Contract
Exhibit 10.1 MEMBERSHIP INTEREST PURCHASE AGREEMENT by and among MEDLEY CAPITAL CORPORATION, GREAT AMERICAN LIFE INSURANCE COMPANY, MCC SENIOR LOAN STRATEGY JV I LLC and GEMS FUND 5, L.P. ___________________ DATED AS OF OCTOBER 8, 2020
MEMBERSHIP INTEREST PURCHASE AGREEMENT This MEMBERSHIP INTEREST PURCHASE AGREEMENT , dated as of October 8, 2020 (this “ Agreement ”), is entered into by and among Medley Capital Corporation, a Delaware corporation (“ Medley ”), Great American Life Insurance Company, an Ohio corporation (“ GALIC ”) (Medley and GALIC, each, a “ Seller ” and collectively, the “ Sellers ”), MCC Senior Loan Strategy JV I LLC, a Delaware limited liability company (the “ Company ”), and GEMS Fund 5, L.P., a Delaware limited partnership (“ Buyer ”). RECITALS: WHEREAS , Sellers collectively own all of the issued and outstanding membership interests (the “ Membership Interests ”) in the Company; WHEREAS , Medley owns 87.5% of the Membership Interests in the Company (the “Medley Interests ”) and GALIC owns 12.5% of the Membership Interests in the Company (the “GALIC Interests ”); WHEREAS , Sellers wish to sell to Buyer, and Buyer wishes to purchase from Sellers, the Membership Interests, subject to the terms and conditions set forth herein; and NOW, THEREFORE , in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: ARTICLE I PURCHASE AND SALE. 1.1 Purchase and Sale; Purchase Price. (a) Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, at the Closing, each Seller shall sell to Buyer, and Buyer shall purchase from each Seller, all of each Seller’s right, title and interest in and to its Membership Interests, free and clear of all Liens, for the consideration specified in Section 1.1(b), as apportioned among the Sellers as set forth on Appendix A hereto (such portion is hereinafter referred to as each Seller’s “Pro Rata Portion ”) and as described in Section 1.1(c). (b) Purchase Price. The aggregate consideration for the Membership Interests shall be an amount in cash equal to $ 145,317,978.54 (the “ Purchase Price ”), which consists of the components set forth in, and has been calculated in accordance with, Exhibit A hereto. As of the Closing, a certificate, in the form attached hereto as Exhibit B, executed by the Chief Financial Officer of Medley (the “ Purchase Price Certificate ”) has been delivered to Buyer, certifying that Medley’s calculation of the Purchase Price is in accordance with the terms of this Agreement, including the calculations set forth on Exhibit A hereto, together with reasonable supporting documentation for each such calculation. 7
(iii) evidence that all authorized signatories on accounts, lockboxes and other depositories of funds of the Acquired Companies are only Persons designated by Buyer; (iv) a certificate executed by a duly authorized officer of Medley, reasonably satisfactory to Buyer, dated as of the Closing Date, certifying that attached thereto are true and complete copies of (i) the resolutions of the board of directors of Medley and the members of the Company authorizing the execution, delivery and performance of the Transaction Documents to which Medley and the Company are a party and the consummation of the Contemplated Transactions, (ii) a certificate of good standing (or equivalent document) for the Acquired Companies issued by the applicable secretary of state of its jurisdiction or organization as of a recent date, (iii) a copy of the certificate of formation (or equivalent document) of the Acquired Companies, certified by the secretary of state of its jurisdiction of organization, and (iv) a copy of the operating agreement (or equivalent document) of the Acquired Companies, in each case, as amended to date; (v) written resignations in the form of Exhibit D of each manager, officer, and member of the board of directors or managers of the Acquired Companies, effective from and after the Closing Date; (vi) a duly completed and executed Form W-9; (vii) evidence reasonably satisfactory to Buyer of the termination of all Indebtedness of the Acquired Companies and of the termination and release of all Liens on any assets of the Acquired Companies or the Membership Interests and of the termination of any UCC financing statements, including the payoff letter attached as Exhibit E (the “Payoff Letter”), which evidences the payoff and termination of all Indebtedness of the Acquired Companies with respect to the DB Credit Facility; (viii) written evidence, in form and substance reasonably satisfactory to Buyer, of the termination of that certain Administrative Services Agreement, dated as of March 27, 2015, by and between Medley Capital LLC, a Delaware limited liability company and the Company, including a waiver of the sixty (60) day written notice requirement set forth in Section 7 therein; (ix) the Purchase Price Certificate; and (x) such other documents as may be reasonably required to effect the intentions of the parties, executed by Medley and/or the Company. (b) GALIC shall deliver to Buyer the following: (i) a Membership Interest Assignment executed by GALIC with respect to the GALIC Interests; and (ii) a duly completed and executed Form W-9. (c) Buyer or, without relieving Buyer of its obligations under this Agreement, its Affiliated designees, shall deliver to the Sellers: 3
(i) the Purchase Price payable to the Sellers in accordance with Appendix A to the accounts set forth therein; and (ii) such other documents as may be reasonably required to effect the intentions of the parties, executed by Buyer. 2.3 Allocation of Purchase Price; Tax Matters. (a) Allocation of Purchase Price. (i) The parties hereto shall allocate the Purchase Price (and any other amount or item treated as consideration for U.S. federal income Tax purposes) in accordance with the rules under Section 1060 of the Code and the Treasury Regulations promulgated thereunder, as applicable, pursuant to an allocation schedule (an “ Allocation Schedule ”) to be prepared by Buyer. Buyer shall prepare and deliver to Sellers an initial Allocation Schedule within thirty (30) days after the Closing Date. (ii) If, within twenty (20) days following the delivery of the initial Allocation Schedule, neither Seller notifies Buyer of its disagreement with the Allocation Schedule, the Allocation Schedule shall be final and binding on all parties. If, within such twenty (20)-day period, either Seller notifies Buyer, in writing, that it disputes any item reflected in the initial Allocation Schedule, Buyer and the Sellers shall use commercially reasonable efforts to settle the dispute with respect to such comments promptly. If Buyer and Sellers have not resolved such dispute within thirty (30) days of Buyer’s receipt of such Seller’s comments, Buyer and Sellers shall jointly retain an Independent Accountant to resolve disputed items in accordance with this Agreement and, absent fraud or manifest error, any determination by the Independent Accountant shall be final and binding on the parties. The costs, fees and expenses of the Independent Accountant shall be borne equally by each Seller asserting a dispute and Buyer or by Medley and Buyer in the case of any dispute asserted by Buyer. Buyer and Sellers hereby covenant and agree to (i) be bound by the final Allocation Schedule for all income Tax purposes, (ii) prepare and file all Tax Returns on a basis consistent with the final Allocation Schedule and (iii) not take any position on any Tax Return, before any Governmental Entity charged with the collection of any Tax, or in any judicial Proceeding that is in any way inconsistent with the terms of the final Allocation Schedule unless required to do so by Applicable Law. (iii) If any indemnification payment is made pursuant to this Agreement or any other adjustment to the Purchase Price for U.S. federal income tax purposes occurs, Buyer shall promptly revise the final Allocation Schedule to take into account such payment or adjustment in a manner consistent with the principles of Section 1060 of the Code and the regulations thereunder (and any corresponding provision of state, local or foreign Tax Law, as appropriate). (b) Tax Returns. Medley shall prepare, or cause to be prepared, all income Tax Returns required to be filed by the Acquired Companies after the Closing Date with respect to a Pre-Closing Tax Period (each, a “ Seller Prepared Tax Return ”). Buyer shall prepare, or cause to be prepared, all other Tax Returns required to be filed by the Acquired Companies after 4
the Closing Date with respect to a Pre-Closing Tax Period (each, a “ Buyer Prepared Tax Return ”). All Tax Returns prepared pursuant to this Section 2.3(b) shall be prepared in a manner consistent with past practice unless otherwise required by Applicable Law or this Agreement. The Sellers and Buyer agree that the methodology set forth in Section 2.3(c) will, where applicable, be used for preparing all Tax Returns for Straddle Periods. The preparing party shall deliver any such Tax Return to each non-preparing party for its review and comment (together with schedules, statements and supporting documentation) at least thirty (30) days prior to the due date (including extensions) of such Tax Return (or, if any such Tax Return is due within thirty (30) days of the Closing Date, as soon as reasonably practicable following the Closing Date to permit the non-preparing party a reasonable period of time to review). If a non-preparing party objects to any item on any such Tax Return, such non-preparing party shall, within ten (10) days after delivery of such Tax Return, notify the preparing party, in writing, that it so objects. With respect to a Seller Prepared Tax Return, Sellers shall consider in good faith any objections raised by Buyer within ten (10) days after delivery of such Tax Return to Buyer; provided, however, to the extent that (i) such Seller Prepared Tax Return is not prepared in a manner consistent with past practice (unless otherwise required by Applicable Law or this Agreement) and (ii) any item on such Seller Prepared Tax Return or any Tax position taken with respect to such Seller Prepared Tax Return is reasonably expected to prejudice Buyer’s Tax position in respect of any Post-Closing Tax Period, the parties agree to resolve any such dispute in accordance with the procedure set forth in this Section 2.3(b). With respect to a Buyer Prepared Tax Return and a Seller Prepared Tax Return that is under dispute pursuant to the immediately foregoing proviso, (A) if a notice of objection shall be duly delivered, Buyer and the Sellers shall negotiate in good faith and use their reasonable best efforts to resolve such items and (B) if Buyer and the Sellers are unable to reach such agreement within ten (10) days after receipt of such notice, the disputed items shall be resolved by the Independent Accountant in accordance with Section 2.3(a)(ii). The Sellers shall pay to Buyer an amount equal to any Taxes shown to be due and payable on any Tax Return prepared pursuant to this Section 2.3(b) for any Straddle Period, to the extent of the amount that is allocated to the Pre-Closing Tax Period as determined pursuant to Section 2.3(c) upon the later of (x) two (2) days before the due date (taking into account extensions) for the payment of any such Tax and (y) two (2) days following the date upon which the Independent Accountant resolves all applicable disputes with respect thereto. The preparation and filing of any Tax Return of the Acquired Companies that does not relate to a Pre-Closing Tax Period shall be exclusively within the control of Buyer. (c) Straddle Period. In the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Taxes that are treated as Pre-Closing Taxes for purposes of this Agreement shall be: (i) in the case of Taxes (A) based upon, or related to, income, receipts, profits, wages, capital or net worth; (B) imposed in connection with the sale, transfer or assignment of property or (C) required to be withheld, deemed equal to the amount which would be payable if the Tax year ended with the Closing Date, provided that exemptions, allowances or deductions that are calculated on an annual basis (including, but not limited to, depreciation and amortization deductions) shall be allocated between the period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each period; and 5
the statute of limitations with respect to any Tax or Tax Return (other than an automatic extension to extend the time for filing any Tax Return in the ordinary course of business) or taken any action, or entered into any other transaction, in each case that would have the effect of increasing the Tax Liability of Buyer or the Acquired Companies in respect of any Post-Closing Tax Period. 4.8 Legal Proceedings. (a) No Acquired Company is a party to any, and there are no (and during the past three (3) years, there have not been any) pending or, to Medley’s Knowledge, threatened, material Proceedings against any Acquired Company (or, to Medley’s Knowledge, pending or threatened against or affecting any of the Acquired Companies’ Representatives with respect to their activities for or on behalf of the Acquired Companies) or to which any of their assets are subject. To Medley’s Knowledge, there is no basis for future Proceedings against an Acquired Company or to which any of their assets, including the Company Loans and the Company- Owned Equity Interests, are subject. (b) There is no material judgment, settlement agreement, order, injunction, decree or regulatory restriction (other than those of general application that apply to similarly situated companies or their Subsidiaries) imposed upon an Acquired Company or the assets of an Acquired Company. 4.9 Company Loans. (a) Section 4.9(a) of the Seller Disclosure Schedule sets forth, as of the Closing Date, a true, correct and complete list of (i) each Company Loan owned by the Acquired Companies, (ii) the name of the Borrower of each Company Loan, (iii) the interest rate on each Company Loan, (iv) the maturity date of each Company Loan, (v) the outstanding unpaid principal amount of each Company Loan, (vi) the amount of accrued interest for each Company Loan; (vii) the amount of accrued but unpaid fees or other amounts (other than accrued interest) for each Company Loan; (viii) the currency for each Company Loan; (ix) any undrawn commitments with respect to each Company Loan; and (x) whether such Company Loan is on accrual or non-accrual status. Except as set forth on Section 4.9(a) of the Seller Disclosure Schedule, no Company Loan constitutes a delayed draw term loan. (b) Each Company Loan Document to which an Acquired Company is a party constitutes the legal, valid and binding obligation of such Acquired Company and, to the Knowledge of Medley, the applicable Borrower, enforceable against such Acquired Company and, to the Knowledge of Medley, the applicable Borrower, in accordance with their respective terms (subject to the Enforceability Exception). No fact, event or condition exists that constitutes or, after notice or lapse of time or both, will constitute, a breach, violation or default on the part of an Acquired Company under any Company Loan Document. As of the Closing Date, to Medley’s Knowledge (i) there is no outstanding “Event of Default” (or similar terms having comparable meanings) under any Company Loan Document or any “Default” (or similar terms having comparable meanings) under any Company Loan Document, (ii) there has been, since September 4, 2020, no other material and adverse change in facts, events or circumstances with respect to a Company Loan (other than any Syndicated Company Loan), (iii) no Company Loan 15
No written claim has been made by any Governmental Entity in any jurisdiction where the Acquired Companies do not file Tax Returns that it is, or may be, subject to Tax by that jurisdiction. (e) There are no actions by any Governmental Entity in respect of or relating to the Taxes of the Acquired Companies that are currently pending, threatened in writing, or being conducted, nor, to Medley’s Knowledge, any examinations, audits or investigations relating to the Taxes of the Acquired Companies and no extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes or Tax Returns of the Acquired Companies other than an automatic extension to extend the time for filing any Tax Return in the ordinary course of business. There is no outstanding written claim concerning any Tax Liability of the Acquired Companies that has been claimed by any Governmental Entity. (f) Medley has made available to Buyer complete and true copies of all income and all other material Tax Returns, examination, audit or action reports, and statements of deficiencies assessed against or agreed to by the Acquired Companies for Tax periods beginning on or after January 1, 2016. (g) Each of the Acquired Companies has complied in all material respects with all Applicable Laws, rules and regulations relating to the payment and withholding of Taxes (including, but not limited to, any withholding on distributions to nonresident partners under Applicable Law, withholding and reporting requirements under Code Sections 1441 through 1446, 3401 through 3406, 6041 and 6049, and similar provisions under any other requirements under Applicable Law) and has, within the times and manner prescribed by Applicable Law, withheld from amounts paid or owing to any employee, independent contractor, creditor, foreign person or other third party and paid over to proper Governmental Entities on a timely basis all amounts required. (h) No Liens for Taxes in respect of any of the Acquired Companies exist with respect to any assets or properties of the Acquired Companies except for statutory liens for current Taxes or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings by an Acquired Company and for which appropriate reserves have been established in accordance with GAAP and are included on the balance sheet. (i) None of the Acquired Companies has ever been a member of an Affiliated Group that filed or was required to file a consolidated, combined or unitary Tax Return. None of the Acquired Companies has any Liability for Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local or foreign Law), as transferee or successor, or by contract (other than commercial contracts entered into in the ordinary course not primarily related to Taxes). (j) None of the Acquired Companies is party to or bound by any Tax sharing agreements, Tax allocation agreements, or similar agreements the principal purpose of which relates to Taxes (including any advance pricing agreement, closing agreement or other agreement relating to Taxes with any Governmental Entity). No private letter rulings, technical advice 19
(a) Except for Losses in respect of the Excepted Matters or resulting from fraud, willful misconduct, or intentional misrepresentation, no Seller shall be liable to any Buyer Indemnified Party for Losses under Section 7.2(a)(i) or Section 7.2(b)(i), (i) unless the aggregate amount of the Losses suffered by Buyer Indemnified Parties exceeds on a cumulative basis an amount equal to $750,000 (the “ Threshold ”), at which time the Buyer Indemnified Parties shall be entitled to be indemnified against the aggregate amount of Losses, regardless of the Threshold, and (ii) for an aggregate amount of Losses in excess of such Seller’s proportional interest in the Purchase Price paid by Buyer (based on such Seller’s Pro Rata Portion). (b) Except for Losses in respect of the Excepted Matters or resulting from fraud, willful misconduct, or intentional misrepresentation, Buyer shall not be liable to any Seller Indemnified Party for Losses under Section 7.2(c)(i), (i) unless the aggregate amount of the Losses suffered by the Seller Indemnified Parties exceeds on a cumulative basis the Threshold, at which time such Seller Indemnified Parties shall be entitled to be indemnified against the aggregate amount of Losses, regardless of the Threshold, (ii) with respect to Medley and its Representatives collectively, for an aggregate amount of Losses in excess of Medley’s proportional interest in the Purchase Price paid by Buyer (based on Medley’s Pro Rata Portion), and (iii) with respect to GALIC and its Representatives collectively, for an aggregate amount of Losses in excess of GALIC’s proportional interest in the Purchase Price paid by Buyer (based on GALIC’s Pro Rata Portion). (c) For purposes of this Article VII, a breach of a representation or warranty shall be deemed to exist either if such representation or warranty is actually inaccurate or breached or would have been inaccurate or breached if such representation or warranty had not contained any limitation or qualification as to “materiality”, “Material Adverse Effect”, or similar language, and the amount of Losses in respect of any breach of representation or warranty, including any deemed breach pursuant to this clause, shall be determined without regard and without giving effect to any such limitation or qualification as to “materiality”, “Material Adverse Effect”, or similar language set forth in such representation or warranty. (d) The parties shall cooperate with each other to resolve any Claim with respect to which one party is obligated to indemnify the other party hereunder, including by making commercially reasonable efforts to mitigate or resolve any such Claim. (e) No Indemnifying Party shall be liable pursuant to this Agreement for any punitive or exemplary damages except to the extent awarded in connection with a third party Claim. (f) The amount of any Losses for which indemnification is provided under this Agreement shall be net of (A) insurance proceeds actually recovered by the Indemnified Party in respect of such Losses (net of any out-of-pocket costs incurred in connection with such recovery and any increases in premium) and (B) recoveries from third parties pursuant to indemnification or otherwise (net of any out-of-pocket costs incurred in connection with such recovery. (g) With respect to all matters other than the Syndicated Company Loans, the right to indemnification, payment of damages and other remedies based on representations, 28
“Affiliated Group ” means an affiliated group as defined in Section 1504 of the Code (or any analogous combined, consolidated or unitary group defined under state, local or non-U.S. Law relating to income Tax) of which an Acquired Company is or has been a member. “Agreement ” has the meaning set forth in the preamble to this Agreement. “Allocation Schedule ” has the meaning set forth in Section 2.3(a)(i). “Anti-Corruption Laws ” has the meaning set forth in Section 4.12(c). “Applicable Law ” means, with respect to a specified Person, any federal, state, local, municipal, or foreign constitution, treaty, law (including the common law), statute, code, ordinance, rule, regulation, permit, approval, judgment, Order, writ, decree, injunction, resolutions or requirements (collectively, “ Laws ”) applicable to the specified Person. “Borrowers ” means those Persons who constitute “borrowers” (or any similarly defined entity) under the Company Loan Documents. “Business Day ” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close. “Buyer ” has the meaning set forth in the preamble to this Agreement. “Buyer Indemnified Parties ” has the meaning set forth in Section 7.2(a). “Buyer Prepared Tax Return ” has the meaning set forth in Section 2.3(b). “Cash and Cash Equivalents ” means, without double counting, the aggregate amount of all cash and cash equivalents of the Acquired Companies as of the Closing Date. “Claim ” has the meaning set forth in Section 7.3(a). “Closing ” has the meaning set forth in Section 2.1. “Closing Date ” has the meaning set forth in Section 2.1. “Code ” means the United States Internal Revenue Code of 1986, as amended. “Company Loan Documents ” means the loan agreements, credit and financing agreements, indentures, guarantees, subordination agreements, Company Loan Notes, note purchase agreements, mortgages, deeds of trust, security agreements (including pledge and control agreements), financing statements, intercreditor agreements, mortgage, sale and servicing agreements, acquisition agreements, intercreditor agreements and other instruments, insurance policies, assumption or substitution agreements, side letters and documents affecting the Acquired Companies’ ownership, economic or other rights with respect to the Company Loans or in which an Acquired Company has an interest, in connection with the Company Loans, in each case, together with all amendments and modifications thereto and any reports or documents 30
delivered to an Acquired Company in its capacity as a lender or noteholder under any such agreement. “Company Loan Notes ” means the original executed promissory notes (or copies, to the extent that only copies of such promissory notes are in an Acquired Company’s possession or control) issued to the order of an Acquired Company, or copies of a “master” note if no such note was issued to an Acquired Company or an allonge endorsing a note in favor of an Acquired Company, evidencing indebtedness owing to an Acquired Company under a Company Loan. “Company Loans ” means the loans owned by the Acquired Companies as of the Closing Date. “Company-Owned Equity Interests ” means the Equity Interests identified on Section 4.10(a) of the Seller Disclosure Schedule as owned by the Acquired Companies. “Confidentiality Agreement ” means that certain Confidentiality Agreement, dated as of June 3, 2020, by and between Medley and Xxxxx Capital LLC. “Consent ” means any consent of the Borrower, the administrative agent, the issuer, any co-investor or other Person required to sell, assign, transfer, convey or deliver the Membership Interests. “Contemplated Transactions ” means the transactions contemplated by this Agreement. “Contract ” means any contract, lease, sublease, license, permit, purchase and sale order, instrument, note and any other agreement, commitment or binding arrangement or understanding, whether written or oral. “DB Credit Facility ” means the credit facility provided to the Acquired Companies under the DB Loan Documents. “DB Loan Documents ” means, collectively, that certain Loan and Servicing Agreement, dated as of August 4, 2015, by and among MCC SPV, as Borrower, the Company, as Servicer and as Originator, each Lender from time to time party thereto, each Lender Agent from time to time party thereto, U.S. Bank National Association, as the Collateral Agent, Account Bank and Collateral Custodian, and Credit Suisse AG, Cayman Islands Branch, as the Administrative Agent, and each document, instrument or agreement entered into in connection with the foregoing, in each case, as amended, amended and restated, supplemented or otherwise modified from time to time. “Enforceability Exception ” has the meaning set forth in Section 3.2(a). “Equity Governing Documents ” means, with respect to a Company-Owned Equity Interest, the Organizational Document, option or warrant agreement, registration rights agreement, buy-sell arrangement and any other document that governs or otherwise affects the terms of any Company-Owned Equity Interest. 31
“Equity Interest ” means (a) any partnership interests, (b) any membership interests or units, (c) any units of capital stock, (d) any other interest or participation that confers on a Person the right to receive a unit of the profits and losses of, or distribution of assets of, the issuing entity, including any stock appreciation, phantom stock, profit participation or similar rights, (e) any subscriptions, calls, warrants, options, or commitments of any kind or character relating to, or entitling any Person or entity to purchase or otherwise acquire membership interests or units, capital stock, or any other equity securities, (f) any securities convertible into or exercisable or exchangeable for partnership interests, membership interests or units, capital stock, or any other equity securities, or (g) any other interest classified as an equity security of a Person. “Excepted Matters ” has the meaning set forth in Section 7.1. “Ex-Im Laws ” means all U.S. and non-U.S. Laws relating to export, reexport, transfer, and import controls, including, without limitation, the Export Administration Regulations, the customs and import Laws administered by U.S. Customs and Border Protection, the EU Dual Use Regulation (428/2009), all equivalent or similar legislation to the foregoing implemented by EU Member States, and the UK’s Export Control Order 2008. “Existing Portfolio Company ” means any portfolio company of the Acquired Companies listed on Sections 4.9(a) and 4.10(a) of the Seller Disclosure Schedule. “Financial Statements ” has the meaning set forth in Section 4.5(a). “GAAP ” means United States generally accepted accounting principles, consistently applied. “GALIC ” has the meaning set forth in the preamble to this Agreement. “GALIC Interests ” has the meaning set forth in the recitals to this Agreement. “Governmental Entity ” means any federal, state or local government, nation, state, province, territory, district or any court, administrative or regulatory agency or commission, arbitrator, mediator, tribunal or other governmental or quasi-governmental authority or agency, department, bureau, office, commission, organization, official or authority domestic or foreign. “Indebtedness ” means with respect to a Person, without duplication, all Liabilities, contingent or otherwise, in respect of: (a) borrowed money or issued in exchange or substitution for borrowed money (including any prepayment costs and penalties associated with prepayment of such Liabilities), (b) any indebtedness evidenced by any note, bond, debenture or other debt security, (c) all amounts due and payable under or obligations in respect of letters of credit, bankers’ acceptances, bank overdrafts, surety and performance bonds or similar facilities and financial guarantees issued for the account of such Person, (d) capitalized lease obligations, (e) the deferred purchase price of assets, services or securities (other than trade accounts payable incurred in the ordinary course of business), (f) interest rate protection agreements or any interest, currency or other hedging, swap, derivative or similar hedging agreements, (g) conditional sale or other title retention agreements, (h) interest, premium, penalties and other amounts owing in respect of the items listed in the foregoing clauses (a) through (g), and (i) guarantees and surety and other similar agreements of such Person of any of the foregoing of any 32
other Person, including guarantees in the form of an obligation to repurchase or reimburse, whether or not any of the foregoing would appear on a consolidated balance sheet prepared in accordance with GAAP, and any fees, penalties or accrued and/or unpaid interest on the foregoing. “Indemnified Party ” means the Person or Persons entitled to, or claiming a right to, indemnification under Article VII. “Indemnifying Party ” has the meaning given to it in Section 7.3(a). “Independent Accountant ” means an independent accounting firm of national reputation. “Interim Financial Statements ” has the meaning set forth in Section 4.5(a). “IRS ” means the United States Internal Revenue Service. “Knowledge of Medley ” or “ Medley’s Knowledge ” means the knowledge of Xxxxxxx Xxxxxxx, Xxxxxx Xxxx, Xxxxxx Xxxxx and Xxxx Xxxxx, after due inquiry and investigation, together with any knowledge (a) that such person could have been expected to discover or otherwise become aware of in the course of such due inquiry and investigation, and (b) that has been made available to any such person, including by way of a virtual data room, as of the Closing with respect to the Company Loans (other than the Syndicated Company Loans). For purposes of this definition, due inquiry and investigation of any individual listed in this definition shall not require inquiry of any Person that is not an Affiliate of Medley, Medley LLC or an officer, director, employee or representative of Medley, Medley LLC or an Affiliate of Medley or Medley LLC, does not extend beyond such individual’s areas of responsibility or such individual’s direct reports (both senior and junior) and does not require inquiry or investigation beyond the books and records of Medley, Medley LLC or any Affiliate of Medley LLC other than information made available by way of a virtual data room, as of the Business Day immediately prior to Closing. “Laws ” has the meaning set forth in the definition of Applicable Law. “Liability ” or “ Liabilities ” means a liability, Indebtedness, obligation, commitment, expense, claim or cause of action (of any kind or nature whatsoever, whether absolute, accrued, contingent or other, and whether known or unknown). “Liens” means liens, pledges, charges, mortgages, license, option, right of first refusal, claims and security interests and similar encumbrances. “Losses ” has the meaning set forth in Section 7.2(a). “Material Adverse Effect ” means any occurrence, change, event, state of facts, effect or development that, individually, or taken together with all other occurrences, changes, events, effects or developments, (a) has or would reasonably be likely to have a material adverse effect on the condition (financial or otherwise), results of operations, properties, assets (including, without limitation, the Company Loans and Company-Owned Equity Interests) or business of the Acquired Companies taken as a whole; provided, however, that, with respect to this subsection 33
(a), the determination of whether a “Material Adverse Effect” exists or has occurred shall not include effects to the extent attributable to (i) changes, after the date hereof, in GAAP or regulatory accounting requirements applicable generally to companies in the industry in which the Acquired Companies operate, (ii) changes, after the date hereof, in laws, rules or regulations of general applicability to companies in the industry in which the Acquired Companies operate, (iii) changes in global or national political conditions or general economic or market conditions generally affecting other companies in the industry in which the Acquired Companies operate, (iv) conditions arising out of acts of terrorism, war, weather conditions, pandemics or other similar events, or (v) the public disclosure of this Agreement or the Contemplated Transactions or any action required to be taken in accordance with this Agreement (other than covenants to operate in the ordinary course of business), except, with respect to clauses (i), (ii), (iii) and (iv), to the extent that the effects of such change are disproportionately adverse to the condition (financial or otherwise), results of operations, properties, assets (excluding, without limitation, the Syndicated Company Loans) or business of the Acquired Companies, taken as a whole, as compared to other companies in the industry in which the Acquired Companies operate, or (b) with respect to either Seller or Buyer, has or would reasonably be expected to prevent or materially delay the ability of either Seller or Buyer, as applicable, to timely consummate the Contemplated Transactions or otherwise perform their respective obligations under the Transaction Documents. “MCC Holdings ” has the meaning set forth in Section 4.1(d). “MCC SPV ” has the meaning set forth in Section 4.1(d). “Medley ” has the meaning set forth in the preamble to this Agreement. “Medley Interests ” has the meaning set forth in the recitals to this Agreement. “Membership Interest Assignment ” has the meaning in Section 2.2(a)(i). “NYSE ” means the New York Stock Exchange. “OFAC ” has the meaning set forth in the definition of Sanctioned Person. “Order ” means any final award, injunction, judgment, order, ruling, assessment, decree, writ, determination or verdict entered or issued by any court of Governmental Entity pertaining to any action, suit, proceeding, arbitration, mediation, audit or investigation. “Organizational Documents ” means, with respect to a Person other than a natural person, (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the certificate of formation and operating agreement of a limited liability company; (c) the partnership agreement and any statement of partnership of a general partnership; (d) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (e) any charter or similar document adopted or filed in connection with the creation, formation, or organization of any other Person; (f) any stockholder or similar agreement among holders of securities of an issuer; and (g) any amendment to any of the foregoing. “Payoff Letter ” has the meaning set forth in Section 2.2(a)(vii). 34
“Permit ” means any license, permit, variance, exemption, franchise, consent, approval, authorization, qualification, or Order of any Governmental Entity. “Person ” means an individual, corporation, partnership, limited liability company, association, trust, sole proprietorship, unincorporated organization, other entity, organization, group (as defined in Section 13(d) of the Securities Exchange Act of 1934, as amended), or any other business entity or any Governmental Entity, including a government or political subdivision or an agency or instrumentality thereof. “Post-Closing Tax Period ” means any taxable period beginning after the Closing Date or, with respect to Straddle Period, the portion of such Straddle Period beginning after the Closing Date. “Pre-Closing Tax Period ” means any taxable period ending at or prior to the Closing Date or, with respect to any Straddle Period, the portion of such Straddle Period ending at the Closing Date. “Pre-Closing Taxes ” means (a) any Taxes (or the non-payment thereof) of, or with respect to, an Acquired Company for any Pre-Closing Tax Period (determined for any Straddle Period in accordance with the principles set forth in Section 2.3(c)), including any Tax assessment resulting from application of the centralized partnership audit regime enacted by the Bipartisan Budget Act of 2015 and any partnership tax withholding obligations, and (b) all Taxes of any Person for a Pre-Closing Tax Period for which an Acquired Company is liable under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or federal Law), as a transferee or successor, under any Tax agreement or by contractual obligation (other than Contracts entered into in the ordinary course of business and not primarily related to Taxes). “Pro Rata Portion ” has the meaning set forth in Section 1.1(a). “Proceeding ” means any action, claim, arbitration, audit, hearing, investigation, litigation, suit or other proceeding (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any court or other Governmental Entity or referee, trustee, arbitrator or mediator. “Purchase Price ” has the meaning set forth in Section 1.1(b). “Purchase Price Certificate ” has the meaning set forth in Section 1.1(b). “Representative ” means, with respect to any Person, its Affiliates, directors, managers, officers, employees, attorneys, accountants, financing sources, financial advisors, agents, consultants or other representatives. “Response Period ” has the meaning set forth in Section 7.3(a). “Sanctioned Country ” means any country or region that is, or has been in the last five (5) years, the subject or target of a comprehensive embargo under Sanctions Laws (including Cuba, Iran, North Korea, Sudan, Syria, and the Crimea region of Ukraine). 35
“Sanctioned Person ” means any individual or entity that is the subject or target of sanctions or restrictions under Sanctions Laws or Ex-Im Laws, including: (a) any individual or entity listed on any applicable U.S. or non-U.S. sanctions- or export-related restricted party list, including, without limitation, the U.S. Department of the Treasury Office of Foreign Assets Control’s (“ OFAC ”) Specially Designated Nationals and Blocked Persons List; the EU Consolidated List and the UK’s Consolidated List of Persons Subject to Financial Sanctions; (b) any entity that is, in the aggregate, fifty percent (50%) or greater owned, directly or indirectly, or otherwise controlled by a Person or Persons described in clause (a); (c) any individual or entity acting on behalf of or at the direction of any Persons described in clauses (a) or (b); or (d) any national of a Sanctioned Country. “Sanctions Laws ” means all U.S. and non-U.S. Laws relating to economic or trade sanctions, including, without limitation, the Laws administered or enforced by the United States (including by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union, the United Kingdom and all other applicable EU Member States. “SEC ” means the United States Securities and Exchange Commission. “Securities Act ” means the Securities Act of 1933, as amended. “Seller ” has the meaning set forth in the preamble to this Agreement. “Seller Disclosure Schedule ” means that certain disclosure schedule delivered by the Sellers to Buyer prior to the execution of this Agreement, which schedule sets forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in Articles III and IV or as an exception to one or more representations or warranties contained in Articles III and IV, or to one or more of the Sellers’ covenants contained in this Agreement, to the extent the relevance of such disclosure to such section or subsection is reasonably apparent on its face. “Seller Indemnified Parties ” has the meaning set forth in Section 7.2(c). “Seller Prepared Tax Return ” has the meaning set forth in Section 2.3(b). “Solvent ” means, at any time with respect to any Person, on the applicable date of determination, such Person (a) is able to pay its debts as they mature and has (and has a reasonable basis to believe it will continue to have) sufficient capital (and not unreasonably small capital) to carry on its business consistent with its practices as of the Closing Date, and (b) the assets and properties of such Person at a fair valuation (and including as assets for this purpose at a fair valuation all rights of subrogation, contribution or indemnification arising pursuant to any guarantees given by such Person) are greater than the Indebtedness of such Person, and including subordinated and contingent liabilities computed at the amount which, such Person has a reasonable basis to believe, represents an amount which can reasonably be expected to become an actual or matured liability (and including as to contingent liabilities arising pursuant to any guarantee the face amount of such liability as reduced to reflect the probability of it becoming a matured liability). 36
“Straddle Period ” means any taxable period beginning before the Closing Date and ending after the Closing Date. “Subsidiary ” means, with respect to any Person, any corporation, company, limited liability company, partnership, association, or other business entity of which (a) if a corporation or a company, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof or (b) if a limited liability company, partnership, association, or other business entity (other than a corporation or a company), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation or a company) if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be a, or control any, managing director or general partner of such business entity (other than a corporation or a company); provided, however, the term “Subsidiary” shall not include any portfolio company of the Acquired Companies, whether an Existing Portfolio Company or otherwise. “Syndicated Company Loans ” means the Company Loans that are set forth on Section 8.1 of the Seller Disclosure Schedule. “Tax ” or “Taxes ” means (a) all federal, state, local, and foreign income, excise, gross receipts, recording, gross income, ad valorem, profits, gains, property, stamp, capital, sales, transfer, use, payroll, employment, severance, withholding, social security (or similar including FICA), customs, duties, intangibles, franchise, backup withholding, escheat or unclaimed property, registration, value added, alternative or add-on minimum, estimated, and any other taxes, charges, levies or like assessments in the nature of or similar to taxes, together with all penalties and additions to tax and interest thereon, in each case whether disputed or not and (b) any liability for Taxes described in clause (a) above for the payment of any amounts as a result of being liable for another Person’s taxes as a transferee or successor, by contract or otherwise. “Tax Return ” means, with respect to a Person, a report, return, election, declaration, or other information or statement (including any amendments thereof and attachments thereto) supplied or required to be supplied to a Governmental Entity with respect to Taxes including, where permitted or required, combined or consolidated returns for any group of entities that includes the Person or any of its Subsidiaries. “Threshold ” has the meaning set forth in Section 7.5(a). “Trade Control Law ” has the meaning set forth in Section 4.12(b). “Transaction Documents ” means this Agreement, the Membership Interest Assignment Agreements and any other document or certificate executed and delivered in connection with the foregoing. 37
“Transfer Taxes ” means, collectively, all federal, state, local foreign transfer, documentary, excise, sales, use, value added, registration, stamp, recording, property and similar Taxes or fees, including any penalties and interest. ARTICLE IX GENERAL PROVISIONS 9.1 Expenses. Except as provided in Section 2.3(f) with respect to Transfer Taxes, the Sellers shall bear their (and the Company’s) costs, fees and expenses, including attorney, investment banker, broker, accountant and other representative and consultant fees, incurred in connection with the execution and negotiation of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby; and Buyer shall bear its own costs, fees and expenses, including attorney, investment banker, broker, accountant and other representative and consultant fees, incurred in connection with the execution and negotiation of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby. 9.2 Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when delivered personally to the recipient, (b) when sent by facsimile, electronic mail or other electronic transmission followed by personal delivery, delivery by certified mail or delivery by reputable overnight courier service, on the date sent by facsimile if sent during normal business hours and the next Business Day if sent after normal business hours, or (c) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications shall be sent to Buyer, the Company or the Sellers at the addresses indicated below or to such other address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party: (a) if to the Sellers, to: Medley Capital Corporation 000 Xxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Attention: Xxxxxxx Xxxxxxx e-mail: xxxxxxx.xxxxxxx@xxxx.xxx with a copy to: Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000 Attention: Xxxxxx Xxxxxx; Xxxxx X. Xxxx e-mail: xxxxxxx@xxxxxxxxxxx.xxx ; xxxxx@xxxxxxxxxxx.xxx 38
shall be construed as having the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. 9.4 Counterparts; Delivery by Facsimile or PDF. This Agreement may be executed in one or more counterparts (including by means of telecopied signature pages or signature pages delivered by electronic transmission in portable document format (pdf)), all of which taken together shall constitute one and the same instrument. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or electronic transmission in portable document format (pdf), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic transmission in portable document format (pdf) to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic transmission in portable document format (pdf) as a defense to the formation of a contract and each such party forever waives any such defense, except to the extent such defense related to lack of authenticity. 9.5 Entire Agreement. This Agreement (including the documents and the instruments referred to in this Agreement), together with the Confidentiality Agreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Agreement, other than the Confidentiality Agreement. 9.6 Governing Law; Jurisdiction. (a) This Agreement and all claims or causes of action (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement as an inducement to enter this Agreement) shall be governed and construed in accordance with the internal laws of the State of Delaware. (b) The parties hereto agree that any Proceeding brought by either party to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the Contemplated Transactions shall be brought in any federal or state court located in the County of New York, State of New York. Each of the parties hereto submits to the jurisdiction of any such court in any Proceeding seeking to enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement or the Contemplated Transactions and hereby irrevocably waives the benefit of jurisdiction derived from present or future domicile or otherwise in such Proceeding. Each party hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such Proceeding in any such court or that any such Proceeding brought in any such court has been brought in an inconvenient forum. 40
(b) The parties hereto agree that if any provision of this Agreement were not performed in accordance with the terms hereof or is otherwise breached, irreparable damage would occur, money damages would not provide an adequate remedy at law and damages would be difficult to determine. Accordingly, it is agreed that the party or parties not in breach shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any court specified in Section 9.6, in addition to any other remedy to which they are entitled at law or in equity. The parties hereto hereby waive, in any such action for specific performance, the defense of adequacy of a remedy at law, the posting of any bond or other security in connection therewith and the necessity of proving actual harm. 9.11 Amendments; Waivers. No modification, amendment or waiver of any provision of, or consent required by, this Agreement shall be effective unless it is in writing and signed by the parties hereto. Any modification, amendment, waiver or consent shall be effective only in the specific instance and for the purpose for which it is given. 9.12 Severability. In the event that any provision of this Agreement as applied to any party or to any circumstance shall be adjudged by a court to be void, unenforceable or inoperative as a matter of law, then the same shall in no way affect any other provision in this Agreement, the application of such provision in any other circumstance or with respect to any other party, or the validity of enforceability of this Agreement as a whole. 9.13 Schedules. The information disclosed in any numbered or lettered part of any Seller Disclosure Schedule shall be deemed to relate to and shall qualify the particular representation or warranty set forth in the corresponding numbered or lettered section or subsection and any other particular representation or warranty to the extent that (a) such information is cross-referenced in another part of the Seller Disclosure Schedules or (b) it is reasonably apparent on the face of the disclosure (without reference to any document referred to therein) that such information qualifies another representation and warranty of the applicable party in this Agreement. The inclusion of an item in a Seller Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by any party hereto that such item represents an exception or material fact, event or circumstance or that such item constitutes a Material Adverse Effect. Without limiting the foregoing, no reference to or disclosure of a possible breach or violation of any contract or applicable law shall be construed as an admission or indication that such breach or violation exists or has actually occurred. Any fact or item that is disclosed in any Schedule in a way as to make its relevance or applicability to information called for by any other Schedule reasonably apparent shall be deemed to be disclosed in such other Schedule, notwithstanding the omission of a reference or cross-reference thereto. 9.14 Representation by Counsel. Each of the parties hereto acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded the execution of this Agreement and that it has executed the same with consent and upon the advice of said independent counsel. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise, or rule of strict constriction applied, favoring or disfavoring any party hereto by virtue of the authorship of any of the provisions of this Agreement. Accordingly, 42
any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against the party that drafted it is of no application and is hereby waived by the parties hereto. 43
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be executed by their respective signatories thereunto duly authorized as of the date first above written. SELLERS : MEDLEY CAPITAL CORPORATION By: /s/ Xxxxxxx X. Xxxxxxx, Xx. Name: Xxxxxxx X. Xxxxxxx, Xx. Title: Authorized Person GREAT AMERICAN LIFE INSURANCE COMPANY By: /s/ Xxxx X. Xxxxxxxx Name: Xxxx X. Xxxxxxxx Title: President COMPANY : MCC SENIOR LOAN STRATEGY JV I LLC BY: MEDLEY CAPITAL CORPORATION, in its capacity as a Member of the Company By: /s/ Xxxxxxx X. Xxxxxxx, Xx. Name: Xxxxxxx X. Xxxxxxx, Xx. Title: Authorized Person BY: GREAT AMERICAN LIFE INSURANCE COMPANY, in its capacity as a Member of the Company By: /s/ Xxxx X. Xxxxxxxx Name: Xxxx X. Xxxxxxxx Title: President [Signature Page to Membership Interest Purchase Agreement]
BUYER : GEMS FUND 5, L.P. By: GC Advisors LLC, its Investment Manager By: /s/ Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx Title: Co-General Counsel and Chief Compliance Officer [Signature Page to Membership Interest Purchase Agreement]
APPENDIX A Membership Interests Name of Seller Membership Allocation of Pro Rata Interests Purchase Price Portion of Payable to Purchase Price Sellers Payable to Sellers MEDLEY CAPITAL 87.5% $41,018,500.13 86.14 % CORPORATION GREAT AMERICAN LIFE 12.5% $ 6,601,265.33 13.86% INSURANCE COMPANY Total: 100% $ 47,619,765.46 100%
Exhibit A Purchase Price Calculation [See Attached.]
Project Maltese Projected Closing Waterfall Memo Adj. Final Initial Gross Purchase Price $155,400,000.00 Principal Payments Plus: Principal Fundings since Aug 13th through Oct. 2 $0.00 Less: Principal Payoffs since Aug 13th through Oct. 2 (10,005,525.67) Less: Principal Payoffs since Oct. 2 through Oct. 5 (8,750.00) Plus: Net Principal Changes (10,014,275.67) Jul 1st - Sep 14th Interest Income Accrued $2,382,493.71 Interest Income Cash Received (1,351,246.22) Cash Adj. for Receipts Outside of Period 684,688.41 Interest Expense Accrued (873,370.08) Cash Adj. for Interest Expense Paid for Jul 1st - Aug 31 729,001.48 Net Interest Income $1,509,123.63 Purchase Price Adj. 62,443.67 Sep 15th - Oct 2nd Interest Income Accrued through Oct. 2 $560,533.96 560,533.96 Interest Income Cash Received through Oct. 2 (1,620,729.22) Cash Adj. for Receipts Outside of Period through Oct. 2 17,162.70 Interest Expense Accrued through Oct. 2 (182,129.95) (182,129.95) Net Interest Income $378,404.01 Purchase Price Adj. (1,225,162.51) Oct 3rd - Closing Est. Net Investment Income Adjustment ($18,663 Per Day) 93,315.00 Working Capital Plus: Other Current Assets at Oct. 7 1,658.05 Less: Other Current Liabilities Oct. 7 0.00 Plus: Net Working Capital 1,658.05 Plus: Purchase Price Adjustment 1,000,000.00 Adjusted Gross Purchase Price $145,317,978.54 Less: Deutsche Bank Payoff Amount (as of Oct. 7) (111,319,482.48) Deutsche Bank AG, New York Branch Fees (376,605.93) Cadwalader, Xxxxxxxxxx & Xxxx LLP (Related to DB Line) (15,000.00) US Bank Interest Calculation (5,075.63) Less: Other Deutsche Bank Payoff Fees (as of Oct. 7) (396,681.56) Adj. Net Purchase Price $33,601,814.50 Plus: Gross Cash Balance at Oct. 2 14,213,435.78 Plus: Other Operating Cash Changes from Oct. 2 through Oct. 5 (195,484.82) Total Net Proceeds to Existing Shareholders $47,619,765.46
Exhibit B Form of Purchase Price Certificate [See Attached.]
EXECUTION VERSION This Purchase Price Certificate is made and delivered Pursuant to that certain Membership Interest Purchase Agreement dated as of October 8, 2020 (the “Agreement”), by and among Medley Capital Corporation, a Delaware corporation (“Medley”), Great American Life Insurance Company, an Ohio corporation (“GALIC”) (Medley and GALIC, each, a “Seller” and collectively, the “Sellers”), MCC Senior Loan Strategy JV I LLC, a Delaware limited liability company (the “Company”), and GEMS Fund 5, L.P., a Delaware limited partnership (“Buyer”). Capitalized terms used but not otherwise defined in this Purchase Price Certificate will have the same meanings ascribed to such terms in the Agreement. The undersigned, Xxxxxxx Xxxxxxx, does hereby certify to Buyer on behalf of Medley as follows: 1. He is the duly elected, qualified and acting Chief Financial Officer of Medley. 2. The calculation of the Purchase Price, attached to the Agreement as Exhibit A, is true and correct as of the Closing Date, in accordance with the terms of the Agreement. [SIGNATURE PAGE FO LLO WS] 9542/38263-022 CURRENT/119607163v3
IN WITNESS WHEREOF, the undersigned has executed this Purchase Price Certificate effective as of the Closing. MEDLEY CAPITAL CORPORATION By: Name: Xxxxxxx Xxxxxxx Title: Chief Financial Officer
Exhibit C Form of Membership Interest Assignment [See Attached.]
EXECUTION VERSION MEMBERSHIP INTEREST ASSIGNMENT AGREEMENT THIS MEMBERSHIP INTEREST ASSIGNMENT AGREEMENT (this “Assignment”) dated as of October 8, 2020, is entered into by and between [●], a Delaware corporation (“Assignor”) and GEMS Fund 5, L.P., a Delaware limited partnership (“Assignee”). WHEREAS, Assignor desires to transfer and assign, and Assignee desires to accept, [●]% of the issued and outstanding limited liability company membership interests in MCC Senior Loan Strategy JV I LLC, a Delaware limited liability company (the “Company”), owned by Assignor (the “Membership Interests”); WHEREAS, after giving effect to such assignment, Assignor will own zero percent (0%) of the Membership Interests; and NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignor and Assignee hereby agree as follows: Section 1. Transfer and Assignment. Assignor hereby sells, transfers, assigns and conveys to Assignee, free and clear of all liens, claims, pledges and encumbrances of any nature whatsoever, all of Assignor’s right, title and interest in and to the Membership Interests, to have and to hold the same unto Assignee (including Assignor’s obligations under that certain Limited Liability Company Operating Agreement of the Company, dated as of March 27, 2015 (as amended, supplemented or otherwise modified from time to time, the “LLC Agreement”)). Section 2. Acceptance. Assignee hereby accepts the foregoing assignment of the Membership Interests from Assignor, agrees to be party to and bound by the terms and conditions of the LLC Agreement and assumes all of the duties, responsibilities and rights, and agrees to perform and discharge all of the obligations of Assignor in Assignee’s capacity as a member of the Company in respect of the Membership Interests conveyed. Assignor and Assignee agree that the Assignment will satisfy Section 3.1(b) of the LLC Agreement. Section 3. Substitution. Assignee is hereby admitted to the Company as a member, it being understood that Assignee is a substitute member of Assignor. Section 4. Further Assurances. Each party hereby agrees to do, execute, acknowledge and deliver, or to cause to be done, executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and other documents or instruments that may be reasonably requested by the other party or the Company in order to effect or confirm the assignment, acceptance and assumption provided for above. Section 5. Terms of the Purchase Agreement. Reference is hereby made to that certain Membership Interest Purchase Agreement dated of even date herewith by and among the Assignee, the Assignor and the other parties named therein (the “Purchase Agreement”). The terms of the Purchase Agreement, including, but not limited to, the representations, warranties, covenants and agreements relating to the Membership Interests are incorporated herein by reference. The parties hereto acknowledge and agree that the representations, warranties, covenants and agreements contained in the Purchase Agreement shall not be superseded hereby but shall remain in full force and effect to the full extent provided therein. In the event of any conflict or inconsistency between the terms of the Purchase Agreement and the terms hereof, the terms of the Purchase Agreement shall govern. Section 6. Miscellaneous. 9542/38263-022 CURRENT/119546483v3
(a) Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed within such State. (b) Headings. Section headings used in this Agreement are for convenience of reference only and shall not be used in interpreting, construing or affecting the meaning or construction of this Agreement. (c) Counterparts. This Agreement may be executed by the parties hereto in any number of counterparts, each of which shall be deemed to be an original but all of which together shall constitute but one and the same instrument. Any counterpart may be executed by facsimile signature and such facsimile signature shall be deemed an original. (d) Third Party Beneficiaries. The Company is an express third party beneficiary of this Agreement. (e) Binding Effect. The respective rights and obligations set forth in this Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. [Remainder of page intentionally left blank] [Signature Page to Membership Interest Assignment Agreement]
Acknowledged and consented to: [●] By: Name: Title: [Signature Page to Membership Interest Assignment Agreement]
Exhibit D Form of Resignation Letter [See Attached.]
EXECUTION VERSION LETTER OF RESIGNATION Medley Capital Corporation 000 Xxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 October 8, 2020 To Whom It May Concern: Reference is hereby made to that certain Membership Interest Purchase Agreement, dated as of October 8, 2020 (as amended, supplemented and/or otherwise modified from time to time, the “Purchase Agreement”), by and among Medley Capital Corporation, a Delaware corporation, Great American Life Insurance Company, an Ohio corporation, MCC Senior Loan Strategy JV I LLC, a Delaware limited liability company, and GEMS Fund 5, L.P., a Delaware limited partnership. Capitalized terms used, but not otherwise defined herein, shall have the meanings set forth in the Purchase Agreement. Effective as of the Closing, the undersigned hereby irrevocably resigns from any and all director, manager and officer positions that the undersigned holds with respect to the Acquired Companies, without need for acceptance or any further action by any of the Acquired Companies. [Signature Page Follows] 9542/38263-022 CURRENT/119544282v2
Sincerely, __________________________ Name: Title: ACKNOWLEDGED: MCC SENIOR LOAN STRATEGY JV I LLC BY: MEDLEY CAPITAL CORPORATION, in its capacity as a Member of the Company By: Name: Title: BY: GREAT AMERICAN LIFE INSURANCE COMPANY, in its capacity as a Member of the Company By: Name: Title: [Signature Page to Letter of Resignation]
Exhibit E Payoff Letter [See Attached.]
EXECUTION VERSION TERMINATION LETTER October 8, 2020 MCC JV SPV Funding I LLC c/o Medley Capital LLC 000 Xxxx Xxxxxx, 0xx Xxxxx Xxx Xxxx, XX 00000 Attention: The General Counsel Re: Loan and Servicing Agreement, dated as of August 4, 2015 (as amended, modified, waived, supplemented or restated from time to time, the “Loan and Servicing Agreement”) by and among MCC JV SPV Funding I LLC, as the borrower (the “Borrower”), MCC Senior Loan Strategy JV I LLC, as the servicer (in such capacity, the “Servicer”), as the equityholder (in such capacity, the “Equityholder”) and the originator (in such capacity, the “Originator”), Deutsche Bank AG, New York Branch, as the facility agent (in such capacity, the “Facility Agent”), each of the Lenders from time to time party thereto (the “Lenders”), each of the Lender Agents from time to time party thereto (the “Lender Agents”) and U.S. Bank National Association, as the collateral agent (in such capacity, the “Collateral Agent”), as the account bank (in such capacity, the “Account Bank”) and as the collateral custodian (in such capacity, the “Collateral Custodian”). Ladies and Gentlemen: Reference is made to the Loan and Servicing Agreement described above. We have been requested to provide this letter setting forth the amount necessary, as of October 8, 2020 (the “Termination Date”), to pay all Obligations of the Borrower under the Loan and Servicing Agreement. Capitalized terms used but not otherwise defined herein shall have the respective meanings provided therefor in the Loan and Servicing Agreement. 1. In accordance with the foregoing, the parties hereto request that the Borrower hereby pay to the Collateral Agent the amounts set forth on Schedule I to be paid for distribution (a) to each Lender under the Loan and Servicing Agreement, an amount equal to the applicable amount set forth on Schedule I hereto in repayment of all outstanding principal, accrued and unpaid interest, fees and all other Obligations owed to the Lenders under the Loan and Servicing Agreement as of the Termination Date; (b) to counsel for the Lenders and other Secured Parties, an amount equal to the applicable amount set forth on Schedule I hereto in repayment of all outstanding fees owed to such counsel as of the Termination Date; and (c) to the Secured Parties, an amount equal to the applicable amount set forth on Schedule I hereto in repayment of all accrued and unpaid interest and fees owed to the Secured Parties as of the Termination Date (such amounts referenced in this Section 1 (and as more fully specified on Schedule I hereto) in the aggregate, the “Termination Amount”). The Collateral Agent shall disburse any amounts that are received pursuant to this Section 1 in accordance with the instructions set forth on Schedule II immediately and, in any event, no later than (x) on the same Business Day that such amounts are received if they are received at or prior to 11:00 a.m. (New York City time) on such Business USActive 55333093.5
Day and (y) on the Business Day following receipt of such amounts if they are received after 11:00 a.m. (New York City time). The parties hereto agree that the payment of the Termination Amount shall constitute payment in full of all Obligations, except for any Obligations of the Borrower with respect to indemnification and other similar provisions in the Transaction Documents which by their express terms survive the termination of such Transaction Documents. 2. Each of the Borrower, the Originator, the Equityholder, the Servicer, the Collateral Agent, the Account Bank, the Collateral Custodian and the Facility Agent for itself on behalf of the Lenders hereby waives all conditions set forth in the Loan and Servicing Agreement and the other Transaction Documents in connection with the voluntary prepayment and permanent reduction of the Maximum Commitment in whole and the termination of the Loan and Servicing Agreement. 3. Each Secured Party hereby acknowledges receipt of payment of all Obligations owing to it under the Transaction Documents as of the Termination Date. The parties hereto agree and acknowledge that upon receipt by the Collateral Agent of the amounts set forth in Section 1 above (and as more fully specified on Schedule I hereto), (i) all the security interests, liens and pledges in favor of the Collateral Agent or any other Secured Party securing the above- referenced Obligations and Collateral under the Transaction Documents are automatically released with no further action on the part of any person, (ii) all obligations of the Borrower, the Originator, the Equityholder and the Servicer in respect of the Transaction Documents are deemed to be paid off, satisfied and discharged in full, (iii) the Commitments are terminated, (iv) each Transaction Document is deemed terminated and of no further force and effect, except for indemnification and other provisions thereof which by their express terms survive the termination of such Transaction Document and (v) all obligations of the Borrower, the Originator, the Equityholder and the Servicer to the Secured Parties under and/or arising in connection with the Transaction Documents are deemed to be terminated, satisfied and discharged in full and of no further force and effect, except for indemnification and other provisions thereof, which by their express terms survive the termination of the Transaction Documents. 4. Upon the termination of all Commitments and payment in full of the Obligations (other than unmatured contingent indemnification obligations) as described herein, the Borrower hereby requests the release of, and the Collateral Agent, the Account Bank and the Collateral Custodian shall release, all Collateral (including any Required Loan Documents and Loan Files) and other documents to the Borrower (and/or its designee). The foregoing shall be at the sole cost and expense of the Borrower with no liability to the Collateral Agent, the Account Bank or the Collateral Custodian. 5. The Facility Agent, the Lenders and the Secured Parties hereby acknowledge that the recipient hereof will rely on this letter and the acknowledgments, certifications, confirmations and agreements of the Secured Parties contained herein. The Secured Parties hereto authorize the filing of termination statements on form UCC-3 (including the UCC-3s attached hereto as Exhibit III) or other security interest terminations with respect to the Transaction Documents and shall procure, deliver or execute and deliver all further instruments USActive 55333093.5 2
and documents, and take any other actions, which are reasonably required to evidence the consummation of the payoff contemplated hereby and the termination of all security interests, liens and pledges arising under or relating to the Transaction Documents, and the prompt delivery to the Borrower (or its designee) of all promissory notes, possessory collateral and other instruments in the possession of the Administrative Agent, the Collateral Agent, any Lender or any other Secured Party. 6. This letter may be executed by the parties hereto individually or in any combination, in one or more counterparts, each of which shall be an original and all of which shall constitute one and the same letter. Delivery of an executed counterpart of a signature page to this letter by e-mail in portable document format (.pdf) or facsimile shall be effective as delivery of a manually executed counterpart of this letter. 7. THE BORROWER AND EACH SECURED PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. 8. This letter shall be governed by, and construed in accordance with, the laws of the State of New York. 9. The Facility Agent hereby authorizes and directs U.S. Bank National Association, in its capacity as Collateral Agent, Account Bank and as Collateral Custodian under the Loan and Servicing Agreement, to execute, deliver and perform this letter. Each of the other parties agrees that the Collateral Agent, the Account Bank and the Collateral Custodian will have no liability for entering into this letter or for any action or inaction of the Collateral Agent, the Account Bank and the Collateral Custodian, as applicable, taken pursuant to this letter (including any instruction given to the Collateral Agent, the Account Bank and the Collateral Custodian, as applicable) in accordance herewith, except to the extent that such action or inaction arises from the bad faith, gross negligence or willful misconduct of the Collateral Agent, the Account Bank and the Collateral Custodian, as applicable. Each of the other parties hereby waives and releases, to the fullest extent permitted by law, any liabilities, obligations, duties, promises or claims it may have on or prior to the Termination Date under any Transaction Document or this letter, at law or in equity, against the Collateral Agent, the Account Bank and the Collateral Custodian, as applicable, except, with respect to this letter, any claim arising from the bad faith, gross negligence or willful misconduct of the Collateral Agent, the Account Bank and the Collateral Custodian, as applicable, as described in the preceding sentence. The Collateral Agent, the Account Bank and the Collateral Custodian may conclusively rely on the directions and certifications set forth in this letter and any Transaction Document without further investigation. 10. The parties agree that this letter may be executed and delivered by electronic signatures and that the signatures appearing on this letter are the same as handwritten signatures for the purposes of validity, enforceability and admissibility. USActive 55333093.5 3
[Signature pages to follow] USActive 55333093.5 4
The instructions set forth above are irrevocable instructions which can only be changed by an instruction signed by the parties hereto. Please sign below in the space provided to confirm receipt and acknowledgement of foregoing. Sincerely, DEUTSCHE BANK AG, NEW YORK BRANCH, as Facility Agent DEUTSCHE BANK AG, NEW YORK BRANCH, as Lender [Signature Page to Termination Letter]
U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent, Account Bank and as Collateral Custodian By: ____________________________________ Name: Xxxxx X. Xxxxxxx, Xx. Title: Senior Vice President [Signature Page to Termination Letter]
ACKNOWLEDGED AND AGREED as of the date first set forth above: MCC JV SPV FUNDING I LLC, as Borrower By: ____________________________________ Name: Xxxxxxx X. Xxxxxxx, Xx. Title: Authorized Person MCC SENIOR LOAN STRATEGY JV I LLC, as Equityholder By: ____________________________________ Name: Xxxxxxx X. Xxxxxxx, Xx. Title: Authorized Person MCC SENIOR LOAN STRATEGY JV I LLC, as Servicer By: ____________________________________ Name: Xxxxxxx X. Xxxxxxx, Xx. Title: Authorized Person MCC SENIOR LOAN STRATEGY JV I LLC, as Originator By: ____________________________________ Name: Xxxxxxx X. Xxxxxxx, Xx. Title: Authorized Person [Signature Page to Termination Letter]
MEDLEY CAPITAL CORPORATION, as Retention Holder By: ____________________________________ Name: Xxxxxxx X. Xxxxxxx, Xx. Title: Chief Financial Officer [Signature Page to Termination Letter]
SCHEDULE I (Amounts Determined as of the Termination Date) 1. Outstanding Principal: Recipient Amount Deutsche Bank AG, New York Branch, as Lender $111,319,482.48 Total $111,319,482.48 2. Accrued and Unpaid Interest and Fees: Recipient Amount Deutsche Bank AG, New York Branch $376,605.93 Cadwalader, Xxxxxxxxxx & Xxxx LLP $15,000.00 U.S. Bank National Association $5,075.63 3. Total Termination Amount: Amount $111,716,164.04 [Schedule I]
SCHEDULE III (See attached.) [Schedule III]
