EXHIBIT 10.35 U.S. SMALL BUSINESS ADMINISTRATION WASHINGTON, D.C. 20416 License No. 02/02-5393 Alvin Murstein Chairman of Board of Directors and Chief Executive Officer Medallion Funding Corp. 205 East 42nd Street, Suite 2020 New York, New York 10017 Dear Mr. Murstein: We have reviewed the request recently submitted, by facsimile, by William A. Kirk of Reid & Priest, LLP on behalf of Medallion Funding Corp. ("Licensee") for approval to amend Licensee's Articles of Incorporation. The amendment would allow the Licensee to invest in small businesses other than Disadvantaged Businesses (as defined in 13 CFR (S)107.50). It has been determined that the amendment, as presented, is acceptable. Prior to the filing of this amendment, with the Secretary of State's Office in New York, the licensee is required to agree and accept the following terms and conditions of SBA's approval of Licensee's request. By countersigning this letter, Licensee hereby agrees to each such term and condition. All capitalized terms used but not defined herein shall have the meanings assigned to such terms in 13 CFR Part 107. 1. Immediately prior to making any investment in a small business other than a Disadvantaged Business (a "Non-Disadvantaged Business Financing"), Licensee must have, in its portfolio, investments in Disadvantaged Businesses with an aggregate cost basis at least equal to the value of SBA's remaining Liquidating Interest (as defined in Licensee's 3% Preferred Stock Repurchase Agreement with SBA) measured at the time of the Non-Disadvantaged Business Financing. 2. For each Non-Disadvantaged Business Financing, Licensee must prepare and maintain in the portfolio concern financing files, a supplemental worksheet demonstrating Licensee's compliance with Item #1 above. This letter agreement, if countersigned by Licensee, will constitute a written agreement with SBA and any failure to comply with any of the terms hereof will constitute nonperformance of this agreement under 13 CFR (S) 107.507(a). Once executed by Licensee and SBA, this letter agreement shall be in full force and effect until such time as both parties agree in writing to its termination or modification. Please indicate your approval and acceptance of this letter agreement by having an authorized officer execute both copies of this letter, affix the corporate seal, and return both copies to SBA. A signed copy will be returned to you. Upon receipt of the signed copy, Licensee may file the amendment with the appropriate State office and may begin making Non-Disadvantaged Business Financings in accordance with this letter agreement. Licensee should submit a certified copy of the filed amendment to SBA. Sincerely, /s/ Don A. Christensen Don A. Christensen Associate Administrator for Investment Enclosure Approved and accepted this 21 day of February, 1997. Medallion Funding Corp. By: /s/ Alvin Murstein ---------------------- Name: Alvin Murstein Title: Chairman Corporate Seal Attested /s/ Marie Russo ----------------- Secretary cc: Daniel F. Baker Treasurer and Chief Financial Officer Medallion Funding Corp.