AMENDMENT NO. 5 TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT ("Amendment") is
dated as of August 1, 1997 and is entered into by and between BankAmerica
Business Credit, Inc. ("Lender") and Premier Financial Services, Inc.
("Borrower"). All capitalized terms used herein but not otherwise defined shall
have the meanings ascribed to them in the Agreement (as hereinafter defined).
WITNESSETH
WHEREAS, the Borrower and the Lender have entered into that certain
Loan and Security Agreement dated as of April 10, 1995, as amended and
supplemented (the "Agreement"); and
WHEREAS, the Borrower desires to amend the Agreement and the Lender is
willing to do so, subject to the terms and conditions stated herein;
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Borrower and Lender hereby agree as follows:
SECTION 1. Amendment to the Agreement. The Lender and Borrower agree
that the Agreement shall be amended as follows:
A. Amendment to Section 1. Section 1.54 of the Agreement is
amended in its entirety to read as follows:
"1.54 Total Credit Facility shall mean
$4,000,000."
B. Amendment to Section 1. Section 1.58 of the Agreement is
amended in its entirety to read as follows:
"1.58 Actual Charge-Off Percent means, as of
the first day of each month, the percent (rounded to the
nearest whole percent) resulting from dividing (a) the
aggregate amount of all of Borrower's Net Charge-Off's during
each of the twelve (12) months immediately preceding the date
of calculation, by (b) the average monthly amount of
Borrower's Net Contracts Payments outstanding as of the last
day of each of those twelve (12) months. In computing the
Actual Charge-Off Percent, the Contracts sold pursuant to a
Securitization Transaction shall be considered and included
for the purpose of calculating the Actual Charge-Off Percent."
C. Amendment to Section 1. Section 1.61 of the Agreement is
amended in its entirety to read as follows:
"1.61 Delinquency/Repossession Adjustment
Percent means, as of the first day of each month, the number
of full percentage points that the
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average Delinquency/Repossession Percent for the two months
immediately preceding such date is greater than six percent
(6%)."
D. Amendment to Section 1. Section 1.62 of the Agreement is
amended in its entirety to read as follows:
"1.62 Delinquency/Repossession Percent means
the percent (rounded to the nearest whole percent), calculated
as of the first day of each month, determined by dividing (a)
the aggregate amount of the Net Contract Payments owing under
all of Borrower's Contracts with respect to which any payment
due thereunder is more than sixty (60) days past due, as
determined on a contractual basis, as of the last day of each
of the three (3) months immediately preceding the date of
calculation, plus the Repossession Value of all Vehicles which
Borrower has repossessed but has not sold as of the date of
calculation, by (b) the average monthly amount of Borrower's
Net Contracts Payments outstanding as of the last day of each
of those three (3) months. In computing the
Delinquency/Repossession Percent, the Contracts sold pursuant
to a Securitization Transaction shall be considered and
included for the purpose of calculating the
Delinquency/Repossession Percent."
E. Amendment to Section 1. Section 1 of the Agreement is
amended to add a new Section 1.69 to read as follows:
"1.69 Securitization Transaction shall mean
a transaction wherein an identified pool of Contracts and
related documents are sold, pledged or conveyed with the
consent of Lender by Borrower to a trustee, grantor trust or
other special purpose financing entity as collateral security
for the issuance by such financing entity of notes,
certificates or other evidence of indebtedness."
F. Amendment to Section 4. Section 4.1 of the Agreement is
amended in its entirety to read as follows:
"4.1 Term of Agreement and Loan Repayment.
This Agreement shall have a term commencing on April 10, 1995,
and terminating on December 31, 1997 (`Maturity Date'). The
Loan shall be due and payable in full on the Maturity Date
without notice or demand and shall be repaid to Lender by a
wire transfer of immediately available funds. Borrower may
terminate this Agreement prior to the Maturity Date by: (a)
giving Lender at least ten (10) business days prior written
notice of its intention to terminate this Agreement and (b)
paying and performing, as appropriate, all Obligations on or
prior to the effective date of termination. Notwithstanding
the foregoing, upon the occurrence of an Event of Default,
Lender may immediately terminate further performance under
this Agreement without notice or demand."
G. Amendment to Section 8. Section 8.12 of the Agreement is
amended in its entirety to read as follows:
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"8.12 Charge-Off Policy. Borrower shall
establish and implement, in a manner satisfactory to Lender, a
policy for charging off the unpaid balance of its delinquent
Contracts. Without limiting the generality of the foregoing,
Borrower's policy shall provide that on the last day of each
quarter in each Fiscal Year, Borrower shall charge-off the
unpaid balance of all Contracts with respect to which (a) any
payment due thereunder is one hundred eighty (180) or more
days delinquent, as determined on a contractual basis, or (b)
the Goods which are the subject thereof have been repossessed
and sold for an amount which is less than the Contract balance
then owing and after application of the sale proceeds to such
Contract balance, a deficiency remains, provided, however,
$50,000 of such delinquent Contracts may remain not charged
off as of the last day of each fiscal quarter."
H. Amendment to Section 8. Section 8.18 of the Agreement is
amended to add at the end of the Section an additional sentence to read
as follows:
"The Borrower shall at all times have
Subordinated Debt of not less than $2,500,000."
I. Amendment to Section 8. Sections 8.6, 8.7, 8.10 and 8.24 of
the Agreement shall be deleted and shall be of no further force or
effect.
J. Amendment to Section 11. Section 11.1(p) of the Agreement
is amended in its entirety to read as follows:
"(p) Change of Stock Ownership. Emergent
Group shall cease to own, either directly or indirectly, all
legal and beneficial title to one hundred percent (100%) of
the voting common stock of Borrower, or Emergent Group shall
convey, pledge, or transfer any interest in such stock to any
Person."
K. Amendment to Section 11. Section 11.1(r) of the Agreement
is amended in its entirety to read as follows:
"(r) the Delinquency/Repossession Percent
plus the Actual Charge-Off Percent is at any time greater than
ten percent (10%)."
SECTION 2. Conditions. The effectiveness of this Amendment is subject
to the satisfaction of the following conditions precedent:
A. Amendment. Fully executed copies of this Amendment signed
by the Borrower and a ratification signed by the Guarantor shall be
delivered to Lender.
B. Resolution. A certificate executed by the Secretary or
Assistant Secretary of Borrower certifying that the Borrower's Board of
Directors has adopted resolutions authorizing the execution, delivery
and performance by Borrower of the Amendment shall be delivered to
Lender.
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C. Other Documents. Borrower shall have executed and delivered
to Lender such other documents and instruments as Lender may require.
D. Resolution by Emergent. A certificate executed by the
Secretary or Assistant Secretary of Emergent Group certifying that
Emergent Group's Board of Directors has adopted resolutions authorizing
the execution, delivery and performance by Emergent Group of the
ratification of the guaranty in favor of Lender shall be delivered to
Lender.
SECTION 3. Miscellaneous.
A. Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other
document or documents relating thereto, including, without limitation,
any Loan Document furnished in connection with this Amendment, shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Lender or any closing shall affect
the representations and warranties or the right of Lender to rely
thereon.
B. Reference to Agreement. The Agreement, each of the Loan
Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof,
or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference therein to the Agreement shall mean a
reference to the Agreement as amended hereby.
C. Agreement Remains in Effect. The Agreement and the Loan
Documents remain in full force and effect and the Borrower ratifies and
confirms its agreements and covenantscontained therein. The Borrower
hereby confirms that, after giving effect to this Amendment, no Event
of Default or Default exists as of such date.
D. Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of this Amendment and the effect
thereof shall be confined to the provision so held to be invalid or
unenforceable.
E. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN THE STATE OF NEW JERSEY AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY.
F. Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Lender and Borrower and their respective
successors and assigns; provided, however, that Borrower may not assign
or transfer any of its rights or obligations hereunder without the
prior written consent of Lender.
G. Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and
the same instrument.
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H. Headings. The headings, captions and arrangements used in
this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.
I. Expenses of Lender. Borrower agrees to pay on demand (i)
all costs and expenses reasonably incurred by Lender in connection with
the preparation, negotiation and execution of this Amendment and the
other Loan Documents executed pursuant hereto and any and all
subsequent amendments, modifications, and supplements hereto or
thereto, including, without limitation, the costs and fees of Lender's
legal counsel and the allocated cost of Lender's in-house counsel and
(ii) all costs and expenses reasonably incurred by Lender in connection
with the enforcement or preservation of any rights under the Agreement,
this Amendment and/or other Loan Documents, including, without
limitation, the costs and fees of Lender's legal counsel and the
allocated cost of Lender's in-house counsel.
J. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AGREEMENT BETWEEN
LENDER AND BORROWER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN LENDER AND BORROWER.
IN WITNESS WHEREOF, the parties have executed this Amendment under seal
on the date first written above.
PREMIER FINANCIAL SERVICES, INC.
By: (Signature of Xxxxx X. Xxxx appears here)
Name: Xxxxx X. Xxxx
Title: Executive Vice President
Chief Financial Officer and Treasurer
BANKAMERICA BUSINESS CREDIT, INC.
By: (Signature of Xxxxxxx X. Xxxxxxxx appears here)
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
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CONSENTS AND REAFFIRMATIONS
The undersigned, successor-in-interest to Emergent Financial
Corporation hereby consents to the terms and conditions of that Amendment No. 5
to Loan and Security Agreement dated as of August 1, 1997, between Premier
Financial Services, Inc. and BankAmerica Business Credit, Inc. ("Creditor") and
reaffirms its obligations under a Guaranty dated as of April 10, 1995 (the
"Guaranty") made by Emergent Financial Corporation in favor of the Creditor and
acknowledges and agrees that the Guaranty remains in full force and effect.
Dated as of August 1, 1997
EMERGENT GROUP, INC.
a South Carolina corporation
By: (Signature of Xxxxx X. Xxxx appears here)
Xxxxx X. Xxxx
Executive Vice President,
Chief Financial Officer and Treasurer
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CERTIFICATE OF RESOLUTION
I, Xxxxx X. Xxxx, hereby certify that:
I am the duly qualified and acting Assistant Secretary of Premier
Financial Services, Inc., a South Carolina corporation.
The following is a true copy of resolutions duly adopted by the board
of directors of the corporation at a special meeting held on August 4th, 1997,
at which a quorum was present and which voted thereon:
"RESOLVED that the terms of Amendment No. 5 to Loan and Security
Agreement between the corporation and BankAmerica Business Credit, Inc. are
hereby approved and ratified.
FURTHER RESOLVED, that any one officer of this corporation is hereby
authorized and directed, on behalf of this corporation, to make, execute, and
deliver to BankAmerica Business Credit Inc., any and all documents and to do any
and all acts necessary or desirable to effectuate the foregoing resolution."
These resolutions are in conformity with the articles of incorporation
and bylaws of the corporation, have never been modified or repealed, and are now
in full force and effect.
IN WITNESS WHEREOF, I have set my hand and the seal of the corporation
on the 4th day of August, 1997.
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx, Assistant Secretary
[Seal]
CERTIFICATE OF SECRETARY
I, Xxxxx X. Xxxxxxx, hereby certify on behalf of the corporation named
below that:
1. I am the duly qualified and acting Assistant Secretary of Emergent
Group, Inc., a South Carolina corporation, and as such Assistant Secretary I am
the keeper of the corporate records and seal of the corporation.
2. The following is a true copy of resolutions duly adopted pursuant to
the unanimous written consent of the board of directors of said corporation on
August 4th, 1997:
"NOW, THEREFORE, BE IT RESOLVED that the corporation enter into, ratify
and/or confirm a Continuing Guaranty ('Guaranty') in connection with that
certain Loan and Security Agreement by and among Premier Financial Services,
Inc. and BankAmerica Business Credit, Inc. ('BABC') in form and substance as is
satisfactory to BABC.
RESOLVED, that any one of the officers of this corporation be, and each
hereby is authorized and directed, in the name and on behalf of this corporation
to execute and deliver and/or ratify and confirm the Guaranty and to make,
execute, and deliver to BABC any and all consents, certificates, documents,
instruments, amendments, papers, or writings as may be required by BABC in
connection with or in furtherance of the Guaranty, the same to be in form and
substance satisfactory to BABC and to do any and all other acts necessary or
desirable to effectuate the foregoing.
FURTHER RESOLVED, that the execution, delivery and performance of the
foregoing documents by such officer or officers of this corporation shall be
deemed conclusive evidence of the approval by this corporation of the terms,
provisions, and conditions thereof."
3. The resolutions specified in paragraph 2 have never been modified or
repealed and are now in full force and effect.
4. The following named individuals are duly elected and appointed
officers of the corporation, are currently serving in their respective offices
and the signatures at the right of those names, respectively, are the genuine
signatures of said officers:
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Office Name Signature
Executive Vice President, Xxxxx X. Xxxx /s/ Xxxxx X. Xxxx
Chief Financial Officer and
Treasurer
President, Chief Operating Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxx
Officer and Assistant Secretary
5. Attached hereto is a true and correct copy of the articles of
incorporation and bylaws of the corporation as in effect on the date hereof,
which have not been amended, modified, or rescinded, and are in full force and
effect on the date hereof.
IN WITNESS WHEREOF, I have executed this Certificate of Secretary on
behalf of the corporation this 4th day of August, 1997.
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Assistant Secretary
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