Exhibit 10.3
OMNIBUS AMENDMENT, CONSENT AND WAIVER
THIS OMNIBUS AMENDMENT, CONSENT AND WAIVER (the "Amendment") is entered
into by and among MorAmerica Capital Corporation (the "Borrower"), MACC Private
Equities, Inc. ("MACC") and Cedar Rapids Bank and Trust (the "Lender") as of
this 29th day of April, 2008.
RECITALS
WHEREAS, the Borrower and the Lender are parties to that certain Business
Loan Agreement dated as of August 30, 2007 (as amended, modified, supplemented
or restated from time to time, the "Loan Agreement"; capitalized terms used
herein shall have the meanings ascribed thereto in the Loan Agreement unless
otherwise defined herein);
WHEREAS, the Borrower has informed the Lender of its intent to merge with
and into MACC (the "Merger");
WHEREAS, as a result of the Merger, MACC will succeed to the rights and
obligations of the Borrower under the Loan Agreement, the Commercial Security
Agreement, the Commercial Pledge and Security Agreement (with the Commercial
Security Agreement, each a "Security Agreement"), the Notes and the Related
Documents (collectively, the "Operative Documents");
WHEREAS, in connection with the Merger, Eudaimonia Asset Management, LLC
("EAM") will be appointed as investment advisor and InvestAmerica Investment
Advisors, Inc. (the "Existing Investment Advisor") will be appointed as
subadvisor with respect to existing investments identified on the exhibits and
schedules to each Security Agreement (the "Existing Investments"); and
WHEREAS, the parties desire to amend the Operative Documents consistent
with the foregoing.
NOW, THEREFORE, of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
Consent and Waiver
The Lender hereby consents to the Merger and the appointment of EAM as
investment advisor in connection therewith and waives any default or Event of
Default which may occur under any Operative Document solely as a result of the
Merger or the appointment of EAM as investment advisor. The Borrower and MACC
agree that such waivers shall not be construed as establishing a course of
conduct which the Borrower or MACC may rely at any time in the future.
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ARTICLE II
Amendments
Section 2.1. Substitution of MACC. MACC hereby agrees to be bound by the
Operative Documents as though MACC was named as the Borrower or the Grantor, as
applicable, therein. All references in the Operative Documents to the "Borrower"
or the "Grantor," as applicable, shall be deemed to refer to MACC. MACC agrees
to execute any and all replacement promissory notes, agreements and other
documents reasonably requested by the Lender to evidence the same. MACC further
ratifies and confirms the grant of a security interest in the Collateral and
authorizes the Lender to file amendments to any financing statements and to file
new financing statements in any jurisdictions deemed necessary by the Lender to
continue the perfection of the security interest previously granted pursuant to
the Operative Documents. MACC is a Delaware corporation and its state
organizational identification number is 2383034.
Section 2.2 Representations and Warranties. The section of the Loan
Agreement titled "Representations and Warranties" is hereby amended by deleting
"State of Iowa" in the first sentence of the paragraph titled "Organization" and
substituting "State of Delaware" in lieu thereof.
Section 2.3 New Loan Agreement Definitions. The following definitions are
hereby added to the definitions section in the Loan Agreement:
Existing Portfolio Company or Existing Portfolio Companies. The words
"Existing Portfolio Company" or "Existing Portfolio Companies" mean any
Portfolio Company in which the Borrower or MorAmerica Capital Corporation
has made an investment prior to April 29, 2008 and with respect to which
the Corporation's investment subadvisor will be providing services with
respect thereto.
New Portfolio Company or New Portfolio Companies. The words "New
Portfolio Company" or "New Portfolio Companies" mean any Portfolio Company,
other than an Existing Portfolio Company, in which the Borrower may make an
investment after April 29, 2008.
Portfolio Company or Portfolio Companies. The words "Portfolio
Company" or "Portfolio Companies" mean any entity in which the Borrower may
make an investment and with respect to which the Borrower's investment
advisor will be providing services with respect thereto, which investments
may include ownership of capital stock, loans, receivables due from a
Portfolio Company or other debtor on sale of assets acquired in liquidation
and assets acquired in liquidation of any Portfolio Company.
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Section 2.4 Loan Agreement Addendum. The Business Loan Agreement Addendum,
dated August 30, 2007, is hereby amended by deleting the paragraphs following
"The following subsection is added to the Affirmative Covenants" and
substituting in lieu thereof the following:
Borrower will satisfy the Business Financial Statement covenant by
delivering an annual audited financial statement prepared in accordance
with GAAP for an investment company and unaudited fiscal quarterly
financial statements prepared in accordance with GAAP for an investment
company.
Investment Portfolio Activity Report - as soon as available, but in no
event later than forty-five (45) days after the end of each fiscal quarter,
furnish Lender with an itemization of all investment dispositions or any
additional investments made by the Borrower to include the date and dollar
amount of such activity, prepared by Borrower, all as set forth in the
quarterly report on Form 10-Q as filed with the Securities and Exchange
Commission.
Investment Portfolio Valuation Report - as soon as available, but in
no event later than forty-five (45) days after the end of each fiscal
quarter, furnish Lender with an itemization of all investments owned by the
Borrower to include the Borrower's ownership interest and valuation for
each investment, prepared by Borrower, all as set forth in the quarterly
report of the Borrower on Form 10-Q as filed with the Securities and
Exchange Commission.
Board Management Letter - as soon as available, but in no event later
than forty-five (45) days after the end of each fiscal quarter, furnish
Lender with a copy of the Management Letter provided to Borrower's Board of
Directors, prepared by Borrower.
Minimum Investment Portfolio Value - Borrower will be required to
maintain at all times an Investment Portfolio Value comprised only of
Existing Portfolio Companies of not less than $5,000,000 more than the
outstanding balances of all Indebtedness due Lender. The Investment
Portfolio Value will be determined in accordance with the Investment
Portfolio Valuation Report and generally accepted accounting principles.
Change in Investment Advisor - Borrower has retained Eudaimonia Asset
Management, LLC as its investment advisor for New Portfolio Companies and
InvestAmerica Investment Advisors, Inc. as subadvisor with respect to
Existing Portfolio Companies. Borrower agrees that if it decides to change
investment advisors or subadvisors that it will notify Bank of the proposed
change in advance and that any change will require Bank's approval which
approval will not be unreasonably withheld.
Negative Covenant. Notwithstanding the covenant regarding Loans,
Acquisitions and Guaranties, the Borrower is authorized to (a) make
investments
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in New Portfolio Companies in the ordinary course of its business in the
form of debt and/or equity and (b) make follow-on investments in Existing
Portfolio Companies in the form of debt and/or equity in the ordinary
course of business, provided that no more than $300,000 of follow-on
investments shall be made in any year and no more than $500,000 of
follow-on investments shall be made during the term of the Notes.
Section 2.5 New Security Agreement Definitions. Each Security Agreement is
hereby amended by inserting the following definitions in the respective
definitions section of each Security Agreement:
Existing Portfolio Company or Existing Portfolio Companies. The words
"Existing Portfolio Company" or "Existing Portfolio Companies" mean any
Portfolio Company in which the Grantor or MorAmerica Capital Corporation
has made an investment prior to April 29, 2008 and with respect to which
the Grantor's investment subadvisor will be providing services with respect
thereto.
New Portfolio Company or New Portfolio Companies. The words "New
Portfolio Company" or "New Portfolio Companies" mean any Portfolio Company,
other than an Existing Portfolio Company, in which the Grantor may make an
investment after April 29, 2008.
Portfolio Company or Portfolio Companies. The words "Portfolio
Company" or "Portfolio Companies" mean any entity in which the Grantor may
make an investment and with respect to which the Grantor's investment
advisor will be providing services with respect thereto, which investments
may include ownership of capital stock, loans, receivables due from a
Portfolio Company or other debtor on sale of assets acquired in liquidation
and assets acquired in liquidation of any Portfolio Company.
Section 2.6 Collateral Description. Each Security Agreement is hereby
amended by inserting the following immediately after the paragraph titled
"Collateral Description":
Notwithstanding anything to the contrary in this Agreement,
"Collateral" shall not include any investment securities issued by, or
obligations of, a New Portfolio Company acquired by the Grantor in the
ordinary course of Grantor's business.
Section 2.7 Safekeeping Agreement. The Safekeeping Agreement among the
Borrower, MACC, and the Lender dated as of September 1, 2007 is hereby amended
as follows:
(a) The first sentence is amended and restated in its entirety to
read as follows:
This letter will confirm our agreement with respect to our
designation of Cedar Rapids Bank & Trust (the "Bank") as the
safekeeping agent for certain securities and similar investments in
Existing Portfolio
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Companies of MACC Private Equities Inc. (the "Corporation").
Notwithstanding anything to the contrary in this agreement, the Bank
acknowledges that it shall not act as safekeeping agent for any
securities and similar investments of the Corporation in New Portfolio
Companies.
For purposes hereof, the following definitions apply:
"Existing Portfolio Companies" mean any Portfolio Companies in
which the Corporation or MorAmerica Capital Corporation has made an
investment prior to April 29, 2008 and with respect to which the
Corporation's investment subadvisor will be providing services with
respect thereto.
"New Portfolio Companies" mean any Portfolio Companies, other
than Existing Portfolio Companies, in which the Corporation may make
an investment after April 29, 2008.
"Portfolio Companies" mean any entities in which the Corporation
may make an investment and with respect to which the Corporation's
investment advisor will be providing services with respect thereto,
which investments may include ownership of capital stock, loans,
receivables due from Portfolio Companies or other debtor on sale of
assets acquired in liquidation and assets acquired in liquidation of
any of the Portfolio Companies.
(b) Each reference in the agreement to the "Corporations" shall be
replaced with "Corporation."
ARTICLE III
Effectiveness
The amendments set forth herein shall be effective upon the consummation of
the Merger. The consent and waiver provisions of this Amendment shall be
effective upon the execution of this Amendment by the Lender. MACC shall provide
Lender with file stamped copies of the Articles of Merger between Borrower and
MACC within 30 days of the consummation of the Merger.
ARTICLE IV
Representations and Warranties; Affirmation of Loan Agreement
Section 4.1 Reassertion of Representations and Warranties. MACC hereby
represent that on and as of the date hereof and after giving effect to this
Amendment (a) all of the representations and warranties contained in the Loan
Agreement are true, correct and complete in all respects as of the date hereof
as though made on and as of such date, except for changes permitted by the terms
of the Loan Agreement or this Amendment and (b) there will exist no
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Event of Default under the Loan Agreement, as amended by this Amendment, on such
date which has not been waived by the Lender.
Section 4.2 Ratification. MACC and the Lender each acknowledge and affirm
that each Operative Document, as hereby amended, is hereby ratified and
confirmed in all respects and all terms, conditions and provisions of each
Operative Document, except as amended by this Amendment, shall remain unmodified
and in full force and effect.
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ARTICLE V
Conditions Precedent
Section 5.1 Legal Opinion. This Amendment shall not be effective until MACC
has delivered to the Lender an opinion of legal counsel for MACC in a form
acceptable to the Lender and its counsel.
ARTICLE VI
Miscellaneous
Section 6.1 Execution in Counterparts. This Amendment may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute one and the same instrument.
Section 6.2 Governing Law. This Amendment and the rights and the
obligations of the parties under this Amendment shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Iowa.
Section 6.3 Waiver and Documentation Fee, Expenses. MACC agrees to pay to
Lender a waiver and documentation fee of $2500.00. MACC also agrees to pay or
reimburse the Lender on demand for the reasonable legal fees and expenses of its
counsel in connection with the preparation and negotiation of this Amendment and
the review of other documents and agreements in connection with this Amendment.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have hereby duly executed this
Amendment as of the date first set forth above.
MORAMERICA CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: President
MACC PRIVATE EQUITIES INC.
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: President
CEDAR RAPIDS BANK AND TRUST COMPANY
By: /s/ Xxxx X. Xxxxxxx
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Name: /s/ Xxxx X. Xxxxxxx
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Title: Senior Vice President
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