AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT ("Amendment") is
dated as of July 30, 1997 and is entered into by and between BankAmerica
Business Credit, Inc. ("Lender") and The Loan Pro$, 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 December 19, 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. The definition of "Adjusted
Tangible Net Worth" contained in Section 1 of the Agreement is amended
in its entirety to read as follows:
"`Adjusted Tangible Net Worth' means, at any
date, the remainder of (a) the net book value (after deducting
related depreciation, obsolescence, amortization, valuation,
and other proper reserves as determined in accordance with
GAAP) at which the Adjusted Tangible Assets of the Borrower
would be shown on a balance sheet of the Borrower at such date
prepared in accordance with GAAP, minus (b) the amount at
which its liabilities (other than capital stock, surplus, and
retained earnings) would be shown on such balance sheet and
including as liabilities all reserves for contingencies and
other potential liabilities which would be shown on such
balance sheet or disclosed in the footnotes thereto."
B. Amendment to Section 1. The definition of
"Delinquency/Repossession Adjustment Percent" contained in Section 1 of
the Agreement is amended in its entirety to read as follows:
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"`Delinquency/Repossession Adjustment
Percent' means, as of the first day of each month, the number
of full percentage points that the average
Delinquency/Repossession Adjustment Percent for the two months
immediately preceding such date is greater than eight percent
(8%). In computing the Delinquency/Repossession Adjustment
Percent, the Contracts sold pursuant to a Securitization
Transaction shall be considered and included for the purpose
of calculating the Delinquency/Repossession Adjustment
Percent."
C. Amendment to Section 1. The definition of "Emergent"
contained in Section 1 of the Agreement is amended in its entirety to
read as follows:
"`Emergent' means Emergent Group, Inc., a South
Carolina Corporation."
D. Amendment to Section 1. The definition of "Total Facility"
contained in Section 1 of the Agreement is amended in its entirety to
read as follows:
"`Total Facility' means Four Million Dollars
($4,000,000)."
E. Amendment to Section 1. The definition of "Charge-Off
Adjustment" contained in Section 1 of the Agreement is deleted.
F. Amendment to Section 1. Section 1 of the Agreement is
amended to add the following ------------------------ definitions:
"`Charge-Off Adjustment Percent' means the
excess, calculated as of the first day of each month, of the
Actual Loss Percent over four percent (4%). In computing the
Charge-Off Adjustment Percent, the Contracts sold pursuant to
a Securitization Transaction shall be considered and included
for the purpose of calculating the Charge-Off Adjustment
Percent."
`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."
G. Amendment to Section 3. The first sentence of Section 3.4
of the Agreement is amended to read as follows:
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"3.4 Audit Fees. The Borrower agrees to pay
to the Lender an annual audit fee of $20,000 during each year
of the Agreement which shall be payable in 12 monthly
installments of $1,666.66 each no later than the fifteenth day
of each month."
H. Amendment to Section 4. Section 4.2 of the Agreement is
amended in its entirety to read as follows:
"4.2 Termination of Facility. The Borrower
may terminate this Agreement at any time by giving at least
ten (10) Business Days prior written notice to the Lender and
paying in full (a) all outstanding Revolving Loans, together
with accrued interest thereon and (b) all other Obligations
together with accrued interest thereon."
I. Amendment to Section 9. Section 9.19 of the Agreement is
amended in its entirety to read as follows:
"9.19 Charge-Off Policy. The Borrower shall
establish and implement, in a manner satisfactory to the
Lender, a policy for charging off the unpaid balance of its
delinquent Contracts. Without limiting the generality of the
foregoing, the Borrower's policy shall provide that as of the
last day of each quarter in each Fiscal Year, the Borrower
shall charge off the unpaid balance of all Contracts with
respect to which any payment due thereunder is one hundred
eighty (180) or more days delinquent, as determined on a
contractual basis, provided, however, $50,000 of such
delinquent Contracts may remain not charged off as of the last
day of each fiscal quarter."
J. Amendment to Section 9. Section 9.15, 9.16, 9.17, and 9.18
of the Agreement are deleted and shall have no further force or effect.
K. Amendment to Section 11. Section 11.1(q) of the Agreement
is amended in its entirety to read as follows:
"(q) the sum of the Delinquency/Repossession
Adjustment Percent plus the Net Charge-Off Percent is at any
time equal to or greater than thirty percent (30%)."
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.
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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.
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 certifying that Emergent's
Board of Directors has adopted resolutions authorizing the execution,
delivery and performance by Emergent 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 covenants contained 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.
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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.
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.
THE LOAN PRO$, INC.
By: (Signature of Xxxxx X. Xxxx
appears here)
Name: Xxxxx X. Xxxx
Title: Executive Vice President
Chief Financial Officer and Treasurer
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BANKAMERICA BUSINESS CREDIT, INC.
By: (Signature of Xxxx X. Xxxx
appears here)
Name: Xxxx X. Xxxx
Title: 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 Waiver and
Amendment No. 3 to Loan and Security Agreement dated as of July 30, 1997,
between The Loan Pro$, Inc. and BankAmerica Business Credit, Inc. ("Creditor")
and reaffirms its obligations under a Guaranty dated as of December 19, 1995
(the "Guaranty") made by the undersigned in favor of the Creditor and
acknowledges and agrees that the Guaranty remains in full force and effect.
Dated as of July 30, 1997
EMERGENT GROUP, INC.
a South Carolina corporation
By: (Signature of Xxxxx X. Xxxx appears here)
Xxxxx X. Xxxx
Executive Vice President,
Chief Financial Officer and Treasurer
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CERTIFICATE OF SECRETARY
I, Xxxxx X. Xxxxxxx, hereby certify on behalf of the corporation named
below that:
1. I am the duly qualified and acting Assistant Secretary of Emergent
Group, Inc., a South Carolina corporation, and as such Assistant Secretary I am
the keeper of the corporate records and seal of the corporation.
2. The following is a true copy of resolutions duly adopted pursuant to
the unanimous written consent of the board of directors of said corporation on
July 30, 1997:
"NOW, THEREFORE, BE IT RESOLVED that the corporation enter into, ratify
and/or confirm a Continuing Guaranty ('Guaranty') in connection with that
certain Loan and Security Agreement by and among The Loan Pro$, 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 30 day of July, 1997.
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Assistant Secretary
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CERTIFICATE OF RESOLUTION
I, Xxxxx X. Xxxx, hereby certify that:
I am the duly qualified and acting Assistant Secretary of The Loan
Pro$, 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 July 30, 1997, at
which a quorum was present and which voted thereon:
"RESOLVED that the terms of Amendment No. 3 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 30th day of July, 1997.
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx, Assistant Secretary
[Seal]
