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Exhibit 5
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT ("Amendment") is dated as of
June 30, 2001, among MIDLAND CREDIT MANAGEMENT, INC., a Kansas corporation
("Company"), CTW FUNDING, LLC, a Delaware limited liability company ("Lender"),
MCM CAPITAL GROUP, INC., a Delaware corporation ("MCM") and MIDLAND ACQUISITION
CORPORATION, a Delaware corporation ("MAC").
FACTUAL BACKGROUND
A. Under the Credit and Security Agreement dated as of
October 31, 2000 (the "Credit Agreement", Lender agreed to make available to
Company a revolving credit facility upon the terms and conditions set forth
therein. (Capitalized terms used herein without definition have the meanings
given to them in the Credit Agreement.)
B. The Advances are evidenced by the Note.
C. Pursuant to the Guaranty, MCM has guaranteed the Guaranteed
Obligations (as defined in the Guaranty), and pursuant to the MCM Pledge
Agreement, MCM has granted to Lender a security interest in the Collateral (as
defined in the MCM Pledge Agreement) to secure the Secured Obligations (as
defined in the MCM Pledge Agreement).
D. Pursuant to the MAC Security Agreement, MAC granted to Lender a
security interest in the Collateral (as defined in the MAC Security Agreement)
to secure the Secured Obligations (as defined in the MAC Security Agreement).
E. The Company, Lender, MCM and MAC have previously amended the
Credit Agreement pursuant to that certain First Amendment to Credit Agreement,
dated as of March 13, 2001 (the "First Amendment"). Pursuant to the First
Amendment, the Funding Termination Date was extended through March 31, 2001. The
Funding Termination Date was, pursuant to the First Amendment, further extended
to June 30, 2001 by the delivery of a Renewal Notice and related Warrant No. 3
for 50,000 warrants. The parties hereto now wish to further amend the Credit
Agreement as set forth below.
F. This Amendment is and shall be one of the Loan Documents and
shall serve as a Renewal Notice (as defined herein) and the Company's election
to extend the Funding Termination Date (as defined in the Credit Agreement as
hereby amended) to September 30, 2001, subject to further extension as provided
in the Credit Agreement, as hereby amended.
AGREEMENT
Therefore, Company, Lender, MCM and MAC agree as follows:
1. Recitals. The recitals set forth above in the Factual Background
are true, accurate and correct and agreed to by the parties to this Amendment.
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2. Reaffirmation of Loan Documents. Company reaffirms all of its
obligations under the Loan Documents, and Company acknowledges that it has no
claims, offsets or defenses with respect to the payment of sums due under the
Note or any other Loan Document. MCM reaffirms all of its obligations under the
Guaranty and the MCM Pledge Agreement, and MCM acknowledges that it has no
claims, offsets or defenses with respect to payment of sums due under any of the
Loan Documents, including, without limitation, the Guaranty and the MCM Pledge
Agreement. MAC reaffirms all of its obligations under the MAC Security
Agreement, and MAC acknowledges that it has no claims, offsets or defenses with
respect to the Secured Obligations (as defined in the MAC Security Agreement).
3. Modification of Credit Agreement. The Credit Agreement is
hereby amended as follows:
(a) Funding Termination Date. The definition of "Funding
Termination Date" in Section 1.1 is hereby amended by replacing such
definition with the following definition:
"Funding Termination Date" means the earliest of: (i) the last
day of a calendar quarter during which a Renewal Notice has not
been received by Lender in accordance with Section 4.3 (or, if
received, the conditions set forth in Section 4.3 have not been
satisfied), (ii) December 31, 2001, and (iii) the termination of
the Commitment during the continuation of an Event of Default
pursuant to Section 8.1.
(b) Renewal Notice. Section 1.1 is hereby amended by adding
the following definition.
"Renewal Notice" means (i) that certain First Amendment to Credit
Agreement, dated as of March 13, 2001, among the Borrower,
Lender, MOM and MAC, whereby the Borrower elects to extend the
Funding Termination Date to Xxxxx 00, 0000, (xx) that certain
Second Amendment to Credit Agreement, dated as of June 30, 2001,
among the Borrower, Lender, MCM and MAC, whereby the Borrower
elects to extend the Funding Termination Date to September 30,
2001 and (iii) a written notice from an Authorized Agent to
Lender whereby Borrower elects to extend the Funding Termination
Date to the last day of the next successive calendar quarter.
(c) Registration Rights Agreement, Warrant Agreement. The
definitions of "Registration Rights Agreement' and "Warrant Agreement"
in Section 1.1 are hereby modified by inserting "as amended,
supplemented or otherwise modified from time to time" immediately before
the period at the end of such definitions.
(d) Condition Precedent to Extension of Funding Termination
Date. The Credit Agreement is hereby amended by adding the following
Section 4.3:
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4.3 Conditions to Extension of Funding Termination Date. The
obligation of Lender to extend the Funding Termination Date to
the last day of the next successive calendar quarter (but in no
event beyond December 31, 2001) is subject to the satisfaction of
the following conditions precedent:
A. Continuation of Representations and Warranties. The
representations and warranties made by the Borrower contained in
Article V shall be true and correct on and as of the date of each
Renewal Notice and the last day of the then current calendar
quarter with the same effect as if made on and as of each such
date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be
true and correct as of such earlier date);
B. No Default. No Default or Event of Default shall
exist as of the date of such Renewal Notice or as of the last
day of the then current calendar quarter;
C. Renewal Notice. Lender shall have received the
Renewal Notice from Borrower before the last day of the calendar
quarter prior to the calendar quarter through which the Borrower
wishes to extend the Funding Termination Date; and
D. Issuance of Warrants. Lender shall have received
Warrants issued in accordance with the Warrant Agreement for an
additional 50,000 MCM Shares to be issued concurrently with each
such Renewal Notice.
4. Conditions Precedent. Before this Amendment becomes effective
and any party becomes obligated under it, all of the following conditions shall
have been satisfied at Company's sole cost and expense in a manner acceptable to
Lender:
(a) Lender shall have received an original of this Amendment
executed by Company, MCM and MAC;
(b) Lender shall have received from Company, MCM and MAC a
Certificate of Secretary, certifying as to (i) the due authorization by all
action, corporate or otherwise, by the Company, MCM and MAC of the execution
delivery and performance of this Amendment and the amendments to the Warrant
Agreement and the Registration Rights Agreement provided for in Section 3(d)
(collectively, the "Amendments"), (ii) the due execution and delivery of the
Amendments by the Company, MCM and MAC, (iii) the enforceability as against the
Company, MCM and MAC of each of the Amendments, and the Loan Documents as
thereby amended, in accordance with their respective terms, (iv) the due
satisfaction of each of the conditions to be satisfied by the Company In
accordance with this Section 4 and (v) the truth and accuracy of each of the
representations and warranties made by each of the Company, MCM and MAC under
the
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Loan Documents and this Amendment, in each case on and as of the effective date
of this Amendment with the same effect as if made on and as of such date (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be certified to have been true and correct as of
such earlier date);
(c) Company shall have reimbursed Lender for reasonable
attorney fees and costs incurred in the preparation, execution and closing of
this Amendment; and
(d) Lender shall have received Warrants for 50,000 MCM Shares.
5. Company's Representations and Warranties. Company represents and
warrants to Lender as follows:
(a) Loan Documents. All representations and warranties made
and given by Company in the Loan Documents are true, accurate and
correct.
(b) No Default. No Default or Event of Default has occurred
and is continuing.
(c) Borrowing Entity. Company is a Kansas corporation which
is duly organized and validly existing under the laws of the State of
Kansas. There have been no changes in the organization, composition,
ownership structure or formation documents of Company since October 31,
2000.
(d) Enforceable Loan Documents. The Loan Documents, including
this Agreement, to which Company is a party, are legal, valid and
binding agreements of Company enforceable In accordance with their
respective terms, and any Instrument or agreement required hereunder or
thereunder, when executed and delivered, will be similarly legal, valid,
binding and enforceable.
6. Incorporation. This Amendment shall form a part of the Credit
Agreement, and all references hereafter to the Credit Agreement in the Loan
Documents shall mean the Credit Agreement as hereby modified.
7. No impairment. Except as specifically hereby amended, the Credit
Agreement and other Loan Documents shall each remain unaffected by this
Amendment and all such documents shall remain in full force and effect.
8. Integration. The Loan Documents, including the Amendments: (a)
integrate all the terms and conditions mentioned in or incidental to the Loan
Documents (b) supersede all oral negotiations and prior and other writings with
respect to their subject matter and (c) are intended by the parties as the final
expression of the agreement with respect to the terms and conditions set forth
in those documents and as the complete and exclusive statement of the terms
agreed to by the parties. If there is any conflict between the terms, conditions
and provisions of this Amendment and those of any other agreement or instrument,
including any of the other Loan Documents, the terms, conditions and provisions
of this Amendment shall prevail.
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9. MCM's Consent. MCM hereby consents to the terms, conditions and
provisions of this Amendment and agrees that (i) the Guaranteed Obligations as
defined in and pursuant to the Guaranty shall include, without limitation, all
Obligations of Company under the Credit Agreement as amended by this Amendment
and (ii) the Secured Obligations as defined in and pursuant to the MCM Pledge
Agreement shall include, without limitation, all obligations of Company under
the Credit Agreement as amended by this Amendment and all obligations of MCM
under the Guaranty as such obligations have been amended pursuant to this
Amendment.
10. MAC's. Consent. MAC hereby consents to the terms, conditions and
provisions of this Amendment and agrees that the Secured Obligations as defined
in an pursuant to the MAC Security Agreement shall include, without limitation,
any Advances made by Lender prior to the Funding Termination Date and the
payment and performance of all other Obligations of the Company under the terms
of the Credit Agreement and the other Loan Documents.
11. Miscellaneous. This Amendment and any attached consents or
exhibits requiring signatures may be executed in counterparts, and all
counterparts shall constitute but one and the same document. If any court of
competent jurisdiction determines any provision of this Amendment or any of the
other Loan Documents to be invalid, illegal or unenforceable, that portion shall
be deemed severed from the rest, which shall remain in full force and effect as
though the invalid, illegal or unenforceable portion had never been a part of
the Loan Documents. As used here, the word "include(s)" means "includes(s),
without limitation," and the word "including" means "including, but not limited
to."
12. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
its principles or rules of conflict of laws to the extent such principles or
rules would require or permit the application of the laws of another
jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
MIDLAND CREDIT MANAGEMENT, INC., a Kansas
corporation
By: /s/ Xxxx X. Xxxxxxx III
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Name: Xxxx X. Xxxxxxx III
Title: President and Chief Executive Officer
"Company"
CTW FUNDING, LLC, a Delaware limited liability
company
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Manager
"Lender"
MCM CAPITAL GROUP, INC., a Delaware corporation
By: /s/ Xxxx X. Xxxxxxx, III
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Name: Xxxx X. Xxxxxxx, III
Title: President and Chief Executive Officer
"MCM"
MIDLAND ACQUISITION CORPORATION, a Delaware
corporation
By: /s/ Xxxx X. Xxxxxxx, III
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Name: Xxxx X. Xxxxxxx, III
Title: President and Chief Executive Officer
"MAC"
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