Exhibit 10.36

 

THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT

 

THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this “Third Amendment”) dated
November 1, 2017, by and among MVC CAPITAL, INC., a corporation formed under the
laws of the State of Delaware (the “Borrower”), MVC FINANCIAL SERVICES, INC., a
corporation formed under the laws of the State of Delaware, MVC CAYMAN, an
exempted company incorporated under the laws of the Cayman Islands, MVC GP II,
LLC, a limited liability company formed under the laws of the State of Delaware,
and MVC PARTNERS LLC, a limited liability company formed under the laws of the
State of Delaware, (collectively, the “Guarantors”, and each a “Guarantor”), the
financial institutions or entities from time to time parties to the Loan
Agreement (as such term is defined herein) (collectively, the “Lenders”, and
each a “Lender”), and SANTANDER BANK, N.A., as agent (the “Agent”), and WINTRUST
BANK, as syndication agent (“Wintrust”).

 

BACKGROUND

 

WHEREAS, Borrower, Lenders and Agent are parties to a Credit and Security
Agreement dated as of December 9, 2015 (as same has been and may be further
modified, amended, supplemented and/or restated from time to time, the “Credit
Agreement”). Capitalized terms used herein shall have the meanings given to them
in the Credit Agreement unless otherwise specified.

 

WHEREAS, Borrower has requested that the Agent and the Lenders amend the Credit
Agreement as described in this Third Amendment and waive certain terms of the
Credit Agreement in connection with the Borrower’s refinancing of the Senior
Notes.

 

WHEREAS, Agent and Lenders are willing to amend certain terms and conditions of
the Credit Agreement and grant the requested waivers as set forth herein.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

 

1.             Amendments to Credit Agreement.  As of the date hereof, the
Credit Agreement is amended as follows:

 

1.1          Definitions.  Section 1.1 of the Credit Agreement is amended by the
addition, the deletion or the amendment and restatement of the following
definitions, as applicable, to read in their entirety as follows:

 

(a)           Subsection (b) of the definition of Permitted Investments is
hereby amended and restated to read as follows:

 

“(b)         Investments consisting of (i) the Debt Investments listed on
Schedule 7.26(b), (ii) the Equity Investments listed on Schedules 7.26(a) and
(c), and (iii) “follow-on” Investments consisting of Debt Investments or Equity
Interests in Portfolio Companies currently owned by Credit Parties in an
aggregate amount not to exceed Eighteen Million Five Hundred Thousand and 00/100
Dollars ($18,500,000);”

 

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(b)           The definition of Excluded Accounts is hereby amended and restated
to read as follows:

 

““Excluded Deposit Account” shall mean (a) any Deposit Account that is
specifically and exclusively used for payroll, payroll taxes, employee wages and
benefits, withholding tax payments, earnest money and escrow deposits, (b) any
Deposit Account in which BB&T holds a perfected first priority security interest
as provided for in the BB&T Intercreditor Agreement,  (c) so long as they are a
Lender hereunder, a Deposit Account with Wintrust Bank in an amount not to
exceed Three Million Dollars ($3,000,000) at any time; (d) other Deposit
Accounts so long as the aggregate amount on deposit in all such other Deposit
Accounts under this clause (d) does not exceed One Million Dollars ($1,000,000)
for any period of three or more consecutive Business Days, and (e) the JPM
Letter of Credit Deposit Account.”

 

“Third Amendment Closing Date” means                                      ,
2017.

 

1.2          Section 2.4(a).  Section 2.4(a) of the Credit Agreement is amended
and restated in its entirety to read as follows:

 

“(a) Letters of Credit. Subject to the terms and conditions of this Agreement,
the Lenders agree to incur, from time to time, upon the request of Borrower and
for Borrower’s account, Letter of Credit Obligations by Agent causing Letters of
Credit to be issued by a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an “L/C Issuer”) for such
Borrower’s account, which may be guaranteed by Agent; provided, that if the L/C
Issuer is a Lender, then such Letters of Credit shall not be guaranteed by Agent
but rather each Lender shall, subject to the terms and conditions hereinafter
set forth, purchase (or be deemed to have purchased) risk participations in all
such Letters of Credit issued with the written consent of Agent, as more fully
described in Section 2.4(b)(ii) below. The initial L/C Issuer shall be Santander
Bank, N.A. and all Letters of Credit issued by Santander Bank, N.A. shall be
issued in its capacity as a Lender, not as Agent. The aggregate amount of all
Letter of Credit Obligations relating to the issuance of Letters of Credit shall
not at any time exceed Ten Million Dollars ($10,000,000); provided, however, in
no event shall Agent cause a Letter of Credit to be issued to the extent that
(i) Agent is in receipt of written notice that the conditions precedent set
forth in Section 6 of this Agreement cannot be satisfied or (ii) the face amount
of such Letter of Credit would then cause the sum of (x) the outstanding
Revolving Loans plus (y) outstanding Letters of Credit, to exceed Borrowing
Availability. All Letters of Credit shall be payable in Dollars. No standby
Letter of Credit shall have an expiry date that is more than one year following
the date of issuance thereof and no commercial Letter of Credit shall have an
expiry date that is more than 90 days

 

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following the date of issuance thereof, unless otherwise determined by the
Agent, in its sole discretion, and neither Agent nor Lenders shall be under any
obligation to incur Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date that is later than
the Final Maturity Date.

 

2.             Waiver.  The Borrower has notified the Agent that it intends to
refinance the Senior Notes with Refinancing Indebtedness, provided, however, the
transaction does not meet all of the requirements of Refinancing Indebtedness,
therefore, the Agent hereby waives the following requirements under the
definition of Refinancing Indebtedness in connection with the Refinancing
Indebtedness transaction:

 

(a)           The Borrower’s failure to provide the Agent with ten (10) Business
Days’ prior written notice of the Borrower’s intention to incur such
Indebtedness and to comply with the required information as set forth in
subsection (a) of the definition of Refinancing Indebtedness;

 

(b)           Provided the principal amount of Refinancing Indebtedness is not
more than one hundred and ten percent (110%) of the current principal amount of
the Refinanced Obligations plus the amount of reasonable refinancing fees and
expenses incurred in connection therewith, the Borrower shall be in compliance
with subsection (b) of the definition of Refinancing Indebtedness;

 

(c)           The final maturity of the Indebtedness will have a final maturity
date that is earlier than the final maturity date of the Refinanced Obligations;
and

 

(d)           Such Indebtedness shall have a Weighted Average Life to Maturity
greater than the Weighted Average Life to Maturity of the Refinanced
Obligations.

 

3.             No Other Changes. Except as explicitly amended by this Third
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to all Revolving Loans and Letters of
Credit thereunder.

 

4.             Conditions Precedent. This Third Amendment shall be effective
when the Agent shall have received an executed original hereof and each of the
following documents (collectively, the “Third Amendment Documents”):

 

(a)           this Third Amendment duly executed;

 

(b)           the Acknowledgment and Agreement of Guarantors set forth at the
end of this Third Amendment, duly executed by the Guarantor; and

 

(c)           payment of an amendment fee to the Agent for the benefit of the
Lenders in an amount equal to Seven Thousand Five Hundred Dollars ($7,500),
which fee shall be fully earned, irrevocable, due and payable on the Third
Amendment Closing Date.

 

5.             Representations and Warranties. Borrower hereby represents and
warrants to Agent and Lenders as follows:

 

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(a)           Borrower has all requisite power and authority to execute this
Third Amendment and the other Third Amendment Documents and to perform all of
its obligations hereunder and thereunder, and the Third Amendment Documents have
been duly executed and delivered by Borrower and constitute the legal, valid and
binding obligation of Borrower, enforceable in accordance with their terms,
subject to applicable Federal and state bankruptcy and insolvency laws affecting
generally the rights of creditors.

 

(b)           The execution, delivery and performance by Borrower of this Third
Amendment and the other Third Amendment Documents have been duly authorized by
all necessary corporate action and do not (i) require any authorization, consent
or approval by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any law,
rule or regulation or of any order, writ, injunction or decree presently in
effect, having applicability to Borrower, or the certificate of incorporation or
bylaws of Borrower, or (iii) result in a breach of or constitute a default under
any indenture or loan or Credit Agreement or any other agreement, lease or
instrument to which Borrower is a party or by which it or its properties may be
bound or affected.

 

(c)           All of the representations and warranties contained in the Credit
Agreement are correct in all material respects on and as of the date hereof as
though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date.

 

6.             References. All references in the Credit Agreement to the
“Agreement” shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Loan Documents to the Credit Agreement shall
be deemed to refer to the Credit Agreement as amended hereby.

 

7.             No Waiver.  The execution of this Third Amendment and of any
documents related hereto shall not be deemed to be a waiver of any Default or
Event of Default under the Credit Agreement or breach, default or event of
default under any Loan Documents or other document held by Agent or Lenders,
whether or not known to Agent or Lenders and whether or not existing on the date
of this Third Amendment.

 

8.             Release.  Borrower and Guarantors by signing the Acknowledgment
and Agreement of Guarantors set forth below, each hereby absolutely and
unconditionally releases and forever discharges the Agent, Lenders and L/C
Issuers, and any and all participants, parent corporations, subsidiary
corporations, affiliated corporations, insurers, indemnitors, successors and
assigns thereof, together with all of the present and former directors,
officers, agents and employees of any of the foregoing, from any and all claims,
demands or causes of action of any kind, nature or description, whether arising
in law or equity or upon contract or tort or under any state or federal law or
otherwise, which Borrower or Guarantors has had, now has or has made claim to
have against any such person for or by reason of any act, omission, matter,
cause or thing whatsoever arising from the beginning of time to and including
the date of this Third Amendment, whether such claims, demands and causes of
action are matured or unmatured or known or unknown.

 

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9.             Costs and Expenses. Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse Agent, Lenders and L/C Issuer on demand
for all reasonable costs and expenses incurred by Agent, Lenders and L/C Issuer
in connection with the Loan Documents, including without limitation all
reasonable fees and disbursements of legal counsel. Without limiting the
generality of the foregoing, Borrower specifically agrees to pay all reasonable
fees and disbursements of counsel to Agent, Lenders and L/C Issuer for the
services performed by such counsel in connection with the preparation of this
Third Amendment and the documents and instruments incidental hereto.  Borrower
hereby agrees that Agent may, at any time or from time to time in its sole
discretion and without further authorization by Borrower, make an Advance to
Borrower under the Credit Agreement, or apply the proceeds of any Advance, for
the purpose of paying any such fees, disbursements, costs and expenses.

 

9.           Miscellaneous. This Third Amendment and the Acknowledgment and
Agreement of Guarantors may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which counterparts, taken together, shall constitute one and the same
instrument.  Delivery of an executed counterpart of a signature page to this
Third Amendment by facsimile or other electronic transmission shall be effective
as delivery of a manually executed counterpart of this Third Amendment.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
duly executed as of the date first written above.

 

 

MVC CAPITAL, INC.

 

 

 

 

 

By:

/s/ MICHAEL T. TOKARZ

 

Name:  MICHAEL T. TOKARZ

 

Title:

 

 

 

 

 

SANTANDER BANK, N.A.,

 

as Agent and as a Lender

 

 

 

 

 

By:

/s/ Pierre A. Desbiens

 

Name: Pierre A. Desbiens

 

Title: SVP

 

 

 

By:

/s/ Mark Metsky

 

Name: Mark Metsky

 

Title: SVP

 

 

 

 

 

WINTRUST BANK, as Lender

 

 

 

By:

/s/ John Paul Hills

 

Name: John Paul Hills

 

Title: VP

 

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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS

 

The undersigned, each a Guarantor of the Indebtedness of MVC Capital, Inc. (the
“Borrower”) to Santander Bank, N.A. ( “Agent”) for itself, as a lender, and as
agent for the other lenders (the “Lenders”) signatory to that certain Credit and
Security Agreement dated as of December 9, 2015 by and among the Borrower, the
Lenders, and the Agent, pursuant to the Guaranty Agreement dated as of
December 9, 2015 (the “Guaranty”), hereby (i) acknowledges receipt of the
foregoing amendment; (ii) consents to the terms and execution thereof;
(iii) reaffirms its obligations to Agent, Lenders or L/C Issuer pursuant to the
terms of the Guaranty; and (iv) acknowledges that the Agent and Lenders may
amend, restate, extend, renew or otherwise modify the Credit Agreement and any
indebtedness or agreement of the Borrower, or enter into any agreement or extend
additional or other credit accommodations, without notifying or obtaining the
consent of the undersigned and without impairing the liability of the
undersigned under the Guaranty for all of the Borrower’s present and future
indebtedness to the Agent and Lenders.

 

 

MVC FINANCIAL SERVICES, INC.

 

 

 

 

 

By:

/s/ MICHAEL T. TOKARZ

 

Name:  MICHAEL T. TOKARZ

 

Title:

 

 

 

 

 

MVC CAYMAN

 

 

 

 

 

By:

/s/ MICHAEL T. TOKARZ

 

Name: MICHAEL T. TOKARZ

 

Title:

 

 

 

 

 

MVC GP II, LLC

 

 

 

 

 

By:

/s/ JAMES PINTO

 

Name: JAMES PINTO

 

Title:

 

 

 

 

 

MVC PARTNERS LLC

 

 

 

 

 

By:

/s/ MICHAEL T. TOKARZ

 

Name: MICHAEL T. TOKARZ

 

Title:

 

Date:                              , 2017

 

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