EX-10.18.5 6 b311988ex10_18-5.txt TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT EXECUTION COPY -------------- TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT This TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") dated as of May 1, 2001 is by and between THE CREDIT STORE, INC., a Delaware corporation (the "Borrower") and COAST BUSINESS CREDIT, a division of Southern Pacific Bank, a California corporation ("Coast"). BACKGROUND INFORMATION The Borrower and Coast are parties to a Loan and Security Agreement dated as of April 30, 1998, as amended as of April 27, 1999, June 25, 1999, December 6, 1999, May 31, 2000, October 31, 2000 and April 16, 2001 (as heretofore amended, the "Loan Agreement" and as amended by this Amendment, the "Amended Loan Agreement"). To secure the payment of the Borrower's obligations under such agreement, the Borrower has granted Coast a security interest in and lien upon substantially all of its assets, including, without limitation, the Borrower's right, title, and interest in Receivables (including the TCS Funding V Receivables, as defined below) and collections related thereto. The Borrower and TCS Funding V, Inc., a Delaware corporation (the "Buyer"), have entered into a Receivables Purchase Agreement (the "Receivables Purchase Agreement") of even date herewith pursuant to which, from time to time, the Borrower agrees to, sell, assign, transfer, set-over, and otherwise convey to the Buyer, and the Buyer agrees to purchase from the Borrower, all of the Borrower's right, title, and interest in, to, and under the Conveyed Property, as defined in the Receivables Purchase Agreement (such Conveyed Property referred to herein as the "TCS Funding V Receivables"). To finance the purchase of the TCS Funding V Receivables, the Buyer, the Borrower, and Miller & Schroeder Investments Corporation, a Minnesota corporation (the "Lender"), have entered into a Master Credit and Security Agreement (the "Credit Agreement") of even date herewith pursuant to which the Lender agrees to extend one or more term loans to the Buyer, which loan is to be secured by, among other things, a first priority security interest in and lien upon the TCS Funding V Receivables. As a condition precedent to disbursing the term loans under the Credit Agreement, the Lender requires the due execution and delivery of this Seventh Agreement by the parties hereto. Therefore, the parties hereto wish to amend the Loan Agreement to release Coast's right, title, and/or interest in, to, or under the TCS Funding V Receivables and to provide for certain other changes in circumstances and new arrangements among themselves. ACCORDINGLY, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS 1.1 Loan Agreement Definitions. Terms defined in the Loan Agreement shall have the same meaning when used herein unless otherwise indicated. ARTICLE II AMENDMENTS 2.1 Amendment to Section 1 of the Loan Agreement. (a) Section 1 of the Loan Agreement is hereby amended by adding the following definitions to such section: "Funding V Receivables" means any of the Conveyed Property (as defined in the TCS Funding V Receivables Purchase Agreement), whether now existing or hereafter arising, to be transferred by the Borrower to TCS Funding V and associated with the credit card accounts marked on the records of TCSI with a permanent pool ID of 200l-004 and listed on the CD provided to Coast labeled "TCS Funding V Closing Account Schedule." "TCS Funding V" means TCS Funding V, Inc., a Delaware corporation. "TCS Funding V Receivables Purchase Agreement" means the Receivables Purchase Agreement dated as of May 1, 2001 by and between the Borrower, as seller, and TCS Funding V, as purchaser. (b) The definitions of "General Intangibles" and "Receivables" stated in Section 1 of the Loan Agreement are hereby amended by amending and restating such definitions in their entirety to read as follows: "General Intangibles" means all general intangibles of Borrower, whether now owned or hereafter created or acquired by Borrower, including, without limitation, all choses in action, causes of action, corporate or other business records, Deposit Accounts, investment property, inventions, designs, drawings, blueprints, patents, patent applications, trademarks and the goodwill of the business symbolized thereby, names, trade names, trade secrets, goodwill, copyrights, registrations, licenses, franchises, customer lists, security and other deposits, rights in all litigation presently or hereafter pending for any cause or claim (whether in contract, tort, or otherwise), and all judgments now or hereafter arising therefrom, all claims of Borrower against Coast, rights to purchase or sell real or personal property, rights as a licensor or licensee of any kind, royalties, telephone numbers, proprietary information, purchase 2 orders, and all insurance policies and claims (Including without limitation life insurance, key man insurance, credit insurance, liability insurance, property insurance and other insurance), tax refunds and claims, computer programs, discs, tapes and tape files, claims under guaranties, security interests or other security held by or granted to Borrower, all rights to indemnification and all other intangible property or every kind and nature (other than Receivables) excluding, however, (i) the Initial Funding IV Receivables and (subject to the terms of Section 45 below) any Future Funding IV Receivables, (ii) the CSSI Receivables and (iii) the TCS Funding V Receivables." "Receivable" means all of Borrower's now owned and hereafter acquired accounts (whether or not earned by performance), letters or credit, contract rights, chattel paper, instruments, securities, documents, securities accounts, security entitlements, commodity contracts, commodity accounts, investment property and all other forms of obligations at any time owing to Borrower, all guaranties and other security therefor, all merchandise returned to or repossessed by Borrower, and all rights, of stoppage in transit and all other rights or remedies of an unpaid vendor, lienor or secured party; excluding, however, (i) the Initial Funding IV Receivables and (subject to the terms of Section 4.5 below) any Future Funding IV Receivables, (ii) the CSSI Receivables and (iii) the TCS Funding V Receivables." 2.2 Amendment to Section 4 of the Loan Agreement. (a) Section 4.1 of the Loan Agreement is hereby amended by amending the final parenthetical clause of such section to read as follows: "(all of the foregoing, together with all other property in which Coast may now or in the future be granted a lien or security interest, excluding, however, (i) the Initial Funding IV Receivables and (subject to the terms of Section 4.5 below) any Future Funding IV Receivables, (ii) the CSSI Receivables and (iii) the TCS Funding V Receivables, is referred to herein, collectively, as the 'Collateral')." (b) The Loan Agreement is hereby further amended by adding the following new Sections after Section 4.6 thereof: 4.7 Release Of TCS Funding V Receivables. Coast hereby (i) releases any and all right, title, and interest Coast may have or hereafter acquire in the TCS Funding V Receivables and (ii) consents to any sale, assignment, transfer, or conveyance of, or granting of a security interest in, the TCS Funding V Receivables by the Borrower to TCS Funding V pursuant to the terms of the Receivables Purchase Agreement. On or before the date of transfer of TCS Funding V Receivables, Coast agrees to promptly take all further action, and to promptly execute and deliver any UCC releases, confirmatory letters, and/or any other document, reasonably required by the Borrower (at the Borrower's expense) to effect, evidence, complete, and/or confirm Coast's release of the TCS Funding V Receivables. 3 2.3 Amendment to Section 8.5(c) of the Loan Agreement. Section 8.5(c) of the Loan Agreement is hereby amended by restating such subsection in its entirety to read as follows: "(c) make any investment, equity contribution, loan or other transfer to any subsidiary or any other affiliate except for dividends or distributions permitted under Section 8.5(k) hereof and except for (i) loans or capital contributions to Credit Store Capital Corp. specifically related to the acquisition of portfolios, (ii) loans or capital contributions to TCS Funding IV in connection with the TCS Funding IV Receivables Purchase Agreement, (iii) loans or capital contributions to CSSI in connection with the CSSI Account Purchase Agreement and (iv) loans or capital contributions to TCS Funding V in connection with the TCS Funding V Receivables Purchase Agreement; provided, however, Borrower may enter into joint ventures, reasonably acceptable to Coast, and may contribute services to joint ventures (or enter into service agreements with joint ventures), so long as Borrower does not make an investment equity contribution or commingle the collections of Receivables;" ARTICLE III REPRESENTATIONS AND WARRANTIES 3.1 Representations And Warranties. Each of the parties hereto represents and warrants to the other party that (a) it is duly organized and existing in good standing under the laws of its jurisdiction of organization and has full power and authority to make and deliver this Amendment, (b) the execution, delivery, and the performance of this Amendment have been duly authorized by all necessary action and do not and will not violate the provisions of, or constitute a default under, any presently applicable law or its organizational documents or any agreement presently binding on it, (c) this Amendment has been duly executed and delivered by its duly authorized attorney-in-fact, officer, or member as the case may be, and constitutes the lawful, binding, and legally enforceable agreement and obligation of such party, and (d) the authorization, execution, delivery, and performance of this Amendment do not require notification to, registration with, or consent or approval by, any federal, state, province, or local regulatory body or administrative agency. ARTICLE IV MISCELLANEOUS 4.1 Ratification. The Amended Loan Agreement is hereby ratified, approved, and confirmed in every respect, and shall remain in full force and effect. 4.2 Further Assurances. The parties hereto agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the other party to this Amendment to more fully effect the purposes of this Amendment and the amendments and modifications contained herein, including, without 4 limitation, the execution of any financing statements or continuation statements or releases or amendments to financing statements or equivalent documents relating to the TCS Funding V Receivables for filing under the provisions of the Uniform Commercial Code as enacted in any applicable jurisdiction or other laws of any applicable jurisdiction. 4.3. Execution in Counterparts and by Facsimile. This Amendment may be executed in any number of counterparts (including facsimile counterparts) and by the different parties on separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. 4.4 Costs and Expenses. The Borrower agrees to pay all costs and expenses in connection with the negotiation, preparation, execution, delivery, and administration of this Fifth Amendment and any and all other documents furnished in connection with the execution and delivery of this Amendment, including reasonable attorneys' fees and expenses. 4.5 Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws (without regard to the conflict of laws provisions) of the State of California. (Signature Page Follows) 5 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. THE CREDIT STORE, INC. By: /s/ Charles A. Schultz --------------------------- Charles A. Schultz, Jr. VP COAST BUSINESS CREDIT, A division of Southern Pacific Bank By: /s/ illegible, SVP --------------------------- (Signature Page 1 of 1 to the Tenth Amendment to Coast Loan Agreement)