FOURTH AMENDMENT TO AND REAFFIRMATION OF LOAN DOCUMENTS
FOURTH AMENDMENT TO AND REAFFIRMATION OF LOAN DOCUMENTS (this
"Fourth Amendment") made as of the 21st day of December, 2000 by and among
ALPHANET SOLUTIONS, INC., a New Jersey corporation (the "Company"), THE
LEARNINGNET, INC. f/k/a NETTEMPS, INC., a New Jersey corporation (the
"Guarantor") and FIRST UNION NATIONAL BANK, a national banking institution (the
"Bank").
W I T N E S S E T H:
WHEREAS, the Bank has agreed to make credit available to the
Company on a revolving basis in the principal amount of up to $15,000,000 (the
"Loan"), pursuant to the terms and conditions of a certain Loan and Security
Agreement, dated June 30, 1997, as amended (as so amended and as amended and
reaffirmed by this Fourth Amendment, the "Loan Agreement"; all capitalized terms
used herein and not defined shall have the meanings ascribed to them therein);
and
WHEREAS, the Loan is evidenced by a certain Revolving Note A of the
Company and a Revolving Note B of the Company, each dated as of January 1, 2000
(collectively, the "Existing Revolving Notes"); and
WHEREAS, as collateral security for its obligations under the Loan
Agreement and the Existing Revolving Notes, the Company granted to the Bank
liens and security interests in the Collateral described in the Loan Agreement;
and
WHEREAS, the repayment and performance obligations of the Company
under the Loan Agreement and the Existing Revolving Notes were guaranteed by the
Guarantor under the Guaranty; and
WHEREAS, as collateral security for its obligations under the Loan
Agreement and the Guaranty, the Guarantor granted to the Bank liens and security
interests in the Collateral described in the Loan Agreement; and
WHEREAS, the Bank, the Company and the Guarantor have agreed that
(a) the Loan Agreement should be amended, among other things, to: (i) modify the
existing revolving credit facility to eliminate the unsecured portion thereof
and to make the entire revolving credit facility in the amount of $15,000,000 a
secured revolving credit facility, (ii) waive compliance by the Company on a
one-time basis with certain covenants as provided herein, and (iii) amend
certain of the definitions set forth therein; and (b) the other Loan Documents
shall be reaffirmed and amended to include the amendments set forth in the Loan
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
premises contained herein, the Bank, the Company and the Guarantor, do hereby
agree as follows:
1. By executing this Fourth Amendment, each of the Company and the
Guarantor confirms and acknowledges that it has no defenses, offsets or
counterclaims against any of its obligations to the Bank under the Loan
Documents and that all amounts outstanding, if any, under the Existing Revolving
Notes and the other Loan Documents are owing to the Bank without defense,
off-set or counterclaim.
2. The following new or revised definitions are hereby added to
Article I of the Loan Agreement:
1.15 "Borrowing Base" means the lesser of (A) Fifteen Million
and 00/100 Dollars ($15,000,000.00), or (B) the Eligible Loan Value of Eligible
Accounts.
1.35D "Fourth Amendment" means the Fourth Amendment to and
Reaffirmation of Loan Documents, dated as of December 21, 2000, by and among the
Company, the Guarantor and the Bank.
1.55 "Loan" means the revolving loan and Letters of Credit in
the maximum principal amount of up to FIFTEEN MILLION DOLLARS ($15,000,000.00)
made available by Bank pursuant to Section 2.1 hereof.
1.56 "Loan Documents" means this Agreement, the Revolving
Note, the Guaranty, the Intercreditor Agreements, any Letter of Credit
Agreement, all notes or other documents executed and delivered by Borrower or
any other Obligor hereunder, and any amendments, renewals, modifications or
supplements thereto, or substitutions therefor.
1.72 "Revolving Note" means that certain Revolving Note dated
as of December 21, 2000 issued by Borrower evidencing the Loan and any revolving
note replacing such note.
3. Sections 1.55A and 1.55B of the Loan Agreement are hereby
deleted in their entirety.
4. Sections 2.1 of the Loan Agreement is hereby follows:
"2.1 REVOLVING LOAN AND LETTERS OF CREDIT. Within the
collateral limits of the Borrowing Base, subject to the terms and conditions
hereinafter set forth, and provided that no Default or Event of Default shall
have occurred and be continuing or would result from the making of any Advance
or issuance of any Letter of Credit, from time to time hereafter, through the
Maturity Date, Bank shall extend credit to Borrower by (i) making Advances and
(ii) the issuance of Letters of Credit; provided, however that at no time shall
(x) the total amount of Letter of Credit Obligations exceed Two Million Five
Hundred Thousand Dollars ($2,500,000) (y) the total principal amount of
Acquisition Advances exceed Five Million Dollars ($5,000,000) and (z) the total
amount of Letter of Credit Obligations plus the total principal amount of
Advances then outstanding exceed the Borrowing Base. Borrower shall have the
right, upon thirty (30) days prior written notice to Bank, to terminate all or
part of the unused portion of the Loan, without premium or penalty."
5. Section 2.2(B) of the Loan Agreement is hereby amended to read
as follows:
"(B) Subject to Section 2.5, if, at any time, the outstanding
Advances exceed the Borrowing Base, Borrower shall pay to Bank monthly interest
computed on the basis of a 360 day year for the actual number of days elapsed,
on that portion of the daily unpaid balance of such Advances which is in excess
of the Borrowing Base, at the default rate set forth in Section 9.7."
6. Section 2.5 of the Loan Agreement is hereby amended to read as
follows:
"2.5 Prepayment. If on any day the sum of the aggregate
outstanding principal balance of the Advances under Section 2.1 plus the Letter
of Credit Obligations hereof shall exceed the then Borrowing Base on such day or
the other limitations set forth in Section 2.1, Borrower shall, on such day,
prepay such Advances by an amount equal to such excess together with the
Repayment Indemnity, if any. The failure to make any such payment shall be an
Event of Default."
7. The second sentence of Section 2.6 of the Loan Agreement is
hereby amended to read as follows:
"The notice to Bank requesting an Advance shall also include
evidence that based upon the most recent Borrowing Base Certificate, there
exists sufficient availability of funds for such Advance."
8. The last sentence of Section 2.14 of the Loan Agreement is
hereby amended to read as follows:
"Nothing herein shall prohibit Bank from pledging or assigning
the Revolving Note to any Federal Reserve Bank in accordance with applicable
law."
9. Section 3.1 of the Loan Agreement is hereby amended to read as
follows:
"3.1 Cross Collateral. All of the Collateral heretofore,
herein or hereafter given or assigned to Bank hereunder or in any other Loan
Document shall secure payment of (A) all Obligations of Borrower and Guarantor
to Bank and (B) all Indebtedness and any and all other obligations of any of the
other Obligors to Bank."
10. The Bank does hereby waive, (a) solely with respect to a
$1,800,000 investment by the Company in an entity known as "xxx-x.xxx",
compliance by the Company with the Loans and Advances and Investments covenant
contained in. Section 7.1 of the Loan Agreement, and (b) solely with respect to
the quarters ending June 30, 2,000 and September 30, 2000, compliance by the
Company with the Fixed Charge Coverage Ratio covenant contained in Section
7.2(B) of the Loan Agreement.
11. The Company shall execute a new Revolving Note dated the date
hereof which shall supersede and replace (but not represent a repayment or
novation of) the Existing Revolving Notes. The Revolving Note dated the date
hereof shall be the "Revolving Note" for all purposes of the Loan Agreement and
the other Loan Documents.
12. By executing this Fourth Amendment, the Company and the
Guarantor confirm and acknowledge that (i) the representations and warranties
contained in Article V of the Loan Agreement (pertaining to each of them) are
correct as of the date hereof, (ii) the Company and the Guarantor are in
compliance with all covenants contained in the Loan Agreement (except as
otherwise agreed to by the Bank in writing) and all other Loan Documents, and
(iii) after giving effect to the terms hereof, no Event of Default, or an event
which with the giving of notice or passage of time or both would constitute an
Event of Default, has occurred and is continuing.
13. All references to the "Agreement" or "this Agreement" in the
Loan Agreement shall mean the Loan Agreement, as amended and reaffirmed by this
Fourth Amendment; all references to the "Guaranty" in the Loan Agreement shall
be deemed to mean the Guaranty, as amended and reaffirmed by this Fourth
Amendment; and all references to the "Loan Documents" shall mean and include the
Loan Documents, as amended and reaffirmed by this Fourth Amendment, as well as
the Revolving Note (as defined in the Loan Agreement, as amended by this Fourth
Amendment). All references to the "Obligations" in the Loan Agreement shall mean
and include the obligations of the Company and the Guarantor to the Bank
pursuant to the Loan Documents, as amended and reaffirmed pursuant to this
Fourth Amendment, including, but not limited to the Revolving Note (as defined
in the Loan Agreement, as amended by this Fourth Amendment).
14. By executing this Fourth Amendment, the parties hereto confirm
the continued accuracy of all Schedules and Exhibits attached to and made a part
of the Loan Agreement and the other Loan Documents. If any such Schedule or
Exhibit is no longer fully accurate or needs updating, such revised or updated
Schedule or Exhibit shall be delivered to the Bank as a condition precedent to
the effectiveness of this Fourth Amendment and shall be deemed to replace the
prior Schedule or Exhibit for all purposes of the Loan Agreement or such other
Loan Document.
15. The Guaranty, effective the date hereof, is hereby amended to
provide that the term "Obligations" therein shall mean and include the
obligations of the Company to the Bank under the Loan Agreement and the other
Loan Documents, as each is amended and reaffirmed by this Fourth Amendment, and
all references to the "Loan Agreement" and the "Loan Documents" in the Guaranty
shall mean and include such agreements, as amended and reaffirmed by, or
delivered pursuant to, this Fourth Amendment. By executing this Fourth
Amendment, the Guarantor reaffirms and acknowledges the validity of the Guaranty
as of the date hereof and confirms that it guarantees unconditionally the
repayment and other obligations of the Company under the Revolving Note (as
defined in the Loan Agreement, as amended and reaffirmed by this Fourth
Amendment) and the other Loan Documents, as amended and reaffirmed by this
Fourth Amendment.
16. By executing this Fourth Amendment, each of the Company and
Guarantor confirms the security interests previously granted to the Bank in and
to the, Collateral described in the Loan Agreement as security for their
obligations under the Loan Documents (as defined in the Loan Agreement as
amended by this Fourth Amendment), and each of the Company and the Guarantor
hereby grants to the Bank a security interest in the Collateral described in the
Loan Agreement to secure the repayment of their Obligations under the Revolving
Note (as defined in the Loan Agreement as amended by this Fourth Amendment) and
Guaranty (as defined in the Loan Agreement as amended by this Fourth Amendment),
as applicable, and the other Loan Documents, as amended and reaffirmed by this
Fourth Amendment.
17. As conditions precedent to the effectiveness of this Fourth
Amendment, the following shall be delivered to the Bank by the Company and/or
the Guarantor:
(a) This Fourth Amendment, duly executed by all parties
hereto;
(b) The Revolving Note, duly executed by the Company;
(c) The Certification (as to jurisdiction of execution);
(d) A corporate resolution, incumbency certificate, and such
other documents as the Bank may reasonably request reflecting the corporate
authorization and approval of the transactions contemplated hereunder by the
Company and the Guarantor;
(e) Payment by the Company of a fee of $15,000 plus the legal
fees, costs, and expenses incurred by the Bank in connection with the
preparation and negotiation of this Fourth Amendment and the other documents
executed in connection herewith; and
(f) Such other documents as the Bank may reasonably request.
18. This Fourth Amendment is incorporated by reference into the
Loan Agreement and the other Loan Documents. Except as otherwise provided
herein, all other provisions of the Loan Agreement and the other Loan Documents
are hereby confirmed and ratified and shall remain in full force and effect as
of the date of this Fourth Amendment.
19. This Fourth Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one and the same instrument.
20. This Fourth Amendment shall be binding upon the parties hereto
and their heirs, executors, administrators, successors and/or assigns.
21. This Fourth Amendment shall be governed by, and construed in
accordance with, the laws of the State of New Jersey.
22. The Company agrees to pay any and all fees and expenses of the
Bank, including without limitation, all legal fees and expenses of Bank's
counsel.
23. In the event any provision of this Fourth Amendment or any
other Loan Document executed and delivered in connection herewith shall be held
invalid or unenforceable by a court of competent jurisdiction, such holdings
shall not invalidate or render unenforceable any other provision hereof or
thereof.
24. Each of the Company and the Guarantor acknowledge and
understand that the Maturity Date of the Loan is December 31, 2,000, and that
the Bank has advised the Company and the Guarantor that the Bank will not renew
the Loan past such date. Therefore, each of the Company and the Guarantor
acknowledge and understand that, pursuant to the terms of the Loan Documents,
all Obligations shall be due and owing, in full, on December 31, 2000.
IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment as of the date first above written.
FIRST UNION NATIONAL BANK
By: XXXXX XXXXXX
------------------------------
Name: XXXXX XXXXXX
Title: Vice President
ATTEST: ALPHANET SOLUTIONS, INC.
By: XXXX X. XXXXX By: XXXXXXX X. XXXXX
---------------------------------- ------------------------------
Name: XXXX X. XXXXX Name: XXXXXXX X. XXXXX
Title: Secretary Title: Chief Financial Officer
And Treasurer
ATTEST: THE LEARNINGNET, INC. f/k/a
NETTEMPS. INC.
By: XXXX X. XXXXX By: XXXX GANG
---------------------------------- ------------------------------
Name: XXXX X. XXXXX Name: XXXX GANG
Title: Secretary Title: Chairman of the Board
