Exhibit 10.1

 

CONDITIONAL WAIVER AGREEMENT REGARDING EVENT OF DEFAULT

 

THIS CONDITIONAL WAIVER AGREEMENT REGARDING EVENT OF DEFAULT (this “Conditional
Waiver”) is entered into as of December 31, 2008, by and between AMERICAN
BUSINESS LENDING, INC., a Texas corporation (“Borrower”), and WELLS FARGO
FOOTHILL, LLC, a Delaware limited liability company (“Lender”), with reference
to the following facts, which shall be construed as part of this Conditional
Waiver:

 

RECITALS

 

A.                                   Borrower and Lender have entered into that
certain Loan Agreement dated as of December 15, 2006, as amended by that certain
First Amendment to Loan Agreement dated as of February 27, 2007, and that
certain Second Amendment to Loan Agreement entered into as of July 30, 2007 to
be effective as of June 30, 2007 (as amended or modified from time to time, the
“Loan Agreement”), pursuant to which Lender is providing financial
accommodations to or for the benefit of Borrower upon the terms and conditions
contained therein.  Unless otherwise defined herein, capitalized terms or
matters of construction defined or established in the Loan Agreement shall be
applied herein as defined or established therein.

 

B.                                     Borrower has requested that Lender waive
an existing Event of Default under the Loan Agreement, and Lender is willing to
do so to the extent provided in, and subject to the terms and conditions of,
this Conditional Waiver.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the continued performance by Borrower of its
promises and obligations under the Loan Agreement and the other Loan Documents,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and Lender hereby agree as follows:

 

1.                                       Ratification and Incorporation of Loan
Agreement and Other Loan Documents. Except to the extent waived under this
Conditional Waiver, (a) Borrower hereby acknowledges, confirms, and ratifies all
of the terms and conditions set forth in, and all of its obligations under, the
Loan Agreement and the other Loan Documents, and (b) all of terms and conditions
set forth in the Loan Agreement and the other Loan Documents are incorporated
herein by this reference as if set forth in full herein.

 

2.                                       Borrower’s Acknowledgement and Lender’s
Conditional Waiver of an Event of Default.  Borrower acknowledges that,
immediately prior to the effectiveness of this Conditional Waiver, an Event of
Default has occurred and is continuing due to Borrower’s failure to meet the
minimum Tangible Net Worth test under Section 5.11(a) of the Loan Agreement as
of the end of its fiscal quarter ended December 31, 2008 (the “Applicable
Default”).  Lender hereby waives the Applicable Default; provided, however, that
an express condition precedent to the effectiveness of such waiver is Borrower’s
maintaining, on a consolidated basis with Borrower’s Subsidiaries, Tangible Net
Worth of not less than $5,500,000 as of the end of such fiscal quarter after
taking into account any dividends paid or accrued.

 

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3.                                       Conditions Precedent.  Notwithstanding
any other provision of this Conditional Waiver, this Conditional Waiver shall be
of no force or effect, and Lender shall not have any obligations hereunder,
until the following conditions have been satisfied:

 

3.1                                 Execution of Conditional Waiver.  Lender
shall have received this Conditional Waiver, duly executed by Borrower and
Lender.

 

3.2                                 No Default or Event of Default.  No Default
or Event of Default shall have occurred and be continuing, except for the
Applicable Default.

 

4.                                       Representations and Warranties re Loan
Agreement.  Borrower hereby represents and warrants that the representations and
warranties contained in the Loan Agreement were true and correct in all material
respects when made and, except to the extent that (a) a particular
representation or warranty by its terms expressly applies only to an earlier
date, or (b) Borrower has previously advised Lender in writing as contemplated
under the Loan Agreement, are true and correct in all material respects as of
the date hereof.  Borrower hereby further represents and warrants that no event
has occurred and is continuing, or would result from the transactions
contemplated under this Conditional Waiver, that constitutes or would constitute
a Default or an Event of Default, except for the Applicable Default.

 

5.                                       Miscellaneous.

 

5.1                                 Headings.  The various headings of this
Conditional Waiver are inserted for convenience of reference only and shall not
affect the meaning or interpretation of this Conditional Waiver or any
provisions hereof.

 

5.2                                 Counterparts.  This Conditional Waiver may
be executed by the parties hereto in several counterparts, each of which shall
be deemed to be an original and all of which together shall be deemed to be one
and the same instrument.  Delivery of an executed counterpart of a signature
page to this Conditional Waiver by facsimile transmission shall be effective as
delivery of a manually executed counterpart thereof.

 

5.3                                 Interpretation.  No provision of this
Conditional Waiver shall be construed against or interpreted to the disadvantage
of any party hereto by any court or other governmental or judicial authority by
reason of such party’s having or being deemed to have structured, drafted or
dictated such provision.

 

5.4                                 Complete Agreement.  This Conditional Waiver
constitutes the complete agreement between the parties with respect to the
subject matter hereof, and supersedes any prior written or oral agreements,
writings, communications or understandings of the parties with respect thereto.

 

5.5                                 Governing Law.  This Conditional Waiver
shall be governed by, and construed and enforced in accordance with, the laws of
the State of New York applicable to contracts made and performed in such state,
without regard to the principles thereof

 

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regarding conflict of laws.

 

5.6                                 Effect.  Upon the effectiveness of this
Conditional Waiver, each reference in the Loan Agreement to “this Agreement,”
“hereunder,” “hereof” or words of like import shall mean and be a reference to
the Loan Agreement as amended hereby and each reference in the other Loan
Documents to the Loan Agreement, “thereunder,” “thereof,” or words of like
import shall mean and be a reference to the Loan Agreement as affected by the
conditional waiver contained herein.

 

5.7                                 Conflict of Terms.  In the event of any
inconsistency between the provisions of this Conditional Waiver and any
provision of the Loan Agreement, the terms and provisions of this Conditional
Waiver shall govern and control.

 

5.8                                 No Novation or Waiver.  Except as
specifically set forth in this Conditional Waiver, the execution, delivery and
effectiveness of this Conditional Waiver shall not (a) limit, impair, constitute
a waiver by, or otherwise affect any right, power or remedy of, Lender under the
Loan Agreement or any other Loan Document, (b) constitute a waiver of any
provision in the Loan Agreement or in any of the other Loan Documents or of any
Default or Event of Default that may have occurred and be continuing, or
(c) alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Loan Agreement or in any
of the other Loan Documents, all of which are ratified and affirmed in all
respects and shall continue in full force and effect.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Conditional Waiver
Agreement Regarding Event Of Default as of the day and year first above written.

 

 

 

AMERICAN BUSINESS LENDING, INC.,

 

 

a Texas corporation

 

 

 

 

 

 

 

 

By:

 

 

 

 

Charles P. Bell, Jr.

 

 

 

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

WELLS FARGO FOOTHILL, LLC,

 

 

a Delaware limited liability company

 

 

 

 

 

 

 

 

By:

 

 

 

 

Laurel L. Varney

 

 

 

Vice President

 

 

[Signature Page to Conditional Waiver Agreement Regarding Event of Default]

 

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