EXHIBIT 3
FIRST AMENDMENT TO WARRANT AGREEMENT
This FIRST AMENDMENT TO WARRANT AGREEMENT ("Amendment") is dated as of
March 13, 2001, between MCM CAPITAL GROUP, INC., a Delaware corporation ("MCM")
and CTW FUNDING, LLC, a Delaware limited liability company ("Lender").
FACTUAL BACKGROUND
A. Under the Credit and Security Agreement dated as of October 31, 2000
(the "Credit Agreement"), Lender agreed to make available to Midland Credit
Management, Inc., a Kansas corporation ("Midland") a revolving credit facility
upon the terms and conditions set forth therein.
B. To induce Lender to enter into the Credit Agreement, MCM and Lender
entered into the Warrant Agreement dated as of October 31, 2000 (the "Warrant
Agreement") by and between MCM and Lender. (Capitalized terms used herein
without definition have the meanings given to them in the Warrant Agreement.)
C. To induce Lender to enter into the First Amendment to Credit Agreement,
dated as of March 13, 2001 (the "Credit Amendment"), among Midland, Lender, MCM
and Midland Acquisition Corporation, MCM has agreed to issue to Lender, warrants
to purchase up to an additional 200,000 shares of Common Stock; 50,000 to be
issued on the date of each Renewal Notice (as defined in the Credit Amendment).
AGREEMENT
Therefore, the MCM and Lender agree as follows:
1. Modification of Warrant Agreement. The Warrant Agreement is hereby
amended as follows:
(a) Credit Agreement. The definition of "Credit Agreement" in Section
1.01 is hereby amended by replacing such definition with the following
definition:
"Credit Agreement" means that certain Credit and
Security Agreement, dated as of October 31, 2000
by and between Midland and Lender, as amended,
supplemented or otherwise modified from time to
time.
(b) First Amendment. Section 1.01 of the Warrant Agreement is hereby
amended by adding the following definition:
"First Amendment" means that certain First
Amendment to Credit Agreement, dated as of March
13, 2001 among Midland, Lender, Company and
Midland Acquisition Corporation, a Delaware
corporation.
(b) First Amendment Date. Section 1.01 of the Warrant Agreement is
hereby amended by adding the following definition:
"First Amendment Date" shall mean March 13, 2001.
(c) Renewal Notice. Section 1.01 of the Warrant Agreement is hereby
amended by adding the following definition:
"Renewal Notice" shall have the meaning specified
in the Credit Agreement.
(d) Warrants. The definition of "Warrants" in Section 1.01 is hereby
amended by replacing such definition with the following definition:
"Warrants" shall mean the warrants issued to
Lender (i) on the Closing Date; (ii) on the
Initial Draw Date; (iii) on the First Amendment
Date; and (iv) in connection with each Renewal
Notice following the First Amendment, if any, in
each case, as contemplated by this Agreement and
the Credit Agreement.
(e) Execution and Delivery of Warrant Certificates. Section 2.02 of
the Warrant Agreement is hereby amended by adding the following sentence
prior to the last sentence: Additional
Warrant Certificates evidencing Warrants to
purchase 50,000 shares of Common Stock shall be
executed by the Company and delivered to Lender
concurrently with each of (i) the execution of the
First Amendment and (ii) each Renewal Notice.
2. Conditions Precedent. Before this Amendment becomes effective and any
party becomes obligated under it, all of the following
conditions shall have been satisfied at the Company's sole cost and expense in a
manner acceptable to Lender:
(a) Lender shall have received an original of this Amendment executed
by MCM;
(b) Lender shall have received from MCM a Certificate of Secretary
covering (i) the matters referred to in Section 3(b) of the Credit
Amendment and (ii) the due authorization, execution and delivery of the
Warrant Certificates to be delivered pursuant to this Amendment and the
enforceability of the Warrants represented thereby in accordance with their
respective terms; and
(c) MCM shall have reimbursed Lender for reasonable attorney fees and
costs incurred in the preparation, execution and closing of this Amendment.
3. Incorporation. This Amendment shall form a part of the Warrant
Agreement, and all references hereafter to the Warrant Agreement in any document
executed in connection with the Warrant Agreement shall mean the Warrant
Agreement as hereby modified.
4. No Impairment. Except as specifically hereby amended, the Warrant
Agreement shall remain unaffected by this Amendment and shall remain in full
force and effect.
5. Integration. The Warrant Agreement and this Amendment: (a) integrate all
the terms and conditions mentioned in or incidental to the Warrant Agreement and
this Amendment;
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(b) supersede all oral negotiations and prior and other writings with respect to
their subject matter; and (c) are intended by the parties as the final
expression of the agreement with respect to the terms and conditions set forth
in those documents and as the complete and exclusive statement of the terms
agreed to by the parties. If there is any conflict between the terms, conditions
and provisions of this Amendment and those of any other agreement or instrument,
including any of the Loan Documents (as defined in the Credit Agreement), the
terms, conditions and provisions of this Amendment shall prevail.
6. Miscellaneous. This Amendment and any attached consents or exhibits
requiring signatures may be executed in counterparts, and all counterparts shall
constitute but one and the same document. If any court of competent jurisdiction
determines any provision of this Amendment or the Warrant Agreement to be
invalid, illegal or unenforceable, that portion shall be deemed severed from the
rest, which shall remain in full force and effect as though the invalid, illegal
or unenforceable portion had never been a part of this Amendment or the Warrant
Agreement. As used here, the word "include(s)" means "includes(s), without
limitation," and the word "including" means "including, but not limited to."
7. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to its
principles or rules of conflict of laws to the extent such principles or rules
would require or permit the application of the laws of another jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
MCM CAPITAL GROUP, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
"MCM"
CTW FUNDING, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Manager
"Lender"
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