Exhibit 10.1
DRAFT 7/22/07
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Second Amendment" or this
"Amendment") is entered into as of July __, 2007, to be effective as of June 30,
2007, 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 Second 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 (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 certain existing Events
of Default under the Loan Agreement and 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 Second 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 SECOND 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.
BORROWER'S ACKNOWLEDGEMENT AND LENDER'S WAIVER OF CERTAIN EVENTS
OF DEFAULT.
BORROWER ACKNOWLEDGES THAT, IMMEDIATELY PRIOR TO THE EFFECTIVENESS
OF THIS SECOND AMENDMENT, EVENTS OF DEFAULT HAVE OCCURRED AND ARE CONTINUING DUE
TO THE FOLLOWING (COLLECTIVELY, THE "APPLICABLE DEFAULTS"): (A) BORROWER'S
FAILURE TO DELIVER ITS INTERNALLY PREPARED FINANCIAL STATEMENTS AS OF THE END OF
ITS FISCAL MONTH ENDED MARCH 31, 2007 WITHIN THE TIME PERIODS REQUIRED BY
SECTION 5.1(B)(I) AND SECTION 7.1(B) OF THE LOAN AGREEMENT, (B) BORROWER'S
FAILURE TO MEET THE NET INTEREST COVERAGE TEST UNDER SECTION 5.11(E) OF THE LOAN
AGREEMENT AS OF THE END OF ITS FISCAL QUARTER ENDED MARCH 31, 2007, AND
(C) BORROWER'S FAILURE TO SATISFY THE CONDITION SUBSEQUENT SET FORTH IN
SECTION 8.4(E) OF THE LOAN AGREEMENT BY DELIVERING THE DOCUMENTS REQUIRED
THEREBY BY THE DEADLINES SET FORTH THEREIN.
UPON THE EFFECTIVENESS OF THIS
SECOND AMENDMENT, LENDER HEREBY WAIVES EACH OF THE APPLICABLE DEFAULTS.
1
3.
AMENDMENTS TO THE