WAIVER AGREEMENT
EXHIBIT 10.1
This Waiver Agreement (this
“Agreement”) is entered into as of __________________, 2009, by and among (a)
SILICON VALLEY BANK, a
California corporation, with its principal place of business at 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a loan production office located
at One Xxxxxx Executive Park, Suite 200, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (“Bank”) and (b) PARADIGM HOLDINGS, INC., a
Wyoming corporation, with offices at 0000 Xxx Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 (“Holdings”), PARADIGM SOLUTIONS
CORPORATION, a Maryland corporation, with offices at 0000 Xxx Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (“Solutions”), XXXXXXXX TECHNOLOGY SOLUTIONS
LLC, a Maryland limited liability company, with offices at 00000 Xxxxxxx
Xxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000 (“Xxxxxxxx”) and TRINITY INFORMATION MANAGEMENT
SERVICES, a Nevada corporation, with offices at 0000 Xxx Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000 (“Trinity”) (hereinafter, Holdings, Solutions,
Xxxxxxxx and Trinity are jointly and severally, individually and collectively,
referred to as “Borrower”).
1. DESCRIPTION OF EXISTING
INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations
which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to
a loan arrangement dated as of March 13, 2007, evidenced by, among other
documents, a certain Loan and Security Agreement (working capital line of
credit) dated as of March 13, 2007, among Borrower and Bank, as amended by a
certain First Loan Modification Agreement dated as of August 11, 2008, as
further amended by a certain Second Loan Modification Agreement dated as of
March 18, 2009, and as further amended by a certain Third Loan Modification
Agreement dated as of May 4, 2009 (as amended, the “Loan
Agreement”). Capitalized terms used but not otherwise defined herein
shall have the same meaning as in the Loan Agreement.
2. DESCRIPTION OF
COLLATERAL. Repayment of the Obligations is secured by (a) the
Collateral as described in the Loan Agreement, (b) the Intellectual Property
Collateral as described in a certain Intellectual Property Security Agreement
dated as of March 13, 2007 between Bank and Holdings (the “Holdings IP Security
Agreement”), (c) the Intellectual Property Collateral as described in a certain
Intellectual Property Security Agreement dated as of March 13, 2007 between Bank
and Solutions (the “Solutions IP Security Agreement”), (d) the Intellectual
Property Collateral as described in a certain Intellectual Property Security
Agreement dated as of July 5, 2007 between Bank and Xxxxxxxx (the “Xxxxxxxx IP
Security Agreement”), and (e) the Intellectual Property Collateral as described
in a certain Intellectual Property Security Agreement dated as of September 5,
2007 between Bank and Trinity (the “Trinity IP Security Agreement”) (together
with any other collateral security granted to Bank, the “Security
Documents”). Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Obligations shall be referred to as
the “Existing Loan Documents”.
3. WAIVER. Bank
hereby waives Borrower’s existing default under the Loan Agreement by virtue of
Borrower’s failure to comply with the financial covenant set forth in Section
6.7(b) of the Loan Agreement as of the three-month period ended March 31,
2009. Bank’s waiver of Borrower’s compliance with such covenant shall
apply only to the foregoing specific period.
4. FEES. Borrower
shall pay to Bank a waiver fee equal to Two Thousand Five Hundred Dollars
($2,500.00), which fee shall be due on the date hereof and shall be deemed fully
earned as of the date hereof. Borrower shall also reimburse Bank for
all reasonable legal fees and expenses incurred in connection with this
Agreement.
5. RATIFICATIONS OF IP SECURITY
AGREEMENTS.
(a) Holdings
hereby ratifies, confirms and reaffirms, all and singular, the terms and
conditions of the Holdings IP Security Agreement and acknowledges, confirms and
agrees that the Holdings IP Security Agreement contains an accurate and complete
listing of all Intellectual Property Collateral as defined
therein.
(b) Solutions
hereby ratifies, confirms and reaffirms, all and singular, the terms and
conditions of the Solutions IP Security Agreement and acknowledges, confirms and
agrees that the Solutions IP Security Agreement contains an accurate and
complete listing of all Intellectual Property Collateral as defined
therein.
(c) Xxxxxxxx
hereby ratifies, confirms and reaffirms, all and singular, the terms and
conditions of the Xxxxxxxx IP Security Agreement and acknowledges, confirms and
agrees that the Xxxxxxxx IP Security Agreement contains an accurate and complete
listing of all Intellectual Property Collateral as defined therein.
(d) Trinity
hereby ratifies, confirms and reaffirms, all and singular, the terms and
conditions of the Trinity IP Security Agreement and acknowledges, confirms and
agrees that the Trinity IP Security Agreement contains an accurate and complete
listing of all Intellectual Property Collateral as defined therein.
6. RATIFICATIONS OF PERFECTION
CERTIFICATES.
(a) Holdings
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of March 13,
2007 between Holdings and Bank, and acknowledges, confirms and agrees the
disclosures and information Holdings provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.
(b) Solutions
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of March 13,
2007 between Solutions and Bank, and acknowledges, confirms and agrees the
disclosures and information Solutions provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.
(c) Xxxxxxxx
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of July 5,
2007 between Xxxxxxxx and Bank, and acknowledges, confirms and agrees the
disclosures and information Xxxxxxxx provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.
(d) Trinity
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of September
5, 2007 between Trinity and Bank, and acknowledges, confirms and agrees the
disclosures and information Trinity provided to Bank in the Perfection
Certificate have not changed, as of the date hereof.
7. CONSISTENT
CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
8. RATIFICATION OF LOAN
DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms
all terms and conditions of all security or other collateral granted to the
Bank, and confirms that the indebtedness secured thereby includes, without
limitation, the Obligations.
9. NO DEFENSES OF
BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability
thereunder.
10. CONTINUING
VALIDITY. Borrower understands and agrees that in providing
the waiver set forth herein, Bank is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Loan
Documents. Except as expressly modified pursuant to this Agreement,
the terms of the Existing Loan Documents remain unchanged and in full force and
effect. Bank’s agreement to modifications to the existing Obligations
pursuant to this Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Agreement shall
constitute a satisfaction of the Obligations. It is the intention of
Bank and Borrower to retain as liable parties all makers of Existing Loan
Documents, unless the party is expressly released by Bank in
writing. No maker will be released by virtue of this
Agreement.
11. COUNTERSIGNATURE. This
Agreement shall become effective only when it shall have been executed by
Borrower and Bank.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first written above.
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BORROWER:
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BANK:
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SILICON
VALLEY BANK
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By:
/s/ Xxxxxxx
Xxxxxxx
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By:
/s/ Silicon Valley Bank
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Name:
Xxxxxxx Xxxxxxx
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Name:_________________________________
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Title:
SVP and CFO
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Title:___________________________________
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PARADIGM
SOLUTIONS CORPORATION
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By:
/s/ Xxxxxxx
Xxxxxxx
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Name: Xxxxxxx
Xxxxxxx
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Title:
SVP and CFO
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XXXXXXXX
TECHNOLOGY SOLUTIONS LLC
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By:
/s/ Xxxxxxx
Xxxxxxx
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Name: Xxxxxxx
Xxxxxxx
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Title:
SVP and CFO
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TRINITY
INFORMATION MANAGEMENT SERVICES
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By:
/s/ Xxxxxxx
Xxxxxxx
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Name: Xxxxxxx
Xxxxxxx
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Title:
SVP and CFO
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