Exhibit 10.44


 


THIRD
AMENDMENT TO LOAN AGREEMENT


 


THIS
THIRD AMENDMENT TO LOAN AGREEMENT (this “Third Amendment” or this “Amendment”)
is entered into as of February 18, 2009 (the “Execution Date”), to
be effective as of February 1, 2009, 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
Third Amendment:


 


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 dated 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
agree to certain amendments to the Loan Agreement, and Lender is willing to do
so to the extent provided in, and subject to the terms and conditions of, this
Third Amendment.


 


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 as expressly modified under this Third
Amendment, (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.             Amendments
to the Loan Agreement.  The Loan
Agreement is hereby amended as follows:


 


2.1           Addition of New Defined Terms.  Section 1.1
of the Loan Agreement is amended by adding thereto in appropriate alphabetical
order the following new defined terms:


 


a.            “Base Rate Margin” means two
and five-eighths percent (2.625%) per annum.


 


b.            “Borrower Originated Cash Flow
Loan or Partially Secured Loan” shall mean a Borrower Originated Loan that
was funded under Borrower’s 


 


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underwriting standards, but
that does not qualify as a Borrower Originated Mixed Collateral Loan or a
Borrower Originated Real Estate Loan.


 


c.            “Borrower Originated Mixed
Collateral Loan” shall mean a Borrower Originated Loan that was funded
under Borrower’s underwriting standards based upon being secured by equipment
or other tangible personal property having an appraised value, or a combination
of such equipment or other tangible personal property and commercial real
estate.


 


d.            “Borrower Originated Real Estate
Loan” shall mean a Borrower Originated Loan that was funded under Borrower’s
underwriting standards based upon being secured by commercial real estate.


 


e.            “Third Amendment” shall mean
the Third Amendment to Loan Agreement dated as of February 18, 2009, and
effective as of February 1, 2009, between Borrower and Lender.


 


2.2            Deletion of Certain Existing
Defined Terms and Exhibit Relating to LIBOR Option.  (i) Section 1.1
of the Loan Agreement is amended by deleting the existing definitions of the
terms “Funding Losses,” “LIBOR Deadline,” “LIBOR Notice,” and “LIBOR Option,”,
and (ii) Exhibit F to the Loan Agreement is deleted.


 


2.3            Amendment to Definition of Base
LIBOR Rate.  Section 1.1 of the Loan Agreement is
amended by deleting the existing definition of the term “Base LIBOR Rate” and
replacing it with the following amended and restated version thereof:


 


“Base LIBOR Rate” means the rate per annum,
determined by Lender in accordance with its customary procedures, and utilizing
such electronic or other quotation sources as it considers appropriate (rounded
upwards, if necessary, to the next 1/100%), to be the rate at which Dollar
deposits (for delivery on the first day of the requested Interest Period) in
the amount of $1,000,000 are offered to major banks in the London interbank
market, on or about 1:00 p.m. (Dallas time) two (2) Business Days
prior to the commencement of such Interest Period, for a term of three (3) months,
which determination shall be conclusive in the absence of manifest error.


 


2.4            Amendment to Definition of Base
Rate.  Section 1.1 of the Loan Agreement is amended by deleting
the existing definition of the term “Base Rate” and replacing it with the
following amended and restated version thereof:


 


“Base Rate” means the higher of (i) the
per annum rate which Wells Fargo publicly announces from time to time to be its
prime lending rate, as in effect from time to time, or (ii) the Base LIBOR
Rate in effect from time to time.  Wells
Fargo’s prime lending rate is a reference rate and does not necessarily
represent the lowest or best rate charged to customers.  Wells Fargo may make commercial loans or
other loans at rates of interest at, above or below Wells Fargo’s prime lending
rate.  Each change in Wells Fargo’s prime
lending rate shall be effective from and including the date such change is
publicly announced as being effective.


 


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2.5            Amendment to Definition of
Borrower Originated Loans Borrowing Base. 
Section 1.1 of the
Loan Agreement is amended by deleting the existing definition of the term “Borrower
Originated Loans Borrowing Base” and replacing it with the following amended
and restated version thereof:


 


“Borrower
Originated Loans Borrowing Base” shall mean the amount by which (A) the
sum of (1) up to one hundred percent (100%) of the Net Eligible SBA
Guaranteed Notes Receivable that are Borrower Originated Loans, plus (2) up
to eighty percent (80%) of the Net Eligible Non-Guaranteed Notes Receivable
that are Borrower Originated Real Estate Loans, plus (3) up to
seventy percent (70%) of the Net Eligible Non-Guaranteed Notes Receivable that
are Borrower Originated Mixed Collateral Loans, exceeds
(B) the sum of (1) the Bank Products Reserves with respect to
Borrower Originated Loans, plus (2) the aggregate amount, if any,
of Note Sale Reserves then established and outstanding with respect to Borrower
Originated Loans, plus (3) the aggregate amount of any other
reserves established by Lender pursuant to Section 2.1(c) with
respect to Borrower Originated Loans.


 


2.6            Amendment to Definition of
Maximum Credit Line.  Section 1.1 of the Loan
Agreement is amended by deleting the existing version of the defined term “Maximum
Credit Line” contained therein and replacing it with the following amended and
restated version thereof:


 


“Maximum Credit Line” shall mean $25,000,000,
or such higher amount as Lender may agree to in its sole discretion.


 


2.7            Amendment to Definition of
Termination Date.  Section 1.1 of the Loan
Agreement is amended by deleting the existing version of the defined term “Termination
Date” contained therein and replacing it with the following amended and
restated version thereof:


 


“Termination Date” shall mean the earliest
of: (a) January 31, 2010 (unless a later date is agreed to in writing
by Borrower and Lender); (b) the date that Borrower elects to terminate
this Agreement and repays the Obligations in full in accordance with the terms
of Section 2.6; and (c) the
date Lender elects to terminate Borrower’s right to receive Revolving Loans in
accordance with Section 7.2.


 


2.8            Amendment to Interest Rate.  Section 2.3(b) of
the Loan Agreement is amended by deleting the existing version thereof and
replacing it with the following amended and restated version thereof:


 


(b)          Interest shall accrue
on the Revolving Loans at a rate equal to (i) in the case of a LIBOR Rate
Loan, at a per annum rate equal to the greater of (A) the LIBOR Rate for
the applicable Interest Period plus the LIBOR Rate Margin, or (B) three
and five-eighths percent (3.625%) per annum; (ii) in the case of a Base Rate
Loan, at a floating per annum rate equal to the greater of (A) the Base
Rate plus the Base Rate Margin, or (B) seven and one-half percent
(7.50%) per annum; and (iii) otherwise, at a floating per annum rate equal
to the greater of (A) the Base 


 


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Rate
plus the Base Rate Margin, or (B) seven and one-half percent
(7.50%) per annum.


 


2.9            Amendment to Unused Credit Line
Fee.  Section 2.5(b) of
the Loan Agreement is amended by adding the following additional text at the
end of the existing text thereof:


 


Without
limiting the generality of the foregoing, upon the effectiveness of the Third
Amendment the Maximum Credit Line was reduced to $25,000,000 as of February 1,
2009, and the fee payable pursuant to this Section 2.5(b) for
periods starting on or after February 1, 2009 shall be calculated using
$25,000,000 as the amount of the Maximum Credit Line unless and until the
Maximum Credit Line is further modified.


 


2.10          Amendment to Eliminate Elective
Nature of LIBOR Rate Pricing.  Section 2.20 of the Loan Agreement is amended by
changing the title of that section from “LIBOR Option” to “LIBOR
Pricing” and deleting the existing versions of Sections 2.20(a),
(b) and (c) and
replacing them with the following amended and restated versions thereof:


 


(a)           Interest and Interest Payment Dates. 
Except as  otherwise
provided in Section 2.20(d)(ii), interest
on all of the Revolving Loans shall be charged at a rate of interest based upon
the LIBOR Rate.  Interest on LIBOR Rate
Loans shall be payable on the earliest of (i) the first calendar day after
the last day of the Interest Period applicable thereto, (ii) the
occurrence of an Event of Default in consequence of which Lender has elected to
accelerate the maturity of all or any portion of the Obligations, or (iii) termination
of this Agreement pursuant to the terms hereof.


 


(b)          [Intentionally Omitted].


 


(c)           [Intentionally Omitted].


 


2.11          Amendment to Special Provisions
Applicable to LIBOR Rate.  Section 2.20(d)(ii) of the Loan Agreement is
amended by deleting the existing version thereof and replacing it with the
following amended and restated version thereof:


 


(ii)           In
the event that any change in market conditions or any law, regulation, treaty,
or directive, or any change therein or in the interpretation of application
thereof, shall at any time after the date hereof, in the reasonable opinion of
Lender, make it unlawful or impractical for Lender to fund or maintain LIBOR
Rate Loans or to continue such funding or maintaining, or to determine or
charge interest rates based upon the LIBOR Rate, Lender shall give notice of
such changed circumstances to Borrower and (A) in the case of any LIBOR
Rate Loans that are outstanding, the date specified in Lender’s notice shall be
deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and
interest upon the LIBOR Rate Loans thereafter shall accrue interest at the rate
then applicable to Base Rate Loans, and (B) all Revolving Loans shall
funded and maintained as Base Rate Loans until Lender determines that it would
no longer be unlawful or 


 


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impractical to fund or
maintain LIBOR Rate Loans or to determine or charge interest rates based upon
the LIBOR Rate.


 


2.12          Amendment to Minimum Tangible Net
Worth Covenant.  Section 5.11(a) of
the Loan Agreement is amended by deleting the existing version thereof and
replacing it with the following amended and restated version thereof:


 


(a)           Minimum
Tangible Net Worth. 
As of the end of each fiscal quarter shown below, maintain, on a consolidated basis
with Borrower’s Subsidiaries, and after taking into account any dividends paid
or accrued, Tangible Net Worth of not less than $5,500,000 plus 100% of
the sum of the positive amounts, if any (but not any negative amounts), of
Borrower’s net income for each of the Fiscal Quarters ending on or after March 31,
2009 through the date of measurement the corresponding amount shown for such
fiscal quarter.


 


2.13          Amendment to Criteria for Net
Eligible Non-Guaranteed Notes Receivable.  Schedule 1.1(a) of the
Loan Agreement is amended by deleting the existing version of paragraph J thereof and replacing it with the following
amended and restated version thereof:


 


J.             If the
Non-Guaranteed Note Receivable is a Borrower Originated Loan, then such
Non-Guaranteed Note Receivable (i) is not a Borrower Originated Cash Flow
Loan or Partially Secured Loan and (ii) does not cause the portion of Net
Eligible Non-Guaranteed Notes Receivable that are Borrower Originated Mixed
Collateral Loans to exceed twenty percent (20%) of the total Net Eligible
Non-Guaranteed Notes Receivable that are Borrower Originated Loans; provided,
that in any case covered by (ii) above, such Non-Guaranteed Note
Receivable will be ineligible only to the extent of such excess;


 


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


 


3.1            Third Amendment and other
Documents in Connection therewith. 
Lender shall have received the following, each in form and substance
satisfactory to Lender:


 


a.            this Third Amendment, duly executed
by Borrower and Lender;


 


b.            an Amended and Restated General
Continuing Limited Guaranty  executed by
FirstCity Financial in favor of Lender (the “Amended FCF Guaranty”),
amending and restating the General Continuing Limited Guaranty dated as
of February 27, 2007
executed by FirstCity Financial in favor of Lender with respect to certain of
the Obligations (the “Original FCF Guaranty”), which Amended FCF
Guaranty amends the “Guaranteed Obligations” and “Indebtedness” thereunder to
include all Obligations of Borrower to Lender under the Loan Agreement and
other Loan Documents, subject only to the “Guaranty Limitation” under the
Original FCF Guaranty;


 


c.            Certificate of the Secretary or an
Assistant Secretary of FirstCity Financial, with respect to the authority of
FirstCity Financial to execute, deliver 


 


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and perform the Amended FCF
Guaranty, and the authority and incumbency of the officer executing the Amended
FCF Guaranty on behalf of FirstCity Financial; and


 


 d.           written
consent by SBA to this Third Amendment and the transactions contemplated
hereby.


 


3.2            No Default or Event of Default.  No Default or Event of Default shall have
occurred and be continuing.


 


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 Third
Amendment, that constitutes or would constitute a Default or an Event of
Default.


 


5.             Borrower’s
Waiver of Claims Arising Prior to Execution Date of Amendment.  In consideration of Lender entering into this
Third Amendment, Borrower, on behalf of itself, its Subsidiaries and its other
Affiliates, hereby waives, releases, remises and forever discharges Lender and
each other Indemnified Person from any and all claims, suits, actions,
investigations, proceedings or demands, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute or
common law of any kind or character, known or unknown (collectively, the “Claims”),
which Borrower ever had, now has or might hereafter have against Lender or any
other Indemnified Person based on any acts or omissions of Lender or any other
Indemnified Person on or prior to the Execution Date.  Borrower hereby waives and relinquishes for
itself, its Subsidiaries and its other Affiliates all of the rights and
benefits each such Person has, or may have, with respect to the Claims released
under Section 1542 of the California Civil Code or any other similar
statute.  Section 1542 of the
California Civil Code states as follows:


 


A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.


 


Borrower
has been advised by counsel with respect to the release contained in this Section 5.


 


6.             Miscellaneous.


 


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


 


6.2          Counterparts.  This Third Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of 


 


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which together shall be
deemed to be one and the same instrument. 
Delivery of an executed counterpart of a signature page to this
Third Amendment by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.


 


6.3            Interpretation.  No provision of this Third Amendment 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.


 


6.4            Complete Agreement.  This Third Amendment 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.


 


6.5            Governing Law.  This Third Amendment 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 regarding conflict of laws.


 


6.6            Effect.  Upon the effectiveness of this Third
Amendment, 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 amended hereby.


 


6.7            Conflict of Terms.  In the event of any inconsistency between the
provisions of this Third Amendment and any provision of the Loan Agreement, the
terms and provisions of this Third Amendment shall govern and control.


 


6.8            No Novation or Waiver.  Except as specifically set forth in this
Third Amendment, the execution, delivery and effectiveness of this Third
Amendment 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 Third Amendment to Loan
Agreement 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 Varney

  
	
   

  	
   

  	
  Vice President