Fifth Amendment to Loan and Security Agreement, dated October 22, 2018
FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made and entered into as of the 22nd day of October, 2018, by and among ATLANTICUS HOLDINGS CORPORATION, a Georgia corporation, as Borrower (“Borrower”), certain Subsidiaries of Borrower as guarantors (“Guarantors”, and together with the Borrower, the “Credit Parties” and each, a “Credit Party”), and DOVE VENTURES, LLC, a Nevada limited liability company, as lender (together with any successors or assigns thereto, “Lender”).
W I T N E S S E T H:
WHEREAS, Credit Parties and Lender are parties to a certain Loan and Security Agreement dated as of November 26, 2014, as amended by a certain First Amendment to Loan and Security Agreement dated as of November 23, 2015, by a certain Second Amendment to Loan and Security Agreement dated as of November 22, 2016 and by a certain Third Amendment to Loan and Security Agreement dated as of November 22, 2017 and by a certain Fourth Amendment to Loan and Security Agreement and First Amendment to Pledge Agreement dated as of June 5, 2018 (as so amended, the “Loan Agreement”), pursuant to which, among other things, Lender has made two separate term loans to Borrower, each in the principal amount of Twenty Million Dollars ($20,000,000) (the “Term Loans”); and
WHEREAS, the Credit Parties request that Lender amend the Loan Agreement as set forth herein and Lender is willing to grant such request, subject to the terms and conditions hereof; and
NOW, THEREFORE, for and in consideration of the premises, the terms and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Defined terms used herein, as indicated by the initial capitalization thereof, shall have the same respective meanings ascribed to such terms in the Loan Agreement unless otherwise specifically defined herein.
2. Amendment to Loan Agreement. Section 1.1 of the Loan Agreement is amended by amending and restating the definition of “Excluded Stock” in its entirety as follows:
“Excluded Stock” means the Stock of (a) Fortiva Funding III, LLC; (b) Fortiva Funding IV, LLC; (c) Atlanticus Funding II, LLC; (d) Atlanticus Funding IV, LLC; (e) CreditLogistics India Private Limited; (f) CCR Reinsurance Ltd.; (g) Perimeter Funding Corporation; (h) Perimeter Master Note Business Trust; (i) Atlanticus Services Corporation; (j) FRC Funding Corporation, a Nevada corporation; (k) Fortiva Retail Credit Master Note Business Trust, a Nevada business trust; (l) Stock of any Subsidiary not organized or formed under the laws of the United States or of any State thereof, to the extent such Stock exceeds 65% of the outstanding voting Stock of such Subsidiary; and (m) any other Subsidiary which Lender approves in writing as constituting Excluded Stock.
3. Representations and Warranties; No Default. The Credit Parties hereby jointly and severally represent and warrant to the Lender as follows:
(a) all of the representations and warranties of the Credit Parties contained in the Loan Agreement and the other Loan Documents are true and correct in all material respects (or, to the extent such representation or warranty is qualified as to materiality, remain true and correct) on and as of the date hereof as fully as though such representations and warranties had been made on the date hereof; provided that each reference to the Loan Agreement therein shall be deemed to be a reference to the Loan Agreement after giving effect to this Amendment; and
(b) on and as of the date of this Amendment and after giving effect to the waivers contained herein, no Default or Event of Default has occurred and is continuing under the Loan Agreement.
4. Guarantor Reaffirmation. Each Guarantor hereby consents to and approves all of the terms of this Amendment, and further, after giving effect to this Amendment (a) reaffirms all of its covenants, agreements, indebtedness, liabilities and obligations under the Loan Agreement and the other Loan Documents to which it is a party, (b) reaffirms the guaranty by such Guarantor of the Obligations and the grant of Liens in all of such Guarantor’s interests in the Collateral owned by it as security for the payment and performance of the Obligations, (c) agrees that notwithstanding the effectiveness of this Amendment or the transactions contemplated thereby, all such covenants, agreements, indebtedness, liabilities, obligations guaranty, grant of Liens and the terms of the Loan Documents to which it is a party are not impaired or affected in any manner whatsoever (except to the extent expressly modified or waived pursuant to this Amendment) and shall continue to be in full force and effect and shall continue to secure all Obligations, and (d) agrees that the Loan Documents to which it is a party shall and do remain in full force and effect.
5. Expenses. Borrower agrees to pay, immediately upon demand by Lender, all costs, expenses, attorneys' fees, and other charges and expenses incurred by Lender in connection with the negotiation, preparation, execution and delivery of this Amendment and other instrument, document, agreement or amendment executed in connection with this Amendment.
6. Defaults Hereunder. The breach of any representation, warranty or covenant contained herein or in any document executed in connection herewith, or the failure to observe or comply with any term or agreement contained herein or in any document executed in conjunction herewith, shall constitute an Event of Default under the Loan Documents and Lender shall be entitled to exercise all rights and remedies it may have under the Loan Agreement, any of the other Loan Documents and applicable law.
7. Conditions Precedent. This Amendment shall not become effective until executed and delivered by Lender and a duly authorized officer of each Credit Party.
8. References in Loan Documents. All references in the Loan Agreement and the other Loan Documents to the Loan Agreement shall hereafter be deemed to be references to the Loan Agreement as amended hereby and as the same may hereafter be amended from time to time.
9. No Claims, Offset. The Credit Parties hereby represent, warrant, acknowledge and agree to and with Lender that (a) no Credit Party holds or claims any right of action, claim, cause of action or damages, either at law or in equity, against Lender which arises from, may arise from, allegedly arise from, are based upon or are related in any manner whatsoever to the Loan Agreement and the Loan Documents or which are based upon acts or omissions of Lender in connection therewith and (b) the Obligations are absolutely owed to Lender, without offset, deduction or counterclaim.
10. No Novation. The terms of this Amendment are not intended to and do not serve to effect a novation as to the Loan Agreement. The parties hereto expressly do not intend to extinguish any debt or security interest created pursuant to the Loan Agreement. Instead, it is the express intention of the parties hereto to affirm the Loan Agreement and the security created thereby.
11. Limitation of Amendment. Except as expressly set forth herein, this Amendment shall not be deemed to waive, amend or modify any term or condition of the Loan Agreement or any of the other Loan Documents, each of which is hereby ratified and reaffirmed, and which shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof.
12. Loan Document. This Amendment shall constitute a “Loan Document” for all purposes of the Loan Agreement and the other Loan Documents.
13. Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one and the same instrument. Signature pages to this Amendment may be detached from multiple separate counterparts and attached to the same document and any facsimile copy of any such executed signature page shall be valid as an original.
14. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto. Notwithstanding any other language to this Amendment or the Loan Agreement, any one of the Lenders may at any time assign all or any portion of its rights under the Loan Agreement, as amended hereby, and the Notes, as replaced and substituted pursuant to the Loan Agreement, as amended hereby, in accordance with Section 12.3 of the Loan Agreement.
15. Section References. Section titles and references used in this Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby.
16. Further Assurances. Each Credit Party agrees to take such further action as Lender shall reasonably request in connection herewith to evidence the amendments herein contained to the Loan Agreement.
17. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of Nevada.
[Signature pages to follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.
ATLANTICUS HOLDINGS CORPORATION
By: /s/William R. McCamey
William R. McCamey
Chief Financial Officer
ACCESS FINANCING, LLC
By:/s/ Brian Stone
Name: Brian Stone
CC SERVE CORPORATION
By:/s/ Mitch Saunders
Name: Mitch Saunders
By: /s/Rosalind T. Drakeford
Name: Rosalind T. Drakeford
MOBILE TECH INVESTMENTS, LLC
By:/s/ Brian Stone
Name: Brian Stone
WILTON ACQUISITIONS, LLC
By:/s/ Jeffrey A. Howard
Name: Jeffrey A. Howard
DOVE VENTURES, LLC, as Lender
By: Bravo Two Company, Inc., its Manager
By:/s/ Joshua C. Miller
Joshua C. Miller