Exhibit 10.1
FIRST AMENDMENT TO REVOLVING
CREDIT AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING
CREDIT AGREEMENT (this
“ Amendment ”), dated as of February 26,
2009 (the “ First Amendment Date ”), is made by
and among MCG CAPITAL CORPORATION (the “
Borrower ”), the financial institutions party hereto
as Lenders, and SUNTRUST BANK , as administrative agent for
itself and the Lenders (the “ Agent
”).
RECITALS:
WHEREAS , the Borrower, the Agent, the Lenders and
SunTrust Robinson Humphrey, Inc. entered into that certain
Revolving Credit Agreement, dated as of May 30, 2008 (as
amended, restated, supplemented or otherwise modified from time to
time, the “ Credit Agreement ”; capitalized
terms used herein and not otherwise defined shall have the
respective meanings ascribed thereto in the Credit
Agreement);
WHEREAS , Borrower has requested that the Agent and the
Lenders amend certain terms and provisions of the Credit Agreement;
and
WHEREAS , the Agent and the Lenders are willing to amend
the Credit Agreement as set forth herein, subject to the terms set
forth herein.
NOW , THEREFORE , in consideration of the
foregoing premises, and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged,
the parties hereto agree as follows:
1. Amendments to the Credit
Agreement . The
Credit Agreement is hereby amended as follows:
(a) Section 1.1 of the
Credit Agreement is hereby amended by amending and restating the
following definitions in their entirety as follows:
“ Commitment : For each
Lender, the amount specified with respect to such Lender on
Schedule 1.1 to the First Amendment, or pursuant to the
relevant Assignment and Assumption Agreement, as such
Lender’s maximum commitment with respect to Loans and
participations in Letters of Credit, in each case pursuant to this
Credit Agreement.”
“ Federal Funds Rate
Margin : Five and one-quarter of one percent (5.25%)
per annum ; provided , that at any time that
the Federal Funds Rate is less than twenty-five (25) basis
points lower than LIBOR, the Federal Funds Rate Margin shall be
reduced to four and one-quarter of one percent (4.25%)
per annum .”
“ Maximum Aggregate
Available Amount : $35,000,000, as such amount may be decreased
from time to time in accordance with §2.5.1(b) or
§2.5.3 or as may be reduced to zero upon the
acceleration of the Obligations during the occurrence of an Event
of Default pursuant to §8 .”
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“ Private Placement
Debt : The senior, unsecured Indebtedness of Borrower issued
pursuant to (i) that certain Note Purchase Agreement executed
by Borrower on October 11, 2005, as amended by an amendment
substantively in all material respects as set forth on Exhibit
A to the First Amendment (as so amended and as such agreement
may be further amended and otherwise modified from time to time to
the extent permitted herein), and (ii) that certain Note
Purchase Agreement executed by Borrower on October 3, 2007, as
amended by an amendment substantively in all material respects as
set forth on Exhibit A to the First Amendment (as so amended
and as such agreement may be further amended and otherwise modified
from time to time to the extent permitted
herein).”
“ Swingline Commitment
: -$0-.”
(b) Section 1.1 of the
Credit Agreement is hereby amended by adding the following new
definitions thereto in proper alphabetical sequence:
“ 2006-1 CLO : MCG
Commercial Loan Trust 2006-1, a Delaware statutory trust that is
indirectly wholly-owned by the Borrower.”
“ 2006-1 CLO Indenture
: means the Indenture dated as of April 18, 2006 by and
between 2006-1 CLO, as the issuer, and the 2006-1 CLO
Trustee.”
“ Advance Prepayment :
any prepayment designated by Borrower as an “Advance
Prepayment” in any Prepayment Notice, and the payment of
which has resulted in a permanent reduction in the Maximum
Aggregate Available Amount pursuant to §2.5.2(c)
.”
“ Applicable Prepayment
Percentage : as of any date of determination, a percentage
equal to 60%; provided , that if at any time a Subsidiary
Non-Recourse Debt Event of Default has occurred and is continuing
and a Private Placement Accelerated Payment Event has occurred and
is continuing, the Applicable Prepayment Percentage shall equal
88%.”
“ CLFT : MCG Commercial
Loan Funding Trust, a Delaware statutory trust that is indirectly
wholly-owned by the Borrower.”
“ Excess Prepayment :
As defined in §2.5.1(b) .”
“ First Amendment :
that certain First Amendment to Revolving Credit Agreement dated as
of February 26, 2009, by and among Borrower, the Lenders and
the Agent.”
“ Monetization Event :
any transaction or event that results in Net Cash Proceeds of
Portfolio Investments.”
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“ Net Cash Proceeds of
Portfolio Investments : Any cash or cash equivalents actually
received by the Borrower or any of its Subsidiaries (other than SPE
Subsidiaries and Solutions Capital and its Subsidiaries) from
(a) the repayment (including any regularly scheduled payments
thereof) or prepayment of principal on account of any Portfolio
Investment owned by Borrower or its Subsidiaries (excluding the SPE
Subsidiaries and Solutions Capital and its Subsidiaries) (other
than, with respect to a revolving credit facility, prepayments that
are not accompanied by, or that do not otherwise result in, a
reduction or termination of the commitments of the lenders
thereunder), (b) any sale, transfer or other disposition of
any Portfolio Investment (whether or not such Portfolio Investment
constitutes an Eligible Investment hereunder) owned by Borrower or
its Subsidiaries (excluding the SPE Subsidiaries and Solutions
Capital and its Subsidiaries), but excluding sales to Solutions
Capital or an SPE Subsidiary, (c) any sale, transfer or other
disposition of any Subsidiary of the Borrower (including, without
limitation, each SPE Subsidiary and Solutions Capital and its
Subsidiaries) other than a transfer to the Borrower or another
Subsidiary, or (d) the release of cash or cash equivalents to
the Borrower or any Subsidiary of the Borrower from any escrow or
contingency arrangement in relation to any of the foregoing
transactions consummated after the First Amendment Date, after
deducting therefrom (without duplication) in connection with any
transaction described in clauses (a) through (d) of this
definition, (1) all costs and expenses incurred by the
Borrower or such Subsidiary in connection with any such
transaction, (2) to the extent received by the Borrower or any
Subsidiary, the portion of such cash or cash equivalents payable by
the Borrower or such Subsidiary to third parties having a co-lender
or participation interest in the related Portfolio Investment,
(3) to the extent received by the Borrower or any Subsidiary,
the portion of such cash or cash equivalents that are required to
be held in escrow pursuant to the documentation giving rise to such
transaction, and (4) to the extent received by the Borrower or
any Subsidiary, the portion of such cash or cash equivalents that
are required to be rolled over or reinvested in a related Portfolio
Investment, in each case by the documentation giving rise to such
transaction.”
“ Permitted Intercompany
Indebtedness : Unsecured Debt of any Subsidiary owing to
Borrower in an aggregate principal amount at any time not to exceed
$10,000,000.”
“ Prepayment Notice :
As defined in §2.5.2(b) .”
“ Private Placement
Accelerated Payment Event : any event that results in the
holders of Private Placement Debt receiving cash net proceeds of
Portfolio Investment monetizations at a rate of 60% under the terms
of the Private Placement Debt agreements.
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“ Quarterly Cash Coverage
Ratio : As measured as of the last day of each Fiscal Quarter
for such Fiscal Quarter of Borrower and its Consolidated
Subsidiaries on a consolidated basis, the ratio of (a) the sum
of (i) Total Revenue for such Fiscal Quarter, less
(ii) to the extent included in the calculation of Total
Revenue for such Fiscal Quarter, all “payment in kind”
(PIK) interest and dividends that are accrued by but not paid in
cash to Borrower during such Fiscal Quarter with respect to any
Portfolio Investment of Borrower or its Consolidated Subsidiaries,
plus (iii) to the extent not otherwise included in the
calculation of Total Revenue for such Fiscal Quarter, all
“payment in kind” (PIK) interest and dividends that are
paid to Borrower in cash during such Fiscal Quarter with respect to
any Portfolio Investment of Borrower or its Consolidated
Subsidiaries, to (b) the sum of (i) “total
operating expenses” for such Fiscal Quarter (calculated in a
manner consistent the audited Financials for Borrower’s
fiscal year ended December 31, 2007), minus
(ii) to the extent included in total operating expenses,
non-cash amortization of employee and director restricted stock
awards, minus (iii) to the extent included in total
operating expenses, non-cash amortization of restructuring expenses
and charges in aggregate amount not to exceed $3,000,000 for any
Fiscal Quarter, minus (iv) to the extent included in
total operating expenses, non-cash amortization and depreciation
expenses (other than non-cash amortization of restructuring
expenses and charges); in each instance for such Fiscal Quarter
and, to the extent applicable, as determined in accordance with
GAAP.”
“ Subsidiary Non-Recourse
Debt :(a) the Debt of an SPE Subsidiary, and (b) the Debt
evidenced by certain debentures issued from time to time by
Solutions Capital through the debenture funding program with the
U.S. Small Business Administration, provided that in the case of
either clause (a) or (b), (1) so long as the Borrower and
its Consolidated Subsidiaries other than the relevant SPE
Subsidiary or Solutions Capital is not by contract or otherwise
liable for such debt and the lender thereunder has not otherwise
successfully established any such liability to the Borrower, and
(2) as such debt (and related agreements) may be amended,
supplemented, restated, increased, refinanced, replaced or
otherwise modified from time to time or any successor
thereto.
“ Subsidiary Non-Recourse
Debt Event of Default : a default by an SPE Subsidiary or
Solutions Capital in (a) the payment of any principal of or
premium or make-whole amount or interest or fee on any Subsidiary
Non-Recourse Debt beyond any period of grace provided with respect
thereto, or (b) the performance of or compliance with any term
(including payment term) of any Subsidiary Non-Recourse Debt or any
other condition exists, and as a consequence of such default or
condition either (i) such Subsidiary Non-Recourse Debt has
become, or has been declared (or one or more Persons are entitled
to declare such debt to be) due and payable before its stated
maturity or before its regularly scheduled dates of payment or
(ii) such SPE Subsidiary or Solutions Capital is obligated to
purchase or repay such Subsidiary Non-Recourse Debt before its
regular maturity or before its regularly scheduled dates of
payment.
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“ Total Revenue : for
any period, with respect to Borrower and its Consolidated
Subsidiaries, on a consolidated basis, “Total revenue”
for such period (calculated in a manner consistent with the audited
Financials for Borrower’s fiscal year ended December 31,
2007).”
“ Unapplied Advance
Prepayments : as of any date of determination, the aggregate
amount of all Advance Prepayments which have not, prior to such
date, been deducted pursuant to §2.5.1(b)(iv) from the
amounts required to prepay the Loans under §2.5.1(b)
.”
(c) Section 1.1 of the
Credit Agreement is hereby amended by deleting the following terms
therefrom: “ Commitment Increase ”, “
Commitment Increase Date ”, “ Increasing
Lender ”, “ New Lender ”, “
Permitted Subsidiary Indebtedness ”, “
Swingline Exposure ”, “ Swingline Loan
”, “ Swingline Loan Request ”, and “
Swingline Rate ”.
(d) Section 2.3 of the
Credit Agreement (including, without limitation, subsections
2.3.1 through 2.3.5 ) is hereby amended and restated in
its entirety as follows:
“ 2.3 Reserved .
”
(e) Section 2.4.1 of the
Credit Agreement is hereby amended and restated in its entirety as
follows:
“ 2.4.1 In
General . So long as no Event of Default has occurred and
is continuing, (i) each Loan that is a LIBOR Loan shall bear
interest for the period commencing with the Drawdown Date thereof
and ending on the last day of the Interest Period with respect
thereto at the rate of four percent (4.00%) per
annum above the LIBOR Rate determined for such Interest
Period, (ii) each Loan that is a Prime Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof
and ending on the last day of the Interest Period with respect
thereto at the rate of two and one-half of one percent
(2.50%) per annum above the Prime Rate, and
(iii) each Loan that is a Federal Funds Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof
and ending on the last day of the Interest Period with respect
thereto at a rate per annum equal to the Federal
Funds Rate Margin plus the Federal Funds Rate. Borrower
promises to pay interest on the Loans or any portion thereof
outstanding during each Interest Period in arrears on each Interest
Payment Date applicable to such Interest Period.”
(f) Section 2.5.1 of the
Credit Agreement is hereby amended by amending and restating
clauses (b) and (c) therein in their entirety as
follows:
“(b) (i) Within five
(5) Business Days after each date upon which Borrower and its
Subsidiaries have received aggregate Net Cash Proceeds of Portfolio
Investments in excess of $3,000,000 (in each case since the later
of the First Amendment Date or the last date Borrower has made any
prepayment required under this §2.5.1(b) ), Borrower
shall prepay the Loans and the Private
5
Placement Debt in an aggregate
amount equal to (A) (1) the Applicable Prepayment
Percentage as of such date, multiplied by
(2) the amount of such Net Cash Proceeds of Portfolio
Investments, minus (B) the amount of any Excess
Prepayment made prior to such date which has not previously been
used as a deduction pursuant to this subclause (B).
(ii) On any date a prepayment is
required under clause (i) of this §2.5.1(b) ,
Borrower may elect, in addition to and not in substitution of such
required prepayment, to make an additional prepayment of the Loans
and Private Placement Debt on such date in excess of the amount of
such required prepayment (such excess, an “ Excess
Prepayment ”).
(iii) Each prepayment required under
clause (i) of this §2.5.1(b) and each Excess
Prepayment shall be applied on a pro rata basis to the Loans and
the Private Placement Debt based on the respective outstanding
principal balances thereof on the date of such prepayment. For the
purposes of determining the outstanding principal balance of the
Loans under this clause (iii) on any date, the principal
balance of the Loans shall be deemed increased by an amount equal
to the aggregate amount of all Unapplied Advance Prepayments as of
such date.
(iv) Following the determination of
any prepayment amount required to be applied to the Loans pursuant
to and in accordance with clause (iii) of this
§2.5.1(b) , such amount shall be reduced by the
aggregate amount of all Unapplied Advance Prepayments as of the
applicable prepayment date.
(v) Borrower shall, at the time of
each prepayment required under clause (i) of this
§2.5.1(b) , deliver to the Agent a certificate executed
by a Financial Officer of Borrower setting forth, (A) the
amount of Net Cash Proceeds of Portfolio Investments related to
such prepayment and the date on which such proceeds were received,
(B) the amount of Cash owned by the Borrower and its
Subsidiaries as of such date, and the resulting Applicable
Prepayment Percentage with respect to such prepayment, (C) the
respective outstanding principal balances of the Loans and Private
Placement Debt on such date (prior to giving effect to such
prepayment), (D) the amount of any Advance Prepayment or
Excess Prepayment that is permitted to be deducted from the
required prepayment amount pursuant to clause (i) of this
§2.5.1(b) , and (E) the aggregate amount of such
prepayment (and any Excess Prepayment) and the corresponding
amounts thereof that are required to prepay the Loans and Private
Placement Debt, respectively.
(vi) Each prepayment of the Loans
required by this §2.5.1(b) and each Excess Prepayment
shall cause a simultaneous permanent reduction in the Maximum
Aggregate Available Amount in an amou
