Exhibit f.1
EXECUTION COPY
AMENDMENT NO. 3
TO
SALE AND SERVICING AGREEMENT
AMENDMENT NO. 3 dated as of May 20, 2002, among MCG Master Trust (the
"Trust"), MCG Finance II, LLC (f/k/a MCG Finance Corporation II), as Seller, and
MCG Capital Corporation (f/k/a MCG Credit Corporation), as Originator and
Servicer, to that certain Sale and Servicing Agreement dated as of June 1, 2000
(as amended by Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and the Omnibus Amendment
thereto, the "Sale and Servicing Agreement") among the Trust, the Seller, the
Originator and the Servicer.
WHEREAS, the Trust, the Seller, the Originator and the Servicer entered
into the Sale and Servicing Agreement in connection with the issuance by the
Trust of the MCG Master Trust Notes; and
WHEREAS, Section 11.02(b) of the Sale and Servicing Agreement permits
the Sale and Servicing Agreement to be amended from time to time pursuant to the
conditions set forth therein; and
WHEREAS, the parties hereto wish to amend the Sale and Servicing
Agreement as set forth herein;
NOW THEREFORE, in consideration of the above premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in Appendix A to the Sale and Servicing Agreement.
2. Section 2.05(b) is hereby amended by inserting the phrase "and the
Issuer Net Worth is at least equal to the Required Net Worth" after the phrase
"Minimum Subordination Amount" on the 7th line from the bottom of such section.
3. Section 3.02(ff) is hereby amended in its entirety to read as
follows:
The Commercial Loan has an Investment Rating of 3.00 or better;
4. Section 3.02(gg) is hereby deleted in its entirety and replaced
with the phrase "[Intentionally Omitted]."
5. Section 3.02 is hereby amended by deleting the language that was
added pursuant to Section 7 of Amendment No. 2 to Sale and Servicing Agreement
dated as of June 6, 2001 and adding the following after clause (jj):
(kk) As of the related Transfer Date, the related Obligor was
required to make current payments of interest no less frequently than
quarterly;
6. Section 5.04(c) is hereby amended by inserting the phrase ", the
Issuer Net Worth is at least equal to the Required Net Worth" after the phrase
"Minimum Subordination Amount" appearing therein.
7. A new Section 11.13 is hereby added to read in its entirety as
follows:
Section 11.13. Required Net Worth.
------------------
If on any date the Issuer Net Worth is less than the Required Net
Worth (as such terms are defined in the Terms Supplement for the
Series 2000-1 Notes), the Issuer may cure such condition by depositing
cash into the Principal and Interest Account or by delivering loans to
the Indenture Trustee. Any cash so deposited shall be deemed Principal
Collections and any delivery of loans shall comply with the provisions
of Article II. Upon the delivery of a loan, such loan shall be deemed
a Commercial Loan and subject to the provisions of the Basic
Documents.
8. Appendix A is hereby amended as follows:
(a) The definition of "Borrowing Base" is hereby amended by
deleting from such definition the provisions added thereto by
Amendment No. 1 to Sale and Servicing Agreement dated as of
September 1, 2000.
(b) The definition of "Concentration and Mix Criteria" is hereby
amended in its entirety to read as follows:
CONCENTRATION AND MIX CRITERIA: On any day, for purposes of
------------------------------
determining the Borrowing Base, the Eligible Loans included in the
AOLB must conform to the concentration limitations set forth below:
(a) at all times, the aggregate Principal Balance of Eligible
Loans represented by Obligors in any one state (as allocated by the
Originator or Servicer in accordance with the Credit and Collection
Policy) shall not exceed 25% of the AOLB;
(b) at all times, the aggregate Principal Balance of Eligible
Loans represented by Obligors in the same industry segment (as
determined by the SIC or NAICS code described below) shall not exceed
the following percentages of the AOLB:
-2-
SIC
Code(s)
Percentage or
Segment Limit descriptions
------- ---------- ------------
Radio 35% 4832
Television 35% 4833, 4841
Other type of Publishing (excluding Community 35% 2721, 2741
Newspapers)
Community Newspapers 40% 2711
Telecommunications 25% 4812, 4813, 4822 (excluding Paging, ISP
and Telecommunications towers in those
codes)
Business Information Services 25% 7375, 7379
Technology 20% 7371, 7372, 7373 (excluding E-Commerce
in those codes)
Security Alarm Leasing Companies 20% 7382
Paging 15% NAICS code 513321
Internet Service Providers ("ISP") 15% NAICS code 514191
Telecommunications towers 20% see definition page
E-Commerce 15% see definition page
Other 15% any other SIC or NAICS codes not listed
here
-3-
Any single sub-segment of Telecommunications 15% any one of the following, see
definition page:
CLEC
long-distance
ICP
ALEC (prepaid, calling card)
Cellular and Other Wireless Telecom
Other
Definitions
Telecommunication towers
Company involved in the leasing, construction, and/or
management of communications facilities in
multi-tenant tower, antennae, rooftop facilities over
a geographic area.
E-Commerce
Company engaged in web-based or internet activities
or providing web-based or internet-related technology
solutions to business entities.
CLEC (competitive local exchange companies)
Company providing local exchange services in
competition with the incumbent local exchange carrier
(ILEC). Company may be facilities-based or may resell
local service provided by the ILEC. Company may
provide other services to complete the product
offering, but the primary business is local service.
Long distance
Company providing long distance services. The
services may be facilities-based or resold, or a
combination of both. The company may provide other
services, but the primary revenue source is long
distance.
ICP (integrated communications provider)
Company providing a broad range of telecommunications
products to customers. The services offered combine
traditional local service, long distance and wireless
communications products. The services can be
facilities-based or resold, but most likely a
combination of both.
-4-
ALEC (alternative local exchange companies)
Company providing prepaid local exchange services
that are resold from the LEC.
Cellular and other wireless telecom
See NAICS 513322
Other
All telecommunications entities not included in Paging, ISP,
Telecommunications towers, or the other identified sub-segments of the
Telecommunications.
(c) the sum of the Principal Balance for all Commercial Loans to
a single Obligor shall not exceed $25,000,000;
(d) the aggregate Principal Balance of all Eligible Loans of the
six largest Obligors (based upon aggregate Principal Balance) shall
not exceed the greater of: (i) $90,000,000 or (ii) 40% of the AOLB;
(e) the aggregate Principal Balance of all Eligible Loans
divided by the total number of Obligors shall not exceed $10,000,000;
(f) the weighted average remaining term to maturity of the
Eligible Loans shall not exceed 6.5 years;
(g) the aggregate Principal Balance of Eligible Loans that do not
require the related Obligor to make current payments of interest no
less frequently than quarterly shall not exceed 0% of the AOLB;
(h) the aggregate Principal Balance of Eligible Loans with an
Investment Rating of 3.00 shall not exceed 50.0% of the AOLB;
(i) the aggregate Principal Balance of all Eligible Loans that
are Subordinate Loans shall not exceed 20.0% of the AOLB;
(j) the aggregate Principal Balance of all Modified Commercial
Loans, shall not exceed 0% of the AOLB; and
(k) the aggregate Principal Balance of Eligible Loans with an
Investment Rating of 4.00 or 5.00 shall not exceed 0% of the AOLB.
(c) The definition of Delinquent Loan is hereby amended in its
entirety to read as follows:
-5-
DELINQUENT LOAN: Any Commercial Loan (other than a Charged-Off
---------------
Loan) as to which the Obligor has failed to make any payment of
principal or interest, or part thereof, required to be made thereunder
for more than sixty (60) days following the Due Date thereof
(inclusive of the 7-day grace period as allowed by the Credit and
Collection Policy). If a Delinquent Loan is restructured, it shall
continue to be deemed a Delinquent Loan unless and until (a) all past
due payments have been received by the Servicer or (b) such loan is no
longer a Modified Commercial Loan.
(d) A new definition of "Modified Commercial Loan" is hereby added to
read in its entirety as follows:
MODIFIED COMMERCIAL LOAN: Any Commercial Loan that has undergone
------------------------
a restructuring as a result of being a Delinquent Loan as to a payment
of interest or that would, in the reasonable judgment of the Servicer,
become a Delinquent Loan as to a payment of interest but for such
restructuring (including restructuring to capitalize any accrued
interest onto the principal balance of such Commercial Loan);
provided, however, that any Modified Commercial Loan shall cease being
classified as such upon the first to occur of (i) the related Obligor
making full and timely payment of all interest required to be paid on
such Commercial Loan at a per annum rate at least equal to the LIBOR
Rate plus 3.75% for a period covering 6 consecutive months and (ii)
one or more investors that are not affiliates of the Obligor acquire
equity in or debt of such Obligor (provided that such debt must by it
terms be subordinate to the debt evidenced by the Commercial Loan).
(e) The defined term "Risk Rating" is hereby replaced with the defined
term "Investment Rating" and all references to "Risk Rating" in the Sale and
Servicing Agreement, including Appendix A thereto, are hereby changed to
references to "Investment Rating."
(f) A new definition of "Senior Secured Loan" is hereby added to read
in its entirety as follows:
SENIOR SECURED LOAN: A Commercial Loan as to which the related
-------------------
Commercial Loan Note, credit agreement, security agreements, and
Mortgages, if any, and UCC-1 and/or intellectual property security
agreement filed or to be filed with respect to such Collateral creates
a valid and subsisting first priority lien of record on such
Collateral subject in all cases to such exceptions that are generally
acceptable to lending institutions in connection with their regular
commercial lending activities, and such other exceptions to which
similar Collateral is commonly
-6-
subject and which do not individually, or in the aggregate, materially
and adversely affect the benefits of the security intended to be
provide by such Commercial Loan Note, security agreement and UCC-1.
(g) A new definition of "Subordinate Loan" is hereby added in its
entirety to read as follows:
SUBORDINATE LOAN: Any Commercial Loan that is not a Senior
----------------
Secured Loan.
9. Exhibit K to the Sale and Servicing Agreement (Servicer's
Certificate) is hereby amended in its entirety to read as set forth on the
attachment hereto.
10. Except as otherwise set forth herein, the Sale and Servicing
Agreement shall continue in full force and effect in accordance with its terms.
11. This Amendment No. 3 may be executed in one or more counterparts,
each of which, when so executed, shall be deemed an original; such counterparts,
together, shall constitute one and the same agreement.
-7-
IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to
the Sale and Servicing Agreement as of the day and year first above written.
MCG MASTER TRUST
By: MCG CAPITAL CORPORATION
(f/k/a MCG Credit Corporation)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and
Chief Operating Officer
MCG FINANCE II, LLC,
(f/k/a MCG Finance Corporation II), as
Seller
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and
Chief Operating Officer
MCG CAPITAL CORPORATION
(f/k/a MCG Credit Corporation), as
Originator and Servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and
Chief Operating Officer
-8-
CONSENTED TO:
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, formerly known as Norwest Bank
Minnesota, National Association, not in its individual capacity but solely as
Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
FIRST UNION SECURITIES, INC.,
as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-------------------
Title: Vice President
--------------
VARIABLE FUNDING CAPITAL CORPORATION,
as Sole Noteholder
By: FIRST UNION SECURITIES, INC.,
As attorney-in-fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------
Title: Vice President
--------------
-9-
EXECUTION COPY
EXHIBIT K
Servicer's Certificate