Exhibit F.13.1
CONSENT AND THIRD AMENDMENT
TO CREDIT AGREEMENT
THIS CONSENT AND THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of
September 5, 2001 (this "Agreement"), is by and among MCG FINANCE CORPORATION, a
Delaware corporation ("Borrower"), ▇▇▇▇▇▇ FINANCIAL, INC., a Delaware
corporation, as agent ("Agent") under and as defined in the Credit Agreement
defined below, M. CREDIT INC. f/k/a Transamerica Business Credit Corporation, a
Delaware corporation, THE BANK OF NOVA SCOTIA, FLEET CAPITAL CORPORATION,
FOOTHILL CAPITAL CORPORATION, PNC BANK, N.A. and the NATIONAL BANK OF CANADA,
each as a "Lender" under such Credit Agreement.
W I T N E S S E T H:
WHEREAS, Borrower, Agent and Lenders are parties to that certain Credit
Agreement dated as of June 24, 1998, as amended by that certain Amendment to
Credit Agreement dated as of September 1, 1998, and as further amended by that
certain Second Amendment to Credit Agreement dated as of October 1, 1999 (as so
amended and hereafter amended, supplemented, restated or otherwise modified from
time to time, the "Credit Agreement"; capitalized terms used but not otherwise
defined herein shall have the definitions provided therefor in the Credit
Agreement) and to certain other documents executed in connection with the Credit
Agreement;
WHEREAS, MCG Capital Corporation, f/k/a MCG Credit Corporation, a
Delaware corporation (the "Company"), owns all of the issued and outstanding
capital stock of Borrower;
WHEREAS, the Company intends to engage in an initial public offering of
its capital stock (the "IPO") pursuant to and in accordance with that certain
Form N2 Registration Statement filed with the Securities and Exchange Commission
on July 5, 2001 (as amended on or about September 5, 2001) and in connection
therewith desires to register as a regulated "investment company" as defined in
and under the Investment Company Act of 1940;
WHEREAS, in connection with or as a result of the IPO, and to comply
with certain regulatory requirements associated with the conversion of the
Company into a regulated investment company as contemplated thereunder, the
Company desires to terminate that certain Stockholders' Agreement dated as of
June 24, 1998 (as heretofore amended, supplemented and in effect, the
"Stockholders Agreement") among the Company, the ▇▇▇▇▇▇▇ Group and certain of
the other stockholders of the Company, as identified on the signature pages
thereof and anticipates that the ▇▇▇▇▇▇▇ Group's ownership and control of the
Class C Common Stock of the Company shall become less than 25% of the total
issued and outstanding shares of such stock;
WHEREAS, Borrower has requested that Agent and Lenders (i) consent to
the election of the Company to be treated as an investment company as aforesaid,
and (ii) amend the Credit Agreement to permit the termination of the
Stockholders' Agreement and to permit the dilution of the ▇▇▇▇▇▇▇ Group's equity
holdings in the Company to as low as 15% (collectively, the "Requested
Modifications"); and
NOW, THEREFORE, in consideration of the foregoing premises (which are
incorporated herein by this reference thereto), to induce Lenders to consent to
the modifications set forth below, and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Consent. Effective upon satisfaction of the conditions precedent set
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forth in Section 4 below, and in reliance upon the representations and
warranties of the Borrower set forth in the Credit Agreement and in this
Agreement, Agent and Lenders each consent to the conversion of the Company into
a business development company and/or other form of an investment company under
the Investment Company Act of 1940 notwithstanding the provisions of the Credit
Agreement to the contrary, including, without limitation Section 5.13 thereof,
which provision is hereby waived to the extent, and only to the extent, the same
may be construed to prohibit the foregoing transaction.
2. Amendments to the Credit Agreement. Effective upon satisfaction of
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the conditions precedent set forth in Section 4 below, and in reliance upon the
representations and warranties of Borrower and Subsidiaries set forth in the
Loan Documents and in this Agreement, the Credit Agreement is hereby amended by
deleting Subsection 6.1(R) in its entirety and substituting the following new
subsection 6.1(R) therefor:
"(R) Change in Control. (1) Prior to an initial public offering
among the Company, the ▇▇▇▇▇▇▇ Group and certain of the other
stockholders of the Company, as identified on the signature pages
thereof, as in effect as of the Closing Date), the ▇▇▇▇▇▇▇ Group
ceases to beneficially own and control, directly or indirectly, free
and clear of all Liens, at least forty percent (40%) of the issued
and outstanding shares of Class A Common Stock, par value $.01 per
share, of the Company, or (2) subsequent to such a initial public
offering, ▇▇▇▇▇▇▇ Group ceases to beneficially own and control, free
and clear of all Liens, at least fifteen percent (15%) of the issued
and outstanding shares of Common Stock of the Company, or (3)
Company ceases to beneficially own and control all of the issued and
outstanding capital stock of Borrower free and clear of all Liens
other than Liens in favor of Agent for the ratable benefit of Agent
and Lenders; or"
3. Reaffirmation. In connection with the execution and delivery of this
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Agreement, each Loan Party, as debtor, grantor, mortgagor, pledgor, guarantor,
assignor, or in other similar capacities in which such Loan Party grant liens or
security interests in their properties or otherwise act as accommodation parties
or guarantors, as the case may be, in any case under the Loan Documents,
ratifies and reaffirms all of its respective payment and performance
obligations, contingent or otherwise, under each of such Loan Documents to which
it is a party and, to the extent such Loan Party granted liens on or security
interests in any of its properties pursuant to any such Loan Documents as
security for the "Obligations" under or with respect to the Credit Agreement,
each hereby ratifies and reaffirms such grant of security and confirms and
agrees that such liens and security interests hereafter secure all of the
Obligations, including, without limitation, all additional Obligations resulting
from the this Agreement, in each case as if each reference in such Loan
Documents to the obligations secured thereby are construed to hereafter mean and
refer to such Obligations under the Credit Agreement as amended hereby.
Each of the Loan Parties hereby consents to the terms and conditions of this
Amendment. Each of the Loan Parties acknowledges receipt of a copy of this
Agreement and the Credit Agreement and acknowledges that each of the Loan
Documents remains in full force and effect and is hereby ratified and confirmed.
4. Conditions. The effectiveness of the amendments and consents stated
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in the Agreement is subject to each of the following conditions precedent,
concurrent or subsequent, as the case may be:
(a) No Default. No Default or Event of Default under the Credit
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Agreement, as amended hereby, shall have occurred and be continuing;
(b) Warranties and Representations. The warranties and
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representations of the Borrower contained in this Agreement, the Credit
Agreement, as amended hereby, and the other Loan Documents, shall be true and
correct in all material respects as of the effective date hereof, with the same
effect as though made on such date, except for those representations which
relate only to a specific date, which are confirmed as of such date only;
(c) Delivery of Third Amendment. The Borrower and the Company shall
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have executed and delivered this Agreement, to Agent in counterparts sufficient
to provide each Lender with one original, fully executed Amendment;
(d) Intentionally Omitted;
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(e) Use of Initial IPO Proceeds. The Company shall, promptly upon
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receipt of the first $150,000,000 of the net cash proceeds from the IPO (or such
lesser amount that is actually received by the Company), utilize such funds (as
and when received) to purchase from Borrower Finance Acquired Assets and/or
Originated Assets from the Media Portfolio, beginning with those loans and
investments bearing the highest Rating (i.e. the least creditworthy or highest
risk loans and investments). For avoidance of doubt and without limiting the
generality of the foregoing, the Company shall first purchase and Borrower shall
first sell such Media Portfolio loans and investments have Ratings of 10 and if
no such loans or investments remain, those loans and investments bearing a
Rating of 9, seriatim, until at least $150,000,000 of loans and investments (or
such lesser amount that is actually received by the Company pursuant to the IPO)
have been purchased by the Company from Borrower.
(f) Other. Such other documents as Agent may reasonably require; and
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(g) Payment of Fees and Expenses. Payment by the Borrower of
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expenses of Lender (including, without limitation reasonable attorneys' and
legal assistants' fees) incurred in connection with the negotiation and
documentation of this Agreement.
5. Miscellaneous.
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(a) Captions. Section captions used in this Agreement are for
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convenience only, and shall not affect the construction of this Agreement.
(b) Governing Law. This Agreement shall be a contract made under and
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governed by the laws of the State of Illinois, without regard to conflict of
laws principles. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
(c) Counterparts. This Agreement may be executed in any number of
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counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Agreement.
(d) Successors and Assigns. This Agreement shall be binding upon
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Borrower, Agent and Lenders and their respective successors and assigns, and
shall inure to the sole benefit of Borrower, Agent and Lenders and their
respective successors and assigns.
(f) Continued Effectiveness. The Credit Agreement and each of the
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other Loan Documents remains in full force and effect and shall not be affected
by this Agreement.
(g) Fees and Expenses. Borrower agrees to pay to Agent and Lenders
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upon demand all reasonable expenses, including reasonable attorneys' and legal
assistants' fees (which attorneys and paralegals may be employees of Agent)
incurred by Agent or Lenders in connection with the preparation, negotiation and
execution of this Amendment and all documents related thereto and any document
required to be furnished herewith.
(h) Sale of Media Portfolio. The Borrower hereby irrevocably agrees
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to sell to the Company loans and investments from the Media Portfolio in
accordance with the provisions of section 4(e) hereof.
(i) Authorizations, Consents and Approvals. The Borrower hereby
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represents and warrants to Agent and Lenders that all approvals, consents and
authorizations necessary or required in connection with this Agreement, the IPO,
the conversion of the Company as aforesaid and the other transactions
contemplated hereunder have been obtained or applied for or will be applied for
in the normal course of business.
(j) Consent to Public Filing. Lenders hereby consent to the filing
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of this Agreement with the Securities Exchange Commission in connection with the
Company's IPO.
Balance of Page Intentionally Left Blank
- Signature Page Follows -
IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Third Amendment to Credit Agreement to be duly executed under seal and delivered
by their respective duly authorized officers on the date first written above.
MCG FINANCE CORPORATION, a
Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name Printed: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Chief Executive Officer
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M CREDIT INC., f/k/a Transamerica ▇▇▇▇▇▇ FINANCIAL, INC., as Agent and
Business Credit Corporation, as Lender as Lender
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: /s/ ▇▇ ▇▇▇▇▇▇ ---------------------------------
------------------------------ Name Printed: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ---------------------
-------------------- Title: Vice President
Title: S VP
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FLEET CAPITAL CORPORATION, PNC BANK, N.A., as Lender
as Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By:_____________________________
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Name Printed: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name Printed: __________________
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Title: S.V.P. Title:__________________________
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THE NATIONAL BANK OF FOOTHILL CAPITAL CORPORATION,
CANADA, as Lender as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name Printed: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ Name Printed: ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: V.P. & MANAGER RICHMOND Title: Assistant Vice President
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Signature Page - Continued
Consent And Third Amendment To Credit Agreement,
dated as of September 5, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as
a Lender
By: A.S. ▇▇▇▇▇▇▇▇▇▇
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Name Printed: A.S. ▇▇▇▇▇▇▇▇▇▇
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Title: SR TEAM LEADER -- LOAN OPERATIONS
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