AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
This Amendment is entered into as of May 31, 1996, between Emergent
Commercial Mortgage, Inc. ("BORROWER") and NationsBank, N.A. (South)
("NATIONSBANK", formerly known as NationsBank of Georgia, N.A.).
Borrower and NationsBank are party to an October 10, 1995 Loan and
Security Agreement (the "AGREEMENT").
Borrower and NationsBank agree as follows:
1. Definitions. Terms defined in the Agreement have the
same meanings as in the Agreement when used in this Amendment.
2. Amendments. The Agreement is hereby amended as follows:
(a) Change all references to "NationsBank of Georgia, N.A."
to "NationsBank, N.A. (South)".
(b) Add the following definitions to Section 1.1:
"BORROWING GROUP": EBC, EFC, and the Borrower.
"EFC L&SA": the May 31, 1996 Loan and Security Agreement
between the Lender and EFC.
"EGI": Emergent Group, Inc.
(c) Change the following definitions in Section 1.1 as
follows:
in "EBIT", change "EBC and its consolidated Subsidiaries" to "the
Borrowing Group and their consolidated Subsidiaries".
in "EVENT OF DEFAULT", change "Borrower" to "Borrower or any of its
Affiliates" in clause (2), and change "Borrower or EBC" to "Borrower,
EBC, or ECM" in clause (4).
in "INTEREST ON NATIONSBANK DEBT", after "L&SA", add "and "Obligations"
under the ECM L&SA".
in "SUBORDINATED DEBT", immediately before the period, add:
, and any other debt of EBC, the Borrower, or EFC that is
subordinated (as to right and time of payment) to such party's
obligations to the Lender in a manner satisfactory to the
Lender
in "TANGIBLE NET WORTH", change "EBC and its consolidated Subsidiaries"
to "the Borrowing Group and their consolidated Subsidiaries".
in "TOTAL LIABILITIES", change "EBC and its consolidated Subsidiaries"
to "the Borrowing Group and their consolidated Subsidiaries".
(d) In the third paragraph in Section 2.2, change the
parenthetical to read: "(I.E., $11,000,000 minus the average daily
principal amount of Stub Loans outstanding)".
(e) Change Section 7.3(a) and (b) to read as follows:
(a) within 30 days after the end of each of the first 11
months in each fiscal year of the Borrower a consolidating balance
sheet of the Borrowing Group and their consolidated subsidiaries
(including the Borrower), as at the end of such period and statements
of income and of cash flows of such corporations for such period and
for the year-to-date period then ended, setting forth in each case in
comparative form the figures for the corresponding period of the
previous fiscal year, in form and detail as reasonably required by the
Lender, and certified as complete and correct by the chief financial
officers of the Borrowing Group, together with a certificate by such
officers stating that, as of the date of such certification, no Default
exists (or, if any Default exists, specifying the nature thereof and
what action the Borrower has taken, is taking or proposes to take with
respect thereto);
(b) within 90 days after the end of each fiscal year, a
consolidated balance sheet of EGI and a consolidating balance sheet of
EGI and its consolidated subsidiaries (including the Borrower) as at
the end of such fiscal year, and statements of profit and loss,
shareholders' equity, and changes in cash flows of such corporations
for such year, setting forth in each case in comparative form the
figures for the previous fiscal year in form and detail as reasonably
required by the Lender, and accompanied by an unqualified report and
opinion on such financial statements (including on the supplemental
schedules) from ▇▇▇▇▇▇ ▇▇▇▇▇ & Company (or other certified public
accountants satisfactory to the Lender), which report and opinion shall
be prepared in accordance with GAAP, together with a certificate by the
chief financial officer of EGI of the character specified in Section
7.3(a), and a certificate by such accountants stating whether or not
their examination has disclosed the occurrence or existence of any
Default, and, if their examination has disclosed a Default, specifying
the nature and period of existence thereof, and demonstrating as at the
end of such accounting period in reasonable detail compliance during
such accounting period
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with Sections 6.18, 7.6, 7.13, 7.14, 7.15, 8.10, 8.11, 8.12,
and 8.14;
(g) In Sections 7.13, 7.14, and 8.14, change "EBC" to "The
Borrowing Group".
(h) Change ss. 7.15 to read as follows:
7.15 INTEREST COVERAGE RATIO. The Borrowing Group shall
maintain (x) for the four-quarter period concluding at the end of each
of the first three fiscal quarters in each fiscal year of the Borrowing
Group, a ratio of EBIT to Interest on NationsBank Debt of at least 1.15
to 1, and (y) for the four-quarter period concluding at the end of each
fiscal year of the Borrowing Group, a ratio of EBIT to Interest on
NationsBank Debt of at least 1.5 to 1.
(i) In ss. 8.1, change clauses (c) and (d) to read as follows:
(c) debt underlying any purchase money security interest
permitted by Section 8.2 not to exceed, in aggregated principal amount,
$100,000 minus any such debt owed by EBC or EFC at any one time
outstanding, (d) unsecured borrowings not to exceed in the aggregate
$500,000 minus any such debt owed by EBC or EFC at any one time
outstanding,
(j) In Section 8.8 change "if it" to ", minus such equipment
disposed of by EBC or EFC, if the Borrower".
(k) In Section 8.11, delete "and" before "(b)', and change
"outstanding" to "minus any advances to such employee by EBC or EFC, and (c)
loans to Guarantor.
(l) In ss. 8.14, change "$100,000" to "$300,000".
3. Effective Date. The amendments to the Agreement set forth
in ss. 2 hereof shall be effective on the date of this Amendment (the
"EFFECTIVE DATE").
4. Representations, etc. Borrower represents, covenants,
and warrants that no Default exists, and that the Obligations are
owing without defense, offset, recoupment right, or counterclaim.
5. Fees and Expenses. Borrower shall reimburse NationsBank for
NationsBank's expenses in connection with this Amendment, including attorneys'
fees, on demand. Borrower authorizes NationsBank to charge Borrower's line of
credit under the Agreement to pay for such fees and expenses (regardless of the
amount of collateral or eligible collateral then existing).
6. The Agreement. Except as specifically amended hereby,
the Agreement shall remain unchanged and continue in full force and
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effect in accordance with its terms. From and after the Effective Date, each
reference in the Agreement (including all Exhibits and Schedules thereto) to
"this Agreement", "hereto", "hereof", and terms of similar import shall refer to
the Agreement as amended by this Amendment, and all references to the Agreement
in any document, instrument, certificate, note, or other agreement executed in
connection therewith shall be deemed to refer to the Agreement as so amended.
7. Applicable Law. This Amendment shall be governed by and
construed in accordance with the laws of Georgia.
8. Further Assurances. Borrower shall promptly and duly
execute and deliver such documents, and take such further action,
as NationsBank reasonably requests to effectuate the purpose and
intent of this Amendment.
9. Headings. Section headings in this Amendment are for
convenience only, and are not a substantive part of this Amendment.
10. Counterparts. This Amendment may be executed separately
in counterparts.
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IN WITNESS WHEREOF, Borrower and NationsBank have executed this
Amendment No. 1 to Loan and Security Agreement.
[Seal] EMERGENT COMMERCIAL MORTGAGE, INC.
Attest:
By: (Signature of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇)
Title: CEO
(Signature of ▇▇▇▇▇ ▇. ▇▇▇▇)
-------------------------
Secretary
NATIONSBANK, N.A. (SOUTH)
By: (Signature of: ▇▇▇▇ ▇. ▇▇▇▇▇)
Title: Vice President
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