THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT ("Third Amendment") is
entered into as of October 1, 1998, by and between BUSINESS LOAN CENTER, INC., a
Delaware corporation ("Borrower"), BLC FINANCIAL SERVICES, INC., a Delaware
corporation, and TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware
corporation ("Lender"), with reference to the following facts:
RECITALS
A. Pursuant to the Loan Agreement dated as of March 25, 1998 executed
by Borrower, Parent and Lender, as amended by the First Amendment to Loan
Agreement dated as of June 24, 1998, and the Second Amendment to Loan Agreement
dated as of September __, 1998 (the "Loan Agreement"), Lender agreed to make
certain financial accommodations to or for the benefit of Borrower upon the
terms and conditions set forth therein. Unless otherwise noted in this Third
Amendment, (i) capitalized terms used herein shall have the meanings attributed
to them in the Loan Agreement, (ii) references to Sections shall refer to
Sections of the Loan Agreement or Schedules thereto, as applicable, and (iii)
references to Schedules shall refer to Schedules to the Loan Agreement.
B. Borrower has requested, and Lender has agreed, to amend certain
provisions of the Loan Agreement, all on the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the continued performance
by Borrower of its promises and obligations under the Loan Agreement and the
other Loan Documents, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Borrower and Lender hereby
agree as follows:
A G R E E M E N T
1. Incorporation of Loan Agreement and Other Loan Documents. Except as
expressly modified under this Third Amendment, all of the terms and conditions
set forth in the Loan Agreement and the other Loan Documents are incorporated
herein by this reference, and Borrower hereby acknowledges, confirms, and
ratifies its obligations under the Loan Agreement and the other Loan Documents.
2. Amendments to Loan Agreement and other Loan Documents. As of the
date of this Third Amendment, the Loan Agreement and the other Loan Documents
are hereby amended in the following manner:
2.1 Amendments to Definitions. The definitions of
"Securitization Transaction," "Subordinated Debt," and "Termination Date" in
Section 1.1 of the Loan Agreement are amended by deleting the existing text
thereof in their entirety and substituting therefor the following amended and
restated versions thereof:
"Securitization Transaction" shall mean (a) the
accounts receivable securitization transaction effected
pursuant to the Pooling and Servicing Agreement dated as of
December 1, 1997 between Marine Midland Bank, as "Trustee,"
and Borrower, as "Seller" and "Servicer," or (b) any other
transaction effected in a manner acceptable to Lender and
through documentation in form and substance acceptable to
Lender, pursuant to which Borrower sells all or a specific
portion of its portfolio of Non-Guaranteed Notes Receivable in
a manner that generates aggregate net proceeds to Borrower of
not less than $5,000,000 by pooling and transferred them to a
trust that issues and sells certificates representing the
entire beneficial interest in such trust. Lender will not
unreasonably withhold its acceptance or approval of a proposed
Securitization Transaction.
"Subordinated Debt" shall mean that portion of the
Indebtedness that is subordinated in a manner reasonably
satisfactory in form and substance to Lender as to right and
time of payment of principal and interest thereon to any and
all of the Liabilities, including all intercompany accounts
and borrowings.
"Termination Date" shall mean the earliest of: (a)
August 26, 2001 (unless a later date is agreed to in writing
by Borrower, Parent and Lender); (b) the date that Borrower
elects to terminate this Agreement and repays the Liabilities
in full in accordance with the terms of Section 2.6; and (c)
the date Lender elects to terminate Borrower's right to
receive Revolving Loans in accordance with Section 7.2.
2.2 Amendment to Add New Defined Terms. Section 1.1 of the
Loan Agreement is amended by adding the following new definitions in appropriate
alphabetical order:
"Eurodollar Reserve Percentage" shall mean, in the
event that any portion of the Revolving Loans is held by a
member bank of the Federal Reserve System, a percentage,
determined by Lender to be in effect from time to time as
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prescribed by the Federal Reserve Board (or any successor) for
determining the maximum reserve requirement for member banks
of the Federal Reserve System in respect of Eurocurrency
liabilities.
"Governing Rate" shall mean that interest rate
published daily in the "Money Rates" section of The Wall
Street Journal as the "LIBOR" rate being offered for a period
of one (1) month plus the Eurodollar Reserve Percentage, if
any; provided, however, that if such newspaper ceases to be
published or ceases to publish a one-month "LIBOR" rate, then,
"Governing Rate" shall mean such alternate, equivalent
published index rate as shall be selected by Lender plus, if
then still applicable, the Eurodollar Reserve Percentage, if
any. The Governing Rate shall be set each month on the first
day of such calendar month, based on the aforesaid index rate
as so published on the first day of such calendar month
(unless on such day such rate is not published, in which event
the Governing Rate shall be based on the aforesaid index rate
as published on the next closest day prior to such first day
of such calendar month), plus the then applicable Eurodollar
Reserve Percentage, if any.
"Prior Year Annual Portfolio Securitization
Requirement" shall mean, with respect to the 12-month period
commencing on March 1, 1999, or any subsequent 12-month period
commencing on March 1, the requirement that Borrower shall
have completed one or more Securitization Transactions within
the preceding 12-month period (or, in the case of the 12-month
period commencing on March 1, 1999, within the period
commencing on the date of the Third Amendment and ending on
February 28, 1999) that generate aggregate net proceeds
available to pay Indebtedness of Borrower of not less than
$15,000,000 (provided, that if the Maximum Credit Line is
increased after the date of the Third Amendment, then such
$15,000,000 amount shall automatically also increase in the
same proportion as such increase in the Maximum Credit Line).
"Third Amendment" shall mean the Third Amendment to
Loan Agreement dated as of October 1, 1998, amending this
Agreement.
2.3 Amendment to Maximum Commitment. Section 2.1(b)(ii) of the
Loan Agreement is amended by deleting the existing text thereof in its entirety
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and substituting therefor the following amended and restated version thereof:
(ii) the amount by which the sum of (w) up to one
hundred percent (100%) of the Net Eligible SBA Guaranteed
Notes Receivable, plus (x) up to eighty percent (80%) of the
Current Portion of Net Eligible Non-Guaranteed Notes
Receivable (provided, that Lender, in its sole discretion, may
increase such percentage to up to eighty-five percent (85%)),
plus (y) up to fifty percent (50%) of the Delinquent Portion
of Net Eligible Non-Guaranteed Notes Receivable, plus (z) up
to fifty percent (50%) of the Defaulted Portion of Net
Eligible Non-Guaranteed Notes Receivable (not exceeding
sixty-five percent (65%) of the estimated remaining value of
such Defaulted Portion of Net Eligible Non-Guaranteed Notes
Receivable as determined by Borrower and accepted by Lender,
and provided that the maximum amount of the Defaulted Portion
of Net Eligible Non-Guaranteed Notes Receivable that may be
used for purposes of the borrowing availability calculation in
this Section 2.1(b)(ii) shall be subject to any applicable
limitation set forth on Schedule 2.1(b)(ii)), exceeds the sum
of (A) the aggregate amount of Note Sale Reserves then
outstanding, and (B) twenty-five percent (25%) of the
aggregate amount of all undisbursed binding lending
commitments of Borrower for which all lending conditions have
been met; provided, that during the period from the date of
the Third Amendment to this Agreement through February 28,
1999, the percentage in clause (x) above shall be increased to
eighty-five percent (85%); and provided further, that the
percentage in clause (x) above shall be increased to
eighty-five percent (85%) during each subsequent 12-month
period commencing on March 1 for which Borrower has satisfied
the Prior Year Annual Portfolio Securitization Requirement; or
2.4 Amendment to Interest Rate. Section 2.3(b) of the Loan
Agreement is amended by deleting the words "Interest shall accrue" at the
beginning of the existing text thereof and substituting therefor the words
"Subject to Section 2.3(e), interest shall accrue".
2.5 Further Amendment to Interest Rate. Section 2.3 of the
Loan Agreement is amended by adding the following new Section 2.3(e) after the
existing text thereof:
(e) Notwithstanding Section 2.3(b) or any other
provision of this Agreement, during the period from September
1, 1998 through February 28, 1999, interest shall accrue on
the Revolving Loans at a floating rate equal to either (i)
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with respect to those Revolving Loans made based upon Net
Eligible SBA Guaranteed Notes Receivable, the Governing Rate
plus two percent (2.00%) per annum, and (ii) with respect to
those Revolving Loans made based upon Net Eligible
Non-Guaranteed Notes Receivable, the Governing Rate plus two
and one-half percent (2.50%) per annum; provided, that if the
Defaulted Portion of Net Eligible Non-Guaranteed Notes
Receivable, as reported in the most recent weekly Borrowing
Base Report delivered prior to the end of any month, is
greater than ten percent (10%) of Borrower's Non-Guaranteed
Notes Receivable (measured by the respective aggregate
outstanding principal amounts), then with respect to that
portion of the Revolving Loans made based upon the Defaulted
Portion of Net Eligible Non-Guaranteed Notes Receivable,
interest shall accrue during the following month at a floating
rate equal to the Index Rate plus one and one-half percent
(1.50%) per annum, adjusted by Lender on the same day as each
change in the Index Rate; and provided further, that if
Borrower fails to satisfy the Prior Year Annual Portfolio
Securitization Requirement for the 12-month period commencing
on March 1, 1999, Lender shall retroactively calculate the
amount, if any, by which (x) the amount of interest that would
have accrued during such period if interest had been
calculated based on the Index Rate under Section 2.3(b),
exceeds (y) the amount of interest that accrued during such
period due to its calculation based on the Governing Rate
pursuant to this Section 2.3(e), and Borrower shall pay the
amount of any such excess to Lender upon demand. With respect
to the 12-month period commencing on March 1, 1999, and each
subsequent 12-month period commencing on March 1, if Borrower
satisfies the Prior Year Annual Portfolio Securitization
Requirement for such 12-month period, then interest shall
accrue during such period pursuant to this Section 2.3(e),
subject to the same retroactive interest recalculation if
Borrower fails to satisfy the Prior Year Annual Portfolio
Securitization Requirement for the subsequent 12-month period.
2.6 Amendment to Prepayment Fee. Section 2.6 of the Loan
Agreement is amended by deleting the existing text thereof in its entirety and
substituting therefor the following amended and restated version thereof:
2.6 Borrower's Termination of Agreement. Upon at
least sixty (60) days prior written notice to Lender, Borrower
may, at its option, terminate only the entirety of this
Agreement and not any single section thereof. In order for
such termination by Borrower to become effective, Borrower
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shall, on or before such termination date, pay to Lender all
of the then outstanding Liabilities; provided, that if
Borrower terminates this Agreement within any of the time
periods listed below using the proceeds of financing from any
source other than a Securitization Transaction, or if this
Agreement is terminated pursuant to Section 7.2, then Borrower
shall also pay to Lender, as liquidated damages for the loss
of the bargain and not as a penalty, a prepayment premium
equal to the following amounts (the "Prepayment Fee"):
If Prepayment is Made
Between the Following
Dates, Inclusive : The Premium Shall Be:
Effective Date to Two Percent (2%) of the
August 26, 1998 Maximum Credit Line
August 27, 1998 to One Percent (1%) of the
August 26, 2000 Maximum Credit Line
August 27, 2000 to One-half Percent (0.5%)
August 26, 2001 of the Maximum Credit Line
provided, however, that (a) if Lender refuses a request by
Borrower solely to increase the Maximum Credit Line after the
date of the Third Amendment to any amount not exceeding Fifty
Million Dollars ($50,000,000), (b) Borrower notifies Lender in
writing, within thirty (30) days of Borrower's receipt of
notice from Lender of such refusal, of Borrower's intention to
terminate this Agreement by reason thereof, and (c) no Default
or Event of Default has occurred and is continuing at the time
such request is refused or at the actual time of termination,
then the applicable Prepayment Fee provided for above shall be
reduced by fifty percent (50%); and further provided, that if
(a) new reserves established by Lender after the Effective
Date pursuant to Section 2.8 result in a reduction of the
Maximum Commitment that is greater than the greater of (i)
Five Hundred Thousand Dollars ($500,000), and (ii) ten percent
(10%) of the Maximum Commitment immediately prior to the
implementation of such new reserves, (b) Borrower notifies
Lender in writing, within thirty (30) days of Borrower's
receipt of notice from Lender of the implementation of such
new reserves, of Borrower's intention to terminate this
Agreement by reason thereof, and (c) no Default or Event of
Default has occurred and is continuing at the actual time of
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termination, then the Prepayment Fee shall be reduced to Fifty
Thousand Dollars ($50,000).
2.7 Amendment to Collection of Payments. Section 2.13(a) of
the Loan Agreement is amended by deleting the existing text thereof in its
entirety and substituting therefor the following amended and restated version
thereof:
(a) Blocked Account; Deposits by Intermediary.
Borrower shall establish a bank account, by lock-box
arrangement or otherwise, from which Lender alone has power of
access and withdrawal except to such limited extent as may
otherwise be provided in the agreement or as otherwise agreed
to in writing by Lender, in form and substance satisfactory to
Lender and Borrower, governing such bank account (the "Blocked
Account"). Borrower shall deposit in the Blocked Account all
Items of Payment. Borrower shall deposit in the Servicer
Account any and all checks, drafts, cash and other remittances
received by Borrower in payment or on account of payment, with
respect to any of the Notes Receivable, and shall transfer to
the Blocked Account from the Servicer Account all Items of
Payment within one (1) Business Day of receipt of cleared
funds; provided, that until Borrower is otherwise notified by
Lender or unless an Default or Event of Default has occurred
and is continuing, Borrower may retain or use collections of
Items of Payment for purposes permitted by this Agreement,
provided that Borrower promptly transfers to the Blocked
Account any amounts necessary to keep the outstanding
Liabilities from exceeding the Maximum Commitment at such
time. The deposits made in the Servicer Account shall be
deposited in precisely the form received, except for the
endorsements of Borrower where necessary to permit the
collection of any such payments, which endorsements Borrower
hereby agrees to make. Notwithstanding the foregoing, Borrower
shall cause Intermediary to deposit by wire transfer to the
Blocked Account, immediately upon the receipt thereof by
Intermediary, all Net Sale Proceeds, and Borrower shall cause
payment of all Note Participation Amounts to be made directly
to the Blocked Account; provided, that until Borrower is
otherwise notified by Lender or unless an Default or Event of
Default has occurred and is continuing, Borrower may cause Net
Sales Proceeds to be deposited in the Servicer Account,
provided that Borrower transfers to the Blocked Account within
one Business Day thereafter such portion thereof equal to the
principal amount of the sold SBA Guaranteed Note Receivable.
The depository holding the Blocked Account and the Servicer
Account shall be instructed to advise Borrower of any deposits
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made to the Blocked Account or the Servicer Account. Subject
to the provisions of Sections 2.13(c) and (d) and Section
2.15, amounts deposited in the Blocked Account (including
deposits through transfers from the Servicer Account) shall be
credited against the Liabilities as follows:
(i) if and to the extent such deposits are made and
accepted into the Blocked Account not later than 2:00 p.m.
Central Time on such Business Day, and Borrower notifies
Lender of the making of such deposits pursuant to the
provisions of Section 9.1(a) not later than 2:00 p.m. Central
Time on such Business Day, as of the same Business Day on
which such deposits are made; and
(ii) otherwise, as of the next Business Day following
the date of such deposit;
provided, that solely for the purpose of calculating interest
due to Lender under this Agreement, such deposits shall be
credited two (2) days after the applicable date specified by
(i) or (ii) above.
2.8 Further Amendment to Collection of Payments. Section
2.13(c) of the Loan Agreement is amended by deleting the existing text thereof
in its entirety and substituting therefor the following amended and restated
version thereof:
(c) Allocation of Payments on Sold and Participated
Notes Receivable. Promptly after becoming available and in any
event within five (5) Business Days after the end of each
month, or more frequently as may be reasonably requested by
Lender (and, if an Event of Default has occurred and is
continuing, such request may be made as often as daily),
Borrower shall deliver to Lender information detailing, with
respect to each deposit made to the Servicer Account pursuant
to Section 2.13(a), the specific Note Receivable to which such
deposit relates and (i) the amount, if any, of such deposit
that relates to a Sold Note Receivable and that Borrower has
determined is payable to Intermediary for the benefit of the
purchaser of such Sold Note Receivable, (ii) the amount, if
any, of such deposit that relates to a GECC Participated Note
Receivable or a Participated Note Receivable and that Borrower
has determined is payable to GECC or the purchaser of such
Participated Note Receivable, (iii) the amount, if any, of
such deposit that relates to a SBA Owned Note Receivable and
that Borrower has determined is payable to SBA (any such
amount described in clauses (i), (ii), or (iii) above being
the "Allocated Payment Portion"), and (iv) the amount of such
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deposit that relates to Borrower's retained interest in a Note
Receivable and that Borrower has determined is payable to
Borrower. The portion payable to Borrower of each Item of
Payment originally deposited in the Servicer Account shall be
held by Borrower for the benefit of Lender, and Borrower shall
cause any such portion to be transferred by Borrower to the
Blocked Account within one (1) Business Day after receipt of
cleared funds.
2.9 Amendment to Reporting Obligations. Section 5.1 of the
Loan Agreement is amended by adding after the first sentence thereof the
following new sentence:
Notwithstanding anything contained in this Section 5.1,
Borrower shall not be required to furnish to Lender any
marketing or personnel information that is not already
available to the public generally.
2.10 Amendment to Financial Covenants. Section 5.11 of the
Loan Agreement is amended by deleting the existing text thereof in its entirety
and substituting therefor the following amended and restated version thereof:
5.11 Financial Covenants. From and after the
Effective Date and until the Liabilities are fully satisfied:
(a) Tangible Net Worth. Parent shall maintain, on a
consolidated basis, Tangible Net Worth of not less than
$3,500,000 as of the end of each of its fiscal quarters.
(b) EBITDA Ratio. Parent shall achieve, on a
consolidated basis, as measured as of the end of each of its
fiscal quarters, a minimum ratio of EBITDA for the
twelve-month period ending on the date of measurement to
total, actual, interest expense for such twelve-month period,
of not less than 1.1 to 1.0.
(c) Consolidated Liabilities to Tangible Net Worth
Ratio. Parent shall maintain, on a consolidated basis, a
maximum ratio of (i) the sum of (A) the Liabilities, and (B)
all other liabilities of Parent or any of its consolidated
subsidiaries to Lender, including those arising under the Loan
Agreement dated as of May 7, 1998 between Lender and BLC
Commercial Capital Corp., to (ii) Tangible Net Worth, each as
measured as of the end of each fiscal quarter, of not more
than 6.0 to 1.0.
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(d) Delinquency Percentage. As measured as of the end
of each month, Borrower shall not cause or allow the
Delinquent Portion of Net Eligible Non-Guaranteed Notes
Receivable to be more than four percent (4%) of Borrower's
Non-Guaranteed Notes Receivable (measured by the respective
aggregate outstanding principal amounts). Solely for purposes
of this Section 5.11(d), the respective calculations of
Borrower's Delinquent Portion of Net Eligible Non-Guaranteed
Notes Receivable and Borrower's Non-Guaranteed Notes
Receivable shall be made without regard to any disposition of
Non-Guaranteed Notes Receivable by Borrower.
(e) Default Percentage. As measured as of the end of
each month, Borrower shall not cause or allow the amount of
the Defaulted Portion of Net Eligible Non-Guaranteed Notes
Receivable to exceed $3,750,000.
2.11 Amendment to Affirmative Covenant Regarding Subordination
Agreement. Section 5.16 of the Loan Agreement is amended by deleting the
existing text thereof in its entirety and substituting therefor the following
amended and restated version thereof:
5.16 Subordination Agreement. Prior to incurring any
Subordinated Debt other than with respect to the Parent
Debentures, Borrower shall cause to be delivered to Lender a
subordination agreement executed by such Person in form and
substance reasonably satisfactory to Lender.
2.12 Amendments to Negative Covenants. Sections 6.2, 6.4, 6.8,
6.14, 6.15 and 6.16 of the Loan Agreement are amended by deleting the existing
text thereof in their entirety and substituting therefor the following amended
and restated versions thereof:
6.2 Loans and Compensation. Borrower shall not make
any loans, distributions, payments, asset transfers, or
advances of money and/or extensions of credit to any Persons,
including officers, directors, employees, stockholders, or
Affiliates and Subsidiaries of Borrower or Parent, other than
(a) reasonable advances made in the ordinary course of
business on account of salary, commissions, and routine travel
and business expenses, (b) loans made in the ordinary course
of business to Term Loan Debtors, and (c) so long as no
Default or Event of Default has occurred and is continuing or
would result therefrom, (i) reasonable amounts with respect to
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payment to Borrower, Parent or their respective Subsidiaries
of servicing fees, reimbursement of origination expenses, and
funding of operating expenses in the ordinary course of
business, (ii) payment to Parent of the amount actually used
by Parent to make interest payments on the Parent Debentures,
to the extent Parent is permitted pursuant to Section 6.15 to
make such interest payments to the holders of the Parent
Debentures, and (iii) loans made to Parent or other Affiliates
of Borrower whose financial statements are consolidated with
those of Parent, for the purpose of providing financing for
capital expenditures made by Parent or such other Affiliate
that are permitted pursuant to Section 6.4.
6.4 Capital Expenses. On a consolidated basis, make
capital expenditures (including capitalized leases) during any
fiscal year of Parent which, in the aggregate, exceed
$750,000. Lender shall not unreasonably withhold its consent
to a written request by Borrower or Parent for Lender's
consent to an increase in such annual dollar limit if Borrower
or Parent reasonably believes that such increase is necessary
due to the expansion of the business or operations of such
Person or its consolidated Subsidiaries.
6.8 Change of Business. Borrower shall not enter into
any new business or make any material change in any of
Borrower's business objectives, purposes or operations. Parent
shall not enter into any business other than that of making
commercial loans within the asset-based lending industry.
6.14 [Intentionally Omitted.]
6.15 Payments on Subordinated Debt. Prepay any
Subordinated Debt or make any payment of principal or interest
thereof or interest thereon or any other payment or
distribution in respect thereof, except that Parent may (a)
make payments of interest on the Parent Debentures regularly
scheduled thereunder provided that no Default or Event of
Default has occurred or is continuing under this Agreement or
would result from such interest payment, and (b) completely
refinance the Parent Debentures so long as the terms of the
refinanced Subordinated Debt, taken as a whole, are no less
favorable to Borrower or Lender than the terms of the Parent
Debentures. All Subordinated Debt shall have a maturity date
after the Termination Date and shall be unsecured and
subordinated to Lender in liquidation and repayment on terms
that are reasonably acceptable to Lender. Conversion of
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Subordinated Debt of a Person into an equity interest in such
Person pursuant to the exercise of a conversion option held by
the holder of such Subordinated Debt shall not constitute a
payment or distribution with respect to such Subordinated Debt
so long as no cash is paid by such Person to such holder and
such conversion does not reduce the Tangible Net Worth of such
Person.
6.16 Affiliates. Hereafter create any Affiliate or
Subsidiary or divest itself of any material assets by
transferring them to any Affiliate or Subsidiary.
Notwithstanding the foregoing, Lender consents to the creation
of (a) a Subsidiary or Subsidiaries to acquire the subordinate
tranche of certificates or participating interests issued in
connection with any Securitization Transaction, and (b)
additional Subsidiaries engaged in the loan origination
business so long as none of such Subsidiaries originates SBA-
guaranteed loans. Lender shall not unreasonably withhold its
consent to a written request by Borrower or Parent for
Lender's consent to a transaction by Borrower or Parent that
would otherwise violate this Section 6.16. Without limiting
the generality of the foregoing, Lender shall not withhold its
consent to the reorganization of the corporate structure of
Parent and its Subsidiaries to merge other loan origination
Subsidiaries into Borrower or to make them Subsidiaries of
Borrower so long as any such reorganization could not
reasonably be expected to have a Material Adverse Effect.
2.13 Amendments to Event of Default. Sections 7.1(b) and
7.1(q) of the Loan Agreement are amended by deleting the existing text thereof
in their entirety and substituting therefor the following amended and restated
versions thereof:
(b) Loan Balance. Lender notifies Borrower that the
outstanding balance of the Loans hereunder exceeds the Maximum
Commitment, and such condition is not corrected within three
(3) Business Days after such notice; provided, that if such
condition is caused solely by the fact that the percentage in
Section 2.1(b)(ii)(x) has been reduced to eighty percent (80%)
due to Borrower's failure to satisfy the Prior Year Annual
Portfolio Securitization Requirement for any 12-month period,
then Borrower shall have 30 days after such notice to correct
such condition; or
(q) Merger. Except as permitted under Section 6.16,
Borrower or Parent shall merge or consolidate with or acquire
the Stock or assets of any Person; or
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2.14 Addition of New Schedule 2.1(b)(ii). The Loan Agreement
is amended by adding in appropriate numerical order the new Schedule 2.1(b)(ii)
attached as Schedule 2.1(b)(ii) to this Third Amendment.
3. Conditions to Effectiveness. The amendments set forth in Section 2
of this Third Amendment are subject to satisfaction of each of the following
conditions:
(a)receipt by Lender of a copy of this Third Amendment, duly executed by
Borrower, Parent, and Lender;
(b)receipt by Lender of such officer's certificates, board of directors'
resolutions, or other evidence satisfactory to Lender of each of Borrower's and
Parent's corporate authority and legal ability to execute, deliver and perform
this Third Amendment and to consummate the transaction contemplated hereunder;
and
(c)the absence of any Defaults or Events of Default.
4. Entire Agreement. This Third Amendment, together with the Loan
Agreement and the other Loan Documents, is the entire agreement between the
parties hereto with respect to the subject matter hereof. This Third Amendment
supersedes all prior and contemporaneous oral and written agreements and
discussions with respect to the subject matter hereof. Except as otherwise
expressly modified herein, the Loan Documents shall remain in full force and
effect.
5. Representations and Warranties. Borrower hereby confirms that the
representations and warranties contained in the Loan Agreement were true and
correct in all material respects when made and, except to the extent (a) that a
particular representation or warranty by its terms expressly applies only to an
earlier date, or (b) Borrower has previously advised Lender in writing as
contemplated under the Loan Agreement, are true and correct in all material
respects as of the date hereof. The Loan Agreement shall continue in full force
and effect in accordance with the provisions thereof on the date hereof.
6. Miscellaneous.
6.1 Counterparts. This Third Amendment may be executed in
identical counterpart copies, each of which shall be an original, but all of
which shall constitute one and the same agreement.
6.2 Headings. Section headings used herein are for convenience
of reference only, are not part of this Third Amendment, and are not to be taken
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into consideration in interpreting this Third Amendment.
6.3 Recitals. The recitals set forth at the beginning of this
Third Amendment are true and correct, and such recitals are incorporated into
and are a part of this Third Amendment.
6.4 Governing Law. This Third Amendment shall be governed by,
and construed and enforced in accordance with, the laws of the State of Illinois
applicable to contracts made and performed in such state, without regard to the
principles thereof regarding conflict of laws.
6.5 No Novation. Except as specifically set forth in paragraph
2 of this Third Amendment, the execution, delivery and effectiveness of this
Third Amendment shall not (a) limit, impair, constitute a waiver of or otherwise
affect any right, power or remedy by Lender under the Loan Agreement or any
other Loan Document, (b) constitute a waiver of any provision in the Loan
Agreement or in any of the other Loan Documents, or (c) alter, modify, amend or
in any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Loan Agreement, all of which are ratified and
affirmed in all respects and shall continue in full force and effect.
6.6 Conflict of Terms. In the event of any inconsistency
between the provisions of this Third Amendment and any provision of the Loan
Agreement, the terms and provisions of this Third Amendment shall govern and
control.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Third Amendment has been duly executed
as of the date first written above.
BORROWER:
BUSINESS LOAN CENTER, INC.,
a Delaware corporation
By: ______________________________
Xxxxxxxx Xxxxxxxxx
Chief Financial Officer
PARENT:
BLC FINANCIAL SERVICES, INC.,
a Delaware corporation
By: ______________________________
Xxxxxx X. Xxxxxxxxxxxx
President
LENDER:
TRANSAMERICA BUSINESS CREDIT CORPORATION,
a Delaware corporation
By: ______________________________
Xxxxxxx X. Xxxxxx
Senior Account Executive
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SCHEDULE 2.1(b)(ii)
Availability Limitation re Defaulted Portion
of Net Eligible Non-Guaranteed Notes Receivable
Solely for purposes of the borrowing availability calculation
in Section 2.1(b)(ii), at any time when the Defaulted Portion of Net Eligible
Non-Guaranteed Notes Receivable is more than ten percent (10%) of Borrower's
Non-Guaranteed Notes Receivable (measured by the respective aggregate
outstanding principal amounts as of the end of each month), the maximum amount
of the Defaulted Portion of Net Eligible Non-Guaranteed Notes Receivable shall
not exceed the applicable limits set forth below:
Date or Period Maximum Amount
Prior to December 31, 1998 $2,500,000
As of December 31, 1998 PFQEDP + CFQO% - CFQEDP% + $100,000
As of March 31, 1999 PFQEDP + CFQO% - CFQEDP% + $75,000
As of June 30, 1999 PFQEDP + CFQO% - CFQEDP% + $50,000
As of September 30, 1999 PFQEDP + CFQO% - CFQEDP% + $25,000
As of the end of each
subsequent fiscal quarter PFQEDP + CFQO% - CFQEDP%
At all times after The maximum amount calculated as of December 31, 1998 other
the end of the most recently ended than a date that is the fiscal quarter +
$300,000 end of a fiscal quarter
"PFQEDP" means the amount of the Defaulted Portion of Net Eligible
Non-Guaranteed Notes Receivable as of the end of the prior fiscal quarter.
"CFQO%" means the amount of the new Net Eligible Non-Guaranteed Notes Receivable
originated by Borrower during the current fiscal quarter, multiplied by 0.025.
"CFQEDP%" means the amount of the Defaulted Portion of Net Eligible
Non-Guaranteed Notes Receivable as of the end of the current fiscal quarter,
multiplied by (a) 0.005 for each fiscal quarter during the fiscal year ending
June 30, 1999, (b) 0.01 for each fiscal quarter during the fiscal year ending
June 30, 2000, or (c) 0.015 for each fiscal quarter during the fiscal year
ending June 30, 2001.
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