CREDIT INCREASE CONFIRMATION
AND NOTE AMENDMENT NO. 1
TO THE
FIRST AMENDED AND RESTATED
INTERIM WAREHOUSE AND SECURITY AGREEMENT
AND SECURED NOTE
Dated as of September 30, 1997
Reference is made to (x) the First Amended and Restated Interim
Warehouse and Security Agreement, dated as of June 9, 1997 (the "Interim
Warehouse Agreement") among Prudential Securities Credit Corporation (the
"Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland") and
American Business Credit, Inc. ("ABC", and together with Xxxxxx, the
"Borrowers"), (y) the Secured Note, dated June 9, 1997 (the "Note"), from the
Borrowers to the Lender, and (z) the Guaranty, dated June 9, 1997 (the
"Guaranty"), from the Borrowers' parent, American Business Financial Services,
Inc. ("ABFS"), to the Lender.
Section 1. Amendment of the Interim Warehouse Agreement and Note.
(a) The "Maturity Date" referenced in the Interim Warehouse
Agreement and in the Note is hereby amended to be the earliest
of (i) December 31, 1997 and (ii) the date on which a
Securitization occurs (other than the ABFS Mortgage Loan Trust
1997-2 Securitization (the "1997-2 Securitization")).
(b) All references to the "1997-1 Securitization" in the Interim
Warehouse Agreement and in the Note are hereby amended to be
references to the "1997-2 Securitization".
Section 2. Amendment of the Guaranty.
(a) Section 9 of the Guaranty is hereby deleted in its
entirety and replaced with the following:
9. The Guarantor covenants with the Lender that, during the
term of this Guaranty: (i) the Guarantor's stated net worth
less intangible assets shall not be less that $27,000,000;
(ii) the Guarantor shall maintain a minimum of $15,000,000 of
outstanding subordinated debentures maturing in more than one
year; (iii) the Guarantor's minimum adjusted capital shall not
be less than $42,000,000, such amount being the sum of (x) the
Guarantor's stated net worth less intangible assets and (y)
the Guarantor's outstanding subordinated debentures maturing
in more than one year; (iv) the Guarantor's leverage ratio
shall not exceed 3.75:1, such ratio being the ratio of (x) the
excess of (A) the Guarantor's total liabilities over (B)
outstanding subordinated debentures maturing in more than one
year, to (y) the sum of (A) the Guarantor's stated net worth
less intangible assets and (B) outstanding subordinated
debentures maturing in more than one year; and (v) the
subordinated debentures shall be subordinate to the
Guarantor's obligations hereunder.
Section 3. Confirmation of the Interim Warehouse Agreement, Note and
Guaranty.
As amended by Section 1 and Section 2 hereof, all provisions of the
Interim Warehouse Agreement, the Note and the Guaranty, are reconfirmed as of
the date hereof. Each of the Borrowers and ABFS, in addition, hereby reconfirms
and remakes as of the date hereof each and every one of its representations,
warranties and covenants as set forth in the Interim Warehouse Agreement, the
Note or the Guaranty, as applicable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BUSINESS CREDIT, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President-Finance and
Chief Financial Officer
HOMEAMERICAN CREDIT, INC. D/B/A
UPLAND MORTGAGE
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President-Finance and
Chief Financial Officer
AMERICAN BUSINESS FINANCIAL
SERVICES, INC.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President-Finance and
Chief Financial Officer
PRUDENTIAL SECURITIES CREDIT
CORPORATION
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
CREDIT INCREASE CONFIRMATION
AND NOTE AMENDMENT NO. 2
TO THE
FIRST AMENDED AND RESTATED
INTERIM WAREHOUSE AND SECURITY AGREEMENT,
SECURED NOTE AND GUARANTY
Dated as of December 22, 1997
Reference is made to (x) the First Amended and Restated Interim
Warehouse and Security Agreement, dated as of June 9, 1997 (the "Interim
Warehouse Agreement") among Prudential Securities Credit Corporation (the
"Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland") and
American Business Credit, Inc. ("ABC", and together with Xxxxxx, the
"Borrowers"), (y) the Secured Note, dated as of June 9, 1997 (the "Note"), from
the Borrowers to the Lender, and (z) the Guaranty, dated as of June 9, 1997 (the
"Guaranty"), from the Borrowers' parent, American Business Financial Services,
Inc. ("ABFS" or the "Guarantor"), to the Lender.
WHEREAS, the Lender, the Borrowers and the Guarantor desire to add the
Guarantor's Affiliate, New Jersey Mortgage and Investments Corp. ("New Jersey
Mortgage"), as a borrower under the Interim Warehouse Agreement, the Secured
Note and the Guaranty; and
WHEREAS, the Lender and the Guarantor desire to amend the financial
covenants contained in the Guaranty;
NOW THEREFORE, the Lender, the Borrowers, New Jersey Mortgage and the
Guarantor hereby amend the Interim Warehouse Agreement, the Secured Note and the
Guaranty as follows:
Section 1. Amendment of the Interim Warehouse Agreement.
(a) The Introductory Clause of the Interim Warehouse Agreement
is hereby deleted in its entirety and replaced with the following:
This FIRST AMENDED AND RESTATED INTERIM WAREHOUSE AND SECURITY
AGREEMENT, dated as of June 9, 1997 (as amended or otherwise
modified from time to time, this "Agreement") among PRUDENTIAL
SECURITIES CREDIT CORPORATION, a Delaware corporation, having
an office at 0000 X. Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
(the "Lender"), AMERICAN BUSINESS CREDIT, INC., a Pennsylvania
corporation, having its principal office at 000 Xxxxxxxxxxxx
Xxxxxxxxx, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000 ("ABC"), NEW JERSEY
MORTGAGE AND INVESTMENTS CORP., a New Jersey Corporation
having its principal office at 000 Xxxxxxxxxxxx Xxxxxxxxx,
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000 ("New Jersey Mortgage"), and
HOMEAMERICAN CREDIT, INC. doing business as UPLAND MORTGAGE, a
Pennsylvania corporation, having its principal office at 000
Xxxxxxxxxxxx Xxxxxxxxx, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
("Upland", and together with ABC and New Jersey Mortgage, the
"Borrowers").
(b) The second sentence of Section 1(A)(1) of the Interim
Warehouse Agreement is hereby deleted in its entirety and replaced with the
following:
The Borrowers agree that the Loan shall be used to warehouse
fixed and adjustable rate, first or second lien, business and
consumer purpose residential mortgage loans that are to be
included in a Securitization (the "Mortgage Loans, as such
Mortgage Loans are identified to the Lender in writing and in
electronic form from time to time.
(c) Section 1(A)(2)(iii)(B) of the Interim Warehouse Agreement
is hereby deleted in its entirety and replaced with the following:
prior to the initial Advance, legal opinions from counsel
(which may be in-house counsel or counsel employed by an
affiliate) to (x) ABC and Upland in the form of Exhibit B-1
and Exhibit B-2, respectively, attached hereto, and (y) New
Jersey Mortgage in substantially similar form.
(d) The definition of "Maturity Date" in Section 1(B)(2) is hereby
deleted in its entirety and replaced with the following:
Maturity Date means, the earliest of (i) March 31, 1998 and
(ii) the date on which a Securitization occurs (other than the
ABFS Home Equity Asset Backed Certificates 1997-2
Securitization (the "97-2 Securitization")). The Maturity Date
may be extended by the Lender, in the Lender's sole and
unreviewable discretion, on any date by the execution and
delivery of a Credit Increase Confirmation and Note Amendment
in the form of Exhibit C hereto.
(e) Section 2(B)(4) of the Interim Warehouse Agreement is hereby
deleted in its entirety and replaced with the following:
Xxxxxx shall have received an opinion from counsel (which may
be in-house counsel or counsel employed by an affiliate) to
(x) ABC and Upland, in substantially the form of Exhibit B-1
and B-2, respectively, attached hereto, and (y) New Jersey
Mortgage in substantially similar form.
(f) Section 4(1) of the Interim Warehouse Agreement is hereby deleted
in its entirety and replaced with the following:
ABC and Upland have been duly organized and are validly
existing as corporations in good standing under the laws of
the State of Pennsylvania and New Jersey Mortgage has been
duly organized and is validly existing as a corporation in
good standing under the laws of the State of New Jersey.
(g) Section 16 of the Interim Warehouse Agreement is hereby amended to
add the following notice addressee:
If to New Jersey Mortgage:
Xxxxxxx X. Xxxxxxxx
Chairman
New Jersey Mortgage and Investments Corp.
000 Xxxxxxxxxxxx Xxxx.
Bala Cynwyd, PA 19004
Phone Number: (000) 000-0000
Fax Number: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxx, XX, Esq.
Blank Rome Xxxxxxx & XxXxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Phone Number: 000-000-0000
Fax Number: 000-000-0000
(h) All references to "either Borrower" in the Interim Warehouse
Agreement are hereby amended to be references to "any Borrower".
Section 2. Amendment of the Note.
The Note is hereby deleted in its entirety and replaced with the
Secured Note, dated as of December 22, 1997 (the "New Note"), a copy of which is
attached hereto as Exhibit C. All remaining obligations of ABC and Upland
incurred under the Note are hereby assumed by the Borrowers (including New
Jersey Mortgage) and included as obligations under the New Note.
Section 3. Amendment of the Guaranty.
(a) The first Whereas clause of the Guaranty is hereby deleted in its
entirety and replaced with the following:
WHEREAS, Prudential Securities Credit Corporation (the
"Lender") has entered in to the First Amended and Restated
Interim Warehouse and Security Agreement dated as of June 9,
1997 (the "Warehouse Agreement") with HomeAmerican Credit,
Inc. d/b/a Upland Mortgage ("Upland"), New Jersey Mortgage and
Investments Corp. ("New Jersey Mortgage"), and American
Business Credit, Inc. ("ABC", and together with Upland and New
Jersey Mortgage, the "Borrowers") (capitalized terms not
defined herein shall have the meanings set forth in the
Warehouse Agreement, unless otherwise noted) providing for a
loan by the Lender to the Borrowers secured by certain
Mortgage Loans; and
(b) The second sentence of Section 1 of the Guaranty is hereby deleted
in its entirety and replaced with the following:
In addition, the Guarantor agrees that in the event that any
of the Borrowers defaults in the performance of or payment
when due of any or all obligations or sums hereby guaranteed,
the Guarantor shall forthwith pay such sums or perform such
obligations.
(c) The fifth sentence of Section 1 of the Guaranty is hereby deleted
in its entirety and replaced with the following:
This Guaranty shall be a continuing Guaranty and shall remain
in full force and effect until all the obligations of the
Borrowers hereby guaranteed are paid or performed in full.
(d) Section 9 of the Guaranty is hereby deleted in its entirety and
replaced with the following:
9. The Guarantor covenants with the Lender that, during the
term of this Guaranty: (i) the Guarantor's Tangible Net Worth
("Tangible Net Worth" being Net Worth less intangible assets,
and "Net Worth" being the sum of (a) the book value of the
common stock, plus (b) paid in capital, plus (c) retained
earnings, plus (d) the book value of any preferred stock not
payable within five years) at all times shall not be less than
the greater of (x) $15,000,000 and (y) the sum of (A) the
Guarantor's Net Worth as of September 30, 1997, plus (B) 50%
of the positive earnings of the Guarantor subsequent to
September 30, 1997, plus (C) the net proceeds to the Guarantor
from the issuance of any common stock or preferred stock
subsequent to September 30, 1997, minus, (D) its intangible
assets; (ii) the Guarantor shall maintain a minimum of
$15,000,000 of outstanding subordinated debentures maturing in
more than one year; (iii) the Guarantor's leverage ratio shall
not exceed 3.75:1, such ratio being the ratio of (x) the
excess of (A) the Guarantor's total liabilities over (B)
outstanding subordinated debentures maturing in more than one
year, to (y) the sum of (A) the Guarantor's Tangible Net Worth
and (B) outstanding subordinated debentures maturing in more
than one year; and (v) the subordinated debentures shall be
subordinate to the Guarantor's obligations hereunder,
including, any unsecured obligations to the Lender. All
calculations made pursuant to this Section 9 shall be made in
accordance with generally accepted accounting principles.
Section 4. Confirmation of the Interim Warehouse Agreement, the Note and the
Guaranty.
As amended by Section 1, Section 2 and Section 3 hereof, all provisions
of the Interim Warehouse Agreement, the Note and the Guaranty, are reconfirmed
as of the date hereof. Each of the Borrowers (including New Jersey Mortgage) and
the Guarantor, in addition, hereby reconfirms and remakes as of the date hereof
each and every one of its representations, warranties and covenants as set forth
in the Interim Warehouse Agreement, the Note or the Guaranty, as applicable.
Section 5. Delivery of Documents.
Pursuant to Sections 1(A)(2)(iii)(B) and 2(B)(4) of the Interim
Warehouse Agreement, the opinion of counsel of New Jersey Mortgage is attached
hereto as Exhibit A-1. Pursuant to Section
2(B)(2) of the Interim Warehouse Agreement, the certificate of the Secretary of
New Jersey Mortgage is attached hereto as Exhibit B-1.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BUSINESS CREDIT, INC., as Borrower
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President-Finance and
Chief Financial Officer
HOMEAMERICAN CREDIT, INC.
D/B/A UPLAND MORTGAGE, as Xxxxxxxx
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President-Finance and
Chief Financial Officer
NEW JERSEY MORTGAGE AND
INVESTMENTS CORP., as Borrower
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President-Finance and
Chief Financial Officer
AMERICAN BUSINESS FINANCIAL
SERVICES, INC., as Guarantor
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President-Finance and
Chief Financial Officer
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
CREDIT INCREASE CONFIRMATION
AND NOTE AMENDMENT NO. 3
TO THE
FIRST AMENDED AND RESTATED
INTERIM WAREHOUSE AND SECURITY AGREEMENT,
SECURED NOTE AND GUARANTY
Dated as of March 30, 1998
Reference is made to (x) the First Amended and Restated Interim
Warehouse and Security Agreement, dated as of June 9, 1997 (the "Interim
Warehouse Agreement") among Prudential Securities Credit Corporation (the
"Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland"), New
Jersey Mortgage and Investments Corp. ("New Jersey Mortgage"), and American
Business Credit, Inc. ("ABC", and together with Upland and New Jersey Mortgage,
the "Borrowers"), as amended by Credit Increase Confirmation and Note Amendment
No. 1, dated September 30, 1997 and Credit Increase Confirmation and Note
Amendment No. 2, dated December 22, 1997, (y) the Secured Note, dated as of
December 22, 1997 (the "Note"), from the Borrowers to the Lender, and (z) the
Guaranty, dated as of June 9, 1997 (the "Guaranty"), from the Borrowers' parent,
American Business Financial Services, Inc. ("ABFS" or the "Guarantor"), to the
Lender.
WHEREAS, the Lender and the Borrowers desire to amend the Interim
Warehouse Agreement; and
WHEREAS, the Lender and the Guarantor desire to amend the financial
covenants contained in the Guaranty;
NOW THEREFORE, the Lender, the Borrowers and the Guarantor hereby amend
the Interim Warehouse Agreement, the Secured Note and the Guaranty as follows:
Section 1. Amendment of the Interim Warehouse Agreement.
(a) Section 1(A)(1) of the Interim Warehouse Agreement is hereby
deleted in its entirety and replaced with the following:
The Lender agrees to lend to the Borrowers up to $50,000,000
(such borrowing, the "Loan") to be made in one or more
advances (each, an "Advance"); provided, however, that, in no
event shall the outstanding debt owed to the Lender by the
Borrowers or any of their Affiliates (including, without
limitation, American Business Leasing, Inc. and Federal
Leasing Corp.) under any loan agreement (including, without
limitation, this Agreement) exceed $50,000,000; provided,
further, that, at any time when funds are on deposit in a
Pre-Funding Account (as defined herein), the amount of the
Loan shall not exceed the amount on deposit in such Pre-
Funding Account. The Borrower agrees that the Loan shall be
used to warehouse fixed and adjustable rate, first or second
lien, business and consumer purpose residential mortgage loans
that are to be included in a Securitization (the "Mortgage
Loans"), as such Mortgage Loans are identified to the Lender
in writing and in electronic form from time to time. Such
Mortgage Loans may be (a) included at the time of closing of
the Securitization or (b) purchased by the Securitization
trust subsequent to
closing with funds on deposit in an account (a "Pre-Funding
Account") relating to the Securitization and designated for
such purpose. All Mortgage Loans financed hereunder shall be
closed loans; i.e., this facility shall not be used for "wet"
or "table" fundings. The Lender may refuse to lend against any
Mortgage Loan(s) which the Lender reasonably believes will not
be eligible for inclusion in a securitized pool, similar to
the pool included in the 98-1 Securization, either (x) due to
the characteristics of such Mortgage Loan or (y) due to the
expected aggregate characteristics of the Mortgage Loans.
(b) The definition of "Maturity Date" in Section 1(B)(2) is hereby
deleted in its entirety and replaced with the following:
Maturity Date means, (i) if no Pre-Funding Account is utilized
in the Securitization the earlier of (a) June 30, 1998 and
(ii) the date on which a Securitization occurs (other than the
ABFS Home Equity Loan Trust 1998- 1 Securitization (the "98-1
Securitization")) and (ii) if a Pre-Funding Account is
utilized in the Securitization, the earlier of (a) September
30, 1998 and (b) the date on which the funds in the
Pre-Funding Account are reduced to zero. The Maturity Date may
be extended by the Lender, in the Lender's sole and
unreviewable discretion, on any date by the execution and
delivery of a Credit Increase Confirmation and Note Amendment
in the form of Exhibit C hereto.
(c) The last sentence of Section 3 of the Interim Warehouse Agreement
is hereby deleted in its entirety and replaced with the following:
The related Borrower hereby pledges all of its right, title
and interest in and to the Collateral to the Lender to secure
the repayment of principal of and interest on the Loan and all
other amounts owing by the Borrowers to the Lender hereunder
or under any other agreement or arrangement among either
Borrower or its Affiliates and the Lender or its affiliates
now existing or hereafter entered into by such parties
(collectively, the "Secured Obligations").
(d) Section 10(C) of the Interim Warehouse Agreement is hereby deleted
in its entirety and replaced with the following:
Any default of any term, condition or agreement or
any breach of any representation or warranty of the
Guarantor under the Guaranty or any other guaranty
executed by the Guarantor in favor of the Lender or
its affiliates.
(e) The following is hereby added as Section 10(I) of the Interim
Warehouse Agreement:
Any "event of default" under any agreement between either
Borrower or any of their Affiliates and the Lender or any of
its affiliates.
Section 2. Amendment of the Guaranty.
(a) Section 9 of the Guaranty is hereby deleted in its entirety and
replaced with the following:
9. The Guarantor covenants with the Lender that, during the
term of this Guaranty: (i) the Guarantor's Tangible Net Worth
("Tangible Net Worth" being Net Worth less intangible assets,
less receivables from Affiliates, and "Net Worth" being the
sum of (a) the book value of the common stock, plus (b) paid
in capital, plus (c) retained earnings, plus (d) the book
value of any preferred stock not payable within five years) at
all times shall not be less than the sum of (A) $15,000,000,
(B) 75% of the positive earnings of the Guarantor subsequent
to December 31, 1997, plus (C) the net proceeds to the
Guarantor from the issuance of any common stock or preferred
stock subsequent to December 31, 1997; (ii) the Guarantor
shall maintain a minimum of $25,000,000 of outstanding
subordinated debentures maturing in more than one year; (iii)
the Guarantor's leverage ratio shall not exceed 3.75:1, such
ratio being the ratio of (x) the excess of (A) the Guarantor's
total liabilities over (B) outstanding subordinated debentures
maturing in more than one year, to (y) the sum of (A) the
Guarantor's Tangible Net Worth and (B) outstanding
subordinated debentures maturing in more than one year; (iv)
the subordinated debentures shall be subordinate to the
Guarantor's obligations hereunder, including, any unsecured
obligations to the Lender; and (v) the Guarantor shall at no
time have guarantees outstanding in respect of obligations in
excess of $200,000,000. All calculations made pursuant to this
Section 9 shall be made in accordance with generally accepted
accounting principles.
(b) Section 10 of the Guaranty is hereby deleted in its entirety and
replaced with the following:
10. As long as this Guaranty is in effect, the Guarantor shall
(i) promptly upon preparation, but in no event later than 50
days following the end of its first three fiscal quarters,
deliver to the Lender its unaudited company-prepared financial
statements as of the end of such fiscal quarter, prepared in
accordance with GAAP, and (ii) promptly upon preparation, but
in no event later than 105 days following the end of its
fourth fiscal quarter, deliver to the Lender its audited and
certified financial statements, prepared in accordance with
GAAP, as of the end of and for the most recently ended fiscal
year, which audits and certification shall be prepared by a
nationally recognized independent accounting firm or by a
regionally recognized independent accounting firm with the
prior written consent of the Lender, which consent shall not
be unreasonably withheld. In all cases, financial statements
shall include, without limitation, a balance sheet, a profit
and loss statement and a statement of cash flows. In
conjunction with the delivery of each of the financial
statements to be delivered by the Guarantor pursuant to this
Paragraph 10, the Guarantor shall deliver to the Lender (a)
and officer's certificate of the Guarantor certifying that, as
of the date of delivery of such financial statement, the
Guarantor is in compliance with all the terms of this Guaranty
including, without limitation, each of the covenants set forth
in Paragraph 9, (b) a schedule setting forth by month of
maturity all outstanding subordinated debentures of the
Guarantor, and (c)
a schedule of other receivables and other assets of the
Guarantor. Such Certificate shall, as appropriate, set forth
any calculations necessary to determine such compliance.
Section 3. Confirmation of the Interim Warehouse Agreement, the Note and the
Guaranty.
As amended by Section 1 and Section 2 hereof, all provisions of the
Interim Warehouse Agreement and the Guaranty, are reconfirmed as of the date
hereof. Each of the Borrowers and the Guarantor, in addition, hereby reconfirms
and remakes as of the date hereof each and every one of its representations,
warranties and covenants as set forth in the Interim Warehouse Agreement, the
Note or the Guaranty, as applicable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BUSINESS CREDIT, INC.,
as Borrower
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
HOMEAMERICAN CREDIT, INC.
D/B/A UPLAND MORTGAGE, as Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
NEW JERSEY MORTGAGE AND
INVESTMENTS CORP., as Borrower
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
AMERICAN BUSINESS FINANCIAL
SERVICES, INC., as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Chairman
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
CREDIT INCREASE CONFIRMATION
AND NOTE AMENDMENT NO. 4
TO THE
FIRST AMENDED AND RESTATED
INTERIM WAREHOUSE AND SECURITY AGREEMENT,
SECURED NOTE AND GUARANTY
Dated as of May 29, 1998
Reference is made to (x) the First Amended and Restated Interim
Warehouse and Security Agreement, dated as of June 9, 1997 (the "Interim
Warehouse Agreement") among Prudential Securities Credit Corporation (the
"Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland"), New
Jersey Mortgage and Investments Corp. ("New Jersey Mortgage"), and American
Business Credit, Inc. ("ABC", and together with Upland and New Jersey Mortgage,
the "Borrowers"), as amended by Credit Increase Confirmation and Note Amendment
No. 1, dated as of September 30, 1997, Credit Increase Confirmation and Note
Amendment No. 2, dated as of December 22, 1997, and Credit Increase Confirmation
and Note Amendment No. 3, dated as of March 30, 1998 (y) the Secured Note, dated
as of December 22, 1997 (the "Note"), from the Borrowers to the Lender, and (z)
the Guaranty, dated as of June 9, 1997 (the "Guaranty"), from the Borrowers'
parent, American Business Financial Services, Inc.
("ABFS" or the "Guarantor"), to the Lender.
WHEREAS, the Lender and the Borrowers desire to amend the Interim
Warehouse Agreement; and
WHEREAS, the Lender and the Guarantor desire to amend the financial
covenants contained in the Guaranty;
NOW THEREFORE, the Lender, the Borrowers and the Guarantor hereby amend
the Interim Warehouse Agreement, the Secured Note and the Guaranty as follows:
Section 1. Amendment of the Interim Warehouse Agreement.
(a) The first WHEREAS clause of the Interim Warehouse Agreement is
hereby deleted in its entirety and replaced with the following:
WHEREAS, the Lender intends to lend and the Borrowers intend
to borrow up to $100,000,000 (one hundred million dollars) to
fund the purchase of origination by the Borrowers of fixed and
floating-rate, first and second lien, business and consumer
purpose residential mortgage loans; and
(b) Section 1(A)(1) of the Interim Warehouse Agreement is hereby
deleted in its entirety and replaced with the following:
The Lender agrees to lend to the Borrowers up to $100,000,000
(such borrowing, the "Loan") to be made in one or more
advances (each, an "Advance"); provided, however, that, in no
event shall the outstanding debt owed to the Lender by the
Borrowers or any of their Affiliates (including, without
limitation, American Business Leasing, Inc. and
Federal Leasing Corp.) under any loan agreement (including,
without limitation, this Agreement) exceed $100,000,000;
provided, further, that, at any time when funds are on deposit
in a Pre-Funding Account (as defined herein), the amount of
the Loan shall not exceed the amount on deposit in such
Pre-Funding Account. The Borrower agrees that the Loan shall
be used to warehouse fixed and adjustable rate, first or
second lien, business and consumer purpose residential
mortgage loans that are to be included in a Securitization
(the "Mortgage Loans"), as such Mortgage Loans are identified
to the Lender in writing and in electronic form from time to
time. Such Mortgage Loans may be (a) included at the time of
closing of the Securitization or (b) purchased by the
Securitization trust subsequent to closing with funds on
deposit in an account (a "Pre-Funding Account") relating to
the Securitization and designated for such purpose. All
Mortgage Loans financed hereunder shall be closed loans; i.e.,
this facility shall not be used for "wet" or "table" fundings.
The Lender may refuse to lend against any Mortgage Loan(s)
which the Lender reasonably believes will not be eligible for
inclusion in a securitized pool, similar to the pool included
in the 98-1 Securization, either (x) due to the
characteristics of such Mortgage Loan or (y) due to the
expected aggregate characteristics of the Mortgage Loans.
Section 2. Amendment of the Note.
The maximum amount of the Loan referenced in the Note shall be
$100,000,000.
Section 3. Amendment of the Guaranty.
Section 9 of the Guaranty is hereby deleted in its entirety and
replaced with the following:
9. The Guarantor covenants with the Lender that, during the
term of this Guaranty: (i) the Guarantor's Tangible Net Worth
("Tangible Net Worth" being Net Worth less intangible assets,
less receivables from Affiliates, and "Net Worth" being the
sum of (a) the book value of the common stock, plus (b) paid
in capital, plus (c) retained earnings, plus (d) the book
value of any preferred stock not payable within five years) at
all times shall not be less than the sum of (A) $15,000,000,
(B) 75% of the positive earnings of the Guarantor subsequent
to December 31, 1997, plus (C) the net proceeds to the
Guarantor from the issuance of any common stock or preferred
stock subsequent to December 31, 1997; (ii) the Guarantor
shall maintain a minimum of $43,000,000 of outstanding
subordinated debentures maturing in more than one year; (iii)
the Guarantor's leverage ratio shall not exceed 3.75:1, such
ratio being the ratio of (x) the excess of (A) the Guarantor's
total liabilities over (B) outstanding subordinated debentures
maturing in more than one year, to (y) the sum of (A) the
Guarantor's Tangible Net Worth and (B) outstanding
subordinated debentures maturing in more than one year; (iv)
the subordinated debentures shall be subordinate to the
Guarantor's obligations hereunder, including, any unsecured
obligations to the Lender; and (v) the Guarantor shall at no
time have guarantees outstanding in respect of obligations in
excess of $250,000,000. All calculations made pursuant to this
Section 9 shall be made in accordance with generally accepted
accounting principles.
Section 4. Confirmation of the Interim Warehouse Agreement, the Note and the
Guaranty.
As amended by Section 1, Section 2 and Section 3 hereof, all provisions
of the Interim Warehouse Agreement, the Note and the Guaranty, are reconfirmed
as of the date hereof. Each of the Borrowers and the Guarantor, in addition,
hereby reconfirms and remakes as of the date hereof each and every one of its
representations, warranties and covenants as set forth in the Interim Warehouse
Agreement, the Note or the Guaranty, as applicable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BUSINESS CREDIT, INC., as Borrower
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
HOMEAMERICAN CREDIT, INC.
D/B/A UPLAND MORTGAGE, as Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
NEW JERSEY MORTGAGE AND
INVESTMENTS CORP., as Borrower
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
AMERICAN BUSINESS FINANCIAL
SERVICES, INC., as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Chairman
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By: /s/
-------------------------------------
Name:
Title:
CREDIT INCREASE CONFIRMATION
AND NOTE AMENDMENT NO. 5
TO THE
FIRST AMENDED AND RESTATED
INTERIM WAREHOUSE AND SECURITY AGREEMENT
AND SECURED NOTE
Dated as of June 30, 1998
Reference is made to (x) the First Amended and Restated Interim
Warehouse and Security Agreement, dated as of June 9, 1997 (the "Interim
Warehouse Agreement") among Prudential Securities Credit Corporation (the
"Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland"), New
Jersey Mortgage and Investments Corp. ("New Jersey Mortgage"), and American
Business Credit, Inc. ("ABC", and together with Upland and New Jersey Mortgage,
the "Borrowers"), as amended by Credit Increase Confirmation and Note Amendment
No. 1, dated as of September 30, 1997, Credit Increase Confirmation and Note
Amendment No. 2, dated as of December 22, 1997, Credit Increase Confirmation and
Note Amendment No. 3, dated as of March 30, 1998, and Credit Increase
Confirmation and Note Amendment No. 4, dated May 29, 1998, (y) the Secured Note,
dated as of December 22, 1997 (the "Note"), from the Borrowers to the Lender,
and (z) the Guaranty, dated as of June 9, 1997 (the "Guaranty"), from the
Borrowers' ultimate parent, American Business Financial Services, Inc. ("ABFS"
or the "Guarantor"), to the Lender.
WHEREAS, the Lender and the Borrowers desire to amend the Interim
Warehouse Agreement;
NOW THEREFORE, the Lender, the Borrowers and the Guarantor hereby amend
the Interim Warehouse Agreement, the Secured Note and the Guaranty as follows:
Section 1. Amendment of the Interim Warehouse Agreement and Note.
(a) The definition of "Maturity Date" in Section 1(B)(2) is hereby
deleted in its entirety and replaced with the following:
Maturity Date means, (i) if no Pre-Funding Account is utilized
in the Securitization the earlier of (a) July 31, 1998 and (b)
the date on which a Securitization occurs (other than the ABFS
Mortgage Loan Trust 1998-2 Securitization (the "98-2
Securitization")) and (ii) if a Pre-Funding Account is
utilized in the Securitization, the earlier of (a) September
30, 1998 and (b) the date on which the funds in the
Pre-Funding Account are reduced to zero. The Maturity Date may
be extended by the Lender, in the Lender's sole and
unreviewable discretion, on any date by the execution and
delivery of a Credit Increase Confirmation and Note Amendment
in the form of Exhibit C hereto.
(b) All references to the "98-1 Securitization" in the Interim
Warehouse Agreement, the Note and the Guaranty are hereby amended to be
references to the "98-2 Securitization".
Section 2. Confirmation of the Interim Warehouse Agreement, Note and Guaranty.
As amended by Section 1 hereof, all provisions of the Interim Warehouse
Agreement, the Note and the Guaranty, are reconfirmed as of the date hereof.
Each of the Borrowers and ABFS, in
addition, hereby reconfirms and remakes as of the date hereof each and every one
of its representations, warranties and covenants as set forth in the Interim
Warehouse Agreement, the Note or the Guaranty, as applicable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BUSINESS CREDIT, INC., as Borrower
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
HOMEAMERICAN CREDIT, INC.
D/B/A UPLAND MORTGAGE, as Xxxxxxxx
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
NEW JERSEY MORTGAGE AND
INVESTMENTS CORP., as Borrower
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
AMERICAN BUSINESS FINANCIAL
SERVICES, INC., as Guarantor
By:/s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By:/s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
CREDIT INCREASE CONFIRMATION
AND NOTE AMENDMENT NO. 6
TO THE
FIRST AMENDED AND RESTATED
INTERIM WAREHOUSE AND SECURITY AGREEMENT
AND SECURED NOTE
Dated as of July 31, 1998
Reference is made to (x) the First Amended and Restated Interim
Warehouse and Security Agreement, dated as of June 9, 1997 (the "Interim
Warehouse Agreement") among Prudential Securities Credit Corporation (the
"Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland"), New
Jersey Mortgage and Investments Corp. ("New Jersey Mortgage"), and American
Business Credit, Inc. ("ABC", and together with Upland and New Jersey Mortgage,
the "Borrowers"), as amended by Credit Increase Confirmation and Note Amendment
No. 1, dated as of September 30, 1997, Credit Increase Confirmation and Note
Amendment No. 2, dated as of December 22, 1997, Credit Increase Confirmation and
Note Amendment No. 3, dated as of March 30, 1998, Credit Increase Confirmation
and Note Amendment No. 4, dated May 29, 1998, and Credit Increase Confirmation
and Note Amendment No. 5, dated June 30, 1998, (y) the Secured Note, dated as of
December 22, 1997 (the "Note"), from the Borrowers to the Lender, and (z) the
Guaranty, dated as of June 9, 1997 (the "Guaranty"), from the Borrowers'
ultimate parent, American Business Financial Services, Inc. ("ABFS" or the
"Guarantor"), to the Lender.
WHEREAS, the Lender and the Borrowers desire to amend the Interim
Warehouse Agreement;
NOW THEREFORE, the Lender, the Borrowers and the Guarantor hereby amend
the Interim Warehouse Agreement, the Secured Note and the Guaranty as follows:
Section 1. Amendment of the Interim Warehouse Agreement and Note.
The definition of "Maturity Date" in Section 1(B)(2) is hereby
deleted in its entirety and replaced with the following:
Maturity Date means, (i) if no Pre-Funding Account is utilized
in the Securitization the earlier of (a) August 31, 1998 and
(b) the date on which a Securitization occurs (other than the
ABFS Mortgage Loan Trust 1998-2 Securitization (the "98-2
Securitization")) and (ii) if a Pre-Funding Account is
utilized in the Securitization, the earlier of (a) November
30, 1998 and (b) the date on which the funds in the
Pre-Funding Account are reduced to zero. The Maturity Date may
be extended by the Lender, in the Lender's sole and
unreviewable discretion, on any date by the execution and
delivery of a Credit Increase Confirmation and Note Amendment
in the form of Exhibit C hereto.
Section 2. Confirmation of the Interim Warehouse Agreement, Note and Guaranty.
As amended by Section 1 hereof, all provisions of the Interim Warehouse
Agreement, the Note and the Guaranty, are reconfirmed as of the date hereof.
Each of the Borrowers and ABFS, in addition, hereby reconfirms and remakes as of
the date hereof each and every one of its
representations, warranties and covenants as set forth in the Interim Warehouse
Agreement, the Note or the Guaranty, as applicable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
AMERICAN BUSINESS CREDIT, INC., as Borrower
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
HOMEAMERICAN CREDIT, INC.
D/B/A UPLAND MORTGAGE, as Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
NEW JERSEY MORTGAGE AND
INVESTMENTS CORP., as Borrower
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
AMERICAN BUSINESS FINANCIAL
SERVICES, INC., as Guarantor
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
CREDIT INCREASE CONFIRMATION
AND NOTE AMENDMENT NO. 7
TO THE
FIRST AMENDED AND RESTATED
INTERIM WAREHOUSE AND SECURITY AGREEMENT
AND SECURED NOTE
Dated as of August 27, 1998
Reference is made to (x) the First Amended and Restated Interim
Warehouse and Security Agreement, dated as of June 9, 1997 (the "Interim
Warehouse Agreement") among Prudential Securities Credit Corporation (the
"Lender") and HomeAmerican Credit, Inc. d/b/a Upland Mortgage ("Upland"), New
Jersey Mortgage and Investments Corp. ("New Jersey Mortgage"), and American
Business Credit, Inc. ("ABC", and together with Upland and New Jersey Mortgage,
the "Borrowers"), as amended by Credit Increase Confirmation and Note Amendment
No. 1, dated as of September 30, 1997, Credit Increase Confirmation and Note
Amendment No. 2, dated as of December 22, 1997, Credit Increase Confirmation and
Note Amendment No. 3, dated as of March 30, 1998, Credit Increase Confirmation
and Note Amendment No. 4, dated May 29, 1998, Credit Increase Confirmation and
Note Amendment No. 5, dated June 30, 1998, and Credit Increase Confirmation and
Note Amendment No. 6, dated July 31, 1998, (y) the Secured Note, dated as of
December 22, 1997 (the "Note"), from the Borrowers to the Lender, and (z) the
Guaranty, dated as of June 9, 1997 (the "Guaranty"), from the Borrowers'
ultimate parent, American Business Financial Services, Inc. ("ABFS" or the
"Guarantor"), to the Lender.
WHEREAS, the Lender and the Borrowers desire to amend the Interim
Warehouse Agreement;
NOW THEREFORE, the Lender, the Borrowers and the Guarantor hereby amend
the Interim Warehouse Agreement, the Secured Note and the Guaranty as follows:
Section 1. Amendment of the Interim Warehouse Agreement and Note.
(a) The definition of "Maturity Date" in Section 1(B)(2) is hereby
deleted in its entirety and replaced with the following:
Maturity Date means the earlier of (i) August 31, 1999 and
(ii) the date on which an Event of Default occurs. The
Maturity Date may be extended by the Lender, in the Lender's
sole and unreviewable discretion, on any date by the execution
and delivery of a Credit Increase Confirmation and Note
Amendment in the form of Exhibit C hereto.
(b) The definition of "Collateral Deficiency Situation" in Section 1 is
hereby deleted in its entirety and replaced with the following:
A Collateral Deficiency Situation shall be deemed to be
existing as of any day on which (x) the outstanding principal
amount of the Loan as of such day exceeds (y) the lesser of
(i) 98.5% of the outstanding principal balance of the Pledged
Mortgage Loans and (ii) the product of (1) the Market Value of
the Pledged Mortgage Loans (disregarding the Market Value of
any Mortgage Loans proposed to be pledged to the Lender on
such day) and
.95.
(c) Section 1(B) of the Interim Warehouse Agreement is hereby deleted
in its entirety and replaced with the following:
The amount of each Advance shall not be less than $1,000,000 or greater
than the lesser of:
1. 98.5% of the aggregate outstanding principal
balance of the Mortgage Loans calculated as of the related
Cut-Off Date (or, if the Borrower is using the proceeds of the
Advance to purchase or originate the related Mortgage Loans at
their aggregate outstanding principal balance as of the
settlement date for the purchase, then their aggregate
outstanding principal balance as of such settlement date)
proposed to be pledged to the Lender in connection with such
Advance, minus, in the event that a Collateral Deficiency
Situation exists as of the date of such Advance, the
Restoration Amount as of the date of such Advance; and
2. the product of (x) the Market Value of the
Mortgage Loans proposed to be pledged to the Lender in
connection with such Advance and (y) .95, minus, in the event
that a Collateral Deficiency Situation exists as of the date
of such Advance the Restoration Amount as of the date of such
Advance. The Lender may amend the Advance rate in the Lender's
sole and unreviewable discretion, on any date by the execution
and delivery of a Credit Increase Confirmation and Note
Amendment in the form of Exhibit C hereto.
(d) Section 1(C) of the Interim Warehouse Agreement is hereby deleted
in its entirety and replaced with the following:
The Loan evidenced hereby shall mature on the Maturity Date
and all amounts outstanding hereunder shall be due and payable on the Maturity
Date. In addition, each quarter, on the earlier to occur of the last business
day of such quarter and the closing of a Securitization for such quarter, the
Loan balance shall be reduced to $5,000,000 or less. Pledged Mortgage Loans that
remain in this facility for longer than one hundred and eighty (180) days, as
measured on a cumulative basis with respect to each Pledged Mortgage Loan during
the term of this facility, shall be valued at a Market Value equal to zero. For
illustrative purposes, if a Pledged Mortgage Loan has been on the line for sixty
(60) days, is then taken off the line for five (5) days and then returned to the
line for an additional 30 days, it will be measured as ninety (90) days old
Section 2. Confirmation of the Interim Warehouse Agreement, Note and Guaranty.
As amended by Section 1 hereof, all provisions of the Interim Warehouse
Agreement, the Note and the Guaranty, are reconfirmed as of the date hereof.
Each of the Borrowers and ABFS, in addition, hereby reconfirms and remakes as of
the date hereof each and every one of its representations, warranties and
covenants as set forth in the Interim Warehouse Agreement, the Note or the
Guaranty, as applicable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BUSINESS CREDIT, INC., as Borrower
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
HOMEAMERICAN CREDIT, INC.
D/B/A UPLAND MORTGAGE, as Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
NEW JERSEY MORTGAGE AND
INVESTMENTS CORP., as Borrower
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
AMERICAN BUSINESS FINANCIAL
SERVICES, INC., as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Chairman
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
CREDIT INCREASE CONFIRMATION
AND NOTE AMENDMENT NO. 1
TO THE
INTERIM WAREHOUSE AND SECURITY AGREEMENT
FOR CONTRACTS, SECURED NOTE AND GUARANTY
Dated as of May 29, 1998
Reference is made to (x) the Interim Warehouse and Security Agreement
for Contracts, dated as of April 3, 1998 (the "Interim Warehouse Agreement")
among Prudential Securities Credit Corporation (the "Lender") and Federal
Leasing Corp. ("Federal Leasing") and American Business Leasing, Inc. ("ABL",
and together with Federal Leasing, the "Borrowers"), (y) the Secured Note, dated
as of April 3, 1998 (the "Note"), from the Borrowers to the Lender, and (z) the
Guaranty, dated as of April 3, 1998 (the "Guaranty"), from the Borrowers'
parent, American Business Financial Services, Inc. ("ABFS" or the "Guarantor"),
to the Lender.
WHEREAS, the Lender and the Borrowers desire to amend the Interim
Warehouse Agreement; and
WHEREAS, the Lender and the Guarantor desire to amend the financial
covenants contained in the Guaranty;
NOW THEREFORE, the Lender, the Borrowers and the Guarantor hereby amend
the Interim Warehouse Agreement, the Secured Note and the Guaranty as follows:
Section 1. Amendment of the Interim Warehouse Agreement.
Section 1(A)(1) of the Interim Warehouse Agreement is hereby
deleted in its entirety and replaced with the following:
The Lender agrees to lend to the Borrowers up to $50,000,000
(such borrowing, the "Loan") to be made in one or more
advances (each, an "Advance"); provided, however, that, in no
event shall the outstanding debt owed to the Lender by the
Borrowers or any of their Affiliates (including, without
limitation, American Business Credit, Inc., HomeAmerican
Credit, Inc. d/b/a Upland Mortgage and New Jersey Mortgage and
Investments Corp.) under any loan agreement (including,
without limitation, this Agreement) exceed $100,000,000;
provided, further, that, at any time when funds are on deposit
in a Pre-Funding Account (as defined herein), the amount of
the Loan shall not exceed the amount on deposit in such Pre-
Funding Account. The Borrower agrees that the Loan shall be
used to warehouse Contracts that are to be included in a
Securitization, as such Contracts are identified to the Lender
in writing and in electronic form from time to time. Such
Contracts may be (a) included at the time of closing of the
Securitization or (b) purchased by the Securitization trust
subsequent to closing with funds on deposit in an account (a
"Pre-Funding Account") relating to the Securitization and
designated for such purpose. The Lender may refuse to lend
against any Contract(s) which the Lender reasonably believes
will not be eligible for inclusion in a securitized pool
either (x) due to the characteristics of such Contract or (y)
due to the expected aggregate characteristics of the
Contracts.
Section 2. Amendment of the Guaranty.
Section 9 of the Guaranty is hereby deleted in its entirety and
replaced with the following:
9. The Guarantor covenants with the Lender that, during the
term of this Guaranty: (i) the Guarantor's Tangible Net Worth
("Tangible Net Worth" being Net Worth less intangible assets,
less receivables from Affiliates, and "Net Worth" being the
sum of (a) the book value of the common stock, plus (b) paid
in capital, plus (c) retained earnings, plus (d) the book
value of any preferred stock not payable within five years) at
all times shall not be less than the sum of (A) $15,000,000,
(B) 75% of the positive earnings of the Guarantor subsequent
to December 31, 1997, plus (C) the net proceeds to the
Guarantor from the issuance of any common stock or preferred
stock subsequent to December 31, 1997; (ii) the Guarantor
shall maintain a minimum of $43,000,000 of outstanding
subordinated debentures maturing in more than one year; (iii)
the Guarantor's leverage ratio shall not exceed 3.75:1, such
ratio being the ratio of (x) the excess of (A) the Guarantor's
total liabilities over (B) outstanding subordinated debentures
maturing in more than one year, to (y) the sum of (A) the
Guarantor's Tangible Net Worth and (B) outstanding
subordinated debentures maturing in more than one year; (iv)
the subordinated debentures shall be subordinate to the
Guarantor's obligations hereunder, including, any unsecured
obligations to the Lender; and (v) the Guarantor shall at no
time have guarantees outstanding in respect of obligations in
excess of $250,000,000. All calculations made pursuant to this
Section 9 shall be made in accordance with generally accepted
accounting principles.
Section 3. Confirmation of the Interim Warehouse Agreement, the Note and the
Guaranty.
As amended by Section 1 and Section 2 hereof, all provisions of the
Interim Warehouse Agreement, the Note and the Guaranty, are reconfirmed as of
the date hereof. Each of the Borrowers and the Guarantor, in addition, hereby
reconfirms and remakes as of the date hereof each and every one of its
representations, warranties and covenants as set forth in the Interim Warehouse
Agreement, the Note or the Guaranty, as applicable.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BUSINESS LEASING, INC.,
as Borrower
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
FEDERAL LEASING CORP., as Borrower
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
AMERICAN BUSINESS FINANCIAL
SERVICES, INC., as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: President
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By: /s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxx
Title: Treasurer
