<PAGE>
File No. 811-07631
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-5
REGISTRATION STATEMENT OF SMALL BUSINESS INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
EDWARDS CAPITAL CORP.
------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
205 East 42nd Street
Suite 2020
New York, New York 10017
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(Address of Principal Executive Offices)
Mr. Alvin Murstein
Chief Executive Officer
Edwards Capital Corp.
205 East 42nd Street
Suite 2020
New York, New York 10017
-------------------------------------
(Name and Address of Agent for Service)
<PAGE>
PART I
ITEM 1. ORGANIZATION AND BUSINESS.
Edwards Capital Corp. (the "Company") is a corporation organized under the
laws of the State of Delaware on May 17, 1996 and a wholly-owned subsidiary of
Medallion Financial Corp. ("Medallion"). The Company is the successor to
Edwards Capital Company, which was organized in 1979 and operated as a
privately-held limited partnership from 1981 until Medallion acquired all of its
assets through the Company on May 29, 1996. The Company proposes to operate as
a non-diversified, closed-end, management investment company and has obtained a
license from the Small Business Administration ("SBA") to operate as a small
business investment company ("SBIC") under the Small Business Investment Act of
1958, as amended. Further information regarding the business of the Company is
set forth in Medallion's Registration Statement on Form N-2 (File No. 33-31670),
which became effective on May 22, 1996 (see "The Company"; "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business").
ITEMS 2 AND 3. FUNDAMENTAL POLICIES OF THE REGISTRANT; POLICIES WITH RESPECT TO
SECURITY INVESTMENTS.
Incorporated by reference from Medallion's Registration Statement on Form
N-2 (see "Investment Objectives, Policies and Restrictions"; "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business").
ITEM 4. OWNERSHIP OF VOTING AND CONVERTIBLE SECURITIES OF OTHER ISSUERS.
Not applicable.
ITEM 5. SPECIAL TAX PROVISIONS APPLICABLE TO REGISTRANT.
Incorporated by reference from Medallion's Registration Statement on Form
N-2 (see "Distributions" and "Federal Income Tax Considerations").
ITEM 6. PENDING LEGAL PROCEEDINGS.
None.
ITEM 7. SUMMARY OF EARNINGS.
Incorporated by reference from (i) Medallion's Registration Statement on
Form N-2 (see "Prospectus Summary"; "Selected Financial Data" and "Financial
Statements"); (ii) Medallion's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") filed with the Securities and Exchange Commission (the
"Commission") on July 15, 1996; and (iii) Medallion's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996 under the Exchange Act filed with the
Commission on August 14, 1996.
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<PAGE>
ITEM 8. PERSONS IN CONTROL RELATIONSHIP WITH REGISTRANT.
<TABLE>
<CAPTION>
---------------------------------------------------------
MEDALLION FINANCIAL CORP.
("MEDALLION")
. RIC
. BDC
---------------------------------------------------------
----------------------------------------------------------------------------------------------------------
- ------------------------ ------------------------ -------------------------- --------------------------
MEDALLION FUNDING EDWARDS CAPITAL TRANSPORTATION CAPITAL MEDALLION TAXI MEDIA,
CORP. CORP. CORP. INC.
("MFC") (THE "COMPANY") ("TCC") ("MEDIA")
. RIC . RIC . RIC . TAXICAB
. SSBIC . SBIC . SSBIC ADVERTISING BUSINESS
. C CORPORATION
- ------------------------ ------------------------ -------------------------- --------------------------
<S> <C> <C> <C> <C>
. BDC - BUSINESS DEVELOPMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT").
. RIC - REGULATED INVESTMENT COMPANY UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
. SBIC - SMALL BUSINESS INVESTMENT COMPANY REGISTERED UNDER THE 1940 ACT AND LICENSED BY THE SBA.
. SSBIC - SPECIALIZED SMALL BUSINESS INVESTMENT COMPANY REGISTERED UNDER THE 1940 ACT AND LICENSED BY THE SBA.
</TABLE>
Medallion owns 100% of the voting securities of the Company, MFC, TCC and
Media. Medallion is a corporation organized under the laws of the State of
Delaware. TCC and Media are corporations organized under the laws of the State
of New York.
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<PAGE>
ITEM 9. PERSONS OWNING EQUITY SECURITIES OF REGISTRANT.
<TABLE>
<CAPTION>
Name and Title of Type of Percentage
Address Class Ownership Amount Owned of Class
- ------- -------- --------- ------------ -----------
<S> <C> <C> <C> <C>
Medallion Common Of Record and 100 100%
205 East 42nd Street Stock Beneficially
Suite 2020
New York, New York 10017
</TABLE>
Officers, directors and members of the advisory board as a group own no
securities of the Company.
ITEM 10. NUMBER OF HOLDERS OF EQUITY SECURITIES.
Title of Class Number of Holders
-------------- -----------------
Common Stock 1
ITEM 11. DIRECTORS AND EXECUTIVE OFFICERS.
Incorporated by reference from Medallion's Registration Statement on Form
N-2 (see "Management").
ITEM 12. MEMBERS OF ADVISORY BOARD OF REGISTRANT.
Not applicable.
ITEM 13. REMUNERATION OF DIRECTORS, OFFICERS AND MEMBERS OF ADVISORY BOARD.
Incorporated by reference from Medallion's Registration Statement on Form
N-2 (see "Management").
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Incorporated by reference from Medallion's Registration Statement on Form
N-2 (see "Management" and "Information Not Required In Prospectus"). The
directors and officers of the Company are indemnified against liability under
the provisions of the Delaware General Corporation Law and pursuant to certain
provisions of Medallion's Certificate of Incorporation and By-Laws. In addition,
the Certificate of Incorporation and By-Laws of the Company contain
indemnification provisions substantially similar to those contained in
Medallion's Certificate of Incorporation and By-Laws and described in
Medallion's Registration Statement on Form N-2.
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<PAGE>
ITEM 15. CUSTODIANS OF PORTFOLIO SECURITIES.
The Company is currently in the process of negotiating custodial
arrangements with respect to the promissory notes held in its portfolio.
ITEMS 16 AND 17. INVESTMENT ADVISERS; BUSINESS AND OTHER CONNECTIONS OF
INVESTMENT ADVISERS AND THEIR MANAGEMENTS.
The Company does not have an investment adviser. However, the Company's
parent, Medallion, has entered into a sub-advisory agreement with FMC Advisers,
Inc (see Medallion's Registration Statement on Form N-2: "Prospectus Summary"
and "Investment Objectives, Policies and Restrictions").
ITEM 18. INTEREST OF AFFILIATED PERSONS IN CERTAIN TRANSACTIONS.
Not applicable.
ITEM 19. CAPITAL STOCK.
The Company has only one class of capital stock, the common stock, all of
which is held by Medallion.
ITEM 20. LONG-TERM DEBT.
Incorporated by reference from Medallion's Registration Statement on Form
N-2 (see "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business").
ITEM 21. OTHER SECURITIES.
Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
Incorporated by reference from (i) Medallion's Registration Statement on
Form N-2 (see "Prospectus Summary"; "Selected Financial Data" and "Financial
Statements"); (ii) Medallion's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996; and (iii) Medallion's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996.
PART III
ITEM 35. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
--------------------
Incorporated by reference from (i) Medallion's Registration Statement on
Form N-2 (see "Prospectus Summary"; "Selected Financial Data" and "Financial
Statements"); (ii) Medallion's
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<PAGE>
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996; and (iii)
Medallion's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996.
(b) Exhibits
--------
(1) Certificate of Incorporation of Edwards
Capital Corp. ............................ Filed Herewith
(2) By-Laws of Edwards Capital Corp. ......... Filed Herewith
(3) Documents Defining Rights of Holders
of Securities ............................ Not Applicable
(4) Custodian Agreement ...................... Not Applicable
(5) Indemnification Contracts ................ Not Applicable
(6) Investment Advisory Contracts ............ Not Applicable
(7) Bonus, Profit-Sharing, Pension
or Similar Contracts ..................... Previously Filed*
(8) Small Business Administration
License .................................. Filed Herewith
(9) Material Contracts Not Made in
the Ordinary Course of Business .......... Previously Filed**
(10) Underwriting Contracts ................... Not Applicable
(11) Opinion of Counsel ....................... Not Applicable
(12) Contracts with Investors ................. Not Applicable
(13) Financial Data Schedule .................. Previously Filed***
(14) Consent of Arthur Andersen LLP ........... Filed Herewith
(15) Consent of Friedman, Alpren & Green LLP .. Filed Herewith
*Incorporated by reference from Medallion's Registration Statement on Form
N-2 (see Exhibits i.1, i.2 and i.3).
**Incorporated by reference from Medallion's Registration Statement on Form
N-2 (see Exhibits f.1 through f.8, k.2, k.2(i) and k.4 through k.14).
***Incorporated by reference from (i) Medallion's Registration Statement on
Form N-2; (ii) Medallion's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996; and (iii) Medallion's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
on the 11th day of October, 1996.
EDWARDS CAPITAL CORP.
(Registrant)
By: /s/ Daniel F. Baker
----------------------------
Daniel F. Baker
Chief Financial Officer and Treasurer
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<PAGE>
CERTIFICATE OF INCORPORATION
OF
EDWARDS CAPITAL CORP.
The undersigned, for the purpose of forming a corporation under the laws of
the State of Delaware, hereby certifies as follows:
FIRST. The name of the corporation is Edwards Capital Corp.
SECOND. The address of the corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, County of New Castle, State of
Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD. The Corporation is being organized solely for the purpose of
operating as a small business investment company under the Small Business
Investment Act of 1958, as amended (the "SBIA") and conducting the activities
described under Title III of the SBIA.
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is three thousand (3,000) shares of Common Stock with a
par value of One Cent ($0.01) per share.
FIFTH. The name and mailing address of the incorporator are as follows:
Stephen C. McEvoy
Palmer & Dodge
One Beacon Street
Boston, Massachusetts 02108
SIXTH. The corporation is to have perpetual existence.
SEVENTH. Election of directors need not be by written ballot unless the
by-laws of the corporation shall so provide.
EIGHTH. The Board of Directors of the corporation is authorized to adopt,
amend or repeal the by-laws of the corporation.
NINTH. A director shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders; (ii) for any acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit. No
amendment or repeal of this provision shall deprive a director of the benefits
hereof with respect to any act or omission occurring prior to such amendment or
repeal. This Article NINTH shall not constitute
<PAGE>
a modification, limitation or waiver of Section 314(b) of the SBIA, or a waiver
by the U.S. Small Business Administration (the "SBA") of any of its rights
pursuant to Section 314(b).
TENTH. The corporation shall indemnify each person who was or is a party
or is threatened to be made party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was, or has agreed to become,
a director or officer of the corporation, or is or was serving, or has agreed to
serve, at the request of the corporation, as a director, officer or trustee of,
or in a similar capacity with, another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgements, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The corporation shall indemnify a person only after a determination has been
made that such person has met the standard of care set forth in the preceding
sentence.
So long as the corporation does not have a reasonable basis for concluding
that a person is not entitled to indemnification under this Article, it may pay
the expenses incurred by such person in defending an action or proceeding in
advance of the final disposition of such action or proceeding upon receipt of an
undertaking by the person indemnified to repay such payment unless it is
ultimately determined that such person is entitled to indemnification under this
Article, which undertaking may be accepted without reference to the financial
ability of such person to make such repayments.
The corporation shall not indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such person
unless the initiation thereof was approved by a majority of the members of the
Board of Directors of the corporation. Any such indemnification shall otherwise
be subject to the requirements of this Article.
The indemnification rights provided in this Article (i) shall be deemed
exclusive of any other rights to which those indemnified may be entitled from
the corporation under any law, agreement or vote of stockholders or
disinterested directors or otherwise, and (ii) shall inure to the benefit of the
heirs, executors and administrators of such persons. The corporation may, to
the extent authorized from time to time by its Board of Directors, grant
indemnification rights to other employees or agents of the corporation or other
persons serving the corporation and such rights may be equivalent to, or less
than, those set forth in this Article.
Any determination of a person's entitlement to indemnification required
hereunder shall be made (i) by a majority vote of the disinterested directors,
or a committee of two or more disinterested directors; (ii) by a majority vote
of a quorum of the outstanding shares of stock of all classes entitled to vote
for directors, voting as a single class, which quorum shall consist of
disinterested stockholders; (iii) by vote of the directors in reliance upon the
opinion of independent legal counsel (who may be counsel to the corporation)
appointed for the purpose, or (iv) by a court of competent jurisdiction.
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<PAGE>
Any amendment or repeal of the provisions of this Article shall not
adversely affect any right or protection of a director or officer of this
corporation with respect to any act or omission of such director or officer
occurring prior to such amendment or repeal.
ELEVENTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
Signed this 17th day of May, 1996.
/s/ Stephen C. McEvoy
------------------------------------
Stephen C. McEvoy, Incorporator
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<PAGE>
BY-LAWS
OF
EDWARDS CAPITAL CORP.
ARTICLE I
STOCKHOLDERS
SECTION 1. Place of Meetings. All meetings of stockholders shall be held
-----------------
at the principal office of the corporation or at such other place as may be
named in the notice.
SECTION 2. Annual Meeting. The annual meeting of stockholders for the
--------------
election of directors and the transaction of such other business as may properly
come before the meeting shall be held on such date and at such hour and place as
the directors or an officer designated by the directors may determine. If the
annual meeting is not held on the date designated therefor, the directors shall
cause the meeting to be held as soon thereafter as convenient.
SECTION 3. Special Meetings. Special meetings of the stockholders may be
----------------
called at any time by the President, the Chairman of the Board, if any, or the
Board of Directors, or by the Secretary or any other officer upon the written
request of one or more stockholders holding of record at least a majority of the
outstanding shares of stock of the corporation entitled to vote at such meeting.
Such written request shall state the purpose or purposes of the proposed
meeting. Business transacted at any special meeting of
<PAGE>
stockholders shall be limited to matters relating to the purpose or purposes
stated in the notice of meeting.
SECTION 4. Notice of Meetings. Except where some other notice is required
------------------
by law, written notice of each meeting of stockholders, stating the place, date
and hour thereof and the purposes for which the meeting is called, shall be
given by or under the direction of the Secretary, not less than ten nor more
than sixty days before the date fixed for such meeting, to each stockholder
entitled to vote at such meeting of record at the close of business on the day
fixed by the Board of Directors as a record date for the determination of the
stockholders entitled to vote at such meeting or, if no such date has been
fixed, of record at the close of business on the day before the day on which
notice is given. Notice shall be given personally to each stockholder or left at
his or her residence or usual place of business or mailed postage prepaid and
addressed to the stockholder at his or her address as it appears upon the
records of the corporation. In case of the death, absence, incapacity or
refusal of the Secretary, such notice may be given by a person designated either
by the Secretary or by the person or persons calling the meeting or by the Board
of Directors. A waiver of such notice in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent to such notice. Attendance of a person at a
meeting of stockholders shall constitute a waiver of notice of such meeting,
except when the stockholder attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of
2
<PAGE>
notice. Except as required by statute, notice of any adjourned meeting of the
stockholders shall not be required.
SECTION 5. Voting List. The officer who has charge of the stock ledger of
-----------
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or if not so specified, at the
place where the meeting is to be held. The list shall also be produced and kept
at the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present. The stock ledger shall be the only
evidence as to who are the stockholders entitled to examine the stock ledger,
the list required by this section or the books of the corporation, or to vote at
any meeting of stockholders.
SECTION 6. Quorum of Stockholders. At any meeting of the stockholders,
----------------------
the holders of a majority in interest of all stock issued and outstanding and
entitled to vote upon a question to be considered at the meeting, present in
person or represented by proxy, shall constitute a quorum for the consideration
of such question, but a smaller group may adjourn any meeting from time to time.
When a quorum is present at any meeting, a majority of the stock represented
thereat and entitled to vote shall, except where a larger vote is required by
law, by the certificate of incorporation, or by these by-laws, decide any
question brought before such meeting. Any election by stockholders shall be
determined by a plurality of the vote cast by the stockholders entitled to vote
at the election.
3
<PAGE>
SECTION 7. Proxies and Voting. Unless otherwise provided in the
------------------
certificate of incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock held of record by such stockholder, but no proxy shall be voted or
acted upon after three years from its date, unless said proxy provides for a
longer period. Persons holding stock in a fiduciary capacity shall be entitled
to vote the shares so held, and persons whose stock is pledged shall be entitled
to vote, unless in the transfer by the pledgor on the books of the corporation
the pledgee shall have been expressly empowered to vote thereon, in which case
only the pledgee or the pledgee's proxy may represent said stock and vote
thereon. Shares of the capital stock of the corporation belonging to the
corporation or to another corporation, a majority of whose shares entitled to
vote in the election of directors is owned by the corporation, shall neither be
entitled to vote nor be counted for quorum purposes.
SECTION 8. Conduct of Meeting. Meetings of the stockholders shall be
------------------
presided over by one of the following officers in the order of seniority and if
present and acting: the Chairman of the Board, if any, the Vice-Chairman of the
Board, if any, the President, a Vice-President, or, if none of the foregoing is
in office and present and acting, a chairman to be chosen by the stockholders.
The Secretary of the corporation, if present, or an Assistant Secretary, shall
act as secretary of every meeting, but if neither the Secretary nor an Assistant
Secretary is present the chairman of the meeting shall appoint a secretary of
the meeting.
SECTION 9. Action Without Meeting. Any action required or permitted to be
----------------------
taken at any annual or special meeting of stockholders of the corporation may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, is signed by the holders or by
proxy for the holders of outstanding
4
<PAGE>
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote on such action were present and voted. Prompt notice of the taking of
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE II
DIRECTORS
SECTION 1. General Powers. The business and affairs of the corporation
--------------
shall be managed by or under the direction of a Board of Directors, who may
exercise all of the powers of the corporation which are not by law required to
be exercised by the stockholders. In the event of a vacancy in the Board of
Directors, the remaining directors, except as otherwise provided by law, may
exercise the powers of the full Board until the vacancy is filled.
SECTION 2. Number; Election; Tenure and Qualification. The initial Board
------------------------------------------
of Directors shall consist of two (2) persons and shall be elected by the
incorporator. A third director shall be elected by the initial Board of
Directors prior to the closing of the corporation's acquisition of substantially
all of the assets of Edwards Capital Company. Thereafter, the number of
directors which shall constitute the whole Board shall be fixed by resolution of
the Board of Directors, but in no event shall be less than three (3). Each
director shall be elected by the stockholders at the annual meeting and all
directors shall hold office until the next annual meeting and until their
successors are elected and qualified, or until their earlier death, resignation
or removal. The number of directors may be increased
5
<PAGE>
or decreased by action of the Board of Directors. Directors need not be
stockholders of the corporation.
SECTION 3. Enlargement of the Board. The number of the Board of Directors
------------------------
may be increased at any time, such increase to be effective immediately, by vote
of a majority of the directors then in office.
SECTION 4. Vacancies. Unless and until filled by the stockholders, any
---------
vacancy in the Board of Directors, however occurring, including a vacancy
resulting from an enlargement of the Board and an unfilled vacancy resulting
from the removal of any director for cause or without cause, may be filled by
vote of a majority of the directors then in office although less than a quorum,
or by the sole remaining director. A director elected to fill a vacancy shall
hold office until the next annual meeting of stockholders and until his or her
successor is elected and qualified or until his or her earlier death,
resignation, or removal. When one or more directors shall resign from the
Board, effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have the power to fill such vacancy
or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective. If at any time there are no directors in
office, then an election of directors may be held in accordance with the General
Corporation Law of the State of Delaware.
SECTION 5. Resignation. Any director may resign at any time upon written
-----------
notice to the corporation. Such resignation shall take effect at the time
specified therein, or if no time is specified, at the time of its receipt by the
President or Secretary.
SECTION 6. Removal. Except as may otherwise be provided by the General
-------
Corporation Law, any director or the entire Board of Directors may be removed,
with or without cause, at an annual meeting or at a special meeting called for
that purpose, by the
6
<PAGE>
holders of a majority of the shares then entitled to vote at an election of
directors. The vacancy or vacancies thus created may be filled by the
stockholders at the meeting held for the purpose of removal or, if not so
filled, by the directors in the manner provided in Section 4 of this Article II.
SECTION 7. Committees. The Board of Directors may, by resolution or
----------
resolutions passed by a majority of the whole Board of Directors, designate one
or more committees, each committee to consist of one or more directors of the
corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of
any member of such committee or committees, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or members constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of such absent or
disqualified member.
A majority of all the members of any such committee may fix its rules of
procedure, determine its action and fix the time and place, whether within or
without the State of Delaware, of its meetings and specify what notice thereof,
if any, shall be given, unless the Board of Directors shall otherwise by
resolution provide. The Board of Directors shall have the power to change the
members of any such committee at any time, to fill vacancies therein and to
discharge any such committee, either with or without cause, at any time.
Any such committee, unless otherwise provided in the resolution of the
Board of Directors, or in these by-laws, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to
be affixed to all papers which may require it; but
7
<PAGE>
no such committee shall have the power or authority denied it by Section 141 of
the General Corporation Law of the State of Delaware.
Each committee shall keep regular minutes of its meetings and make such
reports as the Board of Directors may from time to time request.
SECTION 8. Meetings of the Board of Directors. Regular meetings of
----------------------------------
the Board of Directors may be held without call or formal notice at such places
either within or without the State of Delaware and at such times as the Board
may by vote from time to time determine. A regular meeting of the Board of
Directors may be held without call or formal notice immediately after and at the
same place as the annual meeting of the stockholders, or any special meeting of
the stockholders at which a Board of Directors is elected.
Special meetings of the Board of Directors may be held at any place either
within or without the State of Delaware at any time when called by the Chairman
of the Board of Directors, the President, Treasurer, Secretary, or two or more
directors. Reasonable notice of the time and place of a special meeting shall
be given to each director unless such notice is waived by attendance or by
written waiver in the manner provided in these by-laws for waiver of notice by
stockholders. Notice may be given by, or by a person designated by, the
Secretary, the person or persons calling the meeting, or the Board of Directors.
No notice of any adjourned meeting of the Board of Directors shall be required.
In any case it shall be deemed sufficient notice to a director to send notice by
mail at least seventy-two hours, or by telegram at least forty-eight hours,
before the meeting, addressed to such director at his or her usual or last known
business or home address.
Directors or members of any committee designated by the directors may
participate in a meeting of the Board of Directors or such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting
8
<PAGE>
can hear each other, and participation by such means shall constitute presence
in person at such meeting.
SECTION 9. Quorum and Voting. A majority of the total number of directors
-----------------
shall constitute a quorum, except that when a vacancy or vacancies exist in the
Board, a majority of the directors then in office (but not less than one-third
of the total number of the directors) shall constitute a quorum. A majority of
the directors present, whether or not a quorum is present, may adjourn any
meeting from time to time. The vote of a majority of the directors present at
any meeting at which a quorum is present shall be the act of the Board of
Directors, except where a different vote is required or permitted by law, by the
certificate of incorporation, or by these by-laws.
SECTION 10. Compensation. The Board of Directors may fix fees for their
------------
services and for their membership on committees, and expenses of attendance may
be allowed for attendance at each meeting. Nothing herein contained shall be
construed to preclude any director from serving the corporation in any other
capacity as an officer, agent or otherwise, and receiving compensation therefor.
SECTION 11. Action Without Meeting. Any action required or permitted to
----------------------
be taken at any meeting of the Board of Directors, or of any committee thereof,
may be taken without a meeting, and without notice, if a written consent thereto
is signed by all members of the Board of Directors, or of such committee, as the
case may be, and such written consent is filed with the minutes of proceedings
of the Board of Directors or such committee.
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ARTICLE III
OFFICERS
SECTION 1. Titles. The officers of the corporation shall consist of
------
a President, a Secretary, a Treasurer, and such other officers with such other
titles as the Board of Directors shall determine, including without limitation a
Chairman of the Board, a Vice-Chairman of the Board, and one or more Vice-
Presidents, Assistant Treasurers, or Assistant Secretaries.
SECTION 2. Election and Term of Office. The officers of the
---------------------------
corporation shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of the stockholders. Each officer shall
hold office until his or her successor is elected and qualified, unless a
different term is specified in the vote electing such officer, or until his or
her earlier death, resignation or removal.
SECTION 3. Qualification. Unless otherwise provided by resolution of
-------------
the Board of Directors, no officer, other than the Chairman or Vice-Chairman of
the Board, need be a director. No officer need be a stockholder. Any number of
offices may be held by the same person, as the directors shall determine, except
that the same person shall not hold the offices of President and Secretary of
the corporation at the same time.
SECTION 4. Removal. Any officer may be removed, with or without
-------
cause, at any time, by resolution adopted by the Board of Directors.
SECTION 5. Resignation. Any officer may resign by delivering a
-----------
written resignation to the corporation at its principal office or to the
President or Secretary. Such resignation shall be effective upon receipt or at
such later time as may be specified therein.
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SECTION 6. Vacancies. The Board of Directors may at any time fill
---------
any vacancy occurring in any office for the unexpired portion of the term and
may leave unfilled for such period as it may determine any office other than
those of President, Treasurer and Secretary.
SECTION 7. Powers and Duties. The officers of the corporation shall
-----------------
have such powers and perform such duties as are specified herein and as may be
conferred upon or assigned to them by the Board of Directors, and shall have
such additional powers and duties as are incident to their office except to the
extent that resolutions of the Board of Directors are inconsistent therewith.
SECTION 8. President and Vice-Presidents. The President shall be the
-----------------------------
chief executive officer of the corporation, shall preside at all meetings of the
stockholders and the Board of Directors unless a Chairman or Vice-Chairman of
the Board is elected by the Board, empowered to preside, and present at such
meeting, shall have general and active management of the business of the
corporation and general supervision of its officers, agents and employees, and
shall see that all orders and resolutions of the Board of Directors are carried
into effect.
In the absence of the President or in the event of his or her inability or
refusal to act, the Vice-President if any (or in the event there be more than
one Vice-President, the Vice-Presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. The Board of Directors may assign to any Vice-President the title of
Executive Vice-President, Senior Vice-President or any other title selected by
the Board of Directors.
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SECTION 9. Secretary and Assistant Secretaries. The Secretary shall
-----------------------------------
attend all meetings of the Board of Directors and of the stockholders and record
all the proceedings of such meetings in a book to be kept for that purpose,
shall give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, shall maintain a stock ledger and
prepare lists of stockholders and their addresses as required and shall have
custody of the corporate seal which the Secretary or any Assistant Secretary
shall have authority to affix to any instrument requiring it and attest by any
of their signatures. The Board of Directors may give general authority to any
other officer to affix and attest the seal of the corporation.
The Assistant Secretary if any (or if there be more than one, the Assistant
Secretaries in the order determined by the Board of Directors of if there be no
such determination, then in the order of their election) shall, in the absence
of the Secretary or in the event of the Secretary's inability or refusal to act,
perform the duties and exercise the powers of the Secretary.
SECTION 10. Treasurer and Assistant Treasurers. The Treasurer shall
----------------------------------
have the custody of the corporate funds and securities, shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in the name
and to the credit of the corporation in such depositories as may be designated
by the Board of Directors. The Treasurer shall disburse the funds of the
corporation as may be ordered by the Board of Directors or the President, taking
proper vouchers for such disbursements, and shall render to the President and
the Board of Directors, at its regular meetings, or whenever they may require
it, an account of all transactions and of the financial condition of the
corporation.
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The Assistant Treasurer if any (or if there be more than one, the Assistant
Treasurers in the order determined by the Board of Directors or if there be no
such determination, then in the order of their election) shall, in the absence
of the Treasurer or in the event of his or her inability or refusal to act,
perform the duties and exercise the powers of the Treasurer.
SECTION 11. Bonded Officers. The Board of Directors may require any
---------------
officer to give the corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors upon such terms and
conditions as the Board of Directors may specify, including without limitation a
bond for the faithful performance of the duties of such officer and for the
restoration to the corporation of all property in his or her possession or
control belonging to the corporation.
SECTION 12. Salaries. Officers of the corporation shall be entitled
--------
to such salaries, compensation or reimbursement as shall be fixed or allowed
from time to time by the Board of Directors.
ARTICLE IV
STOCK
SECTION 1. Certificates of Stock. One or more certificates of stock,
---------------------
signed by the Chairman or Vice-Chairman of the Board of Directors or by the
President or Vice-President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, shall be issued to each stockholder
certifying, in the aggregate, the number of shares owned by the stockholder in
the corporation. Any or all signatures on any such certificate may be
facsimiles. In case any officer, transfer agent or registrar who shall have
signed or whose facsimile signature shall have been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may
13
<PAGE>
be issued by the corporation with the same effect as if he or she were such
officer, transfer agent or registrar at the date of issue.
Each certificate for shares of stock which are subject to any restriction
on transfer pursuant to the certificate of incorporation, the by-laws,
applicable securities laws, or any agreement among any number of shareholders or
among such holders and the corporation shall have conspicuously noted on the
face or back of the certificate either the full text of the restriction or a
statement of the existence of such restriction.
SECTION 2. Transfers of Shares of Stock. Subject to the
----------------------------
restrictions, if any, stated or noted on the stock certificates, shares of stock
may be transferred on the books of the corporation by the surrender to the
corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney
properly executed, and with such proof of authority or the authenticity of
signature as the corporation or its transfer agent may reasonably require. The
corporation shall be entitled to treat the record holder of stock as shown on
its books as the owner of such stock for all purposes, including the payment of
dividends and the right to vote with respect to that stock, regardless of any
transfer, pledge or other disposition of that stock, until the shares have been
transferred on the books of the corporation in accordance with the requirements
of these by-laws.
SECTION 3. Lost Certificates. A new certificate of stock may be
-----------------
issued in the place of any certificate theretofore issued by the corporation and
alleged to have been lost, stolen, destroyed, or mutilated, upon such terms in
conformity with law as the Board of Directors shall prescribe. The directors
may, in their discretion, require the owner of the lost, stolen, destroyed or
mutilated certificate, or the owner's legal representatives, to give the
corporation a bond, in such sum as they may direct, to indemnify the corporation
against
14
<PAGE>
any claim that may be made against it on account of the alleged loss, theft,
destruction or mutilation of any such certificate, or the issuance of any such
new certificate.
SECTION 4. Record Date. The Board of Directors may fix in advance a
-----------
record date for the determination of the stockholders entitled to notice of or
to vote at any meeting of stockholders or to express consent to corporate action
in writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action. Such record date shall not be more than 60
nor less than 10 days before the date of such meeting, nor more than 60 days
prior to any other action to which such record date relates.
If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. Unless otherwise fixed by the
Board of Directors, the record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting, when no prior
action by the Board of Directors is necessary, shall be the day on which the
first written consent is expressed. The record date for determining
stockholders for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating to such purpose.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
15
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SECTION 5. Fractional Share Interests. The corporation may, but
--------------------------
shall not be required to, issue fractions of a share. If the corporation does
not issue fractions of a share, it shall (l) arrange for the disposition of
fractional interests by those entitled thereto, (2) pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined, or (3) issue scrip or warrants in registered or bearer
form which shall entitle the holder to receive a certificate for a full share
upon the surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional share shall, but scrip or warrants shall not unless
otherwise provided therein, entitle the holder to exercise voting rights, to
receive dividends thereon, and to participate in any of the assets of the
corporation in the event of liquidation. The Board of Directors may cause scrip
or warrants to be issued subject to the conditions that they shall become void
if not exchanged for certificates representing full shares before a specified
date, or subject to the conditions that the shares for which scrip or warrants
are exchangeable may be sold by the corporation and the proceeds thereof
distributed to the holders of scrip or warrants, or subject to any other
conditions which the Board of Directors may impose.
SECTION 6. Dividends. Subject to the provisions of the certificate
---------
of incorporation, the Board of Directors may, out of funds legally available
therefor, at any regular or special meeting, declare dividends upon the common
stock of the corporation as and when they deem expedient.
16
<PAGE>
ARTICLE V
INDEMNIFICATION AND INSURANCE
SECTION 1. Indemnification. The corporation shall, to the extent
---------------
permitted by the certificate of incorporation, as amended from time to time,
indemnify each person whom it may indemnify pursuant thereto.
SECTION 2. Insurance. The corporation shall have power to purchase
---------
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity or arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against such liability
under the provisions of the General Corporation Law of the State of Delaware.
ARTICLE VI
GENERAL PROVISIONS
SECTION 1. Fiscal Year. Except as otherwise designated from time to
-----------
time by the Board of Directors, the fiscal year of the corporation shall begin
on the first day of January and end on the last day of December.
SECTION 2. Corporate Seal. The corporate seal shall be in such form
--------------
as shall be approved by the Board of Directors. The Secretary shall be the
custodian of the
17
<PAGE>
seal. The Board of Directors may authorize a duplicate seal to be kept and used
by any other officer.
SECTION 3. Certificate of Incorporation. All references in these by-
----------------------------
laws to the certificate of incorporation shall be deemed to refer to the
certificate of incorporation of the corporation, as in effect from time to time.
SECTION 4. Execution of Instruments. The Chairman and Vice-Chairman
------------------------
of the Board of Directors, if any, the President, any Vice-President, and the
Treasurer shall have power to execute and deliver on behalf and in the name of
the corporation any instrument requiring the signature of an officer of the
corporation, including deeds, contracts, mortgages, bonds, notes, debentures,
checks, drafts, and other orders for the payment of money. In addition, the
Board of Directors may expressly delegate such powers to any other officer or
agent of the corporation.
SECTION 5. Voting of Securities. Except as the directors may
--------------------
otherwise designate, the President or Treasurer may waive notice of, and act as,
or appoint any person or persons to act as, proxy or attorney-in-fact for this
corporation (with or without power of substitution) at any meeting of
stockholders or shareholders of any other corporation or organization the
securities of which may be held by this corporation.
SECTION 6. Evidence of Authority. A certificate by the Secretary, or
---------------------
an Assistant Secretary, or a temporary secretary, as to any action taken by the
stockholders, directors, a committee or any officer or representative of the
corporation shall, as to all persons who rely on the certificate in good faith,
be conclusive evidence of that action.
SECTION 7. Transactions with Interested Parties. No contract or
------------------------------------
transaction between the corporation and one or more of the directors or
officers, or between the corporation and any other corporation, partnership,
association, or other organization in
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<PAGE>
which one or more of the directors or officers are directors or officers, or
have a financial interest, shall be void or voidable solely for that reason, or
solely because the director or officer is present at or participates in the
meeting of the Board of Directors or a committee of the Board of Directors which
authorizes the contract or transaction or solely because the vote of any such
director is counted for such purpose, if:
(1) The material facts as to the relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of Directors
or the committee, and the Board or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or
(2) The material facts as to the relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified by the Board of Directors, a
committee of the Board of Directors, or the stockholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
SECTION 8. Books and Records. The books and records of the
-----------------
corporation shall be kept at such places within or without the State of Delaware
as the Board of Directors may from time to time determine.
19
<PAGE>
ARTICLE VII
AMENDMENTS
SECTION 1. By the Board of Directors. These by-laws may be altered,
-------------------------
amended or repealed or new by-laws may be adopted by the affirmative vote of a
majority of the directors present at any regular or special meeting of the Board
of Directors at which a quorum is present.
SECTION 2. By the Stockholders. These by-laws may be altered,
-------------------
amended or repealed or new by-laws may be adopted by the affirmative vote of the
holders of a majority of the shares of the capital stock of the corporation
issued and outstanding and entitled to vote at any regular meeting of
stockholders, or at any special meeting of stockholders provided notice of such
alteration, amendment, repeal or adoption of new by-laws shall have been stated
in the notice of such special meeting.
20
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THE UNITED STATES OF AMERICA
SMALL BUSINESS ADMINISTRATION
LICENSE
This is to certify that Edwards Capital Corp.
--------------------------------------------------------
a Delaware Corporation with its principal office
----------------------------------------------------
located at New York, New York is hereby licensed as a Small
---------------------------------------
Business Investment Company under the Small Business Investment Act of 1958, as
amended, to provide equity capital, long-term loans and management assistance to
small businesses for their operations, growth, expansion and modernization.
This License is not assignable or transferable without the prior approval of the
Small Business Administration.
The aforesaid Licensee is authorized to conduct its operations in the areas
--------------
described in its license application
- --------------------------------------------------------------------------------
Issued at Washington, D.C. on May 17, 1996
--------------------------------------------------
--------------------------------
Administrator
Number 02/02-0366
<PAGE>
[LETTERHEAD OF ARTHUR ANDERSEN LLP APPEARS HERE]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form N-5 of our report dated March
14, 1996, on our audit of the financial statements of Edwards Capital Company
included in the registration statement File No. 33-31670 on Form N-2 of
Medallion Financial Corp. It should be noted that we have not audited any
financial statements of the company subsequent to December 31, 1995 or performed
any audit procedures subsequent to the date of our report.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 15, 1996
<PAGE>
[LETTERHEAD OF FRIEDMAN ALPREN & GREEN LLP APPEARS HERE]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form N-5 of our report dated January
26, 1995, on our audits of the financial statements of Edward Capital Company
and to all references to our Firm included in the registration on Form N-2 of
Medallion Financial Corp.
/s/ Friedman Alpren & Green LLP
Friedman Alpren & Green LLP
New York, New York
October 15, 1996
