Amendment No. 7 to Credit Agreement
Exhibit 10.14
EXECUTION COPY
Amendment No. 7 to Credit Agreement
This Amendment No. 7, dated as of April 13, 2010 (this “Amendment”), among
MVC Capital, Inc., a Delaware corporation (the “Company”), MVC
Financial Services, inc., a Delaware corporation (“MVCFS”, and
together with the Company, each a “Borrower”, and collectively, the “Borrowers”),
the Lenders identified on the signature pages hereto (the “Lenders”), and Guggenheim
Corporate Funding, LLC, as administrative agent for the lenders (in such capacity,
the “Administrative Agent”), amends certain provisions of the Credit Agreement, dated as of
April 27, 2006 (as amended to the date hereof and as the same may be further amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”) among the Borrowers, the
institutions from time to time party thereto as Lenders (the “Lenders”), and the
Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement.
W i t n e s s e t h:
Whereas, the Borrowers have requested that the Lenders amend the Credit Agreement in
certain respects as set forth below;
Whereas, the Lenders have agreed, subject to the terms and conditions set forth
below, to amend the Credit Agreement in certain respects as set forth below;
Now, Therefore, in consideration of the premises and the covenants and
obligations contained herein, the sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
Section 1. Amendments to the Credit Agreement. Effective as of the Amendment
Effective Date (as defined below) and subject to the satisfaction (or due waiver) of the conditions
set forth in Section 3 (Conditions Precedent to the Effectiveness of this Amendment) hereof, the
Credit Agreement is hereby amended as follows:
(a) Section 1.1 (Defined Terms) is hereby amended by amending and restating in
their entirety the following definitions:
“Applicable Margin” with respect to (i) Eurodollar Loans, a rate per annum
equal to 4.50% and (ii) Base Rate Loans, a rate per annum equal to 3.50%.
“Base Rate” for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day, (b)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) 2.25%. For
purposes hereof: “Prime Rate” shall mean the prime rate of interest specified under
the Bloomberg reference identified as “PRIMBB Index” on the date that is
two Business Days prior to such day (or such other comparable page as may, in the opinion of
the Administrative Agent, replace such page for the purpose of displaying such rate), as in
effect from time to time. Any change in the Base Rate due to a change in the Prime Rate
actually available or the Federal Funds Effective Rate shall be effective as of the opening
of business on the effective day of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually available.
“Consolidated Debt” as of any date of determination thereof, the aggregate
unpaid amount of all Indebtedness (including, without limitation, any Portfolio Company
Guaranty Indebtedness) of the Company and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with GAAP and denominated in U.S. dollars after giving
effect to the applicable Exchange Rate; provided, that solely until May 1, 2010,
Amzak Guarantee Indebtedness and ESPI Guarantee Indebtedness shall not be included in the
calculation of Consolidated Debt.
“Eligible Debt Investments” Investments in senior debt, subordinated debt and
junior subordinated debt that have been purchased or otherwise acquired by the Company or a
Consolidated Subsidiary in the ordinary course of business; provided, that no such
Investment shall be an Eligible Debt Investment unless (a) such Investment is (i) evidenced
by an instrument or agreement that has been duly authorized, executed and delivered and is
enforceable against the obligor thereof or (ii) in the form of a participation;
provided, that the aggregate amount of Investments that may constitute Eligible Debt
Investments shall not exceed 7.5% of Total Assets at any time, (b) such Investment, if
applicable, is denominated and payable either in (1) United States dollars or (2) the
currency of a jurisdiction other than the United States of America, provided, that
the aggregate amount of Investments permitted under this subclause (2) and clause (b)(2) of
the definition of Eligible Equity Investments shall not exceed the maximum amount permitted
under applicable law, including, without limitation, the Investment Company Act and the
Code, (c) such Investment is not subject to any Lien and, if such Investment is owned by a
Consolidated Subsidiary, the Company shall not have pledged or otherwise encumbered the
stock of such Consolidated Subsidiary or any direct or indirect parent thereof, (d) except
as set forth on Schedule II hereto, such Investment has a minimum cash coupon of at least
the lesser of (1) 6% per annum and (2) the Eurodollar Base Rate plus 3% per annum, (e) no
right of rescission, set-off, counterclaim, defense or other material dispute has been
asserted with respect to such Investment, (f) the obligor in respect of such Investment is
not (1) an individual, (2) the subject of a Bankruptcy Event (other than with respect to an
Investment in the form of debtor-in-possession financing provided to such obligor under the
Bankruptcy Code) or (3) a party to a Defaulted Investment and (g) the obligor in respect of
such Investment is (1) organized or incorporated under the laws of the United States of
America or (2) organized or incorporated under the laws of a jurisdiction other than the
United States of America, provided, that (x) the aggregate amount of Investments
permitted under this subclause (2) and clause (f)(2) of the definition of Eligible Equity
Investments shall not exceed 25% of Total Assets at any time and (y) no single Investment
permitted under this subclause (2) and clause (f)(2) of the definition of Eligible Equity
Investments shall exceed 15% of Total Assets at any time. It is understood that solely for
the purpose of determining compliance with Section 6.1(d), Vitality Preferred shall be
deemed an Eligible Debt Investment in an aggregate principal amount of up to $10,000,000.
“Eurodollar Base Rate” with respect to each day during each Interest Period,
the rate per annum determined on the basis of the rate for deposits in Dollars for a period
equal to such Interest Period commencing on the first day of such Interest Period appearing
on Page 3750 of the Telerate screen as of 11:00 a.m., London time, two Business Days prior
to the beginning of such Interest Period; provided that in no event shall the
Eurodollar Rate be less than 1.25% per annum. In the event that such rate does not appear on
Page 3750 of the Telerate screen (or otherwise on such screen), the “Eurodollar Base
Rate” for purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be selected by
the Administrative Agent.
“Maturity Date” the seventh anniversary of the Closing Date.
(b) Section 1.1 (Defined Terms) is hereby amended by inserting among the existing
defined terms therein in alphabetical order the following defined term:
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“Additional Permitted Guarantee Request” a written request made by the
Borrowers to the Administrative Agent, from time to time, in the form of Exhibit G, and
otherwise in form and substance satisfactory to the Administrative Agent, that a Borrower be
permitted to enter into a Guarantee Obligation on behalf of a Portfolio Company and that
such Guaranty Obligation be added to Schedule 6.2(d) pursuant to Section 6.2(d);
provided, that any Additional Permitted Guarantee Request shall be sent to the
Administrative Agent at least 10 Business Days prior to the proposed date of the requested
Guarantee Obligation; provided, further, that the Administrative Agent may
reject any Additional Permitted Guarantee Request in its sole discretion for any reason.
(c) Section 6.1(b) (Interest Coverage Ratio) is hereby amended and restated in its
entirety as follows:
(b) Interest Coverage Ratio. Permit the ratio of EBIT (excluding any interest
or other income received on account of the BB&T Investments) to Interest Expense (excluding
all Interest Expense related to the Indebtedness pursuant to the BB&T Credit Facility) of
the Company and its Consolidated Subsidiaries, determined on a consolidated basis as of the
last day of each fiscal quarter for the period of four consecutive fiscal quarters ended on
such day, to be less than 1.75 to 1.0.
(d) Section 6.1(d) (Asset Coverage) is hereby amended and restated in its entirety as
follows:
(i) Permit the ratio of Total Assets (excluding (x) any BB&T Investments
in the BB&T Account and (y) with respect to Eligible Debt Investments or Eligible Equity
Investments, collectively, any Investments in any issuer or obligor organized or
incorporated in under the laws of a jurisdiction other than the United States of America in
excess of 25% of the aggregate amount of Total Assets) to Consolidated Debt (excluding all
Indebtedness pursuant to the BB&T Credit Facility) to be less than 2.5 to 1.0 as of the last
day of any fiscal quarter; provided, that with respect to Guarantee Obligations
incurred by the Company or its Subsidiaries permitted under this Agreement, upon receipt by
the Administrative Agent of evidence that a note or other debt instrument will be issued to
the Company or such Subsidiary at the time of payment of such Guarantee Obligations, on
terms satisfactory to the Administrative Agent, evidencing the amounts owing under such
Guarantee Obligation from the Person on whose behalf such Guarantee Obligation was
undertaken, the face value of such note or debt instrument shall be included in the
calculation of “Total Assets” solely for purposes of this Section 6.1(d)(i).
(ii) Permit the ratio of (1) the sum of Unrestricted Cash (excluding any BB&T
Investments that are Cash Equivalents) plus Eligible Debt Investments (excluding any
Investments in any obligor organized or incorporated in under the laws of a jurisdiction
other than the United States of America in excess of 25% of the aggregate amount of Eligible
Debt Investments) to (2) Consolidated Debt (excluding all Indebtedness pursuant to the BB&T
Credit Facility) to be less than 1.5 to 1.0 as of the last day of any fiscal quarter;
provided, that with respect to Guarantee Obligations incurred by the Company or its
Subsidiaries permitted under this Agreement, upon receipt by the Administrative Agent of
evidence that a note or other debt instrument will be issued to the Company or such
Subsidiary at the time of payment of such Guarantee Obligations, on terms satisfactory to
the Administrative Agent, evidencing the amounts owing under such Guarantee Obligation from
the Person on whose behalf such Guarantee Obligation was undertaken, the face value of such
note or debt instrument shall be
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included in the calculation of “Eligible Debt Investments” solely for purposes of this
Section 6.1(d)(ii).
(e) Section 6.2 (Limitation on Indebtedness) is hereby amended by amending and
restating clause (d) as follows:
(d) Indebtedness outstanding on the Closing Date and listed on Schedule 6.2(d);
provided, that Schedule 6.2(d) may be amended following the Closing Date pursuant to
the approval by the Administrative Agent of an Additional Permitted Guarantee Request;
(f) Section 6.2 (Limitation on Indebtedness) is hereby amended by amending and
restating clause (g) as follows:
(g) solely until May 1, 2010, Amzak Guarantee Indebtedness and solely until August 1,
2010, ESPI Guarantee Indebtedness; and
Section 2. Termination of Revolving Credit Commitment
On the Amendment Effective Date, the Revolving Credit Commitment of each Lender shall be
irrevocably and permanently terminated and reduced to zero ($0) and the Total Revolving Commitments
shall be irrevocably and permanently terminated and reduced to zero ($0). The Borrowers hereby
acknowledge that immediately prior to the effectiveness of this Amendment, there are no Revolving
Credit Outstandings.
Section 3. Conditions Precedent to the Effectiveness of this Amendment
This Amendment shall become effective as of the date (such date, the “Amendment Effective
Date”) when, and only when, the Administrative Agent shall have received: (i) this Amendment,
duly executed by the Borrowers, the Administrative Agent and all Lenders, (ii) payment from the
Borrower, for the account of each Lender a fee equal to 0.50% of such Lender’s Term Loan Commitment
currently in effect and (iii) reimbursement for all its out-of-pocket costs and expenses incurred
in connection with the Credit Agreement and the negotiation, preparation, execution and delivery of
this Amendment and the transactions contemplated hereby, including, without limitation, reasonable
fees and disbursements and other charges of counsel to the Administrative Agent; provided,
that upon receipt of the items set forth in subclauses (i) — (iii), the amendment set forth in
Section 1(f) hereof shall be effective as of December 31, 2009.
Section 4. Representations and Warranties
On and as of the date hereof, after giving effect to this Amendment, the Borrowers hereby
represent and warrant to the Administrative Agent and each Lender as follows:
(a) this Amendment has been duly authorized, executed and delivered by each Borrower and
constitutes the legal, valid and binding obligation of each Borrower, enforceable against each
Borrower in accordance with its terms, and the Credit Agreement as amended by this Amendment
constitutes the legal, valid and binding obligation of each Borrower, enforceable against each
Borrower in accordance with its terms;
(b) each of the representations and warranties contained in Section 3 (Representations and
Warranties) of the Credit Agreement, the other Loan Documents or in any certificate, document or
financial or other statement furnished at any time under or in connection
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therewith is true and correct in all material respects on and as of the date hereof as if made on
and as of such date and except to the extent that such representations and warranties specifically
relate to a specific date, in which case such representations and warranties shall be true and
correct in all material respects as of such specific date; provided, however, that references
therein to the “Credit Agreement” shall be deemed to refer to the Credit Agreement as amended
hereby;
(c) no Default or Event of Default has occurred and is continuing; and
(d) no litigation has been commenced against any Loan Party or any of its Subsidiaries seeking
to restrain or enjoin (whether temporarily, preliminarily or permanently) the performance of any
action by any Loan Party required or contemplated by this Amendment, the Credit Agreement or any
Loan Document, in each case as amended hereby (if applicable).
Section 5. Fees and Expenses
The Borrowers and each other Loan Party agree to pay on demand in accordance with the terms of
Section 9.5 (Payment of Expenses) of the Credit Agreement all reasonable out of pocket costs and
expenses of the Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Amendment and all other Loan Documents entered into in connection herewith.
Section 6. Reference to the Effect on the Loan Documents
(a) As of the date hereof, each reference in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein,” or words of like import, and each reference in the other Loan
Documents to the Credit Agreement (including, without limitation, by means of words like
“thereunder”, “thereof” and words of like import), shall mean and be a reference to the Credit
Agreement as modified hereby, and this Amendment and the Credit Agreement shall be read together
and construed as a single instrument.
(b) Except as expressly modified hereby, all of the terms and provisions of the Credit
Agreement and all other Loan Documents are and shall remain in full force and effect and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of the Lenders or the
Administrative Agent under any of the Loan Documents, nor constitute a waiver or amendment of any
other provision of any of the Loan Documents or for any purpose except as expressly set forth
herein.
(d) This Amendment shall be deemed a Loan Document.
Section 7. Execution in Counterparts
This Amendment may be executed in any number of counterparts and by different parties in
separate counterpart (including by facsimile), each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a single counterpart so
that all signature pages are attached to the same document. Delivery of an executed counterpart by
telecopy shall be effective as delivery of a manually executed counterpart of this Amendment.
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Section 8. Governing Law
This Amendment shall be governed by and construed in accordance with the law of the State of
New York.
Section 9. Section Titles
The Section titles contained in this Amendment are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the parties hereto.
Section 10. Notices
All communications and notices hereunder shall be given as provided in the Credit Agreement.
Section 11. Severability
The fact that any term or provision of this Agreement is held invalid, illegal or
unenforceable as to any person in any situation in any jurisdiction shall not affect the validity,
enforceability or legality of the remaining terms or provisions hereof or the validity,
enforceability or legality of such offending term or provision in any other situation or
jurisdiction or as applied to any person.
Section 12. Successors
The terms of this Amendment shall be binding upon, and shall inure to the benefit of, the
Lenders, the other parties hereto and their respective successors and assigns.
Section 13. Waiver of Jury Trial
Each of the parties hereto irrevocably waives trial by jury in any action or proceeding with
respect to this Amendment or any other Loan Document.
[Signature Pages Follow]
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In Witness Whereof, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date first written
above.
| MVC Capital, Inc. as Borrower |
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| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Chairman | |||||
| MVC Financial Services, Inc. as Borrower |
||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Chairman | |||||
[Signature page to MVC Amendment No. 7]
| Guggenheim Corporate Funding, LLC, as Administrative Agent |
||||||
| By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Managing Director | |||||
[Signature page to MVC Amendment No. 7]
| Midland National Life Insurance Company, as Lender |
||||||
| By: Guggenheim Partners Asset Management, LLC | ||||||
| By: | /s/ Xxxxxxx Xxxxxx | |||||
| Name: | Xxxxxxx Xxxxxx | |||||
| Title: | Senior Managing Director | |||||
| North American Company for Life and health Insurance, as Lender | ||||||
| By: Guggenheim Partners Asset Management, LLC | ||||||
| By: | /s/ Xxxxxxx Xxxxxx | |||||
| Name: | Xxxxxxx Xxxxxx | |||||
| Title: | Senior Managing Director | |||||
| Sands Point Funding Ltd., as Lender | ||||||
| By: Guggenheim Investment Management, LLC, its Collateral Manager |
||||||
| By: | /s/ Xxxxxxx Xxxxxx | |||||
| Name: | Xxxxxxx Xxxxxx | |||||
| Title: | Senior Managing Director | |||||
| Copper River CLO Ltd., as Lender | ||||||
| By: Guggenheim Investment Management, LLC, its Collateral Manager |
||||||
| By: | /s/ Xxxxxxx Xxxxxx | |||||
| Name: | Xxxxxxx Xxxxxx | |||||
| Title: | Senior Managing Director | |||||
[Signature page to MVC Amendment No. 7]
| Kennecott Funding Ltd., as Lender | ||||||
| By: Guggenheim Investment Management, LLC, its Collateral Manager |
||||||
| By: | /s/ Xxxxxxx Xxxxxx | |||||
| Name: | Xxxxxxx Xxxxxx | |||||
| Title: | Senior Managing Director | |||||
| Green Lane CLO Ltd., as Lender | ||||||
| By: Guggenheim Investment Management, LLC, its Collateral Manager |
||||||
| By: | /s/ Xxxxxxx Xxxxxx | |||||
| Name: | Xxxxxxx Xxxxxx | |||||
| Title: | Senior Managing Director | |||||
[Signature page to MVC Amendment No. 7]
| Iron Hill CLO Limited, as Lender | ||||||
| By: Guggenheim Partners Europe Limited, its Collateral Manager |
||||||
| By: | /s/ Xxxxxx Xxxxx | |||||
| Name: | Xxxxxx Xxxxx | |||||
| Title: | Managing Director | |||||
[Signature page to MVC Amendment No. 7]
EXHIBIT G
FORM OF ADDITIONAL PERMITTED GUARANTEE REQUEST
[ ], 201[ ]
| To: | Guggenheim Corporate Funding,
LLC as Administrative Agent 000 Xxxx 00xx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxx Xxxxxx/Xxxx Xxxxx |
Reference is hereby made to the Credit Agreement, dated as of April 27, 2006 (as amended,
supplemented or modified from time to time, the “Credit Agreement”), among MVC CAPITAL,
INC., a Delaware corporation (the “Company”), MVC FINANCIAL SERVICES, INC.(“MVCFS”,
and together with the Company, each a “Borrower”, and collectively, the
“Borrowers”), the Lenders parties thereto, and GUGGENHEIM CORPORATE FUNDING, LLC, as
Administrative Agent. Terms defined in the Credit Agreement and not otherwise defined herein are
used herein with the meanings so defined.
The Borrowers hereby request that the guaranty (the “Guarantee”) of the Debt
Instrument (as defined below) be added to Schedule 6.2(d) of the Credit Agreement:1
Proposed guarantor:
Expected effective date of proposed Guarantee2:
Portfolio Company:
Debt instrument to be guaranteed (the “Debt Instrument”)3:
Aggregate principal amount of Debt Instrument:
Interest rate of Debt Instrument:
Maturity of Debt Instrument:
Proposed description of Guarantee/Indebtedness to be included on Schedule 6.2(d):
| 1 | Administrative Agent may request additional information. | |
| 2 | Attach Guarantee, if available, as Annex A. | |
| 3 | Attach Debt Instrument as Annex A. |
| Yours truly, | ||||||
| MVC Capital, Inc. as Borrower |
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| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| MVC Financial Services, Inc. as Borrower |
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| By: | ||||||
| Name: | ||||||
| Title: | ||||||
The Administrative Agent hereby acknowledges that the Debt Instrument and the description
thereof set forth above shall be added to Schedule 6.2(d) of the Credit Agreement by virtue of its
countersignature to this Additional Permitted Guarantee Request.
| Guggenheim Corporate Funding, LLC, as Administrative Agent |
||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Annex A
See attached.
