Document:

Exhibit 10.39

FIRST
NATIONAL BANK OF NORTHERN CALIFORNIA

SPLIT
DOLLAR LIFE INSURANCE AGREEMENT

          THIS
SUPPLEMENTAL LIFE INSURANCE AGREEMENT (the “Agreement”) is adopted this 1st
day of January, 2008, by and between FIRST NATIONAL BANK OF
NORTHERN CALIFORNIA, a bank located in South San Francisco, California (the “Bank”), and DAVID
A. CURTIS (the “Executive”).  

          The
purpose of this Agreement is to retain and reward the Executive, by dividing
the death proceeds of certain life insurance policies which are owned by
the Bank on the life of the Executive with the designated beneficiary of the
Executive. The Bank will pay the life insurance premiums from its general
assets. 

          Death
proceeds payable under this Agreement shall be paid solely by the Insurer from
the proceeds of any Policy(ies) on the life of the Insured. In no event shall
the Bank be obligated to pay a death benefit under this Agreement from its
general funds. Should an Insurer refuse or be unable to pay death proceeds
endorsed to Insured under the express terms of this Agreement, or should the
Bank cancel the Policy(ies) for any reason, Executive’s Beneficiary(ies) shall
not be entitled to a death benefit.

Article 1
Definitions

	
 

	
 

	
 

	
Whenever used in this Agreement, the following terms
 shall have the meanings specified:

	
 

	
 

	
1.1

	
“Bank’s Interest” means the benefit set forth
 in Section 2.1.

	
 

	
 

	
1.2

	
“Beneficiary” means each designated person,
 or the estate of the deceased Executive, entitled to benefits, if any, upon
 the death of the Executive.

	
 

	
 

	
1.3

	
“Beneficiary Designation Form” means the form
 established from time to time by the Plan Administrator that the Executive
 completes, signs and returns to the Plan Administrator to designate one or
 more Beneficiaries.

	
 

	
 

	
1.4

	
“Board” means the
 Board of Directors of the Bank as from time to time constituted.

	
 

	
 

	
1.5

	
“Effective
 Date” shall mean January 1, 2008.

	
 

	
 

	
1.6

	
“Executive’s Interest” means the benefit set
 forth in Section 2.2.

	
 

	
 

	
1.7

	
“Insurer” means the insurance company issuing
 the Policy on the life of the Executive.

	
 

	
 

	
1.8

	
“Net Death Proceeds”
 means the total death proceeds of the Policy minus the greater of 

18

	
 

	
 

	
 

	
(i) the cash surrender value or (ii) the aggregate
 premiums paid by the Bank.

	
 

	
 

	
1.9

	
“Normal Retirement Age” means the Executive
 attaining age 65.

	
 

	
 

	
1.10

	
“Policy” or “Policies” means the
 individual insurance policy or policies adopted by the Bank for purposes of
 insuring the Executive’s life under this Agreement.

	
 

	
 

	
1.11

	
“Separation from Service” shall mean that the
 Executive’s service, as an employee and independent contractor, to the Bank
 and any member of a controlled group as defined in Section 414 of the Code to
 which the Bank belongs, has terminated for any reason, other than by reason
 of a leave of absence approved by the Bank or the death of the Executive.

Article 2

Policy
Ownership/Interests/Insurer/Assignment

	
 

	
 

	
2.1

	
Bank’s Interest. The Bank shall
 own the Policies and shall have the right to exercise all incidents of
 ownership, including the right to terminate the Policy(ies) without the
 consent of the Executive. The Bank shall be the beneficiary of the remaining
 death proceeds of the Policies after the Executive’s Interest is determined
 according to Section 2.2 below.

	
 

	
 

	
2.2

	
Executive’s Interest. Upon
 Executive’s death prior to a Separation from Service, the Executive, or the
 Executive’s assignee, shall have the right to designate the Beneficiary of
 One Million Eight Hundred Thirty-Seven Thousand Nine Hundred and Eleven
 Dollars ($1,837,911), not to exceed the Net Death Proceeds of the Policy. The
 Executive shall also have the right to elect and change settlement options
 with respect to the Executive’s Interest by providing written notice to the
 Bank and the Insurer, provided such change to settlement options is not in
 conflict with Section 409A of the Internal Revenue Code of 1986, as amended
 (the “Code”). Executive shall not have an interest in the Policy upon a
 Separation from Service.

	
 

	
 

	
2.3

	
Offer to Purchase. If the Bank
 discontinues a Policy during the course of this Agreement, the Bank shall
 give the Executive at least thirty (30) days to purchase such Policy. The
 purchase price shall be the fair market value of the Policy, as determined
 under Treasury Reg. §1.61-22(g)(2) or any subsequent applicable authority.
 Such notification shall be in writing.

	
 

	
 

	
2.4

	
Insurer. The Insurer shall be
 bound only by the terms of the Policy. Any payments the Insurer makes or
 actions it takes in accordance with the Policy shall fully discharge it from
 all claims, suits and demands of all entities or persons. The Insurer shall
 not be bound by or be deemed to have notice of the provisions of this
 Agreement.

	
 

	
 

	
2.5

	
Assignment. The Executive may
 assign without consideration all of the Executive’s interests in the Policy
 and in this Agreement to any person, entity or trust. In the event the
 Executive transfers all of the Executive’s interest in the Policy, then all
 of the Executive’s interest in the Policy and in the Agreement shall be
 vested in the Executive’s transferee, who shall be substituted as a party
 hereunder and the Executive shall have no further interest in the Policy or
 in this Agreement.

19

Article 3
Premiums and Imputed Income

	
 

	
 

	
3.1

	
Premium Payment. The Bank shall
 pay all premiums due on all Policies. 

	
 

	
 

	
3.2

	
Economic Benefit. The Bank shall determine the economic
 benefit attributable to the Executive based on the life insurance premium
 factor for the Executive’s age multiplied by the aggregate death benefit
 payable to the Beneficiary. The “life insurance premium factor” is the
 minimum factor applicable under guidance published pursuant to Treasury Reg.
 § 1.61-22(d)(3)(ii) or any subsequent authority.

	
 

	
 

	
3.3

	
Imputed Income. The Bank shall
 impute the economic benefit to the Executive on an annual basis, by adding
 the economic benefit to the Executive’s W-2, or if applicable, Form 1099.

Article 4
General
Limitations

	
 

	
 

	
4.1

	
Termination for Cause. Notwithstanding any provision of this
 Agreement to the contrary, the Executive shall forfeit any right to a benefit
 under this Agreement if the Bank terminates the Executive’s employment for
 cause. Termination of the Executive’s employment for “Cause” shall mean
 termination because of personal dishonesty, willful misconduct, breach of
 fiduciary duty involving personal profit, intentional failure to perform
 stated duties, willful violation of any law, rule or regulation (other than
 traffic violations or similar offenses) or final cease-and-desist order or
 material breach of any provision of the Agreement. For purposes of this
 paragraph, no act or failure to act on the Executive’s part shall be
 considered “willful” unless done, or omitted to be done, by the Executive not
 in good faith and without reasonable belief that the Executive’s action or
 omission was in the best interest of the Bank.

	
 

	
 

	
4.2

	
Removal. Notwithstanding any provision of this
 Agreement to the contrary, the Executive’s rights in the Agreement shall
 terminate if the Executive is subject to a final removal or prohibition order
 issued by an appropriate federal banking agency pursuant to Section 8(e) of
 the Federal Deposit Insurance Act (“FDIA”).

	
 

	
 

	
4.3

	
Suicide or Misstatement. No benefits shall be payable if the
 Executive commits suicide within two years after the date of this Agreement,
 or if the insurance company denies coverage (i) for material misstatements of
 fact made by the Executive on any application for life insurance purchased by
 the Bank, or (ii) for any other reason; provided, however that the Bank shall
 evaluate the reason for the denial, and upon advice of legal counsel and in
 its sole discretion, consider judicially challenging any denial.

20

Article 5
Beneficiaries

	
 

	
 

	
5.1

	
Beneficiary. The Executive shall
 have the right, at any time, to designate a Beneficiary(ies) to receive any
 benefits payable under the Agreement upon the death of the Executive. The
 Beneficiary designated under this Agreement may be the same as or different
 from the beneficiary designation under any other Agreement of the Bank in
 which the Executive participates.

	
 

	
 

	
5.2

	
Beneficiary Designation; Change.
 The Executive shall designate a Beneficiary by completing and signing the
 Beneficiary Designation Form, and delivering it to the Bank or its designated
 agent. The Executive’s beneficiary designation shall be deemed automatically
 revoked if the Beneficiary predeceases the Executive or if the Executive
 names a spouse as Beneficiary and the marriage is subsequently dissolved. The
 Executive shall have the right to change a Beneficiary by completing, signing
 and otherwise complying with the terms of the Beneficiary Designation Form
 and the Bank’s rules and procedures, as in effect from time to time. Upon the
 acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary
 designations previously filed shall be cancelled. The Bank shall be entitled
 to rely on the last Beneficiary Designation Form filed by the Executive and
 accepted by the Bank prior to the Executive’s death.

	
 

	
 

	
5.3

	
Acknowledgment. No designation or change
 in designation of a Beneficiary shall be effective until received, accepted
 and acknowledged in writing by the Bank or its designated agent.

	
 

	
 

	
5.4

	
No Beneficiary Designation. If the
 Executive dies without a valid designation of beneficiary, or if all
 designated Beneficiaries predecease the Executive, then the Executive’s
 surviving spouse shall be the designated Beneficiary. If the Executive has no
 surviving spouse, the benefits shall be made payable to the personal
 representative of the Executive’s estate.

	
 

	
 

	
5.5

	
Facility of Payment. If the Bank
 determines in its discretion that a benefit is to be paid to a minor, to a
 person declared incompetent, or to a person incapable of handling the
 disposition of that person’s property, the Bank may direct payment of such
 benefit to the guardian, legal representative or person having the care or
 custody of such minor, incompetent person or incapable person. The Bank may
 require proof of incompetence, minority or guardianship as it may deem
 appropriate prior to distribution of the benefit. Any payment of a benefit
 shall be a payment for the account of the Executive and the Executive’s
 Beneficiary, as the case may be, and shall be a complete discharge of any
 liability under the Agreement for such payment amount.

Article 6
Claims And Review Procedure

	
 

	
 

	
 

	
6.1

	
Claims Procedure. The Executive or
 Beneficiary (“claimant”) who has not received benefits under the Agreement
 that he or she believes should be paid shall make a claim for such benefits
 as follows:

	
 

	
 

	
 

	
 

	
6.1.1

	
Initiation – Written Claim. The
 claimant initiates a claim by submitting to the Bank a written claim for the
 benefits.

	
 

	
 

	
 

	
 

	
6.1.2

	
Timing of Bank Response. The Bank
 shall respond to such claimant within 90 days after receiving the claim. If
 the Bank determines that special circumstances require additional time for
 processing the claim, the Bank can extend the response period by an
 additional 90 days by notifying the claimant in writing, prior to the end of
 the initial 90-day period, that an additional period is required. The notice
 of extension must set forth the special circumstances and the date by which
 the Bank expects to render its decision.

21

	
 

	
 

	
 

	
 

	
 

	
6.1.3

	
Notice of Decision. If the Bank
 denies part or all of the claim, the Bank shall notify the claimant in
 writing of such denial. The Bank shall write the notification in a manner
 calculated to be understood by the claimant. The notification shall set
 forth:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
The specific reasons for the denial;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
A reference to the specific provisions of the
 Agreement on which the denial is based;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
A description of any additional information or
 material necessary for the claimant to perfect the claim and an explanation
 of why it is needed;

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
An explanation of the Agreement’s review procedures
 and the time limits applicable to such procedures; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
A statement of the claimant’s right to bring a civil
 action under ERISA Section 502(a) following an adverse benefit determination
 on review.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
6.2

	
Review Procedure. If the Bank
 denies part or all of the claim, the claimant shall have the opportunity for
 a full and fair review by the Bank of the denial, as follows:

	
 

	
 

	
 

	
 

	
 

	
6.2.1

	
Initiation – Written Request. To
 initiate the review, the claimant, within 60 days after receiving the Bank’s
 notice of denial, must file with the Bank a written request for review.

	
 

	
 

	
 

	
 

	
 

	
6.2.2

	
Additional Submissions – Information Access.
 The claimant shall then have the opportunity to submit written comments,
 documents, records and other information relating to the claim. The Bank
 shall also provide the claimant, upon request and free of charge, reasonable
 access to, and copies of, all documents, records and other information
 relevant (as defined in applicable ERISA regulations) to the claimant’s claim
 for benefits.

	
 

	
 

	
 

	
 

	
 

	
6.2.3

	
Considerations on Review. In
 considering the review, the Bank shall take into account all materials and
 information the claimant submits relating to the claim, without regard to
 whether such information was submitted or considered in the initial benefit
 determination.

	
 

	
 

	
 

	
 

	
 

	
6.2.4

	
Timing of Bank’s Response. The
 Bank shall respond in writing to such claimant within 60 days after receiving
 the request for review. If the Bank determines that special circumstances
 require additional time for processing the claim, the Bank can extend the
 response period by an additional 60 days by notifying the claimant in
 writing, prior to the end of the initial 60-day period, that an additional
 period is required. The notice of extension must set forth the special
 circumstances and the date by which the Bank expects to render its decision.

	
 

	
 

	
 

	
 

	
 

	
6.2.5

	
Notice of Decision. The Bank shall
 notify the claimant in writing of its decision on review. The Bank shall
 write the notification in a manner calculated to be understood by the
 claimant. The notification shall set forth:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
The specific reasons for the denial;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
A reference to the specific provisions of the
 Agreement on which the denial is based;

22

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
A statement that the claimant is entitled to
 receive, upon request and free of charge, reasonable access to, and copies
 of, all documents, records and other information relevant (as defined in
 applicable ERISA regulations) to the claimant’s claim for benefits; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
A statement of the claimant’s right to bring a civil
 action under ERISA Section 502(a).

Article 7
Amendments And Termination

	
 

	
 

	
 

	
                      This
 Agreement may be amended or terminated only by a written agreement signed by
 the Company and the Executive. In the event that the Bank decides to maintain
 the Policy after termination of the Agreement, the Bank shall be the direct
 beneficiary of the entire death proceeds of the Policy.

Article 8
Administration

	
 

	
 

	
8.1

	
Plan Administrator Duties. This
 Agreement shall be administered by a Plan Administrator which shall consist
 of the Board, or such committee or persons as the Board may choose. The Plan
 Administrator shall also have the discretion and authority to (i) make,
 amend, interpret and enforce all appropriate rules and regulations for the
 administration of this Agreement and (ii) decide or resolve any and all ques­tions
 including interpretations of this Agreement, as may arise in connection with
 this Agreement, provided that such amendments and interpretations are made at
 all times in compliance with Section 409A of the Code.

	
 

	
 

	
8.2

	
Agents. In the administration of
 this Agreement, the Plan Administrator may employ agents and delegate to them
 such administrative duties as it sees fit, (including acting through a duly
 appointed representative), and may from time to time consult with counsel who
 may be counsel to the Bank.

	
 

	
 

	
8.3

	
Binding Effect of Decisions. The
 decision or action of the Plan Administrator with respect to any question
 arising out of or in connection with the administration, interpretation and
 application of this Agreement and the rules and regulations promulgated
 hereunder shall be final and conclusive and binding upon all persons having
 any interest in this Agreement, provided that such decisions or actions are
 in compliance with Section 409A of the Code.

	
 

	
 

	
8.4

	
Indemnity of Plan Administrator.
 The Bank shall indemnify and hold harmless the members of the Plan
 Administrator against any and all claims, losses, damages, expenses or
 liabilities arising from any action or failure to act with respect to this
 Agreement, except in the case of willful misconduct by the Plan Administrator
 or any of its members.

	
 

	
 

	
8.5

	
Information. To enable the Plan
 Administrator to perform its functions, the Bank shall supply full and timely
 information to the Plan Administrator on all matters relating to the Base
 Salary of the Executive, the date and circumstances of the retirement,
 Disability, death or Separation from Service of the Executive, and such other
 pertinent information as the Plan Administrator may reasonably require.

23

Article 9
Miscellaneous

	
 

	
 

	
9.1

	
Binding Effect. This Agreement
 shall bind the Executive and the Bank, their beneficiaries, survivors,
 executors, administrators and transferees and any Beneficiary.

	
 

	
 

	
9.2

	
No Guarantee of Employment. This
 Agreement is not an employment policy or contract. It does not give the
 Executive the right to remain an Executive of the Bank, nor does it interfere
 with the Bank’s right to discharge the Executive. It also does not require
 the Executive to remain an Executive nor interfere with the Executive’s right
 to terminate employment at any time.

	
 

	
 

	
9.3

	
Applicable Law. The Agreement and
 all rights hereunder shall be governed by and construed according to the laws
 of the State of California, except to the extent preempted by the laws of the
 United States of America.

	
 

	
 

	
9.4

	
Reorganization. The Bank shall not
 merge or consolidate into or with another company, or reorganize, or sell
 substantially all of its assets to another company, firm or person unless
 such succeeding or continuing company, firm or person agrees to assume and
 discharge the obligations of the Bank under this Agreement. Upon the
 occurrence of such event, the term “Bank” as used in this Agreement shall be
 deemed to refer to the successor or survivor company.

	
 

	
 

	
9.5

	
Notice. Any notice or filing
 required or permitted to be given to the Bank under this Agreement shall be
 sufficient if in writing and hand-delivered, or sent by registered or
 certified mail, to the address below:

	
 

	
First National Bank of
 Northern California

	
 

	
975 El Camino Real

	
 

	
South San Francisco, CA 94080

	
 

	
 

	
 

	
 

	
Such notice shall be deemed given as of the date of
 delivery or, if delivery is made by mail, as of the date shown on the
 postmark or the receipt for registration or certification.

	
 

	
 

	
 

	
          Any notice or filing required or permitted to be
 given to the Executive under this Agreement shall be sufficient if in writing
 and hand-delivered, or sent by mail, to the last known address of the
 Executive.

	
 

	
 

	
9.6

	
Entire Agreement. This Agreement,
 along with the Executive’s Beneficiary Designation Form, constitutes the
 entire agreement between the Bank and the Executive as to the subject matter
 hereof. No rights are granted to the Executive under this Agreement other
 than those specifically set forth herein.

24

          IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated above.

	
 

	
 

	
 

	
DAVID A. CURTIS:

	
FIRST NATIONAL BANK OF NORTHERN CALIFORNIA

	 	 	 
	
/s/ David A. Curtis

	
By: 

	
/s/ Thomas C. McGraw

	

	 	

	
Executive

	
Title: 

	
Chief Executive Officer

	
 

	
Date:

	
March 3, 2008

25

	
 

	
 

	
x 

	
New
 Designation

	
 

	
 

	
o

	
Change in
 Designation

I, David A.
Curtis, designate the following as Beneficiary under the Agreement: 

	
 

	
 

	
Primary:
Esther D.
 Curtis

	
100%  

	 

	 

	
Contingent:

	
 

	
___________________________________________________________________________

	
_______%

	
 

	
 

	
___________________________________________________________________________

	
_______%

	
 

	
 

Notes: 

	
 

	
 

	
 

	
 

	
•

	
Please PRINT CLEARLY or TYPE the names of
 the beneficiaries.

	
 

	
 

	
 

	
 

	
•

	
To name a trust as Beneficiary, please
 provide the name of the trustee(s) and the exact name and date of the
 trust agreement.

	
 

	
 

	
 

	
 

	
•

	
To name your estate as Beneficiary, please
 write “Estate of [your name]”.

	
 

	
 

	
 

	
 

	
•

	
Be aware that none of the contingent
 beneficiaries will receive anything unless ALL of the primary beneficiaries
 predecease you.

I understand
that I may change these beneficiary designations by delivering a new written
designation to the Plan Administrator, which shall be effective only upon
receipt and acknowledgment by the Plan Administrator prior to my death. I
further understand that the designations will be automatically revoked if the
Beneficiary predeceases me, or, if I have named my spouse as Beneficiary and
our marriage is subsequently dissolved.

	
 

	
 

	
 

	
 

	
Name:

	
David A.
Curtis 

	
 

	
 

	
 

	
 

	
 

	
 

	
Signature:

	
/s/ David A.
Curtis 

	
Date:

	
March 3,
 2008

	
 

	

	
 

	
 

	
 

	
 

	
 

	
 

	
SPOUSAL CONSENT (Required if Spouse not named beneficiary):

	
 

	
I consent to
 the beneficiary designation above, and acknowledge that if I am named
 Beneficiary and our marriage is subsequently dissolved, the designation will
 be automatically revoked.

	
 

	
 

	
 

	
 

	
Spouse Name:

	
_______________________________

	
 

	
 

	
 

	
 

	
 

	
 

	
Signature: 

	
__________________________________________

	
Date:

	
_______

Received by
the Plan Administrator this 3rd day of March, 2008  

	
 

	
 

	
By:

	
Thomas C. Mc
 Graw

	
 

	 

	
 

	
 

	
Title:

	
Chief
 Executive Officer

	
 

	 

26

Insurer: Beneficial Life Insurance Company

POLICY ENDORSEMENT

Owner: First
National Bank of Northern California 

Insured: David A. Curtis

Policy number: BL2184740

          Pursuant
to the terms of the First National Bank of Northern California SPLIT DOLLAR
LIFE INSURANCE AGREEMENT dated January 1, 2008, the undersigned
Owner requests that the above-referenced policy issued by the Insurer provide
for the following beneficiary designation and limited contract ownership rights
to the Insured:  

          1.
Upon the death of the Insured, Insurer shall pay proceeds in one sum to the
Owner, its successors or assigns, to the extent of its interest in the policy.
It is hereby provided that the Insurer may rely solely upon a statement from
the Owner as to the amount of proceeds it is entitled to receive under this
paragraph. 

          2.
Any proceeds at the death of the Insured in excess of the amount paid under the
provisions of the preceding paragraph shall be paid in one sum to: 

Esther D. Curtis, wife 

PRIMARY BENEFICIARY,
RELATIONSHIP/SOCIAL SECURITY NUMBER

	
 

	

	
CONTINGENT BENEFICIARY,
 RELATIONSHIP/SOCIAL SECURITY NUMBER

The exclusive right to change the beneficiary
for the proceeds payable under this paragraph, to elect any optional method of
settlement for the proceeds paid under this paragraph which are available under
the terms of the policy and to assign all rights and interests granted under
this paragraph are hereby granted to the Insured. The sole signature of the
Insured shall be sufficient to exercise said rights. The Owner retains all
contract rights not granted to the Insured under this paragraph.

          3.
It is agreed by the undersigned that this designation and limited assignment of
rights shall be subject in all respects to the contractual terms of the policy.

          4.
Any payment directed by the Owner under this endorsement shall be a full
discharge of the Insurer, and such discharge shall be binding on all parties
claiming any interest under the policy.

The undersigned for the Owner is signing in a
representative capacity and warrants that he or she has the authority to bind
the entity on whose behalf this document is being executed.

27

Signed at 975 El Camino Real, South San
Francisco, CA this 3rd day of March, 2008.  

	
 

	
 

	
 

	
INSURED:

	
 

	
OWNER:

	
 

	
 

	
 

	
 

	
 

	
First
 National Bank of Northern California 

	
 

	
 

	
 

	
/s/ David A. Curtis 

	
 

	
/s/ Thomas C. McGraw

	

	
 

	

	
David A. Curtis

	
 

	
Thomas C. McGraw, CEO

	
 

	
 

	
 

	
 

	
 

	
March 3, 2008

	
 

	
 

	

	
 

	
 

	
Date

28EXHIBIT 4.8

FOURTH AMENDMENT TO

LOAN AND SECURITY AGREEMENT

          This
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), is
dated as of February 29, 2008, by and between WELLS FARGO FOOTHILL, LLC, a
Delaware limited liability company and assignee of Wells Fargo Foothill, Inc.,
a California corporation (“Lender”), and VELOCITY INVESTMENTS, L.L.C., a
New Jersey limited liability company (“Borrower”).

WITNESSETH:

          WHEREAS,
Borrower and Lender’s predecessor-in-interest entered into that certain Loan
and Security Agreement, dated as of January 27, 2005, as amended by that
certain First Amendment to Loan and Security Agreement, dated as of February
27, 2006, that certain Second Amendment to Loan and Security Agreement, dated
as of December 8, 2006, and that certain Third Amendment to Loan and Security
Agreement, dated as of February 23, 2007 (as amended, restated, supplemented or
otherwise modified through the date hereof, the “Loan Agreement”); 

          WHEREAS,
Borrower has requested that the Lender increase the Maximum Revolver Amount (as
defined in the Loan Agreement), extend the Maturity Date (as defined in the
Loan Agreement) and amend certain covenants set forth in the Loan Agreement, as
more fully set forth herein; and

          WHEREAS,
Lender is willing to increase the Maximum Revolver Amount (as defined in the
Loan Agreement), extend the Maturity Date (as defined in the Loan Agreement)
and amend certain covenants set forth in the Loan Agreement, subject to the
terms hereof;

          NOW
THEREFORE, in consideration of the premises and of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

          SECTION
1. Defined Terms. Unless otherwise defined herein, all capitalized terms
used herein have the meanings assigned to such terms in the Loan Agreement, as
amended hereby.

          SECTION
2. Amendments. Upon the Fourth Amendment Effective Date (as hereinafter
defined), the Loan Agreement shall be amended as follows:

          (a)
The following definitions in Section 1.1 of the Loan Agreement are
hereby deleted in their entirety and replaced with the following:

                    “‘Advance
Period’ means the period from the Closing Date to January 27, 2010.

                    “‘Change
of Control’ means that (a) the Executive Officers fail to own and control,
directly or indirectly, a majority or more, of the Stock of Parent having the
right to vote for the election of members of the Board of Directors of Parent,
(b) any “person” or “group” (within the meaning of Sections 13(d) and 14(d) of
the Exchange Act), other than the Executive Officers, becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 20%, or more, of the Stock of Parent having the right to vote
for the election of members of the Board of Directors of Parent, (c) a majority
of the members of the Board of Directors of Parent do not constitute Continuing
Directors, (d) Parent ceases to own and control 100% of the membership
interests in TLOP, or Parent, itself or through its wholly-owned Subsidiary,
TLOP, ceases to own and control 100% of the membership interests in Borrower,
provided, that TLOP may at any time, merge with or into Parent, or dissolve,
liquidate or transfer all its assets to Parent, so long as, in each case,
Parent is the surviving entity and owner of all assets formerly owned by TLOP,
or (e) Borrower ceases to own, directly or indirectly, and control 100% of the
outstanding Stock of each of its Subsidiaries in existence as of the Closing
Date. 

                    “‘Guarantor’
means each of Parent and TLOP, and ‘Guarantors’ means both of them.

                    “‘Guaranty’
means the continuing guaranty executed and delivered by Parent and TLOP in
favor of Lender whereby each of Parent and TLOP guarantees the prompt payment
and performance of the Obligations, in form and substance satisfactory to
Lender.

                    “‘Loan
Sub-Account Amortization Schedule’ means, for each Loan Sub-Account, the
maximum principal amount of the Advance for the associated Portfolio Pool that
may be outstanding on the last day of each three-month period following the
month in which such Advance was made, determined as follows:

	
  

 	
  

 	
  

 
	
 Number of three-month periods 

following the month in which the 

Advance is made

 	 	
 Allowable % of Initial 

Purchase Advance to be 

outstanding 

 
	

 	  	

 
	
 1

 	  	
 100%

 
	
 2

 	  	
 95%

 
	
 3

 	  	
 85%

 
	
 4

 	  	
 75%

 
	
 5

 	  	
 65%

 
	
 6

 	  	
 55%

 
	
 7

 	  	
 45%

 
	
 8

 	  	
 35%

 
	
 9

 	  	
 25%

 
	
 10

 	  	
 15%

 
	
 11

 	  	
 5%

 
	
 12

 	  	
 0%

 

2

                    “‘Maximum
Revolver Amount’ means $22,500,000.00.”

          (b)
The following definitions in Section 1.1 of the Loan Agreement are
hereby deleted in their entirety and not replaced: “Limited Guarantor” and
“Limited Guaranty Amount.”

          (c)
The following definitions are hereby added to Section 1.1 of the Loan
Agreement to be placed in a manner that maintains alphabetical order:

                    “‘Executive
Officer’ means each of John C. Kleinert, W. Peter Ragan, Sr., and W. Peter
Ragan, Jr.

                    “‘Net
Income’ means for any Person for any period, the net income of such Person
and its consolidated Subsidiaries for such period determined in accordance with
GAAP.”

          (d)
Section 3.5 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:

	
  

 	
  

 
	
  

 	
           “3.5 Term. This Agreement
 shall continue in full force and effect for a term ending on January 27, 2011
 (the “Maturity Date”). The foregoing notwithstanding, Lender shall
 have the right to terminate its obligations under this Agreement
 (i) immediately and without notice upon the occurrence and during the
 continuation of an Event of Default, and (ii) at any time, if the
 average Daily Balance of the Revolver Usage for any three-month period ending
 after nineteen months after the Closing Date is less than $7,000,000.00, upon
 providing not less than six months’ prior written notice of termination to
 the Borrower.”

 

          (e)
Section 6.4 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:

                    “6.4
[Intentionally Blank].”

          (f)
Clauses (c) and (d) of Section 7.17 of the Loan Agreement
are hereby deleted in their entirety and replaced with the following:

	
  

 	
  

 
	
  

 	
           “(c)
 at all times, the sum of Borrower’s Subordinated Debt plus Borrower’s
 member’s equity at not less than $14,000,000.00.

 

3

	
  

 	
  

 
	
  

 	
           “(d)
 at all times, the sum of Parent’s stockholder’s equity plus Subordinated Debt
 at not less than $25,000,000.00.”

 

          (g)
The following clauses (e) and (f) are hereby added to Section
7.17 of the Loan Agreement after clause (d) of Section 7.17 of the
Loan Agreement:

	
  

 	
  

 
	
  

 	
           “(e)
 the Net Income of Borrower for each calendar quarter ending on or after March
 31, 2008, shall not be less than $375,000.

 
	
  

 	
  

 
	
  

 	
           “(f)
 the Net Income of Parent for each calendar quarter ending on or after March
 31, 2008, shall not be less than $200,000.”

 

          (h)
Sections 8.12 and 8.23 of the Loan Agreement are hereby deleted
in their entirety and replaced with the following:

	
  

 	
  

 
	
  

 	
           “8.12 If Parent is dissolved, or if
 the obligation of any Guarantor under the Guaranty is terminated by operation
 of law or by such Guarantor thereunder, unless, within 90 days thereafter,
 (a) the Guaranty of such Person is replaced by a Guaranty from a Person of
 comparable creditworthiness, or, in the case of TLOP, its obligations are
 assumed by Parent, or (b) a Lender’s Lien is perfected in additional
 Collateral with a loan value not less than the value of such Guaranty, as
 determined by Lender in its Permitted Discretion; 

 
	
  

 	
  

 
	
  

 	
           “8.13 If any Executive Officer shall
 become unable to perform, or cease to be an officer or manager of Borrower
 and shall not be replaced within 90 days by an individual with comparable
 education, experience and other qualifications;”

 

          (i)
Exhibit C-1 to the Loan Agreement is hereby deleted its entirety and
replaced with Exhibit C-1 attached hereto and incorporated herein.

          SECTION
3. Representations, Warranties and Covenants of the Borrower. The
Borrower represents and warrants to Lender and agrees that:

          (a)
the representations and warranties contained in the Loan Agreement (as amended
hereby) and the other outstanding Loan Documents are true and correct in all
material respects at and as of the date hereof as though made on and as of the
date hereof, except (i) to the extent specifically made with regard to a
particular date and (ii) for such changes as are a result of any act or
omission specifically permitted under the Loan Agreement (or under any Loan
Document), or as otherwise specifically permitted by the Lender;

          (b)
on the Fourth Amendment Effective Date, after giving effect to this Amendment,
no Default or Event of Default will have occurred and be continuing;

4

          (c)
the execution, delivery and performance of this Amendment have been duly
authorized by all necessary action on the part of, and duly executed and
delivered by the Borrower, and this Amendment is a legal, valid and binding
obligation of the Borrower enforceable against Borrower in accordance with its
terms, except as the enforcement thereof may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors’ rights generally and general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law); and

          (d)
the execution, delivery and performance of this Amendment do not conflict with
or result in a breach by Borrower of any term of any material contract, loan
agreement, indenture or other agreement or instrument to which Borrower is a
party or is subject.

          SECTION
4. Conditions Precedent to Effectiveness of Amendment. This Amendment
shall become effective as of February 29, 2008 (the “Fourth Amendment
Effective Date”), upon satisfaction of each of the following conditions:

          (a)
The Borrower and Lender shall have executed and delivered to Lender this
Amendment, a second supplement to the Fee Letter in form and substance
acceptable to Lender and such other documents as Lender may reasonably request;

          (b)
Parent and TLOP shall reaffirm each Guaranty and Security and Pledge Agreement
to which it is a party; 

          (c)
Lender shall have received a certificate from the Secretary of Parent (i)
attesting to the resolutions of Parent’s Board of Directors authorizing
Borrower’s execution, delivery, and performance of this Amendment, (ii)
authorizing specific officers of Parent, on behalf of Borrower, to execute the
same, (iii) attesting to the incumbency and signatures of such specific
officers of Parent and (iv) accompanied by a current certificate of status for
each of Parent, TLOP and Borrower issued by its jurisdiction of organization;
and

          (d)
All legal matters incident to the transactions contemplated hereby shall be
reasonably satisfactory to counsel for the Lender.

          SECTION
5. Execution in Counterparts. This Amendment may be executed in
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and the
same instrument.

          SECTION
6. Costs and Expenses. The Borrower hereby affirms its obligation under
the Loan Agreement to reimburse Lender for all reasonable costs, internal
charges and out-of-pocket expenses paid or incurred by Lender in connection
with the preparation, negotiation, execution and delivery of this Amendment,
including but not limited to the attorneys’ fees and time charges of attorneys
for Lender with respect thereto.

          SECTION
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUCTED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS
THEREOF.

5

          SECTION
8. Effect of Amendment; Reaffirmation of Loan Documents. The parties
hereto agree and acknowledge that (i) nothing contained in this Amendment in
any manner or respect limits or terminates any of the provisions of the Loan
Agreement or the other outstanding Loan Documents other than as expressly set
forth herein and (ii) the Loan Agreement (as amended hereby) and each of the
other outstanding Loan Documents remain and continue in full force and effect
and are hereby ratified and reaffirmed in all respects. Upon the effectiveness
of this Amendment, each reference in the Loan Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or words of similar import shall mean and be a
reference to the Loan Agreement as amended hereby.

          SECTION
9. Headings. Section headings in this Amendment are included herein for
convenience of any reference only and shall not constitute a part of this
Amendment for any other purposes.

          SECTION
10. Release. BORROWER HEREBY
ACKNOWLEDGES THAT AS OF THE DATE HEREOF IT HAS NO DEFENSE, COUNTERCLAIM,
OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT
CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO
REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR
NATURE FROM LENDER, ITS AFFILIATES, PARTICIPANTS OR ANY OF THEIR RESPECTIVE
DIRECTORS, OFFICERS, AGENTS, EMPLOYEES OR ATTORNEYS. BORROWER HEREBY VOLUNTARILY
AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS AFFILIATES AND
PARTICIPANTS, AND THEIR RESPECTIVE PREDECESSORS, OFFICERS, DIRECTORS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS,
CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN
OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN
PART ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH BORROWER MAY NOW
OR HEREAFTER HAVE AGAINST LENDER AND ITS PREDECESSORS, OFFICERS, AGENTS,
DIRECTORS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF
WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR
REGULATIONS, OR OTHERWISE, AND ARISING FROM THE LIABILITIES, THE EXERCISE OF
ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR OTHER LOAN DOCUMENTS, AND
NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT. BORROWER HEREBY COVENANTS AND
AGREES NEVER TO INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY, NOR
INSTITUTE, PROSECUTE, OR IN ANY WAY AID IN THE INSTITUTION OR PROSECUTION OF
ANY CLAIM, ACTION OR CAUSE OF ACTION, RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY
NATURE AGAINST LENDER, ITS AFFILIATES AND PARTICIPANTS, OR THEIR RESPECTIVE
SUCCESSORS, ATTORNEYS, OFFICERS, AGENTS, DIRECTORS, EMPLOYEES, AND PERSONAL AND
LEGAL REPRESENTATIVES ARISING ON OR BEFORE THE DATE HEREOF OUT OF OR RELATED TO
LENDER’S ACTIONS, OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS IN ADMINISTERING,
ENFORCING, MONITORING, COLLECTING OR ATTEMPTING TO COLLECT THE OBLIGATIONS OF
BORROWER TO LENDER, WHICH OBLIGATIONS WERE EVIDENCED BY THE LOAN AGREEMENT AND
OTHER LOAN DOCUMENTS.

6

          SECTION
11. Return of Limited Guaranties. Within five business days after the
effectiveness of this Fourth Amendment, Lender agrees to return to each of the
Executive Officers the original Limited Continuing Guaranty previously executed
by such Executive Officer, for the benefit of Lender, marked “Cancelled.”

7

          IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first above written.

	
 

	
 

	
 

	
 

	
VELOCITY INVESTMENTS, L.L.C.,

	
 

	
a New Jersey
 limited liability company

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
 

	

	
 

	
Title:

	
 

	
 

	
 

	

	
 

	
 

	
 

	
 

	
WELLS FARGO FOOTHILL, LLC, a Delaware

	
 

	
limited
 liability company, as Lender

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
 

	

	
 

	
Title:

	
 

	
 

	
 

	

Reaffirmation of Guaranties and Pledge
Agreement

          Each
of Velocity Asset Management, Inc., a Delaware corporation (“Parent”),
and TLOP Acquisition Company, LLC, a New Jersey limited liability company (“TLOP”
and, together with Parent, the “Guarantors”) hereby (i) consents and
agrees to the terms and provisions of the foregoing Amendment and each of the
transactions contemplated thereby, and confirms and agrees that all references
in the Loan Documents to the “Loan Agreement” shall mean the Loan Agreement as
amended by the foregoing Amendment, (ii) agrees that the General
Continuing Guaranty, dated as of January 27, 2005, executed by such Guarantor
for the benefit of Lender (each, a “Guaranty”), remains in full force
and effect and continues to be the legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with its terms, and
acknowledges the increase in the obligations guaranteed, (iii) agrees that
the Security and Pledge Agreement, dated as of January 27, 2005, executed by such
Guarantor for the benefit of Lender (each, a “Pledge Agreement”),
remains in full force and effect and continues to be the legal, valid and
binding obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms and acknowledges the increase in the obligations
secured.

          Furthermore,
each Guarantor hereby agrees and acknowledges that (a) the Guaranty
executed by such Guarantor is not subject to any claims, defenses or offsets,
(b) nothing contained in the Amendment shall adversely affect any right or
remedy of Lender under the Guaranty executed by such Guarantor or any agreement
executed by such Guarantor in connection therewith, (c) the execution and
delivery of the Amendment or any agreement entered into by Lender in connection
therewith shall in no way reduce, impair or discharge any obligations of such
Guarantor pursuant to the Guaranty executed by such Guarantor and shall not
constitute a waiver by Lender of any of Lender’s rights against such Guarantor
under the Guaranty executed by such Guarantor, (d) the Pledge Agreement
executed by such Guarantor is not subject to any claims, defenses or offsets,
(e) nothing contained in the Amendment shall adversely affect any right or
remedy of Lender under the Pledge Agreement executed by such Guarantor or any
agreement executed by such Guarantor in connection therewith, (f) the
execution and delivery of the Amendment or any agreement entered into by Lender
in connection therewith shall in no way reduce, impair or discharge any obligations
of such Guarantor pursuant to the Pledge Agreement executed by such Guarantor
and shall not constitute a waiver by Lender of any of Lender’s rights against
such Guarantor under the Pledge Agreement executed by such Guarantor, (g) the
consent of such Guarantor is not required to the effectiveness of the Amendment
and (h) no consent by such Guarantor is required for the effectiveness of
any future amendment, modification, forbearance or other action with respect to
the Loan Agreement or any present or future Loan Document (other than the
Guaranty or Pledge Agreement executed by such Guarantor).

	
 

	
 

	
 

	
 

	
VELOCITY
 ASSET MANAGEMENT, INC.

	
 

	
a Delaware
 corporation

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
TLOP
 ACQUISITION COMPANY, L.L.C.,

	
 

	
a New Jersey
 limited liability company

	
 

	
 

	
 

	
 

	
 

	
By:

	
Velocity
 Asset Management, Inc.

	
 

	
 

	
its sole
 member

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

2

EXHIBIT C-1

Form of Compliance Certificate

[on letterhead of Velocity Investments,
L.L.C.]

	
 

	
 

	
To:

	
Wells Fargo
  Foothill, LLC 

	
 

	
14241 Dallas
  Parkway, Suite 1300 

	
 

	
Dallas,
  Texas  75254 

	
 

	
Attn: Loan
  Portfolio Manager—Velocity Investments 

	
 

	
 

	
 

	
Re:
  Compliance Certificate for the month/quarter ended ________________________.

Ladies and
Gentlemen: 

          Reference
is made to that certain Loan and Security Agreement, dated as of January 27,
2005, between Velocity Investments, L.L.C., a New Jersey limited liability
company (“Borrower”), and WELLS FARGO FOOTHILL, INC. (together with its
successors and permitted assigns, the “Lender”), as amended, restated,
renewed, replaced, supplemented or otherwise modified from time to time (the “Loan
Agreement”).  Capitalized terms used
in this Compliance Certificate have the meanings set forth in the Loan
Agreement unless specifically defined herein. 

          Pursuant
to Section 6.3 of the Loan Agreement, the undersigned officer of
Borrower hereby certifies that: 

          1.          
The financial statements of Borrower and Parent furnished in Schedule 1
attached hereto, have been prepared in accordance with GAAP (except for the
lack of footnotes and being subject to year-end audit adjustments, in the case
of financial statements other than those as of the fiscal year end of Borrower
and Parent) and fairly present in all material respects the financial condition
of Borrower and Parent, respectively. 

          2.
          The representations
and warranties of Borrower contained in the Loan Agreement and the other Loan
Documents are true and correct in all material respects on and as of the date
of this Certificate, as though made on and as of such date (except to the
extent that such representations and warranties (x) relate solely to an earlier
date or (y) relate to an action or omission permitted by Lender to the extent
of such permission). 

          3.
          Such officer has
reviewed the terms of the Loan Agreement and has made, or caused to be made
under his supervision, a review in reasonable detail of the transactions and
condition of Borrower and Parent during the accounting period covered by the
financial statements delivered pursuant to Section 6.3 of the Loan
Agreement. 

          4.
          Such review has not
disclosed the existence on and as of the date hereof, and the undersigned does
not have knowledge of the existence as of the date hereof, of any event or
condition that constitutes a Default or Event of Default, except for such
conditions or events listed on Schedule 2 attached hereto, specifying
the nature and period of existence thereof and what action Borrower has taken,
is taking, or proposes to take with respect thereto. 

          5.
          The representations
and warranties of Borrower set forth in the Loan Agreement and the other Loan
Documents are true and correct in all material respects on and as of the date
hereof (except to the extent they relate to a specified date), except as set
forth on Schedule 2 attached hereto. 

          6.
          Each of Borrower
and Parent is in compliance with the applicable covenants contained in Section
7.17 of the Loan Agreement, all as demonstrated on Schedule 3
hereof. 

          IN
WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this _____ day of ______________, ________. 

	
 

	
 

	
 

	
 

	
Velocity
  Investments, L.L.C.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
Name:

	
 

	
 

	
 

	

	
 

	
Title:

	
 

	
 

	
 

	

2

SCHEDULE 1

Financial Statements

[Attached]

SCHEDULE 2

Defaults or Events of Default

[Attached]

3

SCHEDULE 3

FINANCIAL COVENANTS

For the month/quarter ended _______________
(the “Date”)

	
 

	
 

	
1.

	
Compliance with Debt to ERRV Ratio.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	
PORTFOLIO

 POOL NO.

	
 

	
LOAN SUB-

 ACCOUNT

 BALANCE1

	
 

	
ERRV2

	
 

	
RATIO OF LOAN

 SUB-ACCOUNT

 BALANCE TO

 ERRV3

	
 

	
IS RATIO IN

 COMPLIANCE?4

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	
TOTAL

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

	

	

	

	

	

	

	

	

	
 

	
 

	
 

	

	
 

	
1

	
Outstanding balance of the
 Loan Sub-Account for the corresponding Portfolio Pool 

	
 

	
 

	
 

	
 

	
2

	
ERRV for the corresponding
 Portfolio Pool 

	
 

	
 

	
 

	
 

	
3

	
Number in second column
 divided by number in third column 

	
 

	
 

	
 

	
 

	
4

	
Is the value in the fourth
 column less than or equal to .30? 

4

	
 

	
 

	
2.

	
Minimum Net Worth and Subordinated Debt of Borrower.

          (a)
The Minimum Net Worth and Subordinated Debt of Borrower, as of the Date, is
calculated as follows:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Borrower’s
 member’s equity on the Date is:

	
$

	
____________

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Borrower’s
 Subordinated Debt on the Date is:

	
$

	
____________

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
The sum of
 Item (a)(i) and Item (a)(ii) is:

	
$

	
____________

          (b)
The Net Worth and Subordinated Debt of Borrower required under Section 7.17(c) of the Loan Agreement, as amended, is to be at least $14,000,000.  

          (c)
The amount in Item (a)(iii) [is/is not] greater than or equal to the amount in
Item (b).  

	
 

	
 

	
3.

	
Minimum Net Worth and Subordinated Debt of Parent.

          (a)
The Minimum Net Worth and Subordinated Debt of Parent, as of the Date, is
calculated as follows: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Parent’s
 stockholders’ equity on the Date is:

	
$

	
____________

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Parent’s
 Subordinated Debt on the Date is:

	
$

	
____________

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
The sum of
 Item (a)(i) and Item (a)(ii) is:

	
$

	
____________

          (b)
The Net Worth and Subordinated Debt of Parent required under Section 7.17(d) of
the Loan Agreement, as amended, is to be at least 25,000,000.  

          (c)
The amount in Item (a)(iii) [is/is not] greater than or equal to the amount in
Item (b).  

	
 

	
 

	
4.

	
Minimum Net Income of Borrower.

	
 

	
 

	
 

	
 

	
 

	
 

	
(a) The Net
 Income of the Borrower for the three-month period ended on the Date is

	
$

	
____________

          (b) The Net Income of Borrower set forth above [is/is not] greater than or equal to
$375,000.00 (the amount set forth in Section 7.17(e) of the Loan Agreement).  

5

	
 

	
 

	
5. 

	
Minimum Net Income of Parent.

	
 

	
 

	
 

	
 

	
 

	
 

	
(a) The Net
 Income of the Parent for the three-month period ended on the Date is

	
$

	
____________

          (b) The Net Income of Parent set forth above [is/is not] greater than or equal to
$200,000.00 (the amount set forth in Section 7.17(f) of the Loan Agreement).  

6

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