Exhibit 10.10.1

$15,000,000

CREDIT AGREEMENT

among

NEWTEK BUSINESS SERVICES, INC.,

as Borrower,

The Several Lenders

from Time to Time Parties Hereto,

and

ABC FUNDING, LLC,

as Administrative Agent

Dated as of April 25, 2012

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TABLE OF CONTENTS

 

              Page   SECTION 1. DEFINITIONS      1      1.1    Defined Terms   
  1      1.2    Other Definitional Provisions      17    SECTION 2. AMOUNT AND
TERMS OF COMMITMENTS      18      2.1    Commitments      18      2.2   
Procedure for Borrowing      18      2.3    [Reserved]      19      2.4   
Repayment of Loans; Evidence of Debt      19      2.5    Fees      19      2.6
   [Reserved]      19      2.7    Optional Prepayments      19      2.8   
Mandatory Prepayments and Commitment Reductions      20      2.9    [Reserved]
     20      2.10    [Reserved]      20      2.11    Interest Rates and Payment
Dates      20      2.12    Computation of Interest and Fees      21      2.13   
[Reserved]      21      2.14    Pro Rata Treatment and Payments      22     
2.15    Requirements of Law      23      2.16    Taxes      24      2.17   
[Reserved]      26      2.18    [Reserved]      26      2.19    Change of
Lending Office      26    SECTION 3. REPRESENTATIONS AND WARRANTIES      26     
3.1    Financial Condition      26      3.2    No Change      26      3.3   
Corporate Existence; Compliance with Law      26      3.4    Corporate Power;
Authorization; Enforceable Obligations      27      3.5    No Legal Bar      27
     3.6    No Litigation      27      3.7    No Default      27   

 

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TABLE OF CONTENTS

(continued)

 

              Page    

3.8

   Ownership of Property; Liens      27     

3.9

   Intellectual Property      27     

3.10

   Taxes      28     

3.11

   Federal Reserve Regulations      28     

3.12

   Labor Matters      28     

3.13

   ERISA      29     

3.14

   Investment Company Act; Other Regulations      29     

3.15

   Subsidiaries      29     

3.16

   Use of Proceeds      29     

3.17

   Environmental Matters      29     

3.18

   Insurance      30     

3.19

   Accuracy of Information, etc.      31     

3.20

   Security Documents      31     

3.21

   Solvency      31     

3.22

   Patriot Act      31     

3.23

   Preferred Lender Status      32     

3.24

   Certified Capital Companies      32     

3.25

   Unguaranteed Interest Sale Agreement      32   

SECTION 4. CONDITIONS PRECEDENT

     32     

4.1

   Conditions to Initial Extension of Credit      32     

4.2

   Conditions to Delayed Draw Loans      34     

4.3

   Conditions to Each Extension of Credit      35   

SECTION 5. AFFIRMATIVE COVENANTS

     35     

5.1

   Financial Statements      35     

5.2

   Certificates; Other Information      36     

5.3

   Payment of Obligations      37     

5.4

   Conduct of Business and Maintenance of Existence, etc.      37     

5.5

   Maintenance of Property; Insurance      37     

5.6

   Inspection of Property; Books and Records; Discussions      38     

5.7

   Notices      38     

5.8

   Environmental Laws      39   

 

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TABLE OF CONTENTS

(continued)

 

              Page    

5.9

   [Reserved]      39     

5.10

   Additional Collateral, etc.      39     

5.11

   Further Assurances      40     

5.12

   [Reserved]      40     

5.13

   [Reserved]      40     

5.14

   Joinder of NSBF and CDS as Loan Parties      40     

5.15

   Landlord Waivers      41   

SECTION 6. FINANCIAL AND NEGATIVE COVENANTS

     42     

6.1

   Financial Covenants      42     

6.2

   Limitation on Indebtedness      45     

6.3

   Limitation on Liens      46     

6.4

   Limitation on Fundamental Changes      47     

6.5

   Limitation on Disposition of Property      47     

6.6

   Limitation on Restricted Payments      48     

6.7

   [Reserved]      48     

6.8

   Limitation on Investments      48     

6.9

   Limitation on Transactions with Affiliates      49     

6.10

   [Reserved]      49     

6.11

   Limitation on Changes in Fiscal Periods      49     

6.12

   Limitation on Negative Pledge Clauses      49     

6.13

   Limitation on Restrictions on Subsidiary Distributions      50     

6.14

   Limitation on Lines of Business      50     

6.15

   [Reserved]      50     

6.16

   [Reserved]      50     

6.17

   Limitation on Hedge Agreements      50   

SECTION 7. EVENTS OF DEFAULT

     50     

7.1

   Event of Default      50     

7.2

   Capital One Event of Default      52   

SECTION 8. THE ADMINISTRATIVE AGENT

     53     

8.1

   Appointment      53     

8.2

   Delegation of Duties      53   

 

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TABLE OF CONTENTS

(continued)

 

              Page    

8.3

   Exculpatory Provisions      53     

8.4

   Reliance by Administrative Agent      53     

8.5

   Notice of Default      54     

8.6

   Non-Reliance on Administrative Agent and Other Lenders      54     

8.7

   Indemnification      55     

8.8

   Administrative Agent in Its Individual Capacity      55     

8.9

   Successor Administrative Agent      55     

8.10

   Authorization to Release Liens and Guarantees      56   

SECTION 9. MISCELLANEOUS

     56     

9.1

   Amendments and Waivers      56     

9.2

   Notices      57     

9.3

   No Waiver; Cumulative Remedies      58     

9.4

   Survival of Representations and Warranties      58     

9.5

   Payment of Expenses      58     

9.6

   Successors and Assigns; Participations and Assignments      59     

9.7

   Adjustments; Set-off      61     

9.8

   Counterparts      62     

9.9

   Severability      62     

9.10

   Integration      62     

9.11

   GOVERNING LAW      62     

9.12

   Submission To Jurisdiction; Waivers      62     

9.13

   Acknowledgments      63     

9.14

   Confidentiality      63     

9.15

   Accounting Changes      64     

9.16

   Delivery of Lender Addenda      64     

9.17

   WAIVERS OF JURY TRIAL      64     

9.18

   Capital One Intercreditor Agreement      64   

 

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SCHEDULES:

 

1.1    Unrestricted Subsidiaries 3.4    Consents, Authorizations, Filings and
Notices 3.6    Litigation 3.8    Real Property 3.9    Intellectual Property 3.13
   ERISA 3.15    Subsidiaries 3.17    Environmental Matters 3.18    Insurance
3.24    Certified Capital Companies 6.2(d)    Existing Indebtedness 6.3(f)   
Existing Liens 6.13    Restrictions on Subsidiary Distributions

 

EXHIBITS:

 

A    Form of Guarantee and Collateral Agreement B    Form of Compliance
Certificate C    Form of Closing Certificate D    Form of Assignment and
Acceptance E-1    Form of Legal Opinion of Platte, Klarsfeld, Levine & Lachtman,
LLP E-2    Form of Legal Opinion of O’Reilly & Mark, P.C. F    Form of Note G   
Form of Borrowing Notice H    Form of Lender Addendum I    Form of Capital One
Intercreditor Agreement J    Form of Warrants

 

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CREDIT AGREEMENT, dated as of April 25, 2012, among Newtek Business Services,
Inc., a New York corporation (the “Borrower”), the several banks and other
financial institutions or entities from time to time parties hereto (the
“Lenders”), and ABC FUNDING, LLC, as administrative agent (in such capacity, the
“Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders extend credit, for the
purposes specified in this Agreement, in the form of (a) term loans on the
Closing Date in the aggregate principal amount of $10,000,000 and (b) a
$5,000,000 delayed draw term loan facility;

WHEREAS, the Lenders are willing to make such term loan credit facilities
available upon and subject to the terms and conditions hereinafter set forth;

NOW, THEREFORE, the Lenders are willing to extend such credit to the Borrower on
the terms and subject to the conditions set forth herein and in the other Loan
Documents and in reliance upon the representations and warranties set forth
herein and therein. Accordingly, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

“2010 Newtek Securitization Notes”: the issuance in December 2010 by Newtek
Small Business Loan Trust 2010-1 of $16,000,000 of its Standard & Poor’s AA
rated notes to securitize a portion of its SBA 7(a) Non-Guaranteed Note
Receivables.

“Administrative Agent”: as defined in the preamble hereto.

“Affiliate”: as to any Person, any other Person that, directly or indirectly, is
in control of, is controlled by, or is under common control with, such Person.
For purposes of this definition, “control” of a Person means the power, directly
or indirectly, either to (a) vote 10% or more of the securities having ordinary
voting power for the election of directors (or persons performing similar
functions) of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.

“Aggregate Exposure”: with respect to any Lender at any time, an amount equal to
the sum of (a) the outstanding principal amount of the Loans of such Lender plus
(b) such Lender’s Commitments (exclusive of any portion thereof that has been
terminated by funding or otherwise).

“Aggregate Exposure Percentage”: with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the sum of the Aggregate Exposures of all Lenders at such time.

“Agreement”: this Credit Agreement, as amended, restated, supplemented or
otherwise modified from time to time.

“Asset Sale”: any Disposition of Property or series of related Dispositions of
Property (excluding any such Disposition permitted by clause (a), (b), (c), (d),
(h) or (i) of Section 6.5) which yields gross proceeds to any Loan Party (valued
at the initial principal amount thereof in the case of non-cash proceeds
consisting of notes or other debt securities and valued at fair market value in
the case of other non-cash proceeds) in excess of $500,000 individually or
$1,000,000 in the aggregate.

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“Assignee”: as defined in Section 9.6(c).

“Assignment and Acceptance”: as defined in Section 9.6(c).

“Assignor”: as defined in Section 9.6(c).

“Benefited Lender”: as defined in Section 9.7.

“Black Box Lease Transaction”: any lease transaction involving phone equipment
and services provided by Norstan Communications, Inc. (d/b/a Black Box Network
Services) in which the lessor is Cisco System Capital Corporation (or any
successor entity) and the lessee is CWH.

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor thereto).

“Board Meeting”: any regular or special meeting of the board of directors of the
Borrower held pursuant to Article II of the by-laws of the Borrower

“Borrower”: as defined in the preamble hereto.

“Borrowing”: a borrowing consisting of Loans made on the same day by the Lenders
ratably according to their respective Commitments.

“Borrowing Notice”: with respect to any request for borrowing of Delayed Draw
Loans hereunder, a notice from the Borrower, substantially in the form of, and
containing the information prescribed by, Exhibit G, delivered to the
Administrative Agent.

“Business Day”: any day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.

“Capco”: the following certified capital companies that are Subsidiaries of the
Borrower on the date hereof: (a) Wilshire New York Advisers II, LLC, a New York
limited liability company, (b) Wilshire New York Partners III, LLC, a New York
limited liability company, (c) Wilshire New York Partners IV, LLC, a New York
limited liability company, (d) Wilshire New York Partners V, LLC, a New York
limited liability company, (e) Wilshire Partners, LLC a Florida limited
liability company, (f) Wilshire Louisiana Bidco, LLC, a Louisiana limited
liability company, (g) Wilshire Louisiana Partners II, LLC, a Louisiana limited
liability company, (h) Wilshire Louisiana Partners III, LLC, a Louisiana limited
liability company, (i) Wilshire Louisiana Partners IV, LLC, a Louisiana limited
liability company, (j) Wilshire Colorado Partners, LLC, a Colorado limited
liability company, (k) Wilshire Alabama Partners, LLC, an Alabama limited
liability company, (l) Wilshire DC Partners, LLC, a limited liability company
formed under the laws of the District of Columbia and (m) Wilshire Texas
Partners I, LLC, a Texas limited liability company.

“Capital Expenditures”: for any period, with respect to any Person, the
aggregate of all expenditures by such Person for the acquisition or leasing
(pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person.

 

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“Capital Lease Obligations”: with respect to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP (which capitalized amount, for the avoidance
of doubt, shall be the present value of the rent payments pursuant to the
capital lease discounted at the implicit interest rate).

“Capital One”: Capital One, N.A.

“Capital One CWH Loan Agreement”: the Loan and Security Agreement, dated as of
June 30, 2010, by and between CWH and NSBF, as borrowers, and Capital One, as
lender, as amended, restated, supplemented or otherwise modified from time to
time.

“Capital One CWH Loan Documents”: the “Loan Documents” as defined under the
Capital One CWH Loan Agreement.

“Capital One CWH Facility”: the credit facilities provided to CWH and NSBF
pursuant to the Capital One CWH Loan Agreement in an aggregate amount not to
exceed $1,400,000.

“Capital One Document Modifications”: all amendments, modifications and/or
restatements to the Capital One CWH Loan Documents and the Capital One NSBF Loan
Documents that are required by Capital One pursuant to Section 2 of the Capital
One Waiver.

“Capital One Document Modification Date”: the date upon which all Capital One
Document Modifications have been executed and delivered by each of the parties
thereto and all conditions to the effectiveness thereof have been satisfied or
waived, as determined by Capital One.

“Capital One Default”: the occurrence of a default under either (a) the Capital
One NSBF Loan Agreement or (b) the Capital One CWH Loan Agreement.

“Capital One Event of Default”: the occurrence of an event of default under
either (a) the Capital One NSBF Loan Agreement or (b) the Capital One CWH Loan
Agreement.

“Capital One Intercreditor Agreement”: the Subordination and Intercreditor
Agreement, to be executed and delivered by Capital One, the Administrative
Agent, the Lenders, the Borrower and the other Loan Parties party thereto,
substantially in the form of Exhibit I, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

“Capital One NSBF Loan Agreement”: the Amended and Restated Loan and Security
Agreement, dated as of June 16, 2011, by and between NSBF, as borrower, and
Capital One, as lender, as amended, restated, supplemented or otherwise modified
from time to time.

“Capital One NSBF Loan Documents”: the “Loan Documents” as defined under the
Capital One NSBF Loan Agreement.

“Capital One NSBF Facility”: the credit facilities provided to NSBF pursuant to
the Capital One NSBF Loan Agreement in an aggregate amount not to exceed
$27,000,000.

“Capital One Waiver”: the Waiver to Loan Documents and Term Loan Documents,
dated as of April 25, 2012, by and among NSBF, Capital One and the other Loan
Parties party thereto.

 

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“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
classes of membership interests in a limited liability company, any and all
classes of partnership interests in a partnership, any and all equivalent
ownership interests in a Person and any and all warrants, rights or options to
purchase any of the foregoing.

“Cash Equivalents”: as at any date of determination, (a) marketable securities
(i) issued or directly and unconditionally guaranteed as to interest and
principal by the United States of America or (ii) issued by any agency of the
United States of America the obligations of which are backed by the full faith
and credit of the United States of America, in each case maturing within one
year after such date; (b) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof or the District of Columbia, in each case
maturing within one year after such date and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody’s; (c) commercial paper maturing no more than one year from the date of
creation thereof and having, at the time of the acquisition thereof, a rating of
at least A 1 from S&P or at least P-1 from Moody’s; (d) certificates of deposit
or bankers’ acceptances maturing within one year after such date and issued or
accepted by any Lender or by any commercial bank organized under the laws of the
United States of America or any state thereof or the District of Columbia that
(i) is at least “adequately capitalized” (as defined in the regulations of its
primary federal banking regulator) and (ii) has Tier 1 capital (as defined in
such regulations) of not less than $500,000,000; (e) repurchase obligations with
a term of not more than 30 days for underlying securities of the types described
in clause (a) above entered into with a bank meeting the qualifications
described in clause (d) above; and (f) shares of any money market mutual fund
that has substantially all of its assets invested continuously in the types of
investments referred to above.

“Cash Interest”: as defined in Section 2.11(a).

“Catch-up Payments”: as defined in Section 2.11(d).

“CDS”: CDS Business Services, Inc., a Delaware corporation.

“Change of Control”: the occurrence of any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934, as
amended), other than the Permitted Investor, shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of 25% or more
of the issued and outstanding voting Capital Stock of the Borrower, (b) during
any period of twelve consecutive calendar months, individuals who, at the
beginning of such period, constituted the board of directors of the Borrower
(together with any new directors whose election by the board of directors of the
Borrower or whose nomination for election by the stockholders of the Borrower
was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of such period or whose
elections or nomination for election was previously so approved) cease for any
reason other than death or disability to constitute a majority of the directors
then in office, (c) the Permitted Investor shall cease to beneficially own at
least 50% of the amount of issued and outstanding voting Capital Stock of the
Borrower owned by such Permitted Investor as of the Closing Date or
(d) Mr. Barry Sloane shall cease to be the chief executive officer of the
Borrower.

“Closing Date Commitment”: as to any Lender, the obligation of such Lender, if
any, to make a Closing Date Loan to the Borrower hereunder in a principal amount
not to exceed the amount set forth under the heading “Closing Date Commitment”
opposite such Lender’s name on Schedule 1 to the Lender Addendum delivered by
such Lender, or, as the case may be, in the Assignment and Acceptance pursuant
to which such Lender became a party hereto, as the same may be changed from time
to time pursuant to the terms hereof. The aggregate amount of the Closing Date
Commitments shall not exceed $10,000,000.

 

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“Closing Date”: the first date on which the conditions precedent set forth in
Section 4.1 shall have been satisfied.

“Closing Date Loan Amount”: $10,000,000.

“Closing Date Loans”: as defined in Section 2.1(a).

“Code”: the United States Internal Revenue Code of 1986, as amended from time to
time.

“Collateral”: as defined in the Guarantee and Collateral Agreement.

“Commitment”: with respect to any Lender, each of the Closing Date Commitment
and the Delayed Draw Commitment of such Lender.

“Commodity Account”: as defined in the UCC.

“Commonly Controlled Entity”: an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414 of the Code.

“Compliance Certificate”: a certificate duly executed by a Responsible Officer,
substantially in the form of Exhibit B.

“Consolidated EBITDA”: as to any Person for any period, consolidated net income
(or loss) of such Person and its Subsidiaries for such period, determined on a
consolidated basis, plus goodwill impairment (incurred prior to the date
hereof), interest, taxes (or less benefit), depreciation and amortization, in
each case, determined in accordance with GAAP. For purposes of determining the
Consolidated EBITDA for the Borrower, consolidated net income shall (a) be
reduced by the amount of income from tax credits, (b) be increased by the other
than temporary decline in investments, (c) be reduced by, to the extent included
in the statement of such consolidated net income for such period, any
extraordinary, unusual or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such
consolidated net income for such period, gains on the sales of assets outside of
the ordinary course of business), (d) be reduced (if a gain) or increased (if a
loss) by the net change in the fair market value of credits in lieu of cash and
notes payable in credits in lieu of cash, (e) exclude the effect of any minority
interests, and (f) exclude the amount of any non-cash compensation expense in
respect of stock-based compensation actually included in the determination of
net income (loss) in accordance with GAAP.

“Contamination”: the presence or release or threat of release of Regulated
Substances in, on, under or emanating to or from the Properties, which pursuant
to Environmental Laws requires notification or reporting by a member of the
Newtek Group to a Governmental Authority, or which pursuant to Environmental
Laws requires the investigation, cleanup, removal, remediation, containment,
abatement of or other response action by such member of the Newtek Group or
which otherwise constitutes a violation of Environmental Laws by such member of
the Newtek Group or for which such member of the Newtek Group could reasonably
be expected to be liable, including, but not limited to, indoor air quality.

 

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“Contractual Obligation”: as to any Person, any provision of any Security issued
by that Person or of any indenture, mortgage, deed of trust, contract,
undertaking, agreement (including any Material Contract) or other instrument to
which that Person is a party or by which it or any of its Properties is bound or
to which it or any of its Properties is subject.

“Control Investment Affiliate”: as to any Person, any other Person that
(a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition, “control” of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.

“CWH”: Crystaltech Web Hosting, Inc., a New York corporation.

“Default”: any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both (as provided in Section 7.1) would constitute
an Event of Default.

“Delayed Draw Commitment”: as to any Lender, the obligation of such Lender, if
any, to make a Delayed Draw Loan to the Borrower hereunder in a principal amount
not to exceed the amount set forth under the heading “Delayed Draw Commitment”
opposite such Lender’s name on Schedule 1 to the Lender Addendum delivered by
such Lender, or, as the case may be, in the Assignment and Acceptance pursuant
to which such Lender became a party hereto, as the same may be changed from time
to time pursuant to the terms hereof. The aggregate amount of the Delayed Draw
Commitments from and including the Closing Date until the Delayed Draw
Termination Date shall not exceed $5,000,000.

“Delayed Draw Commitment Period”: the period from and including the Closing Date
to the Delayed Draw Termination Date.

“Delayed Draw Funding Date”: as defined in Section 2.1(b).

“Delayed Draw Loan Amount”: $5,000,000.

“Delayed Draw Loans”: as defined in Section 2.1(b).

“Delayed Draw Termination Date”: the date that is 6 months after the Closing
Date.

“Deposit Account”: as defined in the UCC.

“Deposit Account Control Agreement”: as defined in the Guarantee and Collateral
Agreement.

“Derivatives Counterparty”: as defined in Section 6.6.

“Disposition”: with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer, grant of restriction, issuance or
other disposition thereof (by way of merger, casualty, condemnation or
otherwise); and the terms “Dispose” and “Disposed of” shall have correlative
meanings.

“Disqualified Stock”: with respect to any Person, any Capital Stock that, by its
terms (or by the terms of any Security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is exchangeable for Indebtedness of such Person, or is redeemable at the option
of the holder thereof, in whole or in part, on or prior to the Scheduled
Termination Date.

 

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“Dollars” and “$”: lawful currency of the United States of America.

“Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws
of any jurisdiction within the United States of America.

“Eligible Assignee”: (a) a Lender or an Affiliate, Related Fund or Control
Investment Affiliate of any Lender, (b) a commercial bank, (c) a finance
company, insurance company, financial institution or fund, in each case
regularly engaged in making, purchasing, holding or otherwise investing in loans
and similar extensions of credit, or (d) a savings and loan association or
savings bank organized under the laws of the United States or any State thereof.

“Environmental Complaint”: any written complaint, notice or other communication
by a Governmental Authority or third party, including, but not limited to an
employee, alleging a violation of or potential liability under Environmental
Laws, including, but not limited to any complaint, for natural resource damage,
contribution or indemnity for response costs, civil or administrative penalties,
criminal fines or penalties, or declaratory or equitable relief arising under
any Environmental Law or any order, notice of violation, citation, subpoena,
request for information or other written notice or demand of any type issued by
a Governmental Authority pursuant to any Environmental Law.

“Environmental Laws”: any and all laws, rules, orders, regulations, statutes,
ordinances, guidelines, codes, decrees, or other legally enforceable
requirements (including, without limitation, common law) of any international
authority, foreign government, the United States, or any state, local, municipal
or other Governmental Authority, regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment or of human
health, or employee health and safety in the workplace, as has been, is now, or
may at any time hereafter be, in effect.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.

“Event of Default”: any of the events specified in Section 7.1, provided, that
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Excluded Foreign Subsidiaries”: any Foreign Subsidiary in respect of which
(a) the pledge of all of the Capital Stock of such Subsidiary as Collateral,
(b) the guaranteeing by such Subsidiary of the Obligations, or (c) both, would,
in the good faith judgment of the Borrower, result in adverse tax consequences
to the Borrower.

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this
Agreement) and any current or future regulations or official interpretations
thereof.

“Fee Letter”: the letter dated as of April 25, 2012, addressed to the Borrower
from Summit with respect to certain fees to be paid from time to time to Summit.

“Fixed Charge Coverage Ratio”: calculated for the Borrower together with its
consolidated Subsidiaries, as of the end of any calendar quarter, Consolidated
EBITDA for the previous four (4) fiscal quarters, less capital expenditures
during the previous four (4) fiscal quarters, divided by the sum of the amounts
paid during the previous four (4) fiscal quarters for (a) scheduled payments of
principal of long term debt, (b) interest (excluding interest to the extent
recognized as interest expense on

 

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the Borrower’s financial statements in accordance with GAAP for the applicable
four (4) fiscal quarter period for which the Fixed Charge Coverage Ratio is
being calculated solely in respect of the 2010 Newtek Securitization Notes or
similar future securitization notes), (c) dividends and (d) treasury stock
redemptions. For purposes of the foregoing, during the twelve calendar month
period commencing with the first full calendar month following the
Non-Guaranteed Term Loan Conversion Date, item (a) in the denominator above will
be increased by an amount equal to the first twelve month installments of
principal required to be paid by NSBF in respect of the Non-Guaranteed Term Loan
(but without duplication of amounts during such period that shall actually be
paid, and that are reflected in the calculation under such item (a) as paid, by
NSBF in respect of such installments).

“Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic
Subsidiary.

“GAAP”: generally accepted accounting principles in the United States of America
as in effect from time to time.

“Governmental Authority”: the government of the United States of America or any
other nation, any political subdivision thereof, whether state or local, and any
agency, authority (including the SBA), instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

“Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to
be executed and delivered by the Borrower and each Subsidiary Guarantor,
substantially in the form of Exhibit A, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

“Guarantee Obligation”: as to any Person (the “guarantor”), any obligation,
contingent or otherwise, of (a) the guarantor or (b) another Person (including
any bank under a letter of credit) to induce the creation of which the guarantor
has issued a reimbursement, counter indemnity or similar obligation, in either
case guaranteeing or having the economic effect of guaranteeing any Indebtedness
or other obligation of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation, contingent or
otherwise, of the guarantor, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation,
(ii) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or maintain solvency or net worth, (iv) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation or (v) to otherwise assure or hold harmless the owner
of such Indebtedness or other obligation against loss in respect thereof;
provided, however, that the term “Guarantee Obligation” shall not include
endorsements for collection or deposit in the ordinary course of business. The
amount of any obligation under a Guarantee Obligation of a guarantor shall be
deemed to be the lower of (A) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee Obligation
is made and (B) the maximum amount for which such guarantor may be liable
pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such guarantor
may be liable are not stated or determinable, in which case the amount of such
obligation shall be such guarantor’s maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.

 

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“Hedge Agreements”: all interest rate or currency swaps, caps or collar
agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by the Borrower or its Subsidiaries providing for
protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.

“Indebtedness”: as to any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables incurred in the ordinary course of such Person’s business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations of such Person,
(f) all obligations of such Person, contingent or otherwise, as an account party
or applicant under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any Capital Stock of such Person prior to the
date that is six months after the Maturity Date, valued, in the case of
redeemable preferred stock, at the greater of its voluntary liquidation
preference and its involuntary liquidation preference plus accrued and unpaid
dividends (h) all Guarantee Obligations of such Person in respect of obligations
of the kind referred to in clauses (a) through (g) above; (i) all obligations of
the kind referred to in clauses (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise, to
be secured by) any Lien on Property (including, without limitation, accounts and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation and (j) for the purposes of
Section 7.1(f) only, all obligations of such Person in respect of Hedge
Agreements.

“Indemnified Liabilities”: as defined in Section 9.5.

“Indemnitee”: as defined in Section 9.5.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such
Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent”: pertaining to a condition of Insolvency.

“Intellectual Property”: as defined in the Guarantee and Collateral Agreement.

“Interest Payment Date”: (a) the last day of each calendar quarter to occur
while any Loan is outstanding and prior to the final maturity date of such Loan
and (b) the date of any repayment or prepayment made in respect thereof.

“Investments”: as defined in Section 6.8.

“Joint Venture”: any joint venture that is not a member of the Newtek Group.

“Keyman Life Insurance Policy”: as defined in Section 5.5(b).

“Lender Addendum”: with respect to any initial Lender, a Lender Addendum,
substantially in the form of Exhibit H, to be executed and delivered by such
Lender on the Closing Date as provided in Section 9.16.

 

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“Lenders”: as defined in the preamble hereto.

“Lien”: (a) any lien, mortgage, pledge, hypothecation, collateral assignment,
deposit arrangement, security interest, charge or encumbrance of any kind
(including any agreement to give any of the foregoing (unless such agreement is
entered into in connection with the full refinancing of the Obligations under
this Agreement and the obligation to give any of the foregoing takes effect
substantially concurrently with or after the payment in full of the
Obligations)), any conditional sale or other title retention agreement (and any
lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (b) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.

“Loan”: each Closing Date Loan and Delayed Draw Loan.

“Loan Documents”: this Agreement, the Security Documents, the Notes, the Capital
One Intercreditor Agreement, the Fee Letter and each other agreement or document
executed by a Loan Party and delivered to the Administrative Agent or any Lender
in connection with or pursuant to any of the foregoing.

“Loan Party”: each of the Borrower and the Subsidiary Guarantors.

“Loan Percentage”: as to any Lender at any time, the percentage which such
Lender’s Commitment then constitutes of the aggregate Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal amount
of such Lender’s Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding).

“Material Adverse Effect”: any change, occurrence, event, circumstance or
development that has had, or could reasonably be expected to have, a material
adverse effect on (a) the business, property, assets, condition (financial or
otherwise), operation, performance or prospects of the Loan Parties, taken as a
whole, (b) the validity or enforceability of any of the Loan Documents or the
rights and remedies of the Administrative Agent or the other Secured Parties
thereunder, or (c) the ability of the Loan Parties (taken as a whole) to perform
in any material respect their respective Obligations under the Loan Documents to
which it is a party.

“Material Environmental Amount”: an amount or amounts payable by the Borrower
and/or any of its Subsidiaries, in the aggregate in excess of $500,000, for:
costs to comply with any Environmental Law; costs of any investigation, and any
remediation, of any Regulated Substances; and compensatory damages (including,
without limitation damages to natural resources), punitive damages, fines, and
penalties pursuant to any Environmental Law.

“Material Intellectual Property”: as defined in the Guarantee and Collateral
Agreement.

“Maturity Date”: September 30, 2017.

“Moody’s”: Moody’s Investors Service, Inc., a Delaware corporation, or any
successor thereof.

“Mortgages”: each of the mortgages and deeds of trust made by any Loan Party in
favor of, or for the benefit of, the Administrative Agent for the benefit of the
Secured Parties, in form and substance reasonably satisfactory to the
Administrative Agent, as the same may be amended, supplemented or otherwise
modified from time to time.

 

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“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery
Event, the proceeds thereof in the form of cash and Cash Equivalents (including
any such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received) of such Asset Sale or Recovery Event,
net of attorneys’ fees, accountants’ fees, investment banking fees, amounts
required to be applied to the repayment of Indebtedness secured by a Lien
expressly permitted hereunder on any asset which is the subject of such Asset
Sale or Recovery Event (other than any Lien pursuant to a Security Document) and
other customary fees and expenses actually incurred in connection therewith and
net of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), including any amounts provided as a reserve, in
accordance with GAAP, against any liabilities under any indemnification
obligations or purchase price adjustment associated with such Asset Sale or
Recovery Event (provided, that to the extent and at the time any such amounts
are released from such reserve, such amounts shall constitute Net Cash Proceeds)
and (b) in connection with any issuance or sale of equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds received
from such issuance or incurrence, net of attorneys’ fees, investment banking
fees, accountants’ fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.

“Newtek ABS”: Newtek Asset Based Securities, LLC, a Delaware limited liability
company.

“Newtek Group”: the Borrower and each direct or indirect Subsidiary of the
Borrower; and a “member” of the Newtek Group means any such Person.

“Non-Consenting Lender”: as defined in Section 9.1.

“Non-Excluded Taxes”: as defined in Section 2.18(a).

“Non-Guaranteed Term Loan”: as defined in the Capital One NSBF Loan Agreement.

“Non-Guaranteed Term Loan Conversion Date”: December 16, 2012.

“Non-U.S. Lender”: as defined in Section 2.18(d).

“Note”: any promissory note evidencing any Loan.

“Note Participation”: a participation interest in an SBA 7(a) Loan.

“NSBF”: Newtek Small Business Finance, Inc., a New York corporation.

“Obligations”: the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document or any other document made, delivered or
given in connection herewith or therewith, whether

 

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on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise.

“Other Taxes”: any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.

“Participant”: as defined in Section 9.6(b).

“Participant Register”: as defined in Section 9.6(b).

“Patriot Act”: as defined in Section 3.22.

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

“Permitted Acquisition”: any acquisition of all or substantially all of the
assets or Capital Stock of any Person or any operating division thereof, or the
merger of any such Person or operating division with or into the Borrower or any
Subsidiary of the Borrower (and, in the case of a merger with the Borrower, with
the Borrower being the surviving corporation).

“Permitted Investor”: (a) Mr. Barry Sloane and (b) his heirs, the legal
representatives of any of the foregoing and the trustees of bona fide trusts of
which any of the foregoing are the primary beneficiaries; provided, however,
that any such person referred to in clause (b) (other than Mr. Barry Sloane’s
spouse and lineal descendants, the legal representatives of any of the foregoing
and the trustees of bona fide trusts of which any of the foregoing are the
primary beneficiaries) shall cease to be a “Permitted Investor” upon the death
of Mr. Barry Sloane if such person is not the holder (and is not entitled under
the terms of distribution of Mr. Barry Sloane’s estate to become a holder) of
shares that would result in a Change of Control under clause (a) of the
definition of such term if such person were not a Permitted Investor.

“Permitted Joint Venture”: any Joint Venture (a) that is not a Loan Party, that
does not own Capital Stock in any Loan Party and no direct or indirect
Subsidiary or Joint Venture of which is a Loan Party, (b) all of the Capital
Stock (but only to the extent of a Loan Party’s interest in such Capital Stock),
of which shall be subject to the Liens granted to the Administrative Agent for
the benefit of the Secured Parties, (c) with respect to which no Loan Party
shall be under any Contractual Obligation to make Investments in such Joint
Venture, Asset Sales to such Joint Venture or incur Guarantee Obligations in
respect of such Joint Venture, in each case not permitted hereunder, (d) the
business of which is of a type that is in compliance with Section 6.14 and
(e) approved by the Administrative Agent.

“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

“PIK Interest”: as defined in Section 2.11(a).

“Plan”: at a particular time, any employee benefit plan that is covered by ERISA
and in respect of which the Borrower or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

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“Pledged Stock”: as defined in the Guarantee and Collateral Agreement

“Pro Forma Balance Sheet”: as defined in Section 3.1(a).

“Projections”: as defined in Section 5.2(c).

“Property”: any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including,
without limitation, Capital Stock. When such term is used in Section 3.17, the
term “Property” or “Properties” refers to any real property owned or leased by
the Newtek Group.

“Recovery Event”: any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any lost,
destroyed, damaged or condemned, as applicable, asset, equipment or other
property of a Loan Party in an annual amount greater than $50,000 individually
or $100,000 in the aggregate.

“Register”: as defined in Section 9.6(d).

“Regulated Substances”: any substance, material or waste, regardless of its form
or nature, defined under Environmental Laws as a “hazardous substance,”
“pollutant,” “pollution,” “contaminant,” “hazardous or toxic substance,”
“extremely hazardous substance,” “toxic chemical,” “toxic substance,” “toxic
waste,” “hazardous waste,” “special handling waste,” “industrial waste,”
“residual waste,” “solid waste,” “municipal waste,” “mixed waste,” “infectious
waste,” “chemotherapeutic waste,” “medical waste,” or “regulated substance” or
any other material, substance or waste, regardless of its form or nature, which
otherwise is regulated by Environmental Laws, including, but not limited to
petroleum, mold, or asbestos.

“Regulation T”: Regulation T of the Board as in effect from time to time.

“Regulation U”: Regulation U of the Board as in effect from time to time.

“Regulation X”: Regulation X of the Board as in effect from time to time.

“Related Fund”: with respect to any Lender, any fund that (x) invests in
commercial loans and (y) is managed or advised by the same investment advisor as
such Lender, by such Lender or an Affiliate of such Lender.

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

“Required Environmental Permits”: any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required under
any Environmental Law to lease, occupy or maintain the Properties or otherwise
own or operate the business of each member of the Newtek Group.

 

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“Required Procedures”: procedures, including credit and underwriting standards,
loan to value ratio limitations and the use of Approved Forms with respect to
the financing and servicing of SBA 7(a) Note Receivables as in effect on the
Closing Date, together with such changes and modifications thereto from time to
time as shall be required by SBA Rules and Regulations or as have been approved
in writing by the Administrative Agent, in the Administrative Agent’s reasonable
credit judgment.

“Required Lenders”: at any time, one or more Lenders collectively having or
holding Aggregate Exposure representing more than 50% of the Aggregate Exposure
of all Lenders at such time.

“Required Prepayment Date”: as defined in Section 2.8(d).

“Requirement of Law”: as to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its Property or to which such Person or any of its Property is
subject.

“Responsible Officer”: the chief executive officer, president or chief financial
officer of the Borrower, but in any event, with respect to financial matters,
the chief financial officer of the Borrower.

“Restricted Payments”: as defined in Section 6.6.

“Restricted Subsidiary”: each Domestic Subsidiary of the Borrower that is not an
Unrestricted Subsidiary.

“NSBF Sale and Assignment Agreement”: the Amended and Restated Unguaranteed
Interest Sale and Assignment Agreement, dated as of December 29, 2011, by and
between NSBF, as seller, and Newtek ABS, as purchaser.

“SBA”: United States Small Business Administration or any other federal agency
administering the SBA Act.

“SBA 7(a) Guaranteed Note Receivable”: the portion of any SBA 7(a) Note
Receivable that is guaranteed by the SBA.

“SBA 7(a) Loan Obligor”: any Person, other than the SBA, who is or may become
obligated to the Borrower or any of its Subsidiaries under an SBA 7(a) Loan.

“SBA 7(a) Loans”: any loans made by the Borrower or any of its Subsidiaries to
small businesses and partially guaranteed by the SBA, all originated in
accordance with the SBA Rules and Regulations and pursuant to the authorization
contained in Section 7(a) of the SBA Act.

“SBA 7(a) Non-Guaranteed Note Receivable”: the portion of any SBA 7(a) Note
Receivable that is not guaranteed by the SBA.

“SBA 7(a) Note Receivables”: the obligation of an SBA 7(a) Loan Obligor to pay
an SBA 7(a) Loan made by the Borrower or any of its Subsidiaries to such SBA
7(a) Loan Obligor, whether or not evidenced by a promissory note or other
instrument.

 

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“SBA Act”: the Small Business Act of 1953, as the same may be amended from time
to time.

“SBA Lender’s License”: the authority given to a lender by the SBA to make SBA
7(a) Loans as permitted under the SBA Act, as amended and further authorized by
the SBA in CFR Title 13 Part 120-470 and 471, as amended.

“SBA Rules and Regulations”: the SBA Act, as amended, any other legislation
binding on the SBA relating to financial transactions, any “Loan Guaranty
Agreement”, all rules and regulations promulgated from time to time under the
SBA Act, and SBA Standard Operating Procedures and Official Notices issued by
the SBA, as in effect from time to time.

“SBA Standard Operating Procedures and Official Notices”: Public Law 85-536, as
amended; those Rules and Regulations, as defined in 13 CFR Part 120, “Business
Loans” and 13 CFR Part 121, “Size Standards”; Standard Operating Procedures,
(SOP) 50-10 for loan processing, 50-50 for loan servicing and 50-51 for loan
liquidation as may be published and or amended from time to time by the SBA.

“SEC”: the Securities and Exchange Commission (or successors thereto or an
analogous Governmental Authority).

“Secondary Market Sale”: the sale or participation of an SBA 7(a) Loan to the
secondary market in accordance with the SBA Rules and Regulations.

“Secured Parties”: as defined in the Guarantee and Collateral Agreement.

“Securitization Guaranty”: the Guaranty Agreement, dated as of December 22,
2010, by and between the Borrower and Newtek Small Business Loan Trust 2010-1
and acknowledged by U.S. Bank National Association, as amended, restated or
otherwise modified from time to time.

“Security”: any Capital Stock, Stock Equivalent, voting trust certificate, bond,
debenture, note or other evidence of Indebtedness, whether secured, unsecured,
convertible or subordinated, or any certificate of interest, share or
participation in, any temporary or interim certificate for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing, but shall not include any evidence of the Obligations.

“Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, the Trademark Security Agreement, the Mortgages and all other
security documents hereafter delivered to the Administrative Agent granting a
Lien on any Property of any Person to secure the obligations and liabilities of
any Loan Party under any Loan Document.

“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which
is not a Multiemployer Plan.

“Software”: any and all computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code
or object code; databases and compilations, including any and all data and
collections of data, whether machine readable or otherwise; descriptions,
flow-charts and other work product used to design, plan, organize and develop
any of the foregoing, screens, user interfaces, report formats, firmware,
development tools, templates, menus, buttons and icons; and all documentation
including user manuals and other training documentation related to any of the
foregoing.

 

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“Solvent”: with respect to any Person, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets (including rights of
contribution) of such Person will, as of such date, exceed the amount of all
“liabilities of such Person, contingent or otherwise”, as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets (including rights of contribution) of such Person
will, as of such date, be greater than the amount that will be required to pay
the liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such Person will
be able to pay its debts as they mature. For purposes of this definition,
(i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to
payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

“Sterling”: Sterling National Bank.

“Sterling Facility”: the credit facilities provided to CDS pursuant to the
Sterling Loan Agreement in an aggregate amount not to exceed $10,000,000.

“Sterling Intercreditor Agreement”: an intercreditor agreement to be executed
and delivered by Sterling, the lenders party to the Sterling Loan Agreement, the
Administrative Agent, the Lenders, the Borrower and the other Loan Parties party
thereto, in form and substance reasonably satisfactory to the Administrative
Agent.

“Sterling Loan Agreement”: the Loan and Security Agreement, dated as of
February 28, 2011, by and between CDS, as borrower, the lenders party thereto
and Sterling, as administrative agent and collateral agent, as amended,
restated, supplemented or otherwise modified from time to time.

“Sterling Loan Documents”: the “Loan Documents” as defined under the Sterling
Loan Agreement.

“Stock Equivalents”: all securities convertible into or exchangeable for Capital
Stock and all warrants, options or other rights to purchase or subscribe for any
Capital Stock, whether or not presently convertible, exchangeable or
exercisable.

“S&P”: Standard & Poor’s Rating Services, or any successor thereof.

“Subordinated Debt”: any Indebtedness of the Loan Parties or any of their
Subsidiaries, which by its terms is subordinated to the Obligations in a manner
and to an extent reasonably satisfactory to the Administrative Agent.

“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a “Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to each direct or indirect Subsidiary or Subsidiaries of
the Borrower.

 

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“Subsidiary Guarantor”: each Subsidiary of the Borrower other than (a) until
consummation of the actions set forth in subclauses (i) through (iii) of
Section 5.14(a), NSBF, (b) until consummation of the actions set forth in
subclauses (i) through (iv) of Section 5.14(b), CDS, (c) any Excluded Foreign
Subsidiary and (d) any Unrestricted Subsidiary.

“Summit”: Summit Partners Credit Advisors, L.P.

“Trademark Security Agreement”: the Trademark Security Agreement, dated as of
April 25, 2012, by and between the Borrower and the Administrative Agent.

“Transferee”: as defined in Section 9.14.

“Trigger Event”: as defined in Section 7.2.

“UCC”: the Uniform Commercial Code as in effect from time to time in the State
of New York.

“Unguaranteed Interest Sale Agreement”: the Unguaranteed Interest Sale and
Assignment Agreement, dated as of December 29, 2011, by and between NSBF and
Newtek ABS.

“Unrestricted Subsidiaries”: the Subsidiaries of the Borrower set forth on
Schedule 1.1.

“UPS”: Universal Processing Services of Wisconsin, LLC, a New York limited
liability company.

“Waivable Mandatory Prepayment”: as defined in Section 2.8(d).

“Warrants”: as defined in Section 4.1(p).

“Wholly-Owned Subsidiary”: with respect to any Person, any Subsidiary of such
Person, all of the Capital Stock of which (other than director’s qualifying
shares, as may be required by law) is owned by such Person, either directly or
indirectly through one or more Wholly-Owned Subsidiaries of such Person.

“Wilshire Waiver”: the Waiver to Loan Documents, dated as of April 25, 2012, by
and between PMTWorks Payroll LLC and Wilshire New York Partners V, LLC.

1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in the
other Loan Documents or any certificate or other document made or delivered
pursuant hereto or thereto.

(a) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms relating
to the Newtek Group not defined in Section 1.1 and accounting terms partly
defined in Section 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.

(b) If any change in the accounting principles used in the preparation of the
most recent financial statements referred to in Section 5.1 is hereafter
required or permitted by the rules, regulations, pronouncements and opinions of
the Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or any successors thereto) and such change is adopted by the
Borrower with the agreement of the Borrower’s accountants and results in a
change in any of the

 

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calculations required under this Agreement that would not have resulted had such
accounting change not occurred, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such
change such that the criteria for evaluating compliance with such covenants by
the Newtek Group shall be the same after such change as if such change had not
been made; provided, however, that no change in GAAP that would affect a
calculation that measures compliance with any covenant contained in Section 6
shall be given effect until such provisions are amended to reflect such changes
in GAAP. Notwithstanding the foregoing, when determining the amounts of Capital
Lease Obligations, such determination shall be made in accordance with GAAP;
provided, that any liability with respect to leases that are in effect and
characterized as operating leases under FASB ASC 840 as in effect as of the date
of this Agreement but characterized as capital leases following changes to FASB
ASC 840 after such date shall be classified as operating leases and shall not be
included within the definition of Capital Lease Obligations.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(e) All calculations of financial ratios set forth in Section 6.1 shall be
calculated to the same number of decimal places as the relevant ratios are
expressed in and shall be rounded upward if the number in the decimal place
immediately following the last calculated decimal place is five or greater. For
example, if the relevant ratio is to be calculated to the hundredth decimal
place and the calculation of the ratio is 5.126, the ratio will be rounded up to
5.13.

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

2.1 Commitments. (a) Subject to the terms and conditions hereof, the Lenders
severally agree to make term loans (each, a “Closing Date Loan”) to the Borrower
on the Closing Date in an amount for each Lender not to exceed the amount of
such Lender’s Loan Percentage multiplied by the Closing Date Loan Amount.

(b) Subject to the terms and conditions hereof, the Lenders severally agree to
make term loans (each, a “Delayed Draw Loan”) to the Borrower on no more than
one occasion after the Closing Date (the “Delayed Draw Funding Date”) during the
Delayed Draw Commitment Period in an amount equal to such Lender’s Loan
Percentage multiplied by the Delayed Draw Loan Amount.

2.2 Procedure for Borrowing. (a) Not later than 12:00 Noon, New York City time,
on the Closing Date, each Lender shall make available to the Borrower at an
account designated by the Borrower an amount in immediately available funds
equal to the Loan or Loans to be made by such Lender.

(b) The Borrower shall deliver to the Administrative Agent a Borrowing Notice
(which Borrowing Notice must be received by the Administrative Agent prior to
10:00 A.M., New York City time, 10 Business Days prior to the anticipated
Delayed Draw Funding Date) (i) requesting that the Lenders make Delayed Draw
Loans on such date and (ii) specifying the aggregate principal amount of the
Delayed Draw Loans requested to be made on such Delayed Draw Funding Date (such
requested amount to be equal to the Delayed Draw Loan Amount); provided,
however, that no Delayed Draw Loans may be borrowed after the Delayed Draw
Termination Date. Upon receipt of such Borrowing Notice the

 

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Administrative Agent shall promptly notify each Lender thereof. Not later than
12:00 Noon, New York City time, on the applicable Delayed Draw Funding Date,
each Lender shall make available to the Borrower at an account designated by the
Borrower in such Borrowing Notice an amount in immediately available funds equal
to the Delayed Draw Loan or Delayed Draw Loans to be made by such Lender.

2.3 [Reserved]

2.4 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to each Lender the principal amount of each Loan
(including capitalized PIK Interest) of such Lender on the Maturity Date (or on
such earlier date on which the Loans become due and payable pursuant to
Section 7.1). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rate per annum, and on the dates, set forth
in Section 2.11.

(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing indebtedness of the Borrower to such Lender resulting
from each Loan of such Lender from time to time, including, without limitation,
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.

(c) The Administrative Agent, on behalf of the Borrower, shall maintain the
Register pursuant to Section 9.6(d), and a subaccount therein for each Lender,
in which shall be recorded (i) the amount of each Loan made hereunder and any
Note evidencing such Loan, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by each Lender hereunder from the
Borrower.

(d) The entries made in the Register and the accounts of each Lender maintained
pursuant to Section 2.4(b) shall, to the extent permitted by applicable law and
except for manifest error, be prima facie evidence of the existence and amounts
of the obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.

(e) The Borrower agrees that, upon the request to the Administrative Agent by
any Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note of the Borrower evidencing any Loans of such Lender,
substantially in the form of Exhibit F (a “Note”), with appropriate insertions
as to date and principal amount; provided, that delivery of Notes shall not be a
condition precedent to the occurrence of the Closing Date or the making of the
Loans on the Closing Date.

2.5 Fees. The Borrower agrees to pay to Summit the fees in the amounts and on
the dates set forth in the Fee Letter and as otherwise from time to time agreed
to in writing by the Borrower and Summit.

2.6 [Reserved]

2.7 Optional Prepayments. (a) The Borrower may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable written notice delivered to the Administrative Agent by 12:00 p.m.
(New York City time) at least two (2) Business Days prior thereto, which notice
shall specify the date and amount of such prepayment; provided, that the

 

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Borrower may not prepay the Loans pursuant to this Section 2.7 prior to the
second anniversary of the Closing Date. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given (except in connection with a proposed refinancing), the
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid.
Partial prepayments of Loans shall be in an aggregate principal amount of
$500,000 or a whole multiple of $250,000 in excess thereof. Optional prepayments
of Loans shall be applied as set forth in Section 2.14(b).

(b) Any prepayment of the Loans upon the refinancing thereof (whether with
proceeds of equity or Indebtedness) or upon the occurrence of a Change of
Control shall be deemed to be an optional prepayment.

2.8 Mandatory Prepayments and Commitment Reductions. (a) If any Indebtedness
(other than Indebtedness permitted under Section 6.2) shall be incurred by any
Loan Party, then on the date of such incurrence, the Loans shall be prepaid
(subject to the terms of the Capital One Intercreditor Agreement) by an amount
equal to the amount of the Net Cash Proceeds of such issuance or incurrence and
applied to the Obligations as set forth in Section 2.14(b). The provisions of
this Section do not constitute a consent to the incurrence of any such
Indebtedness.

(b) If on any date any Loan Party shall receive Net Cash Proceeds from any Asset
Sale or Recovery Event then, within 5 Business Days of receipt of such Net Cash
Proceeds, the Loans shall be prepaid (subject to the terms of the Capital One
Intercreditor Agreement) by an amount equal to the amount of such Net Cash
Proceeds and applied to the Obligations as set forth in Section 2.14(b). The
provisions of this Section do not constitute a consent to the consummation of
any Disposition not permitted by Section 6.5.

(c) Anything contained herein to the contrary notwithstanding, in the event the
Borrower is required to make any mandatory prepayment (a “Waivable Mandatory
Prepayment”) of the Loans pursuant to Section 2.8(a) or (b), not less than 10
Business Days prior to the date (the “Required Prepayment Date”) on which the
Borrower elects (or is otherwise required) to make such Waivable Mandatory
Prepayment, the Borrower shall notify the Administrative Agent of the amount of
such prepayment, and the Administrative Agent will promptly thereafter notify
each Lender holding an outstanding Loan of the amount of such Lender’s pro rata
share of such Waivable Mandatory Prepayment and such Lender’s option to refuse
such amount. Each such Lender may exercise such option by giving written notice
to the Administrative Agent of its election to do so on or before the third
Business Day prior to Required Prepayment Date (it being understood that any
Lender which does not notify the Administrative Agent of its election to
exercise such option on or before such Business Day prior to the Required
Prepayment Date shall be deemed to have elected, as of such date, not to
exercise such option). To the extent any Lender elects to decline its pro rata
share of the Waivable Mandatory Prepayment, such declined proceeds may be
retained by the Borrower and may be used for any purpose not otherwise
prohibited by this Agreement.

(d) Mandatory prepayments pursuant to this Section 2.8 shall be without premium
or penalty.

2.9 [Reserved]

2.10 [Reserved]

2.11 Interest Rates and Payment Dates. (a) Subject to the terms of the Capital
One Intercreditor Agreement, each Loan shall bear interest at a rate per annum
equal to 15.0%; provided, that

 

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the Borrower may, at its option, by written notice to the Administrative Agent
at least 5 Business Days prior to any Interest Payment Date, cause a portion of
such interest on the Loans for such period in an amount of up to 2.5% per annum
(the “PIK Interest”, with the portion of the interest that is not paid in kind
referred to as the “Cash Interest”) to be paid in kind by adding such PIK
Interest to the outstanding principal amount of the Loans.

(b) If all or a portion of (i) the principal amount of any Loan shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
all outstanding Loans (whether or not overdue) (to the extent legally permitted)
shall bear interest at a rate per annum that is equal to the rate that would
otherwise be applicable thereto pursuant to paragraph (a) of this Section plus
2% and (ii) any interest payable on any Loan, fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Loans plus 2%, in each case, with
respect to clauses (i) and (ii) above, from the date of such non-payment until
such amount is paid in full.

(c) Interest shall be payable in arrears on each Interest Payment Date;
provided, that interest accruing pursuant to paragraph (b) of this Section shall
be payable from time to time on demand.

(d) Notwithstanding anything to the contrary set forth herein, on the last day
of each “accrual period” (as determined under Section 1272(a)(5) of the Code)
that occurs after the fifth anniversary of the Closing Date with respect to the
Loans, the Company shall pay in cash (the “Catch-up Payments”) the aggregate
amount of the sum of (i) the PIK Interest, (ii) the Cash Interest that has been
deferred or accrued, and has not been paid in cash and (iii) the original issue
discount other than PIK Interest (as determined under Section 163(i) of the
Code) that has accrued and has not been paid in cash on the Loans from the
Closing Date, through the end of such accrual period, that exceeds the product
of the “issue price” (as defined for purposes of the Code) for the Loans and the
“yield to maturity” (as defined for purposes of the Code) on the Loans.

(e) Notwithstanding anything to the contrary set forth in this Section 2.11, if
a court of competent jurisdiction determines in a final order that the rate of
interest payable hereunder exceeds the highest rate of interest permissible
under law (the “Maximum Lawful Rate”), then so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder shall be equal to
the Maximum Lawful Rate; provided, however, that if at any time thereafter the
rate of interest payable hereunder is less than the Maximum Lawful Rate, the
Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate
until such time as the total interest received by the Lenders is equal to the
total interest which would have been received had the interest rate payable
hereunder been (but for the operation of this paragraph) the interest rate
payable since the Closing Date as otherwise provided in this Agreement.
Thereafter, interest hereunder shall be paid at the rate of interest and in the
manner provided in this Section, unless and until the rate of interest again
exceeds the Maximum Lawful Rate, and at that time this paragraph shall again
apply. In no event shall the total interest received by the Lenders pursuant to
the terms hereof exceed the amount which the Lenders could lawfully have
received had the interest due hereunder been calculated for the full term hereof
at the Maximum Lawful Rate. If, notwithstanding the provisions of this
Section 2.11(e), a court of competent jurisdiction shall finally determine that
the Lenders have received interest hereunder in excess of the Maximum Lawful
Rate, the Lenders shall refund any excess to Borrower or as a court of competent
jurisdiction may otherwise order.

2.12 Computation of Interest and Fees. Interest, fees and commissions payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed.

2.13 [Reserved]

 

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2.14 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from
the Lenders hereunder, each payment by the Borrower on account of any fee and
any reduction of the Commitments of the Lenders, shall be made pro rata
according to the respective Loan Percentages of the relevant Lenders. Each
payment (other than prepayments) in respect of principal or interest in respect
of the Loans and each payment in respect of fees payable hereunder shall be
applied to the amounts of such obligations owing to the Lenders pro rata
according to the respective amounts then due and owing to the Lenders.

(b) Each payment (including each prepayment) of the Loans outstanding shall be
allocated among the Lenders holding such Loans pro rata based on the principal
amount of such Loans held by such Lenders. Amounts prepaid on account of the
Loans may not be reborrowed.

(c) [Reserved]

(d) Each payment of the Loans shall be accompanied by accrued interest to the
date of such payment on the amount paid.

(e) All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 12:00 p.m., New York
City time, on the due date thereof to the relevant Lenders at an account
designated by each such Lender in the Lender Addendum delivered by such Lender
hereunder, in Dollars and in immediately available funds. Any payment made by
the Borrower after 12:00 p.m., New York City time, on any Business Day shall be
deemed to have been on the next following Business Day. If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. In the case of any extension of
any payment of principal pursuant to the preceding sentence, interest thereon
shall be payable at the then applicable rate during such extension.

(f) (A) after the occurrence and during the continuance of an Event of Default
specified in Section 7.1(a), Section 7.1(b) or Section 7.1(l), (B) after the
occurrence and during the continuance of an Event of Default specified in
Section 7.1(j) with respect to a material portion of the Collateral or (C) after
the occurrence and during the continuance of any other Event of Default not
specified in subclause (A) or (B) above and the acceleration of the Obligations
pursuant to Section 7.1, all payments in respect of the Obligations and all
proceeds of the Collateral shall be applied against the Obligations in the
following order:

 

  (i) first, to pay incurred and unpaid fees, expenses and indemnities of the
Administrative Agent under the Loan Documents;

 

  (ii) second, to pay incurred and unpaid fees, expenses and indemnities of the
Lenders under the Loan Documents;

 

  (iii) third, to pay interest then due and payable in respect of the Loans; and

 

  (iv) fourth, to pay all other Obligations.

If sufficient funds are not available to fund all payments to be made in respect
of any of the Obligations described in any of the foregoing clauses (i) through
(iv), the available funds being applied with respect to any such Obligation
within such clause shall be allocated to the payment of such Obligations for
such clause ratably, based on the proportion of the Administrative Agent’s,
Lender’s or other Secured Party’s

 

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interest in the aggregate outstanding Obligations described in such clauses. The
order of priority set forth in clauses (i) through (iv) of this Section 2.14(f)
may at any time and from time to time be changed by the agreement of the Lenders
and the Administrative Agent without necessity of notice to or consent of or
approval by the Borrower, any other Loan Party, any Secured Party that is not a
Lender or any other Person.

2.15 Requirements of Law. (a) If any Lender shall have determined that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender’s or such corporation’s capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s
policies with respect to capital adequacy as in effect as of the date of this
Agreement) by an amount deemed by such Lender to be material, then from time to
time, after submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such corporation for such reduction; provided, that the Borrower shall not be
required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than six months prior to the date that such Lender notifies the
Borrower of such Lender’s intention to claim compensation therefor; and
provided, further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.

(b) A certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error. The obligations of
the Borrower pursuant to this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

(c) Failure or delay on the part of any Lender or the Administrative Agent to
demand compensation pursuant to this Section 2.15 shall not constitute a waiver
of such Lender’s or the Administrative Agent’s right to demand such
compensation; provided, that the Borrower shall not be under any obligation to
compensate any Lender or the Administrative Agent under clause (a) of this
Section 2.15 for increased costs or reductions with respect to any period prior
to the date that is 180 days prior to such request if such Lender or the
Administrative Agent knew or could reasonably have been expected to know of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would result in a claim for increased compensation by
reason of such increased costs or reductions; provided, further, that the
foregoing limitation shall not apply to any increased costs or reductions
arising out of the retroactive application of any Change in Law within such
180-day period. The protection of this Section 2.15 shall be available to each
Lender and the Administrative Agent regardless of any possible contention of the
invalidity or inapplicability of the change in any Requirement of Law that shall
have occurred or been imposed. Notwithstanding anything herein to the contrary,
the Dodd-Frank Wall Street Reform and Consumer Protection Act, and all requests,
rules, guidelines and directives promulgated thereunder, all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States regulatory authorities, in each case pursuant to
Basel III, are in each case deemed to have been introduced or adopted after the
date hereof, regardless of the date enacted, adopted, issued or implemented for
all purposes under or in connection with this Agreement (including this
Section 2.15) and any taxes imposed thereby (other than taxes described in
Section 2.16) shall be deemed to be the adoption of or a change in a Requirement
of Law regarding capital adequacy.

 

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2.16 Taxes. (a) All payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on the Administrative Agent or any Lender as a result of a present or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent’s or such Lender’s having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
(“Non-Excluded Taxes”) or any Other Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts
so payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement; provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender’s failure to deliver the forms
required by paragraph (d) or (e) of this Section, unless such failure is solely
a result of a change in law occurring after the date hereof or (ii) that are
United States withholding taxes (including FATCA) imposed on amounts payable to
such Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender’s assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph (a).

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) (i) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the Administrative Agent or the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure. The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

(ii) Unless otherwise excluded under the proviso in Section 2.16(a), the
Borrower agrees to indemnify the Administrative Agent and the Lenders for, and
hold them harmless against, (i) the full amount of Non-Excluded Taxes or Other
Taxes (including any Non-Excluded Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 2.18) paid by the
Administrative Agent or such Lender and (ii) any liability (including additions
to tax, penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Non-Excluded Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
The indemnification payment under this Section 2.16(c) shall be made within
thirty (30) days after the date the Administrative Agent or any Lender (as the
case may be) makes a written demand therefor.

(d) Each Lender shall indemnify the Administrative Agent for the full amount of
any taxes, levies, imposts, duties, charges, fees, deductions, withholdings or
similar charges imposed by any

 

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Governmental Authority that are attributable to such Lender and that are payable
or paid by the Administrative Agent, together with all interest, penalties,
reasonable costs and expenses arising therefrom or with respect thereto, as
determined by the Administrative Agent in good faith. A certificate as to the
amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error.

(e) Each Lender (or Transferee) that is not a citizen or resident of the United
States of America, a corporation, partnership or other entity created or
organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a “Non-U.S. Lender”) shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest” a statement in a form reasonably
satisfactory to the Borrower and the Administrative Agent and a Form W-8BEN, or
any subsequent versions thereof or successors thereto, properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Loan Documents. Such forms shall be delivered
by each Non-U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender
shall promptly notify the Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to the
Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.

(f) A Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided, that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender’s reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.

(g) If the Administrative Agent or any Lender reasonably determines that it has
received a refund of any Non-Excluded Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.16, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.16 with respect to
the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus, any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent or any Lender to claim any tax refund or make
available its tax returns (or any other information relating to its taxes which

 

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it deems confidential) or disclose any information relating to its tax affairs
or any computations in respect thereof or require the Administrative Agent or
any Lender to do anything that would prejudice its ability to benefit from any
other refunds, credits, reliefs, remissions or repayments to which it may be
entitled.

2.17 [Reserved]

2.18 [Reserved]

2.19 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.15 or 2.16(a) with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event with the object of avoiding
the consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section 2.15
or 2.16(a).

SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:

3.1 Financial Condition. Any financial statements previously delivered pursuant
to Section 5.01, (a) present fairly in all material respects the financial
condition and results of operations and cash flows of the applicable Persons as
of such dates and for such periods and (b) disclose all material liabilities,
direct or contingent, of the applicable Persons as of the dates thereof in
accordance with GAAP. Such financial statements were prepared in accordance with
GAAP applied on a consistent basis except for the absence of footnotes and
year-end adjustments for any financial statements other than those prepared for
a fiscal year end. The Borrower and its Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including, without
limitation, any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, that are not reflected in the
most recent financial statements referred to in this paragraph. During the
period from December 31, 2011 to and including the date hereof there has been no
Disposition by the Newtek Group of any material part of its business or
Property.

3.2 No Change. Since December 31, 2011 there has been no development or event
that has had or could reasonably be expected to have a Material Adverse Effect.

3.3 Corporate Existence; Compliance with Law. Each Loan Party (a) is duly formed
or organized, as applicable, validly existing and in good standing under the
laws of the jurisdiction of its formation or organization, as applicable,
(b) has the limited liability company or corporate, as applicable, power and
authority, and the legal right, to own and operate its Property, to lease the
Property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign limited liability company
or corporation, as applicable, and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such qualification except to the extent such failure to
qualify could not reasonably be expected to have a Material Adverse Effect and
(d) is in compliance with all material Requirements of Law.

 

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3.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan Party has
the limited liability company or corporate, as applicable, power and authority,
and the legal right, to make, deliver and perform the Loan Documents to which it
is a party and, in the case of the Borrower, to borrow hereunder. Each Loan
Party has taken all necessary limited liability company or corporate, as
applicable, action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, the
borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents, except
(i) consents, authorizations, filings and notices described in Schedule 3.4,
which consents, authorizations, filings and notices have been obtained or made
and are in full force and effect and (ii) the filings referred to in
Section 3.20. Each Loan Document has been duly executed and delivered on behalf
of each Loan Party that is a party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party that is a party thereto, enforceable against each
such Loan Party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).

3.5 No Legal Bar. The execution, delivery and performance of this Agreement and
the other Loan Documents, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law or any Contractual Obligation of
any member of the Newtek Group and will not result in, or require, the creation
or imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Loan Parties could reasonably be
expected to have a Material Adverse Effect.

3.6 No Litigation. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of any
member of the Newtek Group, threatened by or against any member of the Newtek
Group or against any of their respective properties or revenues, where the
matter in controversy exceeds $50,000, other than as set forth in Schedule 3.6.

3.7 No Default. No member of the Newtek Group is in default under or with
respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.

3.8 Ownership of Property; Liens. Each of the Borrower and its Restricted
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other Property, and none of such Property is subject to any Lien except as
permitted by Section 6.3. Set forth on Schedule 3.8 is a list of the real
properties owned by any Loan Party as of the date hereof, as to which the
Administrative Agent for the benefit of the Secured Parties shall be granted a
Lien pursuant to one or more Mortgages. No lien or other encumbrance authorized
or allowed by Environmental Laws exists against the Properties.

3.9 Intellectual Property. Each member of the Newtek Group owns, or licenses
pursuant to a valid and enforceable written agreement, all Intellectual Property
and Software necessary and sufficient for the conduct of its businesses as
currently conducted and proposed to be conducted. Except as set forth on
Schedule 3.9, as of the date hereof, no Person has contested any right, title or
interest of any Loan Party in or relating to any Material Intellectual Property
or challenged the ownership, use, validity or enforceability of any Material
Intellectual Property of any Loan Party, nor does any Loan

 

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Party know of any valid basis for any such claim. Except as set forth on
Schedule 3.9, as of the date hereof, there are no pending (or, to the knowledge
of any Loan Party, threatened) actions, investigations, suits, proceedings,
audits, claims, demands, orders or disputes with respect to any such
infringement, misappropriation, dilution, violation, impairment, contest or
challenge relating to any Material Intellectual Property. Except as set forth on
Schedule 3.9, as of the date hereof, no judgment or order regarding any such
infringement, misappropriation, dilution, violation, impairment, contest or
challenge has been rendered by any competent Governmental Authority, and no
settlement agreement or similar contract has been entered into by any member of
the Newtek Group with respect to any such infringement, misappropriation,
dilution, violation, impairment, contest or challenge wherein such settlement
agreement or similar contract would materially impact the operation and conduct
of the business of any member of the Newtek Group in a negative manner or
otherwise result in a Material Adverse Effect, and no member of the Newtek Group
has any reason to know of any valid basis for any claim for or based on any such
infringement, misappropriation, dilution, violation, impairment, contest or
challenge. The operation and conduct of the businesses of any member of the
Newtek Group (including, without limitation, the use or practice of any
Intellectual Property and Software therein) does not misappropriate, dilute,
violate or otherwise impair any Intellectual Property owned by any other Person.
As of the date hereof, no Person has been or is infringing, misappropriating,
diluting, violating or otherwise impairing any Intellectual Property of any Loan
Party which would materially impact the operation and conduct of the business of
any Loan Party in a negative manner or otherwise result in a Material Adverse
Effect except as set forth on Schedule 3.9.

3.10 Taxes. Each member of the Newtek Group has filed or caused to be filed all
Federal, state and other material tax returns that are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its Property and all other taxes, fees or
other charges imposed on it or any of its Property by any Governmental Authority
(other than any amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the members of the
Newtek Group) and no tax Lien has been filed, and, to the knowledge of any
member of the Newtek Group, no claim is being asserted, with respect to any such
tax, fee or other charge.

3.11 Federal Reserve Regulations.

(a) The Borrower is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.

(b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for purchasing
or carrying Margin Stock or for the purpose of purchasing, carrying or trading
in any securities under such circumstances as to involve any Loan Party in a
violation of Regulation X or to involve any broker or dealer in a violation of
Regulation T. No Indebtedness being reduced or retired out of the proceeds of
any Loans was or will be incurred for the purpose of purchasing or carrying any
Margin Stock. None of the transactions contemplated by this Agreement will
violate or result in the violation of any of the provisions of the regulations
of the Board, including Regulation T, U or X.

3.12 Labor Matters. There are no strikes or other labor disputes against any
member of the Newtek Group pending or, to the knowledge of the Borrower,
threatened that (individually or in the aggregate) could reasonably be expected
to have a Material Adverse Effect. Hours worked by and payment made to employees
of any member of the Newtek Group have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters that (individually or in the aggregate) could reasonably be expected to
have a Material Adverse Effect. All

 

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payments due from any member of the Newtek Group on account of employee health
and welfare insurance that (individually or in the aggregate) could reasonably
be expected to have a Material Adverse Effect if not paid have been paid or
accrued as a liability on the books of such member of the Newtek Group.

3.13 ERISA. Neither a Reportable Event nor an “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and, except as
set forth on Schedule 3.13, each Plan has complied in all material respects with
the applicable provisions of ERISA and the Code. No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by a material amount. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and neither the Borrower
nor any Commonly Controlled Entity would become subject to any material
liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.

3.14 Investment Company Act; Other Regulations. No Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, within the
meaning of the Investment Company Act of 1940, as amended. No Loan Party is
subject to regulation under any Requirement of Law (other than Regulation X of
the Board) which limits its ability to incur Indebtedness.

3.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 3.15 constitute all
the Subsidiaries of the Borrower at the date hereof. Schedule 3.15 sets forth as
of the Closing Date the name and jurisdiction of formation of each such
Subsidiary and, as to each such Subsidiary, the percentage of each class of
Capital Stock owned by each Loan Party.

(b) Except as listed on Schedule 3.15, there are no outstanding subscriptions,
options, warrants, calls, rights or other agreements or commitments (other than
(i) stock options or restricted shares awards granted to employees or directors
and directors’ qualifying shares and (ii) the Warrants) of any nature relating
to any Capital Stock of the Borrower or any of its Subsidiaries.

3.16 Use of Proceeds. (a) The proceeds of the Closing Date Loans shall be used
(i) for the origination of SBA 7(a) Loans, (ii) to pay related fees and expenses
in connection with the transactions contemplated hereby and (iii) for general
corporate purposes.

(b) The proceeds of the Delayed Draw Loans shall be used (i) for the origination
of SBA 7(a) Loans and (ii) to finance Permitted Acquisitions.

3.17 Environmental Matters. Other than exceptions to any of the following that
could not, individually or in the aggregate, reasonably be expected to result in
the payment of a Material Environmental Amount and except as set forth on
Schedule 3.17:

(a) No member of the Newtek Group has received any Environmental Complaint,
whether directed or issued to any member of the Newtek Group or pertaining to
any operation or occupancy of the Properties, their business or any formerly
owned, operated or leased property, and none have any reason to believe that
they might receive an Environmental Complaint.

 

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(b) To the knowledge of the members of the Newtek Group, the members of the
Newtek Group and their Properties are and have been in compliance with all
applicable Environmental Laws.

(c) To the knowledge of the members of the Newtek Group, there are no Regulated
Substances present at, on, in, under or emanating from, or emanating to, the
Properties or any portion thereof or any formerly owned, operated or leased
property, which has resulted or could result in Contamination or otherwise give
rise to an Environmental Complaint.

(d) The members of the Newtek Group have all Required Environmental Permits to
lease, occupy, or maintain the Properties, and otherwise conduct their business
and operations. To the knowledge of the members of the Newtek Group, all such
Required Environmental Permits are in full force and effect and each member of
the Newtek Group is in and has been in compliance with such Required
Environmental Permits.

(e) To the knowledge of the members of the Newtek Group, no structures,
improvements, equipment, fixtures, aboveground or underground storage tanks
located on the Properties contain or use, except in compliance with
Environmental Laws and Required Environmental Permits, Regulated Substances or
otherwise are operated or maintained except in compliance with Environmental
Laws and Required Environmental Permits.

(f) To the knowledge of the members of the Newtek Group, no facility or site to
which they, either directly or indirectly by a third party, have sent Regulated
Substances for storage, treatment, disposal or other management has been or is
being operated in violation of Environmental Laws or is identified or proposed
to be identified pursuant to Environmental Laws on any list of contaminated
properties or other properties which pursuant to Environmental Laws are the
subject of an investigation, cleanup, removal, remediation or other response
action by a Governmental Authority.

(g) No member of the Newtek Group has received any written request for
information, or been notified that it is a potentially responsible party under
or relating to the federal Comprehensive Environmental Response, Compensation,
and Liability Act or any similar Environmental Law, or with respect to any
Regulated Substances.

(h) No member of the Newtek Group has entered into or agreed to any consent
decree, order, or settlement or other agreement, or is subject to any judgment,
decree, or order or other agreement, in any judicial, administrative, arbitral,
or other forum for dispute resolution, relating to compliance with or liability
under any Environmental Law.

(i) No member of the Newtek Group has to its knowledge assumed or retained, by
contract or operation of law, any liabilities of any kind, fixed or contingent,
known or unknown, under any Environmental Law or with respect to any Regulated
Substances.

3.18 Insurance. Schedule 3.18 sets forth a true, complete and correct
description of all insurance maintained by or on behalf of the Loan Parties as
of the Closing Date. As of the Closing Date, such insurance is in full force and
effect and all premiums (or, if applicable, all installments thereof due on or
before the Closing Date) have been duly paid and such insurance is provided in
such amounts and covering such risks and liabilities (and with such deductibles,
retentions and exclusions) as are in accordance with normal and prudent industry
practice. None of the Loan Parties has any reason to

 

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believe that it will not be able to (a) maintain (or obtain when and as
required) the insurance coverage required to be maintained under the Loan
Documents or (b) renew its existing coverage as and when such coverage expires
or to obtain similar coverage from similar insurers.

3.19 Accuracy of Information, etc. No statement or information contained in this
Agreement, any other Loan Document or any other document, certificate or
statement furnished to the Administrative Agent or the Lenders or any of them,
by or on behalf of any Loan Party for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents taken as a whole,
contained as of the date such statement, information, document or certificate
was so furnished, any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. There is no
fact known to any Loan Party that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.

3.20 Security Documents. The Guarantee and Collateral Agreement is effective to
create in favor of the Administrative Agent, for the benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when any stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 3 to the Guarantee and Collateral Agreement (which
financing statements have been duly completed and delivered to and authorized to
be filed by the Administrative Agent) and such other filings as are specified on
Schedule 3 to the Guarantee and Collateral Agreement have been completed (all of
which filings have been duly completed), the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person (except, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 6.3).

3.21 Solvency. Each Loan Party is, and after giving effect to the incurrence of
all Indebtedness and obligations being incurred in connection herewith will be
and will continue to be, Solvent.

3.22 Patriot Act. To the extent applicable, each Loan Party is in compliance, in
all material respects, with the (i) Trading with the Enemy Act, as amended, and
each of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act (USA Patriot Act of 2001) (the “Patriot Act”). No part of
the proceeds of any Loan will be used, directly or indirectly, for any payments
to any governmental official or employee, political party, official of a
political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended.

 

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3.23 Preferred Lender Status. NSBF has been approved as and continues to be a
preferred lender under the SBA’s Preferred Lender Program in accordance with the
SBA Rules and Regulations. NSBF has not been advised, and has no reason to
believe, that it will not continue to be such a preferred lender after the
Closing Date. No Loan Party has received any correspondence or notice from the
SBA or any other Governmental Authority, nor is it aware of any event or
condition that could lead to the revocation of NSBF’s SBA Lender’s License.

3.24 Certified Capital Companies. The Capcos listed on Schedule 3.24 constitute
all the Capcos of the Borrower. Schedule 3.24 sets forth (a) the certified
status of each Capco with respect to applicable state laws and regulations and
(b) the percentage of funds of each Capco that have been invested in accordance
with applicable state laws and regulations.

3.25 Unguaranteed Interest Sale Agreement. To the knowledge of each of the
Borrower and NSBF, no default has occurred under the Unguaranteed Interest Sale
Agreement that could result in an obligation of NSBF to repurchase any SBA 7(a)
Loans sold, transferred, assigned or conveyed thereunder.

SECTION 4. CONDITIONS PRECEDENT

4.1 Conditions to Initial Extension of Credit. The agreement of each Lender to
make the initial extension of credit requested to be made by it hereunder is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:

(a) Loan Documents. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the Borrower,
(ii) the Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Subsidiary Guarantor, (iii) a Lender
Addendum, executed and delivered by each Lender and accepted by the Borrower,
(iv) a Note for each Lender, to the extent requested by any such Lender on or
prior to the Closing Date, executed and delivered by a duly authorized officer
of the Borrower, (v) the Trademark Security Agreement, executed and delivered by
a duly authorized officer of the Borrower, (vi) the Capital One Intercreditor
Agreement, executed and delivered by Capital One and accepted by the Borrower
and the other Loan Parties party thereto and (vii) the Fee Letter, executed and
delivered by a duly authorized officer of Summit and the Borrower.

(b) Waiver to Existing Credit Facilities. The Administrative Agent shall have
received (i) the Capital One Waiver, executed and delivered by a duly authorized
officer of each of Capital One, NSBF and the other Loan Parties party thereto
and (ii) the Wilshire Waiver, executed and delivered by a duly authorized
officer of each of PMTWorks Payroll LLC and Wilshire New York Partners V, LLC.

(c) Approvals. All governmental and third party approvals (including regulatory
approvals, landlords’ and other consents) necessary in connection with the
continuing operations of the Loan Parties and the transactions contemplated
hereby shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise
impose adverse conditions on the transactions contemplated hereby.

(d) Related Agreements. The Administrative Agent shall have received (in a form
reasonably satisfactory to the Administrative Agent), true and correct copies,
certified as to authenticity

 

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by the Borrower, of such documents or instruments as may be reasonably requested
by the Administrative Agent, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which the Loan
Parties may be a party.

(e) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all expenses for which invoices have been presented
(including reasonable fees, disbursements and other charges of counsel to the
Administrative Agent), on or before the Closing Date. All such amounts will be
paid with proceeds of Loans made on the Closing Date and will be reflected in
the funding instructions given by the Borrower to the Administrative Agent on or
before the Closing Date.

(f) Closing Date Projections. The Lenders shall have received satisfactory pro
forma financial projections consisting of a pro forma income statement for 2012
(the “Closing Date Projections”) which shall contain the Newtek Group’s
anticipated income statements, on a consolidated and business segment basis for
the Newtek Group.

(g) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions in which Uniform Commercial Code
financing statements or other filings or recordations should be made to evidence
or perfect security interests in all assets of the Loan Parties, and such search
shall reveal no liens on any of the assets of the Loan Party, except for Liens
permitted by Section 6.3.

(h) Closing Certificate. The Administrative Agent shall have received a
certificate of each Loan Party, dated as of the Closing Date, substantially in
the form of Exhibit C, with appropriate insertions and attachments.

(i) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions:

 

  (i) the legal opinion of Platte, Klarsfeld, Levine & Lachtman, LLP, New York
counsel of the Loan Parties, substantially in the form of Exhibit E-1; and

 

  (ii) the legal opinion of O’Reilly & Mark, P.C., District of Columbia counsel
of the Loan Parties, substantially in the form of Exhibit E-2.

(j) Pledged Stock; Stock Powers; Pledged Notes. Subject to the terms of the
Capital One Intercreditor Agreement, the Administrative Agent shall have
received (i) all certificates, instruments and other documents representing all
Pledged Stock pledged pursuant to the Guarantee and Collateral Agreement and
stock powers for such certificates, instruments and other documents executed in
blank by the pledgor thereof, and (ii) each promissory note pledged pursuant to
the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank satisfactory to the
Administrative Agent) by the pledgor thereof.

(k) Filings, Registrations and Recordings. Each document (including, without
limitation, any Uniform Commercial Code financing statement) required by the
Security Documents or under law or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a perfected Lien
on the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 6.3),
shall have been filed, registered or recorded or shall have been delivered to
the Administrative Agent be in proper form for filing, registration or
recordation.

 

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(l) Insurance. The Administrative Agent shall have received (i) insurance
certificates satisfying the requirements of Section 5.3 of the Guarantee and
Collateral Agreement and (ii) documentation requested by the Administrative
Agent evidencing the collateral assignment of the Keyman Life Insurance Policy
to the Administrative Agent, for the benefit of the Secured Parties, in
satisfaction of the requirements of Section 5.5(b).

(m) Full Disclosure. The Administrative Agent and the Lenders not becoming aware
prior to the Closing Date of any information or other matter (including any
matter relating to financial models and underlying assumptions relating to the
Closing Date Projections) affecting any member of the Newtek Group or the
transactions contemplated hereby that in their judgment is inconsistent in a
material and adverse manner with any such information or other matter disclosed
to them prior to the Closing Date.

(n) Material Adverse Effect.

 

  (i) Since December 31, 2011, there shall not have occurred any event, change
or condition that, individually or in the aggregate, has had, or could
reasonably be expected to have, a Material Adverse Effect.

 

  (ii) Since March 21, 2012, there shall not have occurred any material
disruption of, or adverse change in, the loan syndication, financial, banking or
capital markets conditions.

(o) Due Diligence. The Administrative Agent shall have completed its business,
legal and collateral due diligence, including a quality of earnings analysis,
with respect to each Loan Party and the results thereof shall be acceptable to
the Administrative Agent. The Administrative Agent shall have received completed
reference checks with respect to senior management and board members of each
Loan Party and the results thereof shall be acceptable to the Administrative
Agent.

(p) Warrants. The Borrower shall have issued to the Lenders non-cancelable
warrants representing 1,696,810 shares of the Borrower’s Capital Stock (the
“Warrants”), in the form attached hereto as Exhibit J, ratably in accordance
with their Loan Percentage

(q) Patriot Act. The Administrative Agent shall have received all documentation
and other information requested by the Administrative Agent and required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including, without limitation, the Patriot
Act.

4.2 Conditions to Delayed Draw Loans. The agreement of each Lender to make the
Delayed Draw Loans requested to be made by it hereunder is subject to the
satisfaction, prior to or concurrently with the making of such extension of
credit on the Delayed Draw Funding Date, of the following conditions precedent:

(a) Joinder of NSBF. The Borrower shall have caused NSBF (i) to become a party
to the Guarantee and Collateral Agreement, (ii) to take such actions necessary
or advisable to grant to the Administrative Agent for the benefit of the Secured
Parties a perfected security interest (subject to Liens expressly permitted by
Section 6.3) in the Collateral described in the Guarantee and Collateral
Agreement with respect to NSBF, including, without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent, and (iii) to obtain all governmental
approvals

 

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(including approval from the SBA) and third party approvals required in
connection with (A) the guarantee by NSBF of the Obligations and (B) the
granting of a security interest by NSBF in the Collateral described in the
Guarantee and Collateral Agreement with respect to NSBF.

(b) Additional Certificates and Legal Opinions. If requested by the
Administrative Agent, the Borrower shall have delivered to the Administrative
Agent certificates and legal opinions relating to the matters described in
clause (a) above, which certificates and opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

4.3 Conditions to Each Extension of Credit. The agreement of each Lender to make
any extension of credit requested to be made by it hereunder on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:

(a) Representations and Warranties. Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct on and as of the Closing Date and shall be true and correct in all
material respects on and as of any such date after the Closing Date with the
same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall have been true and correct in all
material respects as of such earlier date.

(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.

(c) Pro Forma Compliance. The Borrower shall be in pro forma compliance with the
financial covenants set forth in Section 6.1.

Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such extension of credit that the
conditions contained in this Section 4.2 have been satisfied.

SECTION 5. AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect or
any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall, and shall cause each of its Subsidiaries, to:

5.1 Financial Statements. Furnish to the Administrative Agent:

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of the Borrower (commencing with the fiscal year ended December 31,
2011), a copy of the audited combined, consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such year and the
related audited consolidated cash flows statements and statements (including
statements, other than with respect to the balance sheet and cash flows
statements, on a business segment basis) of income and retained earnings (for
such year, setting forth in each case in comparative form the figures as of the
end of and for the previous year, reported on without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the
audit, by J.H. Cohn, L.P. or such other independent certified public accountants
of nationally recognized standing (unless otherwise approved by the
Administrative Agent in its discretion exercised reasonably); and

 

35

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(b) as soon as available, but in any event not later than 45 days after the end
of each of the four quarterly periods of each fiscal year (other than the last
fiscal quarter in any fiscal year) of the Borrower (commencing with the fiscal
quarter ended March 31, 2012), (i) the unaudited combined, consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end of
such quarter, (ii) the unaudited combined, consolidated statements of income and
cash flows of the Borrower and its consolidated Subsidiaries for such quarter,
setting forth in comparative form the figures for the corresponding period in
the prior year and on a trailing twelve month basis, and (iii) the consolidated
income statement of the Borrower and its consolidated Subsidiaries by business
segment as currently reported by the Borrower, in each case, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments);

(c) as soon as available, but in any event not later than (i) 45 days after the
end of each of the first three quarterly periods of each fiscal year of the
Borrower and (ii) 90 days after the end of the last fiscal quarter of each
fiscal year of the Borrower (in the case of each of clauses (i) and (ii),
commencing with the fiscal quarter ended March 31, 2012), the unrestricted cash
balance at the end of such quarter (including a breakout of cash at each of the
Capcos and its qualified businesses);

(d) as soon as available, but in any event not later than 45 days after the end
of each of the four quarterly periods of each fiscal year, the actual results of
operations of the Borrower for such quarter, compared to the Projections for
such quarter;

all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).

5.2 Certificates; Other Information. Furnish to the Administrative Agent:

(a) [Reserved];

(b) concurrently with the delivery of any financial statements pursuant to
Section 5.1(a) or (b), a Compliance Certificate (x) stating that, to the best of
such Responsible Officer’s knowledge, each Loan Party during such period has
observed or performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan Documents to
which it is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (y) containing all information and
calculations necessary for determining compliance by the members of the Newtek
Group with the provisions of this Agreement referred to therein as of the last
day of the fiscal month, fiscal quarter or fiscal year of the Borrower, as the
case may be;

(c) as soon as available, and in any event no later than 90 days after the end
of each fiscal year of the Borrower, a projected pro forma income statement for
four (4) quarters of the then current fiscal year, on a consolidated and
business segment basis for the Newtek Group, and copies of all budgets and
financial projections provided to the board of directors of the Borrower, and,
as soon as available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the “Projections”),
which Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on reasonable
estimates, information and assumptions and that such Responsible Officer has no
reason to believe that such Projections are incorrect or misleading in any
material respect;

 

36

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(d) within 5 Business Days after receipt thereof by any Loan Party, copies of
all management letters, exception reports or similar letters or reports received
by such Loan Party from its independent certified public accountants;

(e) copies of any reports filed with any federal, state or local Governmental
Authority as any Lender may from time to time request;

(f) within 5 Business Days after the same are sent, copies of all financial
statements and reports that the Borrower sends to the holders of any class of
its debt securities or public equity securities and, within five days after the
same are filed, copies of all financial statements and reports that the Borrower
may make to, or file with, the SEC;

(g) within 5 Business Days after the end of each fiscal year of the Borrower,
commencing on the first of such dates to occur after the date hereof, an updated
Schedule 3.24 supplementing the information set forth therein since the date of
the most recent Schedule 3.24 delivered pursuant to this clause (g) (or, in the
case of the first such updated Schedule 3.24 so delivered, since the Closing
Date);

(h) as soon as available, copies of the bi-weekly report distributed to
management;

(i) as soon as available, (i) with respect to NSBF, (A) the quarterly “NSBF
Disclosure Roll Forward Analysis” and (B) quarterly SBA loan statistics, (ii)
with respect to CWH, information relating to (A) transaction revenue and (B)
additions and deletes by type of site (Dedicated, Shared and VPS) and (iii) with
respect to UPS, information relating to (A) chargeback data, (B) merchant
additions and deletions, (C) sales volume and (D) transaction history;

(j) promptly, such additional financial and other information as any Lender may
from time to time reasonably request.

5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the appropriate member of the Newtek Group.

5.4 Conduct of Business and Maintenance of Existence, etc. (a) Preserve, renew
and keep in full force and effect its corporate or other existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 6.4; and (b) comply with all Contractual
Obligations and Requirements of Law, except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

5.5 Maintenance of Property; Insurance. (a) (i) Keep all Property and systems
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (ii) maintain with financially sound and
reputable insurance companies insurance as required pursuant to the Guarantee
and Collateral Agreement.

(b) (i) Obtain and maintain a life insurance policy on the life of Mr. Barry
Sloane (the “Keyman Life Insurance Policy”) in a minimum amount of
(A) initially, the period commencing on the Closing Date and ending six months
thereafter, not less than $2,000,000 and (B) thereafter, not less

 

37

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than $4,000,000, (ii) ensure that all premiums and other payments required under
the Keyman Life Insurance Policy shall be up to date and fully paid and
(iii) ensure that the Keyman Life Insurance Policy is collaterally assigned to
the Administrative Agent, for the benefit of the Secured Parties. The Borrower
shall cause the entire amount of any proceeds of such Keyman Life Insurance
Policy to be applied to the Obligations as set forth in Section 2.14(b).

5.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities, (b) permit the
Administrative Agent in its sole discretion (or upon the request of any Lender)
to visit and inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time and to discuss the business,
operations, properties and financial and other condition of any member of the
Newtek Group with officers and employees of such member of the Newtek Group and
with its independent certified public accountants (an “Inspection”); provided,
that unless a Default or Event of Default shall be continuing, there shall be no
more than two Inspections during any calendar year and (c) (i) at least 30 days
prior to any quarterly Board Meeting or (ii) concurrently with any notice and
informational materials given to the directors of the Borrower in connection
with any other Board Meeting, provide the Administrative Agent with notice of
such Board Meeting and copies of all informational materials provided to the
directors of the Borrower in connection therewith and permit representatives of
the Administrative Agent to attend such Board Meeting in an observer capacity.

5.7 Notices. Promptly give notice to the Administrative Agent of:

(a) the occurrence of any Default or Event of Default;

(b) any (i) default or event of default under any Contractual Obligation of any
member of the Newtek Group, (ii) material litigation, investigation or
proceeding which may exist at any time between any member of the Newtek Group
and any Governmental Authority, (iii) development, event, or condition that,
individually or in the aggregate with other developments, events or conditions,
could reasonably be expected to result in the payment by the members of the
Newtek Group, in the aggregate, of a Material Environmental Amount; and
(iv) notice that any Governmental Authority may deny any application for an
Required Environmental Permit sought by, or revoke or refuse to renew any
Required Environmental Permit held by, any member of the Newtek Group;

(c) any litigation or proceeding affecting any member of the Newtek Group in
which the amount involved is $500,000 or more or in which injunctive or similar
relief is sought;

(d) the following events, as soon as possible and in any event within 10 days
after the Borrower knows or has reason to know thereof: (i) the occurrence of
any Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan
or any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of any
other action by the PBGC or the Borrower or any Commonly Controlled Entity or
any Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan;

(e) any (i) request received from the SBA relating to any potential or actual
repair of incorrectly underwritten loans or revocation of the guarantee provided
by the SBA of SBA 7(a) Loans, (ii) any changes to the SBA’s Preferred Lender
Program or the SBA Rules and Regulations, (iii) any notice or correspondence
received from the SBA in connection with a potential or actual (A) downgrade of
NSBF’s status as a preferred lender under the SBA’s Preferred Lender Program or
(B) revocation of NSBF’s SBA Lender’s License or (iv) any downgrade of NSBF’s
servicer rating issued by S&P in connection with any securitization facility;

 

38

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(f) receipt of any official correspondence received from any Governmental
Authority in connection with any Capco (to the extent disclosure of such
correspondence is not prohibited by any applicable regulatory body); and

(g) any development or event that has had or could reasonably be expected to
have a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to take
with respect thereto.

5.8 Environmental Laws. (a) Comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.

(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal and other actions required of any member of the Newtek
Group under Environmental Laws and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws applicable to the Properties or any member of the Newtek
Group.

5.9 [Reserved]

5.10 Additional Collateral, etc. (a) With respect to any Property acquired after
the Closing Date by any Loan Party (other than (x) any Property described in
paragraph (b) or paragraph (c) of this Section, (y) any Property subject to a
Lien expressly permitted by Section 6.3(g) and (z) Property acquired by an
Excluded Foreign Subsidiary or Unrestricted Subsidiary) as to which the
Administrative Agent, for the benefit of the Secured Parties, does not have a
perfected Lien, promptly, subject to the terms of the Capital One Intercreditor
Agreement, (i) execute and deliver to the Administrative Agent such amendments
to the Guarantee and Collateral Agreement or such other documents as the
Administrative Agent reasonably deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a security
interest in such Property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected security interest (subject to Liens expressly permitted by
Section 6.3) in such Property, including without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent.

(b) With respect to any fee interest in any real property having a value
(together with improvements thereof) of at least $500,000 acquired after the
Closing Date by any Loan Party (other than any such real property owned by an
Excluded Foreign Subsidiary or Unrestricted Subsidiary or subject to a Lien
expressly permitted by Section 6.3(g)), promptly, subject to the terms of the
Capital One Intercreditor Agreement, (i) execute and deliver a Mortgage in favor
of the Administrative Agent, for the benefit of the Secured Parties, covering
such real property, (ii) if requested by the Administrative Agent, provide the
Lenders with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real property
(or such other amount as shall be

 

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reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor’s certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such Mortgage, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph, shall include any existing Subsidiary that ceases to be an
Excluded Foreign Subsidiary or Unrestricted Subsidiary) by any Loan Party,
promptly, subject to the terms of the Capital One Intercreditor Agreement,
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement as the Administrative Agent reasonably deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a perfected security interest in the Capital Stock of such
new Subsidiary that is owned by such Loan Party (other than an Unrestricted
Subsidiary), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of such Loan Party,
(iii) cause such new Subsidiary (A) to become a party to the Guarantee and
Collateral Agreement and (B) to take such actions necessary or advisable to
grant to the Administrative Agent for the benefit of the Secured Parties a
perfected security interest (subject to Liens expressly permitted by
Section 6.3) in the Collateral described in the Guarantee and Collateral
Agreement with respect to such new Subsidiary, including, without limitation,
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

5.11 Further Assurances. From time to time execute and deliver, or cause to be
executed and delivered, such additional instruments, certificates or documents,
and take such actions, as the Administrative Agent may reasonably request for
the purposes of implementing or effectuating the provisions of this Agreement
and the other Loan Documents, or of more fully perfecting or renewing the rights
of the Administrative Agent and the Lenders with respect to the Collateral (or
with respect to any additions thereto or replacements or proceeds thereof or
with respect to any other property or assets hereafter acquired by any Loan
Party which may be deemed to be part of the Collateral) pursuant hereto or
thereto. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from any member of
the Newtek Group for such governmental consent, approval, recording,
qualification or authorization.

5.12 [Reserved]

5.13 [Reserved]

5.14 Joinder of NSBF and CDS as Loan Parties.

(a) Use commercially reasonable efforts to, within 90 days after the Closing
Date, cause NSBF (A) to become a party to the Guarantee and Collateral
Agreement, (B) to take such actions

 

40

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necessary or advisable to grant to the Administrative Agent for the benefit of
the Secured Parties a perfected security interest (subject to Liens expressly
permitted by Section 6.3) in the Collateral described in the Guarantee and
Collateral Agreement with respect to NSBF, including, without limitation, the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent, and (C) to obtain all governmental
approvals (including approval from the SBA) and third party approvals required
in connection with (I) the guarantee by NSBF of the Obligations and (II) the
granting of a security interest by NSBF in the Collateral described in the
Guarantee and Collateral Agreement with respect to NSBF, and (iii) if requested
by the Administrative Agent, deliver to the Administrative Agent certificates
and legal opinions relating to the matters described above, which certificates
and opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent. For the avoidance of doubt, the
failure to consummate any of actions set forth in subclauses (i) through
(iii) above, including the joinder of NSBF as a party to the Guarantee and
Collateral Agreement, in spite of the use of commercially reasonable efforts in
connection therewith shall not constitute an Event of Default.

(b) Use commercially reasonable efforts to, within 60 days after the Closing
Date, (i) cause CDS (A) to become a party to the Guarantee and Collateral
Agreement and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected security
interest (subject to Liens expressly permitted by Section 6.3) in the Collateral
described in the Guarantee and Collateral Agreement with respect to CDS,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent, (ii) deliver to the Administrative Agent any consent, waiver or amendment
to the Sterling Loan Documents, in form and substance reasonably satisfactory to
the Administrative Agent, necessary to permit the transactions contemplated
hereunder and under the Loan Documents, (iii) cause the required parties to
enter into the Sterling Intercreditor Agreement and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent certificates and legal
opinions relating to the matters described above, which certificates and
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent. For the avoidance of doubt, the
failure to consummate any of actions set forth in subclauses (i) through
(iv) above, including the joinder of CDS as a party to the Guarantee and
Collateral Agreement, in spite of the use of commercially reasonable efforts in
connection therewith shall not constitute an Event of Default.

5.15 Landlord Waivers.

(a) As promptly as practicable, and in any event within 30 days (or such longer
period as may be agreed to by the Administrative Agent in its sole discretion)
following the Closing Date, the Loan Parties shall obtain collateral access
agreements or landlord waivers from the landlord or lessor of (a) 212 W. 35th
Street, New York, NY 10123 and (b) 60 Hempstead Avenue, West Hempstead, NY
11552.

(b) The Loan Parties shall use commercially reasonable efforts to obtain, within
30 days following the Closing Date, collateral access agreements or landlord
waivers from the landlord or lessor of each of the following leased properties:
(a) 1125 W. Pinnacle Peak, Phoenix, AZ 85027, (b) 744 North 4th Street,
Milwaukee, WI 53203, (c) 8521 E. Princess Drive, Phoenix, AZ 85255 and (d) 301
Mexico Street, Suite H3-A, Brownsville, TX 78520.

 

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SECTION 6. FINANCIAL AND NEGATIVE COVENANTS

I. FINANCIAL COVENANTS

6.1 Financial Covenants. (a) The Borrower hereby agrees that, prior to the
occurrence of a Trigger Event and so long as the Commitments remain in effect or
any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder:

 

  (i) Fixed Charge Coverage Ratio. The Borrower shall maintain a Fixed Charge
Coverage Ratio as of the last day of each fiscal quarter of at least 1.50:1.00.

 

  (ii) Minimum EBITDA.

(A) The Borrower shall have, on the last day of each fiscal quarter,
Consolidated EBITDA for the four fiscal quarters ending on such day of not less
$7,500,000.

(B) NSBF shall have, on the last day of each fiscal quarter, Consolidated EBITDA
for the four fiscal quarters ending on such day of not less than $2,600,000.

(C) CWH shall have, on the last day of each fiscal quarter, Consolidated EBITDA
for the four fiscal quarters ending on such day of not less than $5,400,000.

(D) UPS shall have, on the last day of each fiscal quarter, Consolidated EBITDA
for the four fiscal quarters ending on such day of not less than $5,600,000.

 

  (iii) Unrestricted Cash Balance. The Borrower shall not have less than
$4,000,000 in unrestricted cash at any time.

(b) The Borrower hereby agrees that, upon the occurrence of a Trigger Event and
so long as the Commitments remain in effect or any Loan or other amount is owing
to any Lender or the Administrative Agent hereunder:

 

  (i) Capital Expenditure. The Borrower shall not make or incur, or permit its
Restricted Subsidiaries to make or incur, aggregate Capital Expenditures during
each fiscal year set forth below in excess of the maximum amount set forth below
opposite such fiscal year:

 

Fiscal Year

   Maximum
Capital
Expenditures  

2012

   $ 2,000,000   

2013

   $ 2,000,000   

2014

   $ 2,000,000   

2015

   $ 2,000,000   

2016

   $ 2,000,000   

 

  (ii) Minimum EBITDA.

 

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(A) The Borrower shall have, on the last day of each fiscal quarter set forth
below, Consolidated EBITDA for the four fiscal quarters ending on such day (or
with respect to the fiscal quarters ending on or before December 31, 2013, the
period commencing on the Closing Date and ending on the last day of such fiscal
quarter) of not less than the following:

 

Fiscal Quarter Ending

   Minimum
Consolidated
EBITDA  

June 30, 2012

   $ 7,500,000   

September 30, 2012

   $ 7,500,000   

December 31, 2012

   $ 7,500,000   

March 31, 2013

   $ 7,500,000   

June 30, 2013

   $ 7,500,000   

September 30, 2013

   $ 7,500,000   

December 31, 2013

   $ 7,500,000   

March 31, 2014

   $ 7,500,000   

June 30, 2014

   $ 7,500,000   

September 30, 2014

   $ 7,500,000   

December 31, 2014

   $ 7,500,000   

March 31, 2015

   $ 7,500,000   

June 30, 2015

   $ 7,500,000   

September 30, 2015

   $ 7,500,000   

December 31, 2015

   $ 7,500,000   

March 31, 2016

   $ 7,500,000   

June 30, 2016

   $ 7,500,000   

September 30, 2016

   $ 7,500,000   

December 31, 2016

   $ 7,500,000   

March 31, 2017

   $ 7,500,000   

June 30, 2017

   $ 7,500,000   

(B) NSBF shall have, on the last day of each fiscal quarter set forth below,
Consolidated EBITDA for the four fiscal quarters ending on such day (or with
respect to the fiscal quarters ending on or before December 31, 2013, the period
commencing on the Closing Date and ending on the last day of such fiscal
quarter) of not less than the following:

 

Fiscal Quarter Ending

   Minimum
Consolidated
EBITDA  

June 30, 2012

   $ 2,600,000   

September 30, 2012

   $ 2,600,000   

December 31, 2012

   $ 2,600,000   

March 31, 2013

   $ 2,600,000   

June 30, 2013

   $ 2,600,000   

September 30, 2013

   $ 2,600,000   

December 31, 2013

   $ 2,600,000   

March 31, 2014

   $ 2,600,000   

June 30, 2014

   $ 2,600,000   

September 30, 2014

   $ 2,600,000   

December 31, 2014

   $ 2,600,000   

March 31, 2015

   $ 2,600,000   

June 30, 2015

   $ 2,600,000   

September 30, 2015

   $ 2,600,000   

December 31, 2015

   $ 2,600,000   

March 31, 2016

   $ 2,600,000   

June 30, 2016

   $ 2,600,000   

September 30, 2016

   $ 2,600,000   

December 31, 2016

   $ 2,600,000   

March 31, 2017

   $ 2,600,000   

June 30, 2017

   $ 2,600,000   

 

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(C) CWH shall have, on the last day of each fiscal quarter set forth below,
Consolidated EBITDA for the four fiscal quarters ending on such day (or with
respect to the fiscal quarters ending on or before December 31, 2013, the period
commencing on the Closing Date and ending on the last day of such fiscal
quarter) of not less than the following:

 

Fiscal Quarter Ending

   Minimum
Consolidated
EBITDA  

June 30, 2012

   $ 4,650,000   

September 30, 2012

   $ 4,650,000   

December 31, 2012

   $ 4,650,000   

March 31, 2013

   $ 4,650,000   

June 30, 2013

   $ 4,650,000   

September 30, 2013

   $ 4,650,000   

December 31, 2013

   $ 4,650,000   

March 31, 2014

   $ 4,650,000   

June 30, 2014

   $ 4,650,000   

September 30, 2014

   $ 4,650,000   

December 31, 2014

   $ 4,650,000   

March 31, 2015

   $ 4,650,000   

June 30, 2015

   $ 4,650,000   

September 30, 2015

   $ 4,650,000   

December 31, 2015

   $ 4,650,000   

March 31, 2016

   $ 4,650,000   

June 30, 2016

   $ 4,650,000   

September 30, 2016

   $ 4,650,000   

December 31, 2016

   $ 4,650,000   

March 31, 2017

   $ 4,650,000   

June 30, 2017

   $ 4,650,000   

(D) UPS shall have, on the last day of each fiscal quarter set forth below,
Consolidated EBITDA for the four fiscal quarters ending on such day (or with
respect to the fiscal quarters ending on or before December 31, 2013, the period
commencing on the Closing Date and ending on the last day of such fiscal
quarter) of not less than the following:

 

Fiscal Quarter Ending

   Minimum
Consolidated
EBITDA  

June 30, 2012

   $ 6,350,000   

September 30, 2012

   $ 6,350,000   

December 31, 2012

   $ 6,350,000   

March 31, 2013

   $ 6,350,000   

June 30, 2013

   $ 6,350,000   

September 30, 2013

   $ 6,350,000   

December 31, 2013

   $ 6,350,000   

March 31, 2014

   $ 6,350,000   

June 30, 2014

   $ 6,350,000   

September 30, 2014

   $ 6,350,000   

December 31, 2014

   $ 6,350,000   

March 31, 2015

   $ 6,350,000   

June 30, 2015

   $ 6,350,000   

September 30, 2015

   $ 6,350,000   

December 31, 2015

   $ 6,350,000   

 

44

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March 31, 2016

   $ 6,350,000   

June 30, 2016

   $ 6,350,000   

September 30, 2016

   $ 6,350,000   

December 31, 2016

   $ 6,350,000   

March 31, 2017

   $ 6,350,000   

June 30, 2017

   $ 6,350,000   

 

  (iii) Unrestricted Cash Balance. The Borrower shall not have less than
$4,000,000 in unrestricted cash and Cash Equivalents on the consolidated balance
sheet of the Borrower at any time.

II. NEGATIVE COVENANTS

The Borrower hereby agrees that, so long as the Commitments remain in effect or
any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:

6.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness owed to another Person, except:

(a) Indebtedness of any Loan Party pursuant to any Loan Document;

(b) [Reserved];

(c) Indebtedness including, without limitation, Capital Lease Obligations, in an
aggregate principal amount not to exceed $100,000 at any one time outstanding
secured by Liens permitted by Section 6.3(g);

(d) Indebtedness outstanding on the date hereof and listed on Schedule 6.2(d)
and any refinancings, refundings, renewals or extensions thereof (without any
increase in the principal amount thereof or any shortening of the maturity of
any principal amount thereof);

(e) guarantees by a Loan Party of Indebtedness of another Loan Party with
respect to Indebtedness otherwise permitted to be incurred pursuant to this
Section 6.2;

(f) Indebtedness related to Hedging Agreements not prohibited by Section 6.17;

(g) Indebtedness of a Loan Party to another Loan Party;

(h) Indebtedness consisting of intercompany loans owed by NSBF to any Loan
Party;

(i) Indebtedness in connection with (i) the Capital One NSBF Facility, (ii) the
Capital One CWH Facility and (iii) the Sterling Facility;

(j) guarantees provided by the Borrower in connection with (i) the
Securitization Guaranty and (ii) any Indebtedness under Section 6.2(l) in
connection with future securitization transactions, in the aggregate amount not
to exceed the amount guaranteed pursuant to this Section 6.2(j) as of the
Closing Date;

 

45

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(k) Subordinated Debt of the Borrower or any of its Restricted Subsidiaries in
an amount not to exceed $5,000,000;

(l) Indebtedness attributable to the sale of SBA 7(a) Loans in connection with
securitization transactions consistent with past practices, to the extent such
transactions must be accounted for as such pursuant to GAAP notwithstanding the
true sale of such assets;

(m) Indebtedness in connection with the Black Box Lease Transaction in an amount
not to exceed $900,000; and

(n) Indebtedness consisting of an intercompany loan owed by SBL to Wilshire New
York Partners V, LLC, which by its terms is subordinated to the Obligations in a
manner and to an extent reasonably satisfactory to the Administrative Agent, in
an aggregate amount not to exceed $500,000.

6.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon
any of its Property, whether now owned or hereafter acquired, except for:

(a) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings, provided, that adequate reserves with respect thereto
are maintained on the books of the applicable Person in conformity with GAAP;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not yet due or
that are being contested in good faith by appropriate proceedings, provided,
that adequate reserves with respect thereto are maintained on the books of the
applicable Person in conformity with GAAP;

(c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation;

(d) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business that, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the Property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;

(f) Liens in existence on the date hereof listed on Schedule 6.3(f), securing
Indebtedness permitted by Section 6.2(d), provided, that no such Lien is spread
to cover any additional Property after the Closing Date and that the amount of
Indebtedness secured thereby is not increased;

(g) Liens securing Indebtedness of the Borrower or any other Restricted
Subsidiary incurred pursuant to Section 6.2(c) to finance the acquisition of
fixed or capital assets, provided, that (i) such Liens shall be created within
60 days of the acquisition of such fixed or capital assets, (ii) such Liens do
not at any time encumber any Property other than the Property financed by such
Indebtedness, and (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the amount of Indebtedness initially secured thereby is not
less than 80%, or more than 100% of the purchase price of such fixed or capital
asset;

 

46

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(h) Liens in favor of the Administrative Agent for the benefit of Secured
Parties granted pursuant to any Loan Document;

(i) any interest or title of a lessor under any lease (including, without
limitation, operating leases and UCC financing statements filed by lessors to
evidence such operating leases) entered into by the Borrower or any Restricted
Subsidiary in the ordinary course of its business and covering only the assets
so leased;

(j) Liens securing Indebtedness permitted by Section 6.2(i), (j), (k) and (m);

(k) [Reserved]; and

(l) rights of licencees under licenses granted by the Borrower or any Restricted
Subsidiary in the ordinary course of business.

6.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
Property or business, except that:

(a) any member of the Newtek Group may merge into or consolidate with any other
member of the Newtek Group; provided, however, that, in the case of any such
merger or consolidation involving a Loan Party, the Person formed by such merger
or consolidation shall be a Loan Party; and

(b) any Restricted Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor.

6.5 Limitation on Disposition of Property. Dispose of any of its Property
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Restricted Subsidiary,
issue or sell any shares of such Restricted Subsidiary’s Capital Stock to any
Person, except:

(a) the Disposition of obsolete or worn out property in the ordinary course of
business;

(b) the sale of inventory in the ordinary course of business;

(c) Dispositions permitted by Section 6.4(b);

(d) the sale or issuance of any Restricted Subsidiary’s Capital Stock to the
Borrower or any Subsidiary Guarantor;

(e) the Disposition of other assets having a fair market value not to exceed
$100,000 in the aggregate for any fiscal year of the Borrower;

(f) any Recovery Event, provided, that the requirements of Section 2.8(b) are
complied with in connection therewith;

(g) Dispositions of any line of business if after giving pro forma effect
thereto, the Borrower is in compliance with Section 6.1; provided, that (i) such
Disposition is at fair market value and (ii) the Net Cash Proceeds thereof will
be used to prepay the Loans and as required by Section 2.8(b);

 

47

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(h) Dispositions of accounts receivable (other than current payroll advances) in
the ordinary course of business and in connection with the collection or
compromise thereof; and

(i) (i) Sales in the ordinary course of business of SBA 7(a) Note Receivables,
(ii) sales of Note Participations; (iii) sales to SBA of the SBA 7(a)
Non-Guaranteed Note Receivable portion of any SBA 7(a) Note Receivable with
respect to which SBA also holds the SBA 7(a) Guaranteed Note Receivable portion
thereof; (iv) other Secondary Market Sales of financed SBA loans; and (v) other
dispositions of SBA 7(a) Note Receivables or the collateral therefore, in each
case to the extent required or permitted by the SBA in accordance with SBA Rules
and Regulations; provided, that any sales of SBA 7(a) Guaranteed Note
Receivables or any sales of Note Participations in any SBA 7(a) Guaranteed Note
Receivables may not be for an amount less than par.

6.6 Limitation on Restricted Payments. Declare or pay any dividend on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any Capital Stock of the Borrower or any Restricted Subsidiary, whether now
or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower or any Restricted Subsidiary, or enter into any derivatives or
other transaction with any financial institution, commodities or stock exchange
or clearinghouse (a “Derivatives Counterparty”) obligating the Borrower or any
Restricted Subsidiary to make payments to such Derivatives Counterparty as a
result of any change in market value of any such Capital Stock (collectively,
“Restricted Payments”), except that:

(a) any Restricted Subsidiary may make Restricted Payments to the Borrower or
any Subsidiary Guarantor; and

(b) the Borrower may (i) repurchase outstanding shares of the Borrower’s common
stock in the open market from Persons other than its Affiliates and (ii) declare
and pay dividends on the Borrower’s common stock, in an aggregate amount not to
exceed $1,000,000.

6.7 [Reserved]

6.8 Limitation on Investments. Make any advance, loan, extension of credit (by
way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting an ongoing business from, or make any other investment in,
any other Person (all of the foregoing, “Investments”; for the avoidance of
doubt, Investments shall be limited to any advance, loan, extension of credit,
capital contribution or purchase made directly by a Loan Party), except:

(a) extensions of trade credit in the ordinary course of business;

(b) Investments in Cash Equivalents;

(c) Investments in (i) Unrestricted Subsidiaries and other non-Loan Parties
(other than NSBF); provided, that advances, loans and extensions of credit (by
way of guaranty or otherwise) made to any Unrestricted Subsidiaries or other
non-Loan Parties (other than NSBF) pursuant to this subclause (i) shall not
exceed an aggregate amount of $2,500,000 outstanding at any one time, and
(ii) Permitted Acquisitions, with the Investments made pursuant to this clause
not to exceed $5,000,000 individually or $10,000,000 in the aggregate (with
respect to the aggregate amount of advances, loans and extensions of credit made
under subclause (i) above, such amount shall be deemed to be the amount
outstanding at any one time);

 

48

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(d) Investments consisting of intercompany loans made to NSBF pursuant to
Section 6.2(h);

(e) Investments by the Borrower or any of its Restricted Subsidiaries in the
Borrower or any Person that, prior to such Investment, is a Subsidiary
Guarantor;

(f) SBA 7(a) and other SBA loans, in each case (i) that are originated by the
Borrower or any of its Restricted Subsidiaries in the ordinary course of such
Person’s business, (ii) that are in compliance with and conform to the Required
Procedures and the SBA Rules and Regulations and in all material respects with
all other applicable laws, and (iii) as to which such Person shall have
perfected its security interests and Liens in and to all underlying collateral;
for the avoidance of doubt, this clause (f) shall be construed to permit
purchases by Newtek ABS of SBA 7(a) Non-Guaranteed Note Receivable from NSBF
pursuant to the NSBF Sale and Assignment Agreement;

(g) loans and advances to employees of the Borrower or any of its Restricted
Subsidiaries in the ordinary course of business (including, without limitation,
for travel, entertainment and relocation expenses) in an aggregate amount for
the Borrower and its Restricted Subsidiaries not to exceed $100,000 at any one
time outstanding;

(h) in addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any of its Restricted Subsidiaries in an
aggregate amount (valued at cost) net of returns of capital not to exceed
$100,000 during the term of this Agreement; and

(i) Permitted Joint Ventures.

6.9 Limitation on Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of
Property, the rendering of any service or the payment of any management,
advisory or similar fees, with any Affiliate (other than the Borrower or any
Subsidiary Guarantor) unless such transaction is (a) otherwise permitted under
this Agreement, and (b) upon fair and reasonable terms no less favorable to the
Borrower or such Restricted Subsidiary, as the case may be, than it would obtain
in a comparable arm’s length transaction with a Person that is not an Affiliate;
provided, that sales of SBA 7(a) Non-Guaranteed Note Receivables by NSBF to
Newtek ABS pursuant to a securitization pursuant to the NSBF Sale and Assignment
Agreement are expressly permitted under this Section 6.9.

6.10 [Reserved]

6.11 Limitation on Changes in Fiscal Periods. Permit the fiscal year of each of
the Borrower, NSBF, CWH and UPS to end on a day other than December 31 or change
the method of determining fiscal quarters for each of the Borrower, NSBF, CWH
and UPS.

6.12 Limitation on Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of the
Borrower or any Restricted Subsidiary to create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, to secure the Obligations or, in the case of any guarantor,
its obligations under the Guarantee and Collateral Agreement, other than
(a) this Agreement and the other Loan Documents, (b) any agreements governing
any purchase money Liens or Capital Lease Obligations otherwise permitted hereby
(in which case, any prohibition or limitation shall only be effective against
the assets financed thereby), (c) customary restrictions and conditions
contained in agreements relating to the sale of a Restricted Subsidiary or any
assets of the Borrower or any Restricted Subsidiary pending such sale, provided,
that such restrictions and conditions apply only to the Restricted Subsidiary or
assets that are to

 

49

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be sold and such sale is permitted hereunder, (d) restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement (including (i) the Capital One NSBF Loan Documents, (ii) the Capital
One CWH Loan Documents and (iii) the Sterling Loan Documents) if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (e) customary provisions in leases, licenses, sub-leases and
sub-licenses and other contracts restricting the assignment thereof.

6.13 Limitation on Restrictions on Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction
(other than in effect on the date of this Agreement and set forth in Schedule
6.13) on the ability of any Restricted Subsidiary to (a) make Restricted
Payments in respect of any Capital Stock of such Restricted Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Restricted
Subsidiary, (b) make Investments in the Borrower or any other Restricted
Subsidiary or (c) transfer any of its assets to the Borrower or any other
Restricted Subsidiary, except for such encumbrances or restrictions existing
under or by reason of (i) any restrictions existing under the Loan Documents,
(ii) any restrictions with respect to a Restricted Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Restricted
Subsidiary and (iii) restrictions and conditions imposed on any Foreign
Subsidiary by the terms of any Indebtedness of such Foreign Subsidiary permitted
to be incurred hereunder.

6.14 Limitation on Lines of Business. Enter into any business, either directly
or through any Restricted Subsidiary, except for those businesses in which the
Borrower or any Restricted Subsidiary is engaged on the date of this Agreement
or that are reasonably related thereto.

6.15 [Reserved]

6.16 [Reserved]

6.17 Limitation on Hedge Agreements. Enter into any Hedge Agreement other than
Hedge Agreements entered into in the ordinary course of business, and not for
speculative purposes, to protect against changes in interest rates, commodity
prices or foreign exchange rates.

SECTION 7. EVENTS OF DEFAULT

7.1 Event of Default. If any of the following events shall occur and be
continuing:

(a) The Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof;

(b) The Borrower shall fail to pay any interest on any Loan or any other amount
payable hereunder or under any other Loan Document, within three business days
after any such interest or other amount becomes when due in accordance with the
terms hereof or thereof;

(c) Any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or that is contained in any certificate, document
or financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall prove to
have been inaccurate in any material respect on or as of the date made or deemed
made or furnished;

 

50

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(d) Any Loan Party shall default in the observance or performance of any
agreement contained in Section 5.4(a) (with respect to the Borrower only),
Section 5.7(a) or Section 6, or in Section 5 of the Guarantee and Collateral
Agreement or (ii) an “Event of Default” under and as defined in any Mortgage
shall have occurred and be continuing;

(e) Any Loan Party shall default in the observance or performance of any other
agreement contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (d) of this Section, and such default shall
continue unremedied for a period of 15 days after the earlier of (i) the date on
which a Responsible Officer of such Loan Party becomes aware of such failure and
(ii) the date on which written notice thereof shall have been given to such Loan
Party by the Administrative Agent or any Lender;

(f) Any member of the Newtek Group shall (i) default in making any payment of
any principal of any Indebtedness (including, without limitation, any Guarantee
Obligation, but excluding the Loans) on the scheduled or original due date with
respect thereto; or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or to
become subject to or mandatory offer to purchase by the obligor thereunder or
(in the case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; provided, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (f) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) or (iii) of this paragraph
(f) shall have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $1,000,000;

(g) (i) Any Loan Party shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Loan Party shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Loan Party any case, proceeding or other action of a nature referred
to in clause (i) above that (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 30 days; or (iii) there shall be commenced against any
Loan Party any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 30 days from the entry thereof; or (iv) any Loan Party
shall take any corporate action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) any Loan Party shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they become
due;

(h) (i) Any Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether
or not waived, shall exist with respect to any

 

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Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of
the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders shall be likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or condition
shall occur or exist with respect to a Plan; and in each case in clauses
(i) through (vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the Required
Lenders, reasonably be expected to have a Material Adverse Effect;

(i) One or more judgments or decrees shall be entered against any Loan Party
involving for any Loan Party taken as a whole a liability (not fully covered by
insurance as to which the relevant insurance company has acknowledged coverage)
of $500,000 or more, and all such judgments or decrees shall not have been paid,
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof;

(j) Any of the Security Documents shall cease, for any reason (other than by
reason of the express release thereof pursuant to the terms thereof), to be in
full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby;

(k) Any provision of any Loan Document after delivery thereof shall cease, for
any reason (other than by reason of the express release thereof pursuant to the
terms thereof), to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert;

(l) Any Change of Control shall occur; or

(m) Any Capital One Event of Default shall occur;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, the Administrative Agent
may, with the consent of the Required Lenders (or upon the request of the
Required Lenders, the Administrative Agent shall), by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable;
provided, that to the extent the occurrence of any Default or Event of Default
is not directly attributable to NSBF, neither the Administrative Agent nor any
Lender shall have the right to make any demands for payment from NSBF or
exercise or enforce any rights or remedies available to it hereunder and under
the Guarantee and Collateral Agreement against the Collateral of NSBF.

7.2 Capital One Event of Default. Notwithstanding any provision of Section 7.1
and elsewhere in this Agreement to the contrary, until the earlier to occur of
(a) 180 days after the Closing Date and (b) the Capital One Document
Modification Effective Date (the earlier to occur of clauses (a) and (b) above,
the “Trigger Event”), the occurrence of any event shall not constitute a Default
or an Event

 

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of Default hereunder unless such event also constitutes a Capital One Default or
a Capital One Event of Default, respectively; provided, that to the extent such
event would have constituted a Default or an Event of Default hereunder but for
the absence of a corresponding Capital One Default or Capital One Event of
Default, then upon the occurrence of the Trigger Event, a Default or Event of
Default, as applicable, shall be deemed to have occurred and be continuing.
Following the occurrence of the Trigger Event, any Default or Event of Default
hereunder shall not be conditioned upon the occurrence of a corresponding
Capital One Default or Capital One Event of Default, respectively. For the
avoidance of doubt, this Section 7.2 shall not limit the ability of the Lenders
to charge default interest pursuant to Section 2.11(b).

SECTION 8. THE ADMINISTRATIVE AGENT

8.1 Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes the Administrative
Agent, in such capacity, to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

8.2 Delegation of Duties. The Administrative Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

8.3 Exculpatory Provisions. Neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person’s own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.

8.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by the Administrative Agent.

 

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The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with Section 9.6 and all actions required by such Section in
connection with such transfer shall have been taken. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.

8.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent shall have received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default”. In the
event that the Administrative Agent shall receive such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or, if
so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement); provided, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.

8.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of a
Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

 

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8.7 Indemnification. The Lenders agree to indemnify the Administrative Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), for, and to save the Administrative
Agent harmless from and against, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of, the Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided,
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the
Administrative Agent’s gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.

8.8 Administrative Agent in Its Individual Capacity. The Administrative Agent
and its affiliates may make loans to, accept deposits from and generally engage
in any kind of business with any Loan Party as though the Administrative Agent
were not the Administrative Agent. With respect to its Loans made or renewed by
it, the Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms “Lender” and
“Lenders” shall include the Administrative Agent in its individual capacity.

8.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent at any time by giving written notice to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 10 days after the retiring Administrative
Agent’s giving of notice of resignation, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent,
selected from among the Lenders. In either case, such appointment shall (unless
an Event of Default under Section 7.1(a), Section 7.1(b) or Section 7.1(g) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term “Administrative Agent” shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent within 30 days after the retiring Administrative Agent’s
giving of notice of resignation, the retiring Administrative Agent shall remain
Administrative Agent until such time as the Administrative Agent appoints a
successor agent as provided above; provided, that the Administrative Agent’s
resignation shall nevertheless become effective 30 days after the retiring
Administrative Agent’s giving of notice of resignation if the Administrative
Agent determines, in its sole discretion, that it is required by law to resign
in its capacity as Administrative Agent. In such case, the Lenders shall assume
and perform all of the duties of the Administrative Agent hereunder until such
time, if any, as the Required Lenders appoint a successor agent as provided for
above. After any retiring Administrative Agent’s resignation as Administrative
Agent, the provisions of this Section 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement and the other Loan Documents.

 

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8.10 Authorization to Release Liens and Guarantees. The Administrative Agent is
hereby irrevocably authorized by each of the Lenders to effect any release of
Liens or guarantee obligations contemplated by Section 8.15 of the Guarantee and
Collateral Agreement.

SECTION 9. MISCELLANEOUS

9.1 Amendments and Waivers. Neither this Agreement or any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 9.1. The Required Lenders and
each Loan Party party to the relevant Loan Document may, or (with the written
consent of the Required Lenders) the Administrative Agent and each Loan Party
party to the relevant Loan Document may, from time to time, (a) enter into
written amendments, supplements or modifications hereto and to the other Loan
Documents (including amendments and restatements hereof or thereof) for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Loan Parties
hereunder or thereunder or (b) waive, on such terms and conditions as may be
specified in the instrument of waiver, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:

 

  (i) forgive the principal amount or extend the final scheduled date of
maturity of any Loan, extend the scheduled date of any amortization payment in
respect of any Loan, reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Commitment of any Lender; require
additional consents to be obtained with respect to the sale or any assignment or
participations of any interests of the Lenders hereunder, in each case without
the consent of the Administrative Agent and each Lender directly affected
thereby;

 

  (ii) amend, modify or waive any provision of this Section, or reduce any
percentage specified in or otherwise amend or modify the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their guarantee obligations
under the Guarantee and Collateral Agreement, in each case without the consent
of the Administrative Agent and all Lenders;

 

  (iii) amend, modify or waive any provision of Section 8, or any other
provision of this Agreement affecting the rights and obligations of the
Administrative Agent, without the consent of the Administrative Agent; or

 

  (iv) amend, modify or waive any provision of Section 2.16 without the consent
of the Administrative Agent and each Lender directly affected thereby.

 

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Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon. Any such waiver, amendment, supplement or modification shall be
effected by a written instrument signed by the parties required to sign pursuant
to the foregoing provisions of this Section; provided, that delivery of an
executed signature page of any such instrument by facsimile transmission shall
be effective as delivery of a manually executed counterpart thereof.

If, in connection with any proposed amendment, modification, waiver or
termination (a “Proposed Change”) requiring the consent of all affected Lenders,
the consent of Required Lenders is obtained but the consent of other Lenders
whose consent is required is not obtained (any such Lender whose consent is not
obtained as described in this Section 9.1 being referred to as a “Non-Consenting
Lender”), then, so long as the Lender acting as the Administrative Agent is not
a Non-Consenting Lender, at the Borrower’s request, an Eligible Assignee
acceptable to the Administrative Agent shall have the right with the
Administrative Agent’s consent and in the Administrative Agent’s discretion
exercised reasonably (but shall have no obligation) to purchase from such
Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon
the Administrative Agent’s request, sell and assign to the Lender acting as the
Administrative Agent or such Eligible Assignee, all of the applicable
Commitments and Loans of such Non-Consenting Lender for an amount equal to the
principal balance of all applicable Loans held by the Non-Consenting Lender and
all accrued interest and fees with respect thereto through the date of sale;
provided, however, that such purchase and sale shall not be effective until the
Administrative Agent shall have received from such Eligible Assignee an
agreement in form and substance reasonably satisfactory to the Administrative
Agent and the Borrower whereby such Eligible Assignee shall agree to be bound by
the terms hereof. Each Lender agrees that, if it becomes a Non-Consenting
Lender, it shall execute and deliver to the Administrative Agent an Assignment
an Acceptance to evidence such sale and purchase and shall deliver to the
Administrative Agent any Note (if the assigning Lender’s Loans are evidenced by
Notes) subject to such Assignment and Acceptance; provided, however, that the
failure of any Non-Consenting Lender to execute an Assignment and Acceptance
shall not render such sale and purchase (and the corresponding assignment)
invalid.

9.2 Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered, or three Business Days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when received, addressed
(a) in the case of the Borrower and the Administrative Agent, as follows and
(b) in the case of the Lenders, as set forth in an administrative questionnaire
delivered to the Administrative Agent or on Schedule I to the Lender Addendum to
which such Lender is a party or, in the case of a Lender which becomes a party
to this Agreement pursuant to an Assignment and Acceptance, in such Assignment
and Acceptance or (c) in the case of any party, to such other address as such
party may hereafter notify to the other parties hereto:

 

The Borrower:  

Newtek Business Services, Inc.

212 W. 35th Street, 2nd Floor

New York, NY 10001

Attention: Chief Executive Officer

Telecopy: 212-356-9542

Telephone: 212-356-9550

 

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The Administrative Agent:  

ABC Funding, LLC

222 Berkeley Street, 18th Floor

Boston, MA 02116

Attention: Todd Hearle, Adam Britt, Gregg Nardone

Telecopy: 617-598-4901

Telephone: 617-598-4801

 

with copy to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention: Douglas R. Urquhart

Telecopy: (212) 310-8007

Telephone: (212) 310-8001

provided, that any notice, request or demand to or upon the Administrative Agent
or any other Lender shall not be effective until received.

9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

9.4 Survival of Representations and Warranties. All representations and
warranties made herein, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

9.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the
Administrative Agent for all of its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements and other charges of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Administrative Agent for all their costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any other documents
prepared in connection herewith or therewith, including, without limitation, the
fees and disbursements of counsel to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, or reimburse each Lender and the
Administrative Agent for, and hold each Lender and the Administrative Agent
harmless from, any and all search, recording and filing fees, financial
examination and collateral appraisal fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other taxes
(except for Other Taxes), if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any

 

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amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, the other Loan Documents and any such other
documents and (d) to pay, indemnify or reimburse each Lender, the Administrative
Agent, their respective affiliates, and their respective officers, directors,
trustees, employees, advisors, agents and controlling persons (each, an
“Indemnitee”) for, and hold each Indemnitee harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower or any of its Subsidiaries or any of their Properties and the fees and
disbursements and other charges of legal counsel in connection with claims,
actions or proceedings by any Indemnitee against the Borrower hereunder (all the
foregoing in this clause (d), collectively, the “Indemnified Liabilities”),
provided, that the Borrower shall have no obligation hereunder to any Indemnitee
with respect to Indemnified Liabilities to the extent such Indemnified
Liabilities are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted primarily from the gross negligence or
willful misconduct of such Indemnitee. No Indemnitee shall be liable for any
damages arising from the use by unauthorized persons of Information or other
materials sent through electronic, telecommunications or other information
transmission systems that are intercepted by such persons or for any special,
indirect, consequential or punitive damages in connection with the Facilities.
Without limiting the foregoing, and to the extent permitted by applicable law,
the Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries so to waive, all rights
for contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section shall be payable not later than 30 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section shall be
submitted to the Borrower at the address of the Borrower set forth in
Section 9.2, or to such other Person or address as may be hereafter designated
by the Borrower in a notice to the Administrative Agent. The agreements in this
Section shall survive repayment of the Loans and all other amounts payable
hereunder.

9.6 Successors and Assigns; Participations and Assignments. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower, the Lenders, the
Administrative Agent, all future holders of the Loans and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Administrative Agent and each Lender.

(b) Any Lender may, without the consent of the Borrower, in accordance with
applicable law, at any time sell to one or more banks, financial institutions or
other entities (each, a “Participant”) participating interests in any Loan owing
to such Lender, any Commitment of such Lender or any other interest of such
Lender hereunder and under the other Loan Documents. In the event of any such
sale by a Lender of a participating interest to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Participant under
any such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would require the consent of all Lenders pursuant to Section 9.1. The Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid,

 

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or shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided, that in purchasing such
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 9.7(a) as fully as
if such Participant were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.15 and 2.16 with
respect to its participation in the Commitments and the Loans outstanding from
time to time as if such Participant were a Lender; provided, that in the case of
Section 2.16, such Participant shall have complied with the requirements of said
Section, and provided, further, that no Participant shall be entitled to receive
any greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred. Each Lender that sells a participating interest shall, acting solely
for this purpose as agent of the Borrower, maintain a register on which it
enters the name and address of each Participant and the principal amounts (and
stated interest) of each Participant’s interest in the Loans (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
Loans) to any Person except to the extent that such disclosure is necessary to
establish that such Loan is in registered form under Section 5f.103-1(c) of the
United States Treasury Regulations. The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participating interest for all purposes of this Agreement notwithstanding notice
to the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(c) Any Lender (an “Assignor”) may, in accordance with applicable law and upon
written notice to the Administrative Agent, at any time and from time to time
assign to any Eligible Assignee or, with the consent of the Administrative Agent
and the Borrower (which, in each case, shall not be unreasonably withheld or
delayed), to an additional bank, financial institution or other entity (each, an
“Assignee”) all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit D
(an “Assignment and Acceptance”), executed by such Assignee and such Assignor
(and, where the consent of the Administrative Agent and the Borrower is required
pursuant to the foregoing provisions, by the Administrative Agent and the
Borrower) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided, that no such assignment to an Assignee
(other than any Lender or any Affiliate, Related Fund or Control Investment
Affiliate thereof) shall be in an aggregate principal amount of less than
$1,000,000 (other than in the case of an assignment of all of a Lender’s
interests under this Agreement), unless otherwise agreed by the Administrative
Agent. Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with Commitments and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor’s rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto, except as to Section 2.15, 2.16 and 9.5 in respect of the period prior
to such effective date). For purposes of the minimum assignment amounts set
forth in this paragraph, multiple assignments by two or more Related Funds shall
be aggregated. Notwithstanding any provision of this Section, the consent of the
Borrower shall not be required for any assignment that occurs at any time when
any Event of Default shall have occurred and be continuing.

 

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(d) The Administrative Agent shall, as agent of the Borrower, maintain at its
address referred to in Section 9.2 a copy of each Assignment and Acceptance
delivered to it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of (and
stated interest on) the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked “canceled”.

(e) Upon its receipt of an Assignment and Acceptance executed by an Assignor and
an Assignee (and, in any case where the consent of any other Person is required
by Section 9.6(c), by each such other Person) together with payment to the
Administrative Agent of a registration and processing fee of $3,500 (treating
multiple, simultaneous assignments by or to two or more Related Funds as a
single assignment) (except that no such registration and processing fee shall be
payable in the case of an Assignee which is already a Lender or is an affiliate
or Related Fund of a Lender or a Person under common management with a Lender),
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Borrower. On or prior to such effective date, the
Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Note of the assigning Lender) a new
Note to the order of such Assignee in an amount equal to the Commitment and/or
Loans, as the case may be, assumed or acquired by it pursuant to such Assignment
and Acceptance and, if the Assignor has retained a Commitment and/or Loans, as
the case may be, upon request, a Note to the order of the Assignor in an amount
equal to the Commitment and/or Loans, as the case may be, retained by it
hereunder. Such new Note or Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note or Notes replaced thereby.

(f) For avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section concerning assignments of Loans and Notes relate only
to absolute assignments and that such provisions do not prohibit assignments
creating security interests in Loans and Notes, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.

9.7 Adjustments; Set-off. (a) If any Lender (a “Benefited Lender”) shall at any
time receive any payment of all or part of the Obligations owing to it, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 7.1(g), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Lender, if any, in respect of such other
Lender’s Obligations, such Benefited Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender’s Obligations, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest.

 

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(b) In addition to any rights and remedies of the Lenders provided by law, each
Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, provided, that the failure to give such notice shall not affect
the validity of such setoff and application.

9.8 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement or of a
Lender Addendum by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

9.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

9.10 Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Borrower, the Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.

9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

9.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:

(a) submits for itself and its Property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

 

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(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 9.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

9.13 Acknowledgments. The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;

(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Administrative Agent and the Lenders, on one hand, and the Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Administrative Agent and the Lenders or among the Borrower and the Lenders.

9.14 Confidentiality. Each of the Administrative Agent and the Lenders agrees to
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided, that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any thereof, (b) to
any Participant or Assignee (each, a “Transferee”) or prospective Transferee
that agrees to comply with the provisions of this Section or substantially
equivalent provisions, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) to any of its
investors and potential investors, (e) upon the request or demand of any
Governmental Authority having jurisdiction over it, (f) in response to any order
of any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (g) in connection with any litigation or
similar proceeding, (h) that has been publicly disclosed other than in breach of
this Section, (i) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender’s investment portfolio in connection with
ratings issued with respect to such Lender or (i) in connection with the
exercise of any remedy hereunder or under any other Loan Document; provided,
further, that any investors and potential investors that receive any non-public
information pursuant to clause (c) of this Section 9.14 may disclose such
information to the same extent permitted in the case of the Administrative Agent
and the Lenders pursuant to clauses (e) and (i) of this Section 9.14.
Notwithstanding anything herein to the contrary, any party subject to
confidentiality obligations hereunder or under any other related document (and
any employee, representative or other agent of such party) may disclose to any
and all persons, without limitation of any kind, such party’s U.S. federal
income tax treatment and tax structure of the transactions contemplated by this
Agreement relating to such party and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure. However, no such party shall disclose any
information relating to such tax treatment or tax structure to the extent
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.

 

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9.15 Accounting Changes. In the event that any “Accounting Change” (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting Change with the desired result that the criteria for evaluating the
Borrower’s financial condition shall be the same after such Accounting Change as
if such Accounting Change had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. “Accounting Change”
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.

9.16 Delivery of Lender Addenda. Each initial Lender shall become a party to
this Agreement by delivering to the Administrative Agent a Lender Addendum duly
executed by such Lender, the Borrower and the Administrative Agent.

9.17 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

9.18 Capital One Intercreditor Agreement. Each Lender hereby (a) consents to the
subordination of the Liens securing the Obligations on the terms set forth in
the Capital One Intercreditor Agreement, (b) agrees that this Agreement and the
other Loan Documents, and the rights and remedies of the Administrative Agent
and the Lenders hereunder and thereunder, are subject to the terms of the
Capital One Intercreditor Agreement, (c) agrees that it will be bound by and
will take no actions contrary to the provisions of the Capital One Intercreditor
Agreement and (d) authorizes and instructs the Administrative Agent to enter
into the Capital One Intercreditor Agreement and to subject the Liens securing
the Obligations to the provisions thereof.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

NEWTEK BUSINESS SERVICES, INC., as Borrower By:  

/s/ Barry Sloane

  Name:   Barry Sloane   Title:   CEO

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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ABC FUNDING, LLC, as Administrative Agent By:   Summit Partners, L.P. Its:  
Manager By:   Summit Master Company, LLC Its:   General Partner By:  

/s/ Tom Roberts

  Name:   Tom Roberts   Title:   Member

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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SUMMIT PARTNERS CREDIT FUND, L.P.,

as Lender

By:   Summit Partners Credit GP, L.P. Its:   General Partner By:   Summit
Partners Credit GP, LLC Its:   General Partner By:  

/s/ Tom Roberts

  Name:   Tom Roberts   Title:   Authorized Signatory

SUMMIT PARTNERS CREDIT FUND A-1, L.P.,

as Lender

By:   Summit Partners Credit GP A-1, L.P. Its:   General Partner By:   Summit
Partners Credit GP A-1, LLC Its:   General Partner By:  

/s/ Tom Roberts

  Name:   Tom Roberts   Title:   Authorized Signatory SUMMIT INVESTORS I, LLC,
as Lender By:   Summit Investors Management, LLC Its:   Manager By:   Summit
Partners, L.P. Its:   Manager   By:   Summit Master Company, LLC Its:   General
Partner By:  

/s/ Tom Roberts

  Name:   Tom Roberts   Title:   Authorized Signatory

[SIGNATURE PAGE TO CREDIT AGREEMENT]

--------------------------------------------------------------------------------

SUMMIT INVESTORS I (UK), L.P., as Lender By:   Summit Investors Management, LLC
Its:   Manager By:   Summit Partners, L.P. Its:   Manager By:   Summit Master
Company, LLC Its:   General Partner By:  

/s/ Tom Roberts

  Name:   Tom Roberts   Title:   Authorized Signatory

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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Schedule 1.1

Unrestricted Subsidiaries

Automated Merchant Services, Inc.

Business Connect, LLC

Exponential Business Development Co., Inc.

First Bankcard Alliance of Alabama, LLC

Fortress Data Management, LLC

Newtek Asset Backed Securities, LLC

Secure CyberGateway Services, LLC

Solar Processing Solutions, LLC

Summit Systems and Design, LLC

The Texas Whitestone Group, LLC

Where Eagles Fly, LLC

The Whitestone Group, LLC

Wilshire Alabama Partners, LLC

Wilshire Colorado Partners, LLC

Wilshire DC Partners, LLC

Wilshire Holdings I, Inc.

Wilshire Holdings II, Inc.

Wilshire Louisiana Bidco, LLC

Wilshire Louisiana Capital Management Fund, LLC

Wilshire Louisiana Partners II, LLC

Wilshire Louisiana Partners III, LLC

Wilshire Louisiana Partners IV, LLC

Wilshire New York Advisers II, LLC

Wilshire New York Partners III, LLC

Wilshire New York Partners IV, LLC

Wilshire New York Partners V, LLC

Wilshire Partners, LLC

Wilshire Texas Partners I, LLC

and any company (other than CDS) which becomes a subsidiary of any of the
foregoing