This “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” should be read in
conjunction with “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in the
Annual Report on Form 10-K of MCM Capital Group, Inc.
(“MCM” or collectively with its subsidiaries, the
“Company”) for the year ended December 31, 1999 as
filed with the Securities and Exchange Commission. A general
description of the Company’s industry and a discussion of
recent trends affecting that industry are contained therein.
Certain statements under this caption may constitute
“forward-looking statements” under the Private
Securities Litigation Reform Act of 1995 (the “Reform
Act”). Such forward-looking statements involve risks,
uncertainties and other factors which may cause the actual
results, performance, or achievements of the Company to be
materially different from any future results, performance or
achievements express or implied by such forward-looking
statements. For those statements the Company claims the
protection of the safe harbor for forward-looking statements
contained in the Reform Act. See “Part II — Other
Information.”
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Three Months Ended March 31, 2000 Compared with Three
Months Ended March 31, 1999 |
Revenues. Total revenues for the three months ended
March 31, 2000 were $7.9 million compared to total revenues
of $4.2 million for the three months ended March 31, 1999,
an increase of $3.7 million or 88%. The increase in revenues was
the net result of an increase in income from receivable
portfolios of $2.7 million; an increase in income on retained
interest of $0.9 million; and an increase in servicing fees and
related income of $0.1 million.
Income from receivable portfolios increased $2.7 million or 475%,
from $0.6 million to $3.3 million for the three months ended
March 31, 2000. Such increase was the result of a $55.0
million increase in the average outstanding balance of our
investment in receivable portfolios from an average of $4.0
million during the three months ended March 31, 1999 to an
average of $59.0 million during the three months ended
March 31, 2000. The increase in the average outstanding
balance of our investment in receivable portfolios is due to
(i) the purchase of $52.0 million and $3.5 million of
receivable portfolios during the year ended December 31,
1999 and the three months ended March 31, 2000,
respectively, and (ii) the December 30, 1998
securitization of receivable portfolios with a carrying amount of
$33.8 million. This 1998 securitization was accounted for as a
sale in accordance with Statement of Financial Accounting
Standards No. 125 and, thus, the receivables were sold and
no longer accrue income to the benefit of MCM other than
servicing fees and income from the retained interest.
In connection with the December 30, 1998 securitization
transaction and the related servicing agreement, the Company
recorded a retained interest in the securitized receivables and a
servicing liability. For the three months ended March 31,
2000, we recognized income from retained interest in securitized
receivables in the amount of $2.5 million, servicing fees in the
amount of $1.5 million and amortization of servicing liability in
the amount of $0.6 million compared to income from retained
interest in securitized receivables in the amount of $1.7
million, servicing fees in the amount of $1.3 million and
amortization of servicing liability in the amount of $0.6 million
in the three months ended March 31, 1999. The amortization
of the servicing liability is included in servicing fees and
related income over the expected term of the securitization in
the condensed consolidated statements of operations.
Total Operating Expenses. Total operating expenses were
$7.7 million for the three months ended March 31, 2000
compared to $5.4 million for the three months ended
March 31, 1999, an increase of $2.3 million or 41%. Total
operating expenses as a percentage of revenues improved to 97%
for the three months ended March 31, 2000, compared to 130%
for the three months ended March 31, 1999. The increase in total
operating expenses reflects our significant growth during the
past twelve months while the decrease in operating expenses as a
percentage of revenues reflects the efficiencies we gained in our
operations. The growth of MCM included the addition of executive
and management personnel during the second half of 1999 when we
purchased the majority of our owned receivable portfolios. In
addition, the increase in personnel was
11
necessary to install and implement our new Davox call management
system and related new computer network. Further, during the
three months ended March 31, 2000, collections per collector
averaged $48,553, a 122% increase over the average collection
per collector of $21,918 in the three months ended March 31,
1999, resulting in higher base salaries and commissions for
collection personnel in the 2000 period. These factors considered
together are the primary reasons for the 42% increase in
salaries and employee benefits to $5.2 million for the three
months ended March 31, 2000 from $3.7 million for the same
period in 1999.
Other operating expenses, general and administrative expenses and
depreciation and amortization expenses increased $0.7 million or
38% from $1.7 million to $2.4 million for the three months ended
March 31, 1999 and 2000, respectively. This increase was
due primarily to the expansion of our Phoenix location and the
growth in the receivable portfolios managed by MCM and the
resulting increase in expenses relating to the collection of such
receivable portfolios.
Other income and expenses. Total other income and expenses
for the three months ended March 31, 2000 was $3.9 million
compared to $0.1 million for the three months ended
March 31, 1999, an increase of $2.8 million. Interest
expense for the three months ended March 31, 2000 was $1.9
million compared to $0.2 million for the three months ended
March 31, 1999, an increase of $1.7 million. The increase is
attributable to higher average outstanding borrowings during the
three months ended March 31, 2000 as compared to the same
period in 1999 as a result of the 1998 securitization which was
accounted for as a sale, purchases of $52.0 million and $3.5
million of receivable portfolios in the year ended
December 31, 1999 and the three months ended March 31,
2000, respectively, which were financed principally with debt
borrowings, and the issuance of $10 million of 12% Senior Notes
in January, 2000. See “Liquidity and Capital Resources”
below for further discussion of our borrowings. We recorded a
provision for portfolio losses of $2.1 million during the three
months ended March 31, 2000 as a result of reasons described
below.
During the three months ended March 31, 2000, we determined
that a number of our receivable portfolios that had been acquired
during the past twelve months, with a carrying value of
approximately $31.9 million, did not appear to conform to the
terms of the contracts under which they were purchased. As a
result of such apparent noncompliance, the portfolios were not
performing in a manner consistent with our expectations and
historical results for the specific type of receivables within
those portfolios. Due to the significance of the apparent
noncompliance, we are unable to determine the potential impact on
the performance of the portfolios.
As a result, we are unable to determine the fair value of these
portfolios because we cannot reasonably estimate the amount and
timing of anticipated collections and, therefore, we ceased
accrual of income on these portfolios effective January 1,
2000. In accordance with AICPA Practice Bulletin 6, we will
continue to account for these portfolios under the cost recovery
method indefinitely until such time, if ever, that we have
demonstrated a basis upon which to estimate the amount and timing
of anticipated collections. However, we made our best estimate
of the expected gross collections on the portfolios in order to
determine the potential loss exposure based on the difference
between aggregate undiscounted collections and the corresponding
carrying amount of the portfolios. Based on these estimates, we
recorded a provision for portfolio losses for the three months
ended March 31, 2000 in the amount of $2.1 million.
We are currently in the process of determining possible remedies
that may be available to us from those entities from whom the
apparent non-conforming receivables were purchased. Until such
time as we can better estimate the future cash projections of
these portfolios, no income will be accrued with respect to these
portfolios, and the full amount of collections from these
portfolios will be credited to the receivables balance.
Income Tax Benefit. For the three months ended
March 31, 2000 and 1999, we recorded income tax benefits of
$1.5 million and $0.5 million, respectively, reflecting an
effective rate of 40% in each period.
Net Loss. The net loss for the three months ended
March 31, 2000 was $2.2 million compared to net loss of $0.8
million for the three months ended March 31, 1999.
12
Liquidity and Capital Resources
Historically, we have engaged in the business of acquiring and
servicing charged-off loan portfolios, originated by credit card
issuers. However, as a result of limitations under our most
recent securitization transaction and our warehouse facility, as
amended, we cannot make significant additional purchases of
receivables until we have acquired additional funding and
maintain a specified level of liquidity. As of March 31,
2000, we are limited to approximately $0.4 million of
additional receivables purchases until we obtain the required
additional financing. As a result, we are currently focused on
servicing our existing owned and securitized portfolios and are
seeking additional financing and liquidity.
At both March 31, 2000 and December 31, 1999, we had
cash of $0.4 million. We utilize our unsecured, revolving line of
credit for working capital needs and thus maintain a minimal
amount of cash since we draw on the revolving line of credit on a
regular basis for required cash expenditures.
We had total recoveries on managed receivable portfolios of $13.8
million for the three months ended March 31, 2000, a 100%
increase over the $6.9 million collected in the same period in
the prior year.
On January 18, 2000, Midland Receivables 99-1 Corporation, a
bankruptcy remote special purpose entity formed by MCM as a
subsidiary of Midland Credit, issued nonrecourse notes in the
amount of $28.9 million, bearing interest at 9.63% per annum
(“Securitization 99-1”). The notes are collateralized
by certain charged-off receivables securitized by us with a
carrying amount of approximately $43.0 million at the time of
transfer and an initial cash reserve account of $1.4 million and
are insured through a financial guaranty insurance policy. The
securitization has been accounted for as a financing transaction
and the proceeds were used to reduce the level of outstanding
borrowings of our warehouse facility. Any income from these
receivable portfolios will be recognized over the estimated life
of the receivables securitized and the receivables and
corresponding debt will remain on our balance sheet. The assets
pledged in the securitization transaction, together with their
associated cash flows, would not be available to satisfy claims
of creditors of MCM. At March 31, 2000, the balance
outstanding under these nonrecourse notes was $27.2 million.
In addition, as a condition to closing Securitization 99-1, we
were required to amend the warehouse facility to add many of the
same restrictive covenants and default provisions agreed to in
Securitization 99-1 and to require the note insurer or other
controlling party to reappoint MCM as the servicer prior to the
end of each quarter. We have been reappointed as servicer for the
second quarter of 2000 under Securitization 99-1 and the
warehouse facility.
The warehouse facility contains a condition to borrowing that we
maintain diversity among our receivables suppliers and the age
and type of credit card receivables. As of March 31, 2000,
we are out of compliance with the receivables suppliers diversity
requirement and with a requirement that not greater than 20%
(25% in California) of our receivable portfolios financed within
the warehouse be from a single state. The non-compliance is not a
default under the warehouse facility. However, as a result of
our non-compliance, we cannot borrow further funds under the
warehouse unless the new accounts funded bring us back into
compliance with these two items. If we can maintain adequate
liquidity, we believe that we will able to able to acquire
sufficient quantities of receivables from various suppliers to
satisfy the diversity requirement and fund future purchases of
receivables through the warehouse facility.
During the three months ended March 31, 2000, we determined
that a number of our receivable portfolios that were acquired
during the past twelve months with a carrying value of
approximately $31.9 million did not appear to conform to the
terms of the contracts under which they were purchased. As a
result of the portfolio performance issues pertaining to the
instances of non-compliance with the sales contract terms, we
currently forecast that an event of default will occur under
Securitization 99-1 and our warehouse facility, as amended,
during the second quarter of 2000. Specifically, we forecast that
we will fail to maintain specified levels of liquidity and
collect, on a quarterly basis, certain minimum amounts from the
receivable portfolios within Securitization 99-1. We are in
discussions with the financial guaranty insurance company
13
that guarantees the notes issued in Securitization 99-1 and the
warehouse facility to waive the anticipated event of default.
Although no waivers have yet been executed, we expect to receive
a letter that the financial guaranty insurance company intends to
waive until June 16, 2000 any event of default that occurs
prior thereto. There can be no assurance that any waiver will be
provided beyond June 16, 2000.
If an event of default occurs and a waiver is not effective at
such time, MCM may be removed as servicer of the receivables in
Securitization 99-1 and the warehouse facility and those
receivables can be liquidated to pay off the related notes issued
in the securitization and the warehouse. If the receivables are
collected in the ordinary course, MCM expects collections on the
receivables to exceed the amount due to the noteholders. However,
if the receivables are liquidated to pay off the noteholders as
a result of an event of default, these expected excess
collections could not be recovered by MCM. Such liquidation would
have no effect on our operating results, unless the receivables
are liquidated for less than their book value, as we are
currently accounting for these portfolios under the cost recovery
method and, accordingly, are not accruing any income on these
portfolios. The note insurer for the securitization and the
warehouse (or noteholders under certain circumstances) can waive
the event of default or, if the event of default is not waived,
can elect not to remove MCM as the servicer or to liquidate the
receivables. Should such an event of default occur, MCM believes
that it would have sufficient liquidity to fund its operations
and working capital needs through at least December 2000,
provided (i) the event of default is waived or if the event
of default is not waived and the election is made not to remove
MCM as the servicer nor to liquidate the receivables,
(ii) the controlling party, which is currently the note
insurer, continues to reappoint MCM as the servicer on a
quarterly basis, and (iii) MCM makes no additional purchases
of receivables. If, however, the controlling party does not
reappoint MCM as servicer or an event of default occurs and the
controlling party removes MCM as servicer or liquidates the
receivables, MCM may be required to, among other things,
(i) reduce any future capital expenditures for computer,
telephone and system upgrades, (ii) sell certain of its
receivables portfolios for cash, (iii) reduce the number of
employees and overall scope of operations, (iv) pursue
strategic alternatives such as a sale, merger or recapitalization
of MCM or Midland Credit, or (v) seek protection under
reorganization, insolvency or similar laws.
In addition, if an event of default under the Securitization 99-1
or the warehouse facility occurs and is continuing, and the
controlling party removes MCM as servicer, that would also cause
an event of default under the 12% Series No. 1 Senior Notes
more fully described below which would allow the senior notes to
be accelerated.
On January 12, 2000, we issued $10 million in principal
amount of 12% Series No. 1 Senior Notes (the
“Notes”) to an institutional investor. The Notes are
unsecured obligations of MCM but are guaranteed by Midland Credit
and Triarc Companies, Inc., a shareholder of MCM
(“Triarc”). Triarc beneficially owns approximately 9.6%
of the outstanding common stock of MCM. In connection with the
issuance of the Notes, MCM issued warrants to the institutional
investor and Triarc to acquire up to 428,571 and 100,000 shares,
respectively, of common stock of the Company at an exercise price
of $0.01 per share. In addition, we paid Triarc a fee of
$200,000 in consideration of Triarc’s guarantee of this
indebtedness. We engaged an independent valuation firm to
determine the allocation of the $10 million principal amount
between the Notes and the warrants. The results of the valuation
were such that the value of the warrants was approximately $3.05
per share. This valuation of $3.05 per share results in the
warrants being included as a component of stockholders’
equity in the amount of $1.6 million with the same amount
recorded as a reduction of the $10 million note payable. This
$1.6 million debt discount is being amortized as interest expense
over the five-year exercise period of the warrants.
We entered into the Fourth Amended and Restated Promissory Note
effective March 30, 2000 to renew our revolving line of
credit. The $15.0 million revolving line of credit carries
interest at the Prime Rate and matures on April 15, 2001.
Under this revolving credit facility, there was $1.4 million and
$5.4 million available as of December 31, 1999 and
March 31, 2000, respectively. At May 17, 2000, there
was $3.3 million available under the working capital facility.
Borrowings under this unsecured revolving line of credit are
guaranteed by certain stockholders of MCM, including Triarc.
Triarc purchased a $15.0 million certificate of deposit from such
lending bank which is subject to set off under certain
circumstances if the parties to the bank guaranties and related
agreements fail to perform their obligations thereunder.
14
During the three months ended March 31, 2000, MCM purchased
receivables with a face value of $71.0 million for $3.5 million
representing an average cost of $0.05 per dollar of face while
during the three months ended March 31, 1999 MCM purchased
receivables with a face value of $101.7 million for $4.1 million
representing an average cost of $0.04 per dollar of face. The
increase in the average cost of receivables purchased as a
percentage of face value in 2000 versus 1999 reflects MCM’s
efforts to increase the amount of receivables purchased directly
from credit card issuers before any third party collection
agencies had been engaged by the issuer to service the
receivables as compared to those purchased in 1999 which had been
serviced by one or more agencies prior to the Company purchasing
the receivables.
Capital expenditures for fixed assets and capital leases were
$1.3 million during the three months ended March 31, 2000
reflecting the installation of our new Davox call management
system and other hardware and software to support this system.
Capital expenditures were funded primarily from bank borrowings,
capital leases and recoveries on receivable portfolios.
On May 12, 2000 through a new wholly owned subsidiary, we
executed a definitive agreement to acquire certain operating
assets of West Capital Financial Services Corp., an acquirer and
servicer of distressed consumer receivables, in exchange for
375,000 shares of MCM’s common stock and the assumption of
certain operating liabilities of West Capital. MCM will guaranty
certain obligations of the new subsidiary under the agreement. In
addition we will acquire certain distressed consumer receivables
from a trust formed by a bankruptcy remote special purpose
subsidiary of West Capital in exchange for 25,000 shares of
MCM’s common stock and certain other non-cash consideration.
The shares of MCM common stock exchanged will be valued at the
market price of the stock as of the date of closing of the
transaction, which is subject to the satisfaction of certain
conditions. The transactions have several conditions precedent,
including without limitation the execution of definitive
documents for us to become the successor servicer to West Capital
for a securitized pool of receivables. We anticipate closing
these transactions on or about May 22, 2000.
Contingencies
MCM was involved in litigation involving the sales of certain
receivables by MCM to third parties in 1997. The parties met to
mediate these disputes on March 20, 2000 and agreed to a
settlement of all claims asserted. The settlement agreement has
been executed and we expect to make our required payment under
terms of the settlement agreement by May 31, 2000. The costs
and expenses relating to the lawsuit and this settlement were
expensed in the fourth quarter of 1999.
We do not believe that contingencies for ordinary routine claims,
litigation and administrative proceedings and investigations
incidental to our business will have a material adverse effect on
our consolidated financial position or results of operations.
Item 3. Quantitative and Qualitative
Disclosures About Market Risk.
We accrue income on our retained interest and certain of our
receivable portfolios based on the effective interest rate, i.e.,
internal rate of return, applied to the original cost basis,
adjusted for accrued income and principal paydowns. Effective
interest rates are determined based on assumptions regarding the
timing and amounts of portfolio collections. Such assumptions may
be affected by changes in market interest rates. Accordingly,
changes in market interest rates may affect our earnings. Changes
in short-term interest rates also affect our earnings as a
result of our borrowings under the revolving credit facility and
the warehouse facility.
We believe that our market risk information has not changed
materially from December 31, 1999.
15
PART II — OTHER INFORMATION
This report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(the “Reform Act”). The words “believe,”
“expect,” “anticipate,” “estimate,”
“project,” or the negation thereof or similar
expressions constitute forward looking statements within the
meaning of the Reform Act. These statements may include, but are
not limited to, projections of revenues, income, or loss,
estimates of capital expenditures, plans for future operations,
products or services, and financing needs or plans, as well as
assumptions relating to these matters. These statements include,
among others, statements found under “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.” For all forward-looking statements, the Company
claims the protection of the safe-harbor for forward-looking
statements contained in the Reform Act.
The Company’s actual results could differ materially from
those contained in the forward-looking statements due to a number
of factors, some of which are beyond the Company’s control.
Factors that could affect the Company’s results and cause
them to differ from those contained in the forward-looking
statements include:
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our ability to maintain existing and secure additional financing; |
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our ability to maintain sufficient liquidity to operate our
business including our ability to meet the liquidity covenant of
our securitization and warehouse transactions and to obtain new
capital to enable the Company to reinstitute receivable
purchases; |
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• |
our continued servicing of the receivables in our securitization
transactions and warehouse facility; |
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• |
our ability to recover sufficient amounts on or with respect to
receivables to fund operations (including from sellers of
non-conforming receivable portfolios); |
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• |
our ability to hire and retain qualified personnel to recover our
receivables efficiently; |
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• |
changes in, or failure to comply with, government regulations; |
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• |
our ability to successfully integrate the assets and operations
of West Capital Financial Services Corp.; |
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• |
the costs, uncertainties and other effects of legal and
administrative proceedings; and |
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• |
risk factors and cautionary statements made in our Annual Report
on Form 10-K for the period ended December 31, 1999. |
Forward looking statements speak only as of the date the
statement was made. They are inherently subject to risks and
uncertainties, some of which we cannot predict or quantify.
Future events and actual results could differ materially from the
forward looking statements. We will not undertake and
specifically decline any obligation to publicly release the
result of any revisions to any forward-looking statements to
reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated
events, whether as a result of new information, future events, or
for any other reason.
In addition, it is our policy generally not to make any specific
projections as to future earnings and we do not endorse
projections regarding future performance that may be made by
third parties.
Item 1 — Legal Proceedings
See Part I, Item 2 Management’s Discussion and
Analysis of Financial Condition and Results of
Operations — Contingencies, which is incorporated by
reference hereto, for disclosure of a settlement reached in the
first quarter in an outstanding litigation matter.
Item 2 — Changes in Securities and Use of
Proceeds
See Note 5 to the Condensed Consolidated Financial
Statements included in Part I, Item 1 Financial
Statements, which is incorporated by reference hereto. The sale
of the notes and warrants described therein was exempt from the
registration provisions of the Securities Act of 1933, as
amended, under section 4(2) of
16
the 1933 Act for transactions not involving a public offering,
based on the fact that the notes and warrants were offered and
sold to a limited number of institutional investors who had
access to financial and other relevant data concerning the
Company, its financial condition, business, and assets.
Item 5 — Other Information
Effective May 21, 2000, Robert E. Koe resigned as a
director, President and Chief Executive Officer of the Company
and its subsidiaries. The Board of Directors is expected to elect
Carl C. Gregory, III, previously Chairman and Chief
Executive Officer of West Capital Financial Services Corp., as
President and Chief Executive Officer of the Company.
Item 6 — Exhibits and Reports on
Form 8-K
(a) Exhibits
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10.1 |
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Amendment No. 1 to $10.0 Million principal amount of 12.0%
Series No. 1 Senior Notes dated April 28, 2000. |
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27.1 |
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Financial Data Schedule for the three month period ended
March 31, 2000 submitted to the Securities and Exchange
Commission in electronic format. |
(b) Reports on Form 8-K.
During the first quarter of 2000, MCM filed one report on
Form 8-K dated January 13, 2000 and filed
January 21, 2000. Under that report, MCM disclosed that it
had entered into a senior note financing and had closed its
securitization transaction.
17
MCM CAPITAL GROUP, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
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MCM CAPITAL GROUP, INC. |
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By: |
/s/ R. BROOKS SHERMAN, JR. |
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R. Brooks Sherman, Jr. |
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Executive Vice-President, |
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Chief Financial Officer and Treasurer |
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(Principal Financial and Accounting Officer) |
Date: May 22, 2000
18
EXHIBIT INDEX
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Description of Exhibits |
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10.1 |
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Amendment No. 1 to $10.0 Million principal amount of 12.0%
Series No. 1 Senior Notes dated April 28, 2000. |
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27.1 |
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Financial Data Schedule for the three month period ended
March 31, 2000 submitted to the Securities and Exchange
Commission in electronic format. |
1
Exhibit 10.1
AMENDMENT NO. 1
AMENDMENT NO. 1, dated as of April 28, 2000, between MCM CAPITAL GROUP,
INC., a corporation duly organized and validly existing under the laws of the
State of Delaware (the "Company"); and ING (U.S.) CAPITAL LLC, a limited
liability company duly organized and validly existing under the laws of the
State of Delaware ("ING").
The Company and ING are parties to a Note Purchase Agreement dated as
of January 12, 2000 (as heretofore modified and supplemented and in effect on
the date hereof, the "Purchase Agreement"), providing, subject to the terms and
conditions thereof, for the purchase by ING of $10,000,000 principal amount of
12.0% Series No. 1 Senior Notes due January 15, 2007. The Company and ING wish
to amend the Purchase Agreement in certain respects and, accordingly, the
parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Amendment
No. 1, terms defined in the Purchase Agreement are used herein as defined
therein.
Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 4 below, but effective as of the date hereof, the
Purchase Agreement shall be amended as follows:
2.01. Section 1.1 of the Purchase Agreement shall each be
amended by adding the following new definitions and inserting the same
in the appropriate alphabetical locations:
"EMC Bond Liens" shall mean Liens securing
obligations of the Company and/or Midland to EMC Insurance
Companies in respect of collection agency bonds (but only so
long as such obligations do not constitute Indebtedness).
"Vision Leasing Sale Lease-back" shall mean a sale
lease-back transaction between the Company (or Midland), as
lessee, and Vision Leasing, L.L.C., as lessor, relating to
computer equipment acquired by the Company (or Midland) in
January 2000 for an original purchase price equal to $607,000.
2.02. Clause (c) of the definition of "Permitted Liens" in
Section 1.1 of the Purchase Agreement shall be amended by adding the
following at the end thereof (immediately prior to the semi-colon):
", including (without limitation) EMC Bond Liens;"
2.03. Section 6.2.2(g) of the Purchase Agreement
(Indebtedness) shall be amended by adding at the end thereof
(immediately prior to the semi-colon):
", and (iii) arising under the Vision Leasing Sale Lease-
back;"
2.04. Section 6.2.12 of the Purchase Agreement (Asset
Dispositions, Etc.) shall be amended by replacing the period at the end
thereof with "; or" and by adding the following new clause (d):
"(d) such sale is the sale contemplated by the Vision
Leasing Sale Lease-back."
- 1 -
2
Section 4. Representations and Warranties. The Company represents and
warrants to ING that (a) the representations and warranties set forth in Article
V of the Purchase Agreement are true and complete on the date hereof as if made
on and as of the date hereof and as if each reference in said Article V to "this
Agreement" included reference to this Amendment No. 1, and (b) as of the date
hereof, and after giving effect to this Amendment No. 1, no Default shall be
continuing.
Section 5. Conditions Precedent. As provided in Section 2 above, the
amendments to the Purchase Agreement set forth in said Section 2 shall become
effective, as of the date hereof, upon the execution and delivery of this
Amendment No. 1 by the Company and by ING.
Section 6. Miscellaneous. Except as herein provided, the Purchase
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same amendatory instrument and any of the parties
hereto may execute this Amendment No. 1 by signing any such counterpart. This
Amendment No. 1 shall be governed by, and construed in accordance with, the law
of the State of New York.
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be duly executed and delivered as of the day and year first above written.
MCM CAPITAL GROUP, INC.
By /s/ R. Brooks Sherman
R. Brooks Sherman
Treasurer
ING (U.S.) CAPITAL LLC
By /s/ Robert L. Fellows
Robert L. Fellows
Director
5
1,000
3-MOS
DEC-31-2000
JAN-01-2000
MAR-31-2000
394
32,581
55,710
0
0
0
11,356
2,514
106,027
5,642
59,643
0
0
72
32,071
106,027
0
7,887
0
7,669
(44)
2,059
1,855
(3,652)
1,461
(2,191)
0
0
0
(2,191)
(0.30)
(0.30)
