuer of any agreement, covenant or
representation made in or pursuant to this Agreement. This
indemnification shall not apply to the extent that the Claim
arises out of or is based upon Dealer Information.
5.2 Provisions relating to claims made for indemnification under this
Section 5 are set forth on Exhibit B to this Agreement.
5.3 In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this
Section 5 is held to be unavailable or insufficient to hold
harmless the Indemnitees, although applicable in accordance with
the terms of this Section 5, the Issuer shall contribute to the
aggregate costs incurred by the Dealer in connection with any
Claim in the proportion of the respective economic interests of
the Issuer and the Dealer; provided, however that such
contribution by the Issuer shall be in an amount such that the
aggregate costs incurred by the Dealer do not exceed the
aggregate of the commissions and fees earned by the Dealer
hereunder with respect to the issue or issues of Notes to which
such Claim relates. The respective economic interests shall be
calculated by reference to the aggregate proceeds to the Issuer
of the Notes issued hereunder and the aggregate commissions and
fees earned by the Dealer hereunder.
6. Definitions.
6.1 "Claim" shall have the meaning set forth in Section 5.1.
6.2 "Company Information" at any given time shall mean the CP
Memorandum together with, to the extent applicable, (i) the
Issuer's most
recent report on Form 10-K filed with the SEC and each report on
Form 10-Q or 8-K filed by the Issuer with the SEC since the most
recent Form 10-K, (ii) the Issuer's most recent annual audited
financial statements and each interim financial statement or
report prepared subsequent thereto, if not included in item (i)
above, (iii) the Issuer's and its affiliates' other publicly
available recent reports, including, but not limited to, any
publicly available filings or reports provided to their
respective shareholders, (iv) any other information or disclosure
prepared pursuant to Section 4.3 hereof and (v) any information
prepared or approved by the Issuer for dissemination to investors
or potential investors in the Notes.
6.3 "CP Memorandum" shall mean offering materials prepared in
accordance with Section 4 (including materials referred to
therein or incorporated by reference therein) provided to
purchasers and prospective purchasers of the Notes, and shall
include amendments and supplements thereto which may be prepared
from time to time in accordance with this Agreement (other than
any amendment or supplement that has been completely superseded
by a later amendment or supplement).
6.4 "Dealer Information" shall mean material concerning the Dealer
provided by the Dealer in writing expressly for inclusion in the
CP Memorandum.
6.5 "DTC" shall mean The Depository Trust Company.
6.6 "Exchange Act" shall mean the U.S. Securities Exchange Act of
1934, as amended.
6.7 "Indemnitee" shall have the meaning set forth in Section 5.1.
6.8 "Institutional Accredited Investor" shall mean an institutional
investor that is an accredited investor within the meaning of
Rule 501 under the Securities Act and that has such knowledge and
experience in financial and business matters that it is capable
of evaluating and bearing the economic risk of an investment in
the Notes, including, but not limited to, a bank, as defined in
Section 3(a)(2) of the Securities Act, or a savings and loan
association or other institution, as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its
individual or fiduciary capacity.
6.9 "Issuing and Paying Agency Agreement" shall mean the issuing and
paying agency agreement described on the cover page of this
Agreement, as such agreement may be amended or supplemented from
time to time.
6.10 "Issuing and Paying Agent" shall mean the party designated as
such on the cover page of this Agreement, as issuing and paying
agent under the
Issuing and Paying Agency Agreement, or any successor thereto in
accordance with the Issuing and Paying Agency Agreement.
6.11 "Non-bank fiduciary or agent" shall mean a fiduciary or agent
other than (a) a bank, as defined in Section 3(a)(2) of the
Securities Act, or (b) a savings and loan association, as defined
in Section 3(a)(5)(A) of the Securities Act.
6.12 "Qualified Institutional Buyer" shall have the meaning assigned
to that term in Rule 144A under the Securities Act.
6.13 "Rule 144A" shall mean Rule 144A under the Securities Act.
6.14 "Regulation D" shall mean Regulation D (Rules 501 et seq.) under
the Securities Act.
6.15 "SEC" shall mean the U.S. Securities and Exchange Commission.
6.16 "Securities Act" shall mean the U.S. Securities Act of 1933, as
amended.
6.17 "Sophisticated Individual Accredited Investor" shall mean an
individual who (a) is an accredited investor within the meaning
of Regulation D under the Securities Act and (b) based on his or
her pre-existing relationship with the Dealer, is reasonably
believed by the Dealer to be a sophisticated investor (i)
possessing such knowledge and experience (or represented by a
fiduciary or agent possessing such knowledge and experience) in
financial and business matters that he or she is capable of
evaluating and bearing the economic risk of an investment in the
Notes and (ii) having a net worth of at least $5 million.
7. General
7.1 Unless otherwise expressly provided herein, all notices under
this Agreement to parties hereto shall be in writing and shall be
effective when received at the address of the respective party
set forth as follows:
For the Issuer:
Address: 437 Madison Ave. 38th Floor
New York, NY 10022
Attention: Chief Financial Officer
Telephone: (212)328-2100
Fax number: (212)328-2121
For the Dealer:
Address: 111 SW Fifth Ave., T-19
Portland, OR 97204
Attention: Michael Malmquist
Vice President
Telephone: (503)275-4131
Fax number: (503)275-3490
7.2 This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota, without regard to its
conflict of laws provisions.
7.3 The Issuer agrees that any suit, action or proceeding brought by
the Issuer against the Dealer in connection with or arising out
of this Agreement or the Notes or the offer and sale of the Notes
shall be brought solely in the United States federal courts
located in Minnesota or the courts of the State of Minnesota
located in the City of Minneapolis. Each of the Dealer and the
Issuer waives its right to trial by jury in any suit, action or
proceeding with respect to this Agreement or the transactions
contemplated hereby.
7.4 This Agreement may be terminated, at any time, by the Issuer,
upon one business day's prior notice to such effect to the
Dealer, or by the Dealer upon one business day's prior notice to
such effect to the Issuer. Any such termination, however, shall
not affect the obligations of the Issuer under Sections 3.7, 5
and 7.3 hereof or the respective representations, warranties,
agreements, covenants, rights or responsibilities of the parties
made or arising prior to the termination of this Agreement.
7.5 This Agreement is not assignable by either party hereto without
the written consent of the other party; provided, however, that
the Dealer may assign its rights and obligations under this
Agreement to any affiliate of the Dealer.
7.6 This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
7.7 This Agreement is for the exclusive benefit of the parties
hereto, and their respective permitted successors and assigns
hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year first above written.
Medallion Funding Corp., as Issuer U.S. Bancorp Investments, Inc., as Dealer
By: /s/ Allen Greene By: /s/ Joe Baker
--------------------------------- --------------------------------------
Name: Allen Greene Name: Joe Baker
Title: Senior Executive Vice President Title: Senior Managing Director
By: /s/ Daniel F. Baker
---------------------------------
Name: Daniel F. Baker
Title: Chief Financial Officer
Exhibit A
Form of Legend for CP Memorandum and Notes
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES
THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT IT
HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER
AND THE NOTES, THAT IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY
DISTRIBUTION THEREOF AND THAT IT IS EITHER (a) AN INSTITUTIONAL INVESTOR OR
SOPHISTICATED INDIVIDUAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(a) UNDER THE ACT AND WHICH, IN THE CASE OF AN INDIVIDUAL,
(i) POSSESSES SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS
THAT HE OR SHE IS CAPABLE OF EVALUATING AND BEARING THE ECONOMIC RISK OF AN
INVESTMENT IN THE NOTES AND (ii) HAS A NET WORTH OF AT LEAST $5 MILLION (AN
"INSTITUTIONAL ACCREDITED INVESTOR" OR "SOPHISTICATED INDIVIDUAL ACCREDITED
INVESTOR", RESPECTIVELY) AND THAT EITHER IS PURCHASING NOTES FOR ITS OWN
ACCOUNT, IS A U.S. BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS
AND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF
THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR IS A FIDUCIARY OR
AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN) PURCHASING NOTES FOR ONE OR
MORE ACCOUNTS EACH OF WHICH IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR OR
SOPHISTICATED INDIVIDUAL ACCREDITED INVESTOR (i) WHICH ITSELF POSSESSES SUCH
KNOWLEDGE AND EXPERIENCE OR (ii) WITH RESPECT TO WHICH SUCH PURCHASER HAS SOLE
INVESTMENT DISCRETION; OR (B) A QUALIFIED INSTITUTIONAL BUYER ("QIB") WITHIN THE
MEANING OF RULE 144A UNDER THE ACT WHICH IS ACQUIRING NOTES FOR ITS OWN ACCOUNT
OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH IS A QIB AND WITH RESPECT TO EACH OF
WHICH THE PURCHASER HAS SOLE INVESTMENT DISCRETION; AND THE PURCHASER
ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM
THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A. BY
ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL ALSO BE DEEMED TO AGREE
THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A) IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO U.S.
BANCORP INVESTMENTS INC. OR ANOTHER PERSON DESIGNATED BY THE ISSUER AS A
PLACEMENT AGENT FOR THE NOTES (COLLECTIVELY, THE "PLACEMENT AGENTS"), NONE OF
WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT
AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR, SOPHISTICATED INDIVIDUAL
ACCREDITED INVESTOR OR A QIB, OR (3) TO A QIB IN A TRANSACTION THAT MEETS THE
REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM AMOUNTS OF $100,000.
Model Opinion of Counsel to Issuer
Set forth below are the operative provisions on which the Dealer will generally
expect a legal opinion. Parties should recognize that there may be additions
to the Dealer's opinion request, and variations as to the opinion language,
depending on the details of the transaction and the differing opinion practices
of law firms; it may also be necessary to split the opinion between two or more
counsel where no one counsel is in a position to opine as to all subjects or in
all relevant jurisdictions.
[Date]
[Name and Address of Dealer]
Ladies and Gentlemen:
We have acted as counsel to ___________, a ___________ corporation (the
"Company"), in connection with the proposed offering and sale by the Company in
the United States of commercial paper in the form of short-term promissory notes
(the "Notes").
In our capacity as such counsel, we have examined a specimen form of Note, an
executed copy of the Commercial Paper Dealer Agreement dated _________, ___ (the
"Agreement") between the Company and U.S. Bancorp Investments Inc. (the
"Dealer"), and the Issuing and Paying Agency Agreement dated _________, ___ (the
"Issuing and Paying Agency Agreement") between the Company and ___________, as
issuing and paying agent (the "Issuing and Paying Agent") as well as originals,
or copies certified or otherwise identified to our satisfaction, of such other
records and documents as we have deemed necessary as a basis for the opinions
expressed below. In such examination, we have assumed the genuineness of all
documents submitted to us as originals, and the conformity to the originals of
all documents submitted to us as copies.
Capitalized terms used herein without definition are used as defined in the
Agreement.
Based upon the foregoing, it is our opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the state of ________ and has all the
requisite power and authority to execute, deliver and perform its
obligations under the Notes, the Agreement and the Issuing and Paying
Agency Agreement.
2. Each of the Agreement and the Issuing and Paying Agency Agreement has
been duly authorized, executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law), and except as rights
under the Agreement to indemnity and contribution may be limited by
federal or state laws.
3. The Notes have been duly authorized, and when issued as provided in
the Issuing and Paying Agency Agreement, will be duly and validly
issued and will constitute legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
4. The issuance and sale of Notes under the circumstances contemplated by
the Agreement and the Issuing and Paying Agency Agreement do not
require registration of the Notes under the Securities Act, pursuant
to the exemption from registration contained in Section 4(2) thereof
and Regulation D thereunder and do not require compliance with any
provision of the Trust Indenture Act of 1939, as amended; and the
Notes will rank at least pari passu with all other unsecured and
unsubordinated indebtedness of the Issuer.
5. No consent or action of, or filing or registration with, any
governmental or public regulatory body or authority, including the
Securities and Exchange Commission, is required to authorize, or is
otherwise required in connection with the execution, delivery or
performance of, the Agreement, the Notes or the Issuing and Paying
Agency Agreement, except as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Notes.
6. Neither the execution and delivery of the Agreement and the Issuing
and Paying Agency Agreement, nor the issuance of the Notes in
accordance with the Issuing and Paying Agency Agreement, nor the
fulfillment of or compliance with the terms and provisions of either
thereof by the Company, will (i) result in the creation or imposition
of any mortgage, lien, charge or encumbrance of any nature whatsoever
upon any of the properties or assets of the Company, or (ii) violate
or result in a breach or default under any of the terms of the
Company's charter documents or by-laws, any contract or instrument to
which the Company is a party or by which it or its property is bound,
or any law or regulation, or any order, writ, injunction or decree of
any court or government instrumentality, to which the Company is
subject or by which it or its property is bound.
7. There is no litigation or governmental proceeding pending, or to the
knowledge of the Company threatened, against or affecting the Company
or any of its subsidiaries which might result in a material adverse
change in the condition (financial or otherwise), operations or
business prospects of the Company or the ability of the Company to
perform its obligations under the Agreement, the Notes or the Issuing
and Paying Agency Agreement.
8. The Company is not an "investment company" or an entity "controlled"
by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
This opinion may be delivered to the Issuing and Paying Agent, each holder
from time to time of Notes and any nationally recognized rating agency (in
connection with the rating of the Notes), each of which may rely on this
opinion to the same extent as if such opinion were addressed to it.
Very truly yours,
Exhibit B
Further Provisions Relating to Indemnification
(a) The Issuer agrees to reimburse each Indemnitee for all expenses (including
reasonable fees and disbursements of internal and external counsel) as they
are incurred by it in connection with investigating or defending any loss,
claim, damage, liability or action in respect of which indemnification may
be sought under Section 5 of the Agreement (whether or not it is a party to
any such proceedings).
(b) Promptly after receipt by an Indemnitee of notice of the existence of a
Claim, such Indemnitee will, if a claim in respect thereof is to be made
against the Issuer, notify the Issuer in writing of the existence thereof;
provided that (i) the omission so to notify the Issuer will not relieve the
Issuer from any liability which it may have hereunder unless and except to
the extent it did not otherwise learn of such Claim and such failure
results in the forfeiture by the Issuer of substantial rights and defenses,
and (ii) the omission so to notify the Issuer will not relieve it from
liability which it may have to an Indemnitee otherwise than on account of
this indemnity agreement. In case any such Claim is made against any
Indemnitee and it notifies the Issuer of the existence thereof, the Issuer
will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the Indemnitee, to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnitee; provided
that if the defendants in any such Claim include both the Indemnitee and
the Issuer, and the Indemnitee shall have concluded that there may be legal
defenses available to it which are different from or additional to those
available to the Issuer, the Issuer shall not have the right to direct the
defense of such Claim on behalf of such Indemnitee, and the Indemnitee
shall have the right to select separate counsel to assert such legal
defenses on behalf of such Indemnitee. Upon receipt of notice from the
Issuer to such Indemnitee of the Issuer's election so to assume the defense
of such Claim and approval by the Indemnitee of counsel, the Issuer will
not be liable to such Indemnitee for expenses incurred thereafter by the
Indemnitee in connection with the defense thereof (other than reasonable
costs of investigation) unless (i) the Indemnitee shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the Issuer shall not be liable for the expenses
of more than one separate counsel (in addition to any local counsel in the
jurisdiction in which any Claim is brought), approved by the Dealer,
representing the Indemnitee who is party to such Claim), (ii) the Issuer
shall not have employed counsel reasonably satisfactory to the Indemnitee
to represent the Indemnitee within a reasonable time after notice of
existence of the Claim or (iii) the Issuer has authorized in writing the
employment of counsel for the Indemnitee. The indemnity, reimbursement and
contribution obligations of the Issuer hereunder shall be in addition to
any other liability the Issuer may otherwise have to an Indemnitee and
shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Issuer and any Indemnitee. The
Issuer agrees that without the Dealer's prior written consent, it will not
settle, compromise or consent to the entry of any judgment in any Claim in
respect of which indemnification may be
sought under the indemnification provision of the Agreement (whether or not
the Dealer or any other Indemnitee is an actual or potential party to such
Claim), unless such settlement, compromise or consent includes an
unconditional release of each Indemnitee from all liability arising out of
such Claim.
Model Certificate as to Resolutions1
[Name of Issuer]
I, _____________, the [Assistant] Secretary of __________, a ________
corporation (the "Issuer"), do hereby certify, in connection with the issuance
and sale of short-term promissory notes under the Commercial Paper Dealer
Agreement dated _________, ____ (the "Agreement", the terms defined therein
being used herein as therein defined) between the Issuer and U.S. Bancorp
Investments Inc. (the "Dealer"), that:
1. The following resolution was duly adopted by the Board of Directors of the
Issuer [by unanimous written consent dated _______, ____] [at a meeting
thereof duly called and held on _________, ____, at which meeting a quorum
was present and acting throughout], and such resolution has not been
amended, modified or revoked and is in full force and effect on the date
hereof.
RESOLVED, that the Chairman of the Board, the President, the Executive Vice
President, any Vice President and the Treasurer of the Issuer be, and each
of them hereby is, individually authorized to: (i) borrow for the use and
benefit of the Issuer from time to time up to an aggregate of $_______ at
any one time outstanding through the issuance of commercial paper notes;
(ii) execute such commercial paper notes in the name and on behalf of the
Issuer and issue such notes in accordance with the Issuing and Paying
Agency Agreement referred to below; (iii) execute and deliver (A) a
Commercial Paper Dealer Agreement between the Issuer and _____________, as
Dealer, providing, among other things, for the sale of commercial paper
notes on behalf of the Issuer and the indemnification of the Dealer in
connection therewith, (B) an Issuing and Paying Agency Agreement between
the Issuer and ___________, as issuing and paying agent, and (C) a Letter
of Representations addressed to The Depository Trust Company; (iv) execute
and file with the Securities and Exchange Commission Form D and any and all
amendments thereto, as required by Section 1.6(j) of the Agreement2, (v)
delegate to any other officers or employees of the Issuer authority to give
instructions to the Dealer pursuant to the Agreement; and (vi) do such acts
and execute such other instruments and documents as may be necessary and
proper to effect the transactions contemplated hereby including (a)
amending documents referred to herein and (b) appointing additional dealers
and successors to any of the parties named.
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1This model certificate will serve as a guide for resolutions adopted by the
Issuer. Any resolutions actually adopted, regardless of form, should cover all
the substantive matters covered in this model, and a certificate substantially
to the effect of this model is required to be delivered to the Dealer under
Section 3.6(c) of the Agreement.
2Clause (iv) may be deleted in Section 1.6(j) is not part of the Agreement. See
paragraph 2 of the Addendum and the Guidance Note relating to Section 1.6
generally.
2. Each of the Agreement and the Issuing and Paying Agency Agreement, as
executed and delivered by the Issuer, is substantially in the form thereof
approved by the Board of Directors and referred to in the resolution set
forth in paragraph 1 hereof.
IN WITNESS WHEREOF, I have signed this certificate the ___ day of ________, ___.
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[Assistant] Secretary