Exhibit 4.3
FIRST AMENDMENT TO SECURITY AGREEMENT
AND APPOINTMENT OF AGENT FOR HOLDERS
This First Amendment to the Security Agreement And Appointment of Agent For
Holders dated January 25, 2002 (the "SECURITY AGREEMENT") by and between Ebiz
Enterprises, Inc., Xxxxx Business Systems, Inc. (collectively, the "BORROWER"),
First Financial Equity Corporation ("FFEC") and those lenders to the Company
listed on the signature pages to the Security Agreement (each a "HOLDER" and
collectively the "HOLDERS") is dated and effective as of the ___ day of April,
2002. All terms used, but not otherwise defined herein, shall have the meanings
ascribed to such terms in the Security Agreement.
RECITALS
A. The Canopy Group, Inc. ("CANOPY") holds a properly perfected first
priority security interest in all of the assets of JBSI and a properly
perfected security interest in all of the assets of EBIZ subject only
to the prepetition first priority position of Xxxxxx Micro, Inc. FFEC,
as Agent for the Holders, holds a properly perfected security interest
in all of Borrower's assets. FFEC and Canopy have entered into an
intercreditor agreement which addresses various matters regarding the
seniority of their relative security interests and their respective
rights to property serving as their collateral.
B. Borrower has negotiated with Canopy for a new revolving line of credit
in the initial amount of $500,000, subject to approval by the
Bankruptcy Court, and which may be renewed, extended or increased as
agreed to by Canopy and Borrower (the "NEW LINE"). The parties have
determined that the funding offered by the New Line is critical for
Borrower's financial and business operations.
C. To complete the transaction for the New Line, Borrower must grant to
Canopy a first lien priority position in all of Borrower's
post-petition accounts receivable. Borrower requests that the security
interest in Borrower's post-petition accounts receivable held by FFEC,
as Agent for the Holders, be subordinated to the security interest in
the post-petition accounts receivable to be granted to Canopy under
the New Line (the "SUBORDINATION").
D. FFEC and Holders have determined it to be in their best interests to
grant the Subordination.
E. FFEC and Holders hereby approve the Subordination and Holders
authorize FFEC, as Agent, to take all necessary action to effect the
Subordination.
AGREEMENT
NOW THEREFORE, for and in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. A new Section 1.1 is hereby added to the Security Agreement and states
as follows:
1.1 SUBORDINATION OF SECURITY INTERESTS. Notwithstanding anything
to the contrary contained herein, the security interest granted to
Agent hereunder in all of Borrower's post-petition accounts receivable
shall be and is hereby subordinated to the security interest granted
to Canopy in all of Borrower's post-petition accounts receivable under
the New Line.
2. Except as otherwise amended hereby, the Security Agreement remains in
full force and effect.
3. This First Amendment may be executed in one or more counterparts and by
original or facsimile signature, each of which will constitute an original and
all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, this First Amendment has been executed by each of the
parties as of the day and year first above written.
BORROWER:
EBIZ ENTERPRISES, INC.
XXXXX BUSINESS SYSTEMS, INC.
By
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Xxxxx Xxxxxxx
Its: President
AGENT:
FIRST FINANCIAL EQUITY CORP.
By
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Its:
2
HOLDER:
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Print or type Name below:
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