FIRST AMENDMENT AND JOINDER TO LOAN AND SECURITY AGREEMENT AND SCHEDULE TO LOAN AND SECURITY AGREEMENT
EXHIBIT
99.1
FIRST AMENDMENT AND JOINDER
TO LOAN AND SECURITY AGREEMENT
AND
SCHEDULE TO LOAN AND
SECURITY AGREEMENT
This
First Amendment and Joinder to the Loan and Security Agreement and Schedule to
the Loan and Security Agreement (“Amendment”) is made as of
this 5th day of
December, 2008 by and among EMTEC INC. (a Delaware
corporation), EMTEC INC.
(a New Jersey corporation), EMTEC VIASUB LLC (a Delaware
limited liability company), and EMTEC FEDERAL, INC. (formerly known
as WESTWOOD COMPUTER CORPORATION) (a New Jersey corporation)
(collectively, the "Existing
Borrowers"), whose address is 00 Xxxxxxx Xxxx, Xxxxxxxxxxx, XX 00000;
EMTEC GLOBAL SERVICES LLC
(formerly known as EMTEC FEDERAL SERVICES LLC, formerly known as WESTWOOD
FEDERAL SERVICES, LLC) (a Delaware limited liability
company), LUCEO,
INC. (an Illinois corporation), EBUSINESS APPLICATION SOLUTIONS,
INC. (a New Jersey corporation) and AVEEVA, INC. (a Delaware
corporation) (each a "Joining
Borrower", and all together with Existing Borrowers, jointly and
severally, “Borrower”);
and DE XXXX XXXXXX FINANCIAL
SERVICES, INC. ("DLL"),
whose address is 0000 Xxx Xxxxx Xxxxxx Xxxx, Xxxxx, XX
00000.
BACKGROUND
A. Existing
Borrowers and DLL are party to that certain Loan and Security Agreement dated
December 7, 2006 (as it may otherwise have been and may hereafter be modified,
amended, extended, restated, supplemented or replaced, from time to time, the
“Loan and
Security Agreement”), including that certain Schedule to the Loan and
Security Agreement dated December 7, 2006 executed by Borrower and DLL in
connection with and as a part of the Loan and Security Agreement (as it may
otherwise have been and may hereafter be modified, amended, extended, restated,
supplemented or replaced, from time to time, the “Schedule”),
pursuant to which DLL established certain credit facilities in favor of
Borrower. The Loan and Security Agreement, collectively together with
the Schedule, as either may otherwise have been and may hereafter be modified,
amended, extended, restated, supplemented or replaced, from time to time, are
referred to herein collectively as the “Loan and
Security Agreement”. The Loan and Security Agreement and
all instruments, documents and agreements executed in connection therewith or
related thereto are referred to herein collectively as the “Existing
Loan Documents.” All capitalized terms not otherwise defined
herein shall have the meaning ascribed thereto in the Loan and Security
Agreement.
B. Borrower
has requested that DLL make certain amendments and modification to the Loan and
Security Agreement and the credit facilities established thereunder, including
(i) extending the Term of the Loan and Security Agreement through December 7,
2010 and (ii) consenting to the joinder of such Joining Borrowers into the Loan
and Security Agreement as joint and several Borrower entities thereunder, and
DLL has agreed to make such amendments and modifications in accordance with the
provisions of and on the terms and conditions set forth in this
Amendment.
NOW,
THEREFORE, with the foregoing Background incorporated by reference and made a
part hereof and intending to be legally bound, the parties agree as
follows:
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1. Joinder. Upon
the effectiveness of this Amendment as provided for in Section 4 below, each
Joining Borrower joins in as, assumes the obligations and liabilities of, adopts
the obligations, liabilities and role of, and becomes, one of the joint and
several Borrower entities under the Loan and Security Agreement and the other
Existing Loan Documents (including without limitation the Secured Floorplan Loan
Note and the Secured Revolving Credit Note). All references to
Borrower contained in the Existing Loan Documents, specifically including the
Loan and Security Agreement, are hereby deemed for all purposes to also refer to
and include each Joining Borrower as one of the Borrower entities and each
Joining Borrower hereby agrees to comply with all of the terms and conditions of
the Existing Loan Documents, specifically including the Loan and Security
Agreement, as if such Joining Borrower were an original signatory
thereto. Without limiting the generality of the provisions above,
each Joining Borrower hereby becomes liable, on a joint and several basis, along
with all other Borrower entities, for all Obligations, including, without
limitation, all existing and future Loans and other liabilities and obligations
incurred at any time by any one or more Borrower entities under the Existing
Loan Documents or any future Loan Documents that may hereafter be executed and
delivered by the parties hereto (including, without limitation, the Secured
Floorplan Loan Note and the Secured Revolving Credit Note), as amended hereby or
as may be hereafter amended, modified, supplemented or replaced. In
connection with the joinder of Emtec Global Services LLC (formerly known as
Emtec Federal Services LLC, formerly known as Westwood Federal Services, LLC)
(“Emtec
Global”) as provided for in this paragraph, upon the effectiveness of
this Amendment as provided for in Section 4 below, the subsection titled “Westwood Federal Services,
LLC as Inactive Subsidiary” set forth in Section 6.1.1.5 of the Schedule
titled “Additional
Covenants” is hereby deleted from the Schedule and shall be of no further
force or effect.
2. Amendment to Loan and
Security Agreement. Upon the effectiveness of this Amendment as
provided for in Section 4 below, the Loan and Security Agreement is hereby
amended and modified in the following manner.
(A) Amendment to Clarify
Treatment of Collections in Excess of Obligations. Section
2.10(c) of the Loan and Security Agreement is hereby amended by adding the
following new paragraphs to the end thereof. The parties hereto agree
that this amendment to Section 2.10(c) of the Loan and Security Agreement shall
supersede any prior agreements, written or oral or established by course of
dealing or course of business or practice, between them as to the treatment of
funds received by DLL through the Blocked Accounts in excess of the amount of
the Obligations outstanding from time to time:
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Notwithstanding
anything to the contrary provided for herein, in the event that, at any time,
the funds received by DLL through the Blocked Accounts shall exceed the amount
of the then-outstanding Obligations that are then due and payable, DLL shall
(and Borrower hereby authorizes DLL to) retain and hold such excess funds
received through the Blocked Accounts as cash collateral for the Obligations
(all such funds received and held by DLL from time to time as cash collateral
prior to the application thereof to the Obligations as provided for in this
paragraph, the “Excess
Collections”). DLL hereby agrees that all such Excess
Collections held by DLL from time to time shall accrue interest for the benefit
of Borrower at a per annum rate equal to the Cash Collateral Rate (as defined
below) as in effect from time to time, which interest shall accrue on a daily
basis at the Cash Collateral Rate on the daily balance of such Excess
Collections as of the end of each day and shall be credited to Borrower’s
account, as though it were additional Excess Collections received by DLL, on a
monthly basis on the first Business Day of the following month. All
such interest accruing on such excess funds shall continue to be held by DLL as
further cash collateral for the Obligations. Such excess funds and
interest held by DLL as cash collateral as defined in the foregoing shall be
applied to the payment of future Obligations as and when such Obligations are
incurred and/or become payable. Without limiting the generality of
Section 3.1 of this Agreement below, Borrower hereby grants to DLL a first
priority security interest and lien in any and all such excess funds held by DLL
from time to time and all interest accruing thereon (collectively, the “Excess
Cash Collateral”) to secure the payment and performance of the
Obligations when due and Borrower agrees that all such Excess Cash Collateral
held by DLL from time to time shall be part of the “Collateral” as defined in
Section 3.1 of this Agreement below. DLL shall not be required to
deposit the actual funds representing such Excess Cash Collateral into any
particular deposit account maintained specifically for the benefit of Borrower
and/or to otherwise segregate or maintain such funds separately from DLL’s other
funds and assets and may instead commingle all such Excess Cash Collateral held
by DLL for the benefit of Borrower with DLL’s other funds and assets (including
by depositing any and all funds representing such Excess Cash Collateral into
DLL’s general operating deposit accounts and/or other deposit accounts or
securities accounts). For avoidance of doubt, the parties hereto
agree that upon the occurrence of any Event of Default, DLL shall have the
immediate right, exercisable it is sole and absolute discretion, to apply and
any all Excess Cash Collateral held by DLL for Borrower’s account to the
repayment of any and all then-outstanding and owing Obligations.
“Cash Collateral Rate”
means, with respect to any day in any calendar
month, the annual rate equal to the annual rate in effect in the London
Interbank market applicable to deposits of U.S. dollars as reported in the
“Money Rates” section of The Wall Street Journal with respect to three month (90
day) LIBOR on the last Business Day in the preceding calendar
month. The Cash Collateral Rate shall be adjusted as of the first day
of each month in accordance with the foregoing sentence. If the Wall
Street Journal is not published on such Business Day or does not report such
rate, such rate shall be the annual rate in effect in the London Interbank
market applicable to deposits of U.S. dollars with respect to three month (90
day) LIBOR on the applicable date as reported by such other publication or
source as DLL may reasonably select.
(B) Amendment to Add Limitation
on Liens on Equity of Foreign Subsidiaries. Section 3.1 of the
Loan and Security Agreement is hereby amended by adding the following new
paragraph to the end thereof:
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Notwithstanding
anything to the contrary contained in the foregoing or otherwise set forth in
this Agreement, the Schedule or any other Loan Document, the “Collateral” shall
not include, and DLL shall not hold and Borrower shall not be deemed to have
granted a security interest, pledge or other lien of any kind on, more than 65%
of the capital stock, shares, membership interests, partnership interests or
other equity interests possessing voting/management power (collectively, “Voting Capital
Stock”) issued by any Subsidiary of Borrower that is organized under the
laws of a jurisdiction outside of the United States (provided that, for
the avoidance of doubt, the “Collateral” shall include, and the Borrower hereby
grants a security interest to secure the Obligations in, (x) 65% of such Voting
Capital Stock issued by any such foreign Subsidiary of Borrower and (y) 100% of
any other capital stock, shares, membership interests, partnership interests or
other equity interests issued by any such foreign Subsidiary of Borrower that
does not possess any such voting/management power).
3. Amendments to the
Schedule. Upon the effectiveness of this Amendment as provided
for in Section 4 below, the Schedule is hereby amended and modified in the
following manner.
(A) Amendment to Revise
Definition of Base Rate. Section 1 of the Schedule titled
“DEFINITIONS” is hereby
amended by amending and restating the definition of “Base Rate” set forth
therein as follows:
“Base Rate” means, with respect to any day in any calendar month,
the annual rate equal to the annual rate in effect in the London
Interbank market applicable to deposits of U.S. dollars as reported in the
“Money Rates” section of The Wall Street Journal with respect to three month (90
day) LIBOR on the last Business Day in the preceding calendar
month. The Base Rate shall be adjusted as of the first day of each
month in accordance with the foregoing sentence. If the Wall Street
Journal is not published on such Business Day or does not report such rate, such
rate shall be the annual rate in effect in the London Interbank market
applicable to deposits of U.S. dollars with respect to three month (90 day)
LIBOR on the applicable date as reported by such other publication or source as
DLL may reasonably select.
(B) Amendments to Definition of
Eligible Receivables. The definition of “Eligible Receivables”
set forth in Section 1 of the Schedule titled “DEFINITIONS” is hereby amended
is hereby amended as follows:
(i) clause
(viii) of such definition is hereby amended and restated as
follows:
Borrower
is or may become liable to the Account Debtor for goods sold or services
rendered by the Account Debtor to Borrower, provided that, DLL may in the
exercise of its Permitted Discretion elect to (and, with respect to any HP
Rebate Receivable (as defined below), DLL shall) permit any Receivable(s) that
would otherwise be made ineligible by the provisions of this clause (vii) to be
treated as Eligible Receivable(s) hereunder (subject to the remaining provisions
of this definition) and to establish a reserve against the Revolving Credit
Borrowing Base Amount equal to the amount of the applicable offset, contra,
amount which is or may become owing from Borrower to such Account
Debtor.
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(ii) the
following new paragraph shall be added to the end of such definition as
follows:
Notwithstanding
anything to the contrary provided for in the Loan and Security Agreement or this
Schedule, each rebate amount owing to Borrower under Hewlitt-Packard’s “Big
Deal” rebate program (each an “HP Rebate
Receivable”) shall be treated as a “Receivable” of Borrower for all
purposes under this Agreement, and as such, shall be eligible to be treated as
an “Eligible Receivable” of Borrower for all purposes under this Agreement, but
only to the extent that such HP Rebate Receivable shall satisfy all of the other
terms and provisions, requirements and conditions, of this
definition.
(C) Amendment to Revise Interest
Rates on Revolving Credit Loans. Section 2.6 of the Schedule
titled “INTEREST AND
FEES” is hereby amended by amending and restating the subsection thereof
titled “Revolving
Interest Rate” as follows:
Revolving
Interest Rate. Borrower shall pay DLL interest on the daily
outstanding balance of Borrower's Revolving Credit Loans at a per annum rate of
the Base Rate plus three and one-quarter percent (3.25%) (subject to the
provisions of Section 2.7 of the Agreement regarding default
rates).
(D) Amendment to Revise Interest
Rates on Overdue Floorplan Loans. Section 2.6 of the Schedule
titled “INTEREST AND
FEES” is hereby amended by amending and restating the last sentence of
the subsection thereof titled “Floorplan
Credit Line Interest” as follows:
Interest
on any outstanding amount of any specific Floorplan Loan not repaid in full on
or prior to the applicable Due Date for such Floorplan Loan (subject to any
extension of such Due Date for such Floorplan Loan as provided for in Section
2.10(a)), including any Refinancing Floorplan Loan, shall accrue at a per
annum rate of six and one-quarter percent (6.25%) in excess of the Base
Rate.
(E) Amendment to Amend Limits on
Audit Fees. Section 2.6 of the Schedule titled “INTEREST AND FEES” is hereby
amended by amending and restating the subsection thereof titled “Examination
Fee” as follows:
Examination
Fee. Borrower shall pay DLL an examination fee equal to Seven
Hundred Fifty Dollars ($750) per day per field
examiner, plus all out-of-pocket costs and expenses incurred by each such field
examiner for each field examination and/or audit conducted by DLL regarding
Borrower and its Collateral (the “Examination Fee”),
which shall be deemed fully earned and non-refundable as of the end of each such
day of each such field examination and/or audit and shall be due and payable on
demand ,provided
that, unless an Event of Default has occurred and remains outstanding,
(i) Borrower shall not be liable for any Examination Fee in excess of Six
Thousand Dollars ($6,000) with respect to any
particular field examination and audit (however, the parties hereto agree that,
in the event that after December 5. 2008, any further additional Borrower
entities are joined into and become part of this Agreement, such $6,000 amount
shall be increased by up to $2,250 for each such new Borrower entity so joined)
and (ii) Borrower shall not be liable for any Examination Fee with respect to
more than four (4) such field examinations and audits in any year, but provided further that
Borrower acknowledges that the foregoing limitations shall not apply with
respect to any field examination or audit conducted by DLL at any time when an
Event of Default has occurred and remains outstanding. Borrower
acknowledges and agrees that DLL shall conduct such field examinations and
audits at least quarterly. Notwithstanding anything to the contrary
contained in the foregoing but subject to the other terms in the Agreement,
nothing shall limit DLL’s (and its agents’ or auditors’) rights of access upon
reasonable notice and at reasonable times (except that no such notice shall be
required at any time after the occurrence and during the continuance of an Event
of Default) at any time to Borrower's records, files, books of account and all
other documents, instruments and agreements relating to the Collateral and to
Borrower’s business locations and the Collateral as provided for under Section
9.1(a) of the Agreement or the number of field examinations and/or audits with
respect to Borrower and its Collateral that DLL (and its agents or auditors) may
conduct at DLL’s own expense from time to time or to limit DLL’s rights to
determine the appropriate scope of any field examination or audit or the number
of field examiners DLL may send to conduct any field examination or
audit.
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(F) Amendment to Establish
Minimum Floorplan Annual Volume Commitment. Section 2.6 of the
Schedule titled “INTEREST AND
FEES” is hereby amended by adding the following new subsection to the end
thereof as follows::
Minimum Floorplan Annual
Volume Commitment and Floorplan Commitment Fee. In addition to
the interest and fees payable by Borrower as set forth above, to the extent that
the aggregate amount of all Floorplan Loans funded by DLL under this Agreement
(such amount as to any applicable period, the “Floorplan Volume
Usage”) during the period of December 1st of any
given calendar year through November 30th of the
following calendar year (each such period, a “Floorplan Annual Volume
Period”) does not equal or exceed Sixty Million Dollars
($60,000,000) (the “Floorplan Annual Volume
Commitment”), Borrower shall pay DLL a fee (the “Floorplan Commitment
Fee”) for such Floorplan Annual Volume Period equal to (i) the difference
of the Floorplan Annual Volume Commitment minus the Floorplan Volume
Usage for such Floorplan Annual Volume Period multiplied by (ii)
one percent (1.00%). Any such annual Floorplan Commitment Fee which
may be owing with respect to any Floorplan Annual Volume Period shall be due and
payable, and fully earned and non-refundable, on December 1st of each
year, and without limiting the generality of Section 9.11 of this Agreement, the
coming due of any such Floorplan Commitment Fee, at the sole option of DLL, may
be deemed to be an automatic request by Borrower for a Revolving Credit Loan in
an amount equal to such Floorplan Commitment Fee, and DLL, in its sole option,
may make such Revolving Credit Loan and use the proceeds of such Revolving
Credit Loan to satisfy such payment due regardless of whether the conditions
otherwise required by the making of a Revolving Credit Loan under Section 4.2
have been satisfied and regardless of whether the total outstanding balance of
all Revolving Credit Loans (after giving effect to the making of such Revolving
Credit Loan) would exceed any dollar or percentage limitation otherwise
applicable to Revolving Credit Loans, including the Revolving Credit Borrowing
Base Amount, the Revolving Credit Limit or the amount of the Total
Facility. Concurrently with the monthly account statement provided by
DLL pursuant to Section 2.10(f) of this Agreement for the period including any
such December 1st on
which any such Floorplan Commitment Fee may be due and payable, DLL shall
provide Borrower with a reasonably detailed statement showing the calculation of
such Floorplan Commitment Fee. Such calculation shall be deemed
correct, accurate and binding on Borrower and DLL and an account stated unless
Borrower notifies DLL in writing to the contrary within fifteen (15) days after
such calculation is provided by DLL to Borrower, describing the nature of any
alleged errors or omissions. Upon any such written notification of a
dispute by Borrower regarding any such Floorplan Comment Fee, Borrower and DLL
shall seek in good faith to resolve any differences provided in the notice of
disagreement, and if such resolution shall be in favor of Borrower, DLL shall
make an appropriate adjustment (including, if applicable, a reversal of the
applicable portion of any Revolving Credit Loan made pursuant to Section 9.11 in
satisfaction of the Floorplan Comment Fee as originally computed by DLL and any
interest that may have accrued on such reversed portion of such Revolving Credit
Loan).
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Notwithstanding
anything to the contrary provided for in the forgoing, if this Agreement is
terminated during any Floorplan Annual Volume Period (whether voluntarily at the
request of Borrower or otherwise for any reason), and the Floorplan Volume Usage
determined for the period from the first day of such Floorplan Annual Volume
Period through the date of such termination (the “Proration Period”) is
less than the Minimum Floorplan Annual Volume Commitment pro-rated for the
number of days in such Proration Period (the Minimum Floorplan Annual Volume
Commitment as so pro-rated being equal to (x) the Minimum Floorplan Annual
Volume Commitment multiplied
by (y) a fraction where the numerator is equal to the number of days
in such Proration Period and the denominator is 365), then Borrower shall pay to
DLL a pro-rated Floorplan Commitment Fee equal to (a) the Minimum Floorplan
Annual Volume Commitment as so pro-rated for such Proration Period minus the Floorplan Volume
Usage for such Proration Period multiplied by (b)
one percent (1.00%), which such pro-rated Floorplan Commitment Fee shall be
shall be due and payable (and fully-earned and non-refundable) on the date of
such termination (provided that, if this
Agreement shall terminate on or before December 10th of any
calendar year, no such pro-rated Floorplan Commitment Fee shall be payable for
the period from December 1st of such
year through the date of such termination).
The
Floorplan Volume Usage for any applicable Floorplan Annual Volume Period or
Proration Period shall be conclusively determined based on the amount of the
invoices generated by the applicable Vendors and issued to Borrower for the
Floorplanned Inventory purchased pursuant to such Floorplan Loans during such
period.
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(G) Amendment to Require
Quarterly Testing of Positive Net Income Covenant. Section
6.1.1.3 of the Schedule titled “Financial
Covenants” is hereby amended by amending and restating the subsection
thereof titled “Positive Annual Net
Income” as follows.
Positive Net
Income. Borrower shall maintain a positive net income as
determined in accordance with GAAP as measured at the end of each fiscal quarter
of Borrower (beginning with Borrower’s fiscal quarter ending November 30, 2008)
for the trailing twelve (12) month fiscal measurement period ending as of the
last day of such fiscal quarter.
(H) Amendment to Delete Minimum
Excess Revolver Availability Covenant. Section 6.1.1.3 of the
Schedule titled “Financial
Covenants” is hereby amended by permanently deleting the subsection
thereof titled “Minimum Excess Revolver
Availability”, which shall hereafter be of no further force or
effect.
(I) Amendment to Modify Covenant
Regarding Permitted Dividends and Distributions. Section 6.2.3
of the Schedule titled “Permitted
Dividends and Distributions” is hereby amended and restated in its
entirety as follows:
Permitted
Dividends and Distributions (Section 6.2.3):
At any
time, dividends may be paid by any wholly-owned direct or indirect Subsidiary of
Borrower (including any such wholly-owned Subsidiary of a Borrower entity that
is also a Borrower entity hereunder) to its parent Borrower (and/or to any
intermediate wholly-owned direct or indirect Subsidiary of such parent
Borrower).
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Borrower
may also make other distributions and dividends to its shareholders on a
quarterly basis based on Borrower’s net income (calculated on a consolidated
basis for all Borrower entities and their respective Consolidated Subsidiaries
taken together as a whole) as determined in accordance with GAAP for such
quarter (beginning with Borrower’s fiscal quarter ending as of November 30,
2008) but only so long
as, in each case: (i) prior to making any such distribution or
dividends with respect to any such fiscal quarter (each, a “Subject Quarter”),
Borrower shall have delivered to DLL Borrower’s quarterly financial statements
required under Section 9.1(b)(f) of this Schedule for such Subject Quarter (or,
if such Subject Quarter is the last fiscal quarter in any fiscal year of
Borrower, Borrower’s audited annual financial statements required under Section
9.1(b)(g) of this Schedule for the fiscal year ending with such Subject Quarter)
prior to the date delivery of such financial statements was required under such
Section 9.1(b)(f) of this Schedule (or, if applicable, Section 9.1(b)(g) of this
Schedule), (ii) such dividend or distribution with respect to such Subject
Quarter is made within thirty (30) days of the date such quarterly financial
statements (or, if applicable, audited annual financial statements) with respect
to such Subject Quarter were delivered to DLL, (iii) both prior and after giving
effect to any such distribution or dividend, no Event of Default, or event that
with the passage of time or giving of notice or both will become an Event of
Default, has occurred and is continuing or will occur (and without limiting the
generality of the foregoing, Borrower is and will be and shall remain in
compliance with the financial covenants set forth in Section 6.1.13 above), and
(iv) after giving effect to such proposed distribution or dividend, and all
other prior distributions or dividends made with respect to such Subject
Quarter, Borrower shall have retained as retained earnings (and not distributed
or made a dividend with respect to) at least eighty percent (80.00%) of
Borrower’s net income (calculated on a consolidated basis for all Borrower
entities and their respective Consolidated Subsidiaries taken together as a
whole) as determined in accordance with GAAP for such Subject
Quarter. In addition, Borrower may make a one-time
distribution/dividend to its shareholders at any time prior to December 31, 2008
in respect of Borrower’s net income (calculated on a consolidated basis for all
Borrower entities and their respective Consolidated Subsidiaries taken together
as a whole) as determined in accordance with GAAP for Borrower’s fiscal year
ended August 31, 2008 in an amount not to exceed $251,000 but only so long
as: (i) prior to making such distribution/dividend, Borrower
shall have delivered to DLL Borrower’s final audited annual financial statements
required under Section 9.1(b)(g) of this Schedule for Borrower’s fiscal year
ended August 31, 2008 prior to the date delivery of such financial
statements was required under such Section 9.1(b)(g) of this Schedule, which
such final audited annual financial statements shall not reflect any material
change to the calculation of Borrower’s net income for such fiscal year as
compared to the draft version of such annual financing statements delivered by
Borrower to DLL prior to the execution of the First Amendment to the Loan and
Security Agreement and Schedule to the Loan and Security Agreement, and (ii)
both prior and after giving effect to any such distribution or dividend, no
Event of Default, or event that with the passage of time or giving of notice or
both will become an Event of Default, has occurred and is continuing or will
occur (and without limiting the generality of the foregoing, Borrower is and
will be and shall remain in compliance with the financial covenants set forth in
Section 6.1.13 above).
(J) Amendment to Add Earn-Out
Obligations to Permitted Indebtedness Covenant. Section 6.2.11
of the Schedule entitled “Indebtedness”
shall be amended by adding the following new items of permitted Indebtedness
under the heading “Other Specific Indebtedness”
In connection with the purchase by Emtec Global of all
of the outstanding stock of Luceo, Inc., Emtec Global agreed to make
contingent cash payments to the former stockholder of Luceo, Inc. each year for
three (3) years after the closing, if certain performance goals are
met. The aggregate amount of these contingent payments shall not
exceed
$705,000 in any one year.
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In connection with the purchase by Emtec Global of all
of the outstanding stock of eBusiness Applications Solutions, Inc. and Aveeva,
Inc., Emtec Global agreed to make contingent cash payments to the former
stockholder of these entities of up to $1,000,000 per year for the next three
(3) years if certain performance goals are met.
(K) Amendment to Amend and
Restate Covenant Regarding Insider/Affiliated
Indebtedness. Section 6.1.15 of the Schedule entitled “Additional
Covenants” is hereby amended by amending and restating in its entirety
the subsection thereof entitled “Insider/Affiliated
Indebtedness” as follows:
Insider/Affiliated Indebtedness. Borrower
represents and warrants that as of December 5, 2008, the only Indebtedness for
borrowed money owing by any Borrower entity to any Affiliate, shareholder (or
former shareholder), employee (or former employee), officer (or former officer)
or director (or former director) of any Borrower entity, or any relative of any
of the foregoing, is as follows:
Indebtedness
owing to Darr Westwood LLC pursuant to that certain Subordinated Note dated
April 16, 2004 issued by Westwood Computer Corporation (as successor by merger
to Darr Westwood Acquisition Corporation).
Indebtedness
owing to Darr Westwood LLC pursuant to that certain 8% Promissory Note dated
August 5, 2005 issued by Emtec Viasub LLC (as successor by merger to Darr
Westwood Technology Corporation).
Indebtedness
owing to Four Kings Management LLC pursuant to that certain Subordinated Note
dated April 16, 2004 issued by Westwood Computer Corporation (as successor by
merger to Darr Westwood Acquisition Corporation).
Indebtedness
owing to Xxxxx Xxxxxxxx pursuant to that certain Separation Agreement dated
April 16, 2004 between Xxxxx Xxxxxxxx and Westwood Computer
Corporation.
Indebtedness
owing to Xxxxx Xxxxxx pursuant to that certain five percent (5%) subordinated note
dated
February 5, 2007 issued by Westwood Computer Corporation.
Indebtedness
owing to Xxxx Xxxxxxxx Xxxxxx pursuant to that certain five percent (5%) subordinated promissory note
dated
February 5, 2007 issued by Westwood Computer Corporation.
Indebtedness
owing to Xxxxxxxxxx Xxxxxxxxx pursuant to
that certain eight percent (8%)
unsecured subordinated promissory note
dated
March 20, 2008 issued by Emtec Global
(the “Natarajan Note”).
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Indebtedness owing to
XXXX Global Holdings, Inc. pursuant to that certain five percent (5%)
subordinated note dated February 5, 2007
issued
by Westwood Computer Corporation.
Without
limiting the generality of Section 6.2.11 of this Agreement, from and after the
Closing Date, Borrower shall not incur any additional Indebtedness for borrowed
money from any Affiliate, shareholder (or former shareholder), employee (or
former employee), officer (or former officer) or director (or former director)
of any Borrower entity, or any relative of any of the foregoing, unless such
Indebtedness is incurred as Subordinated Debt with the specific prior written
consent of DLL.
Borrower
shall not make any payments of any kind, whether or principal, interest or
otherwise and whether regularly scheduled, upon maturity or acceleration or
otherwise, in respect of any such Indebtedness for borrowed money existing from
time to time owing to any Affiliate, shareholder (or former shareholder),
employee (or former employee), officer (or former officer) or director (or
former director) of any Borrower entity, or any relative of any of the
foregoing, unless and except as and if expressly permitted pursuant to the
Subordination Agreement executed between such insider/affiliated creditor and
DLL; provided however that, notwithstanding anything to the contrary contained
in the foregoing, (x) DLL shall not require, and Borrower shall not be obligated
to obtain or deliver, a Subordination Agreement from Xxxxx Xxxxxxxx regarding
the Indebtedness owing to Xxxxx Xxxxxxxx pursuant to that certain Separation
Agreement dated April 16, 2004 between Xxxxx Xxxxxxxx and Westwood Computer
Corporation (“Xxxxxxxx Separation Indebtedness”) and such Xxxxxxxx Separation
Indebtedness shall be permitted under this Agreement regardless of the fact that
it is not Subordinated Debt and (y) Borrower may, at any time and from time to
time as it may elect, make payments to Xxxxx Xxxxxxxx in such amounts as
Borrower may elect (including any regularly scheduled payment thereof or any
full or partial prepayment thereof) so long as, at the time of any such proposed
payment and after giving effect thereto, no Event of Default, or event that with
the passage of time or giving of notice or both will become an Event of Default,
shall have occurred and remain outstanding and no such Event of Default, or
event that with the passage of time or giving of notice or both will become an
Event of Default, would occur as a result of the making of such proposed
payment.
(L) Amendment to Amend and
Restate Covenant Regarding Insider/Affiliated
Indebtedness. Section 6.1.15 of the Schedule entitled “Additional
Covenants” is hereby amended by adding the following new subsection
entitled “Covenants
Regarding Non-Borrower Subsidiary – Aviance Software (India) Pvt.
Ltd.”:
11
Covenants Regarding
Non-Borrower Subsidiary –Aviance Software (India) Pvt.
Ltd.. Borrower represents and warrants that as of December 5,
2008, Aviance Software (India) Pvt. Ltd (“Aviance”), an Indian private limited
company and majority-owned Subsidiary of Borrower entity Aveeva, Inc. (“Aveeva”), does not
conduct any business other than the business of providing back office support
and consulting services for Emtec Global and the other Borrower entities and
their direct and indirect Subsidiaries and that Aviance does not have any
significant or material assets other than the assets reasonably necessary to
carry out such business. The current issued and outstanding equity in
Aviance as of December 5, 2008 consists of 9,999 shares issued to Aveeva and 1
share issued to Emtec Global Services, LLC (formerly known as Emtec Federal
Services LLC, formerly known as Westwood Federal Services LLC) (“Emtec
Global”). Borrower hereby covenants that Borrower shall not permit
Aviance to carry out any other business or to have or acquire any other
significant or material assets. Without limiting the generality of
any other provisions of this Agreement (specifically including without
limitation Section 6.2.2, 6.2.1 and 6.2.12), no Borrower entity shall make any
intercompany loans or capital contributions or investments, or otherwise
transfer any assets of any kind (including sales or transfers of inventory) to
or engage in any other transactions of any kind with Aviance without the prior
written consent of DLL, except
that Borrower entities may continue to make intercompany transfers
to fund the payroll, capital expenditures and operations of Aviance as (but only
to the extent) necessary for Aviance to continue to provide back office support
for Aveeva, Emtec Global and the other Borrower entities and their direct and
indirect Subsidiaries, all in the ordinary course of business for the Borrower
entities and their direct and indirect Subsidiaries substantially consistent
with past practices as conducted prior to December 5, 2008.
(M) Amendment to Extend the
Term. Section 9.2 of the
Schedule entitled “Term” is hereby
is hereby amended by amending and restating Section 9.2
as follows:
The term of this Agreement shall be from the Closing Date through and including December 7,
2010 (the “Term”), unless earlier
terminated as provided in Section 7 or
9.2 above or elsewhere in this Agreement.
4. Effectiveness
Conditions. This Amendment shall be effective upon the satisfaction
of the following conditions (any and all Loan Documents, agreements, documents,
contracts, certificates, authorizing resolutions, etc. required to be delivered
below must be satisfactory in form and substance, and on terms and conditions
acceptable to, DLL and its counsel in their Permitted Discretion) (the “Effectiveness
Conditions”):
(A) execution
and delivery of this Amendment by all parties hereto;
(B) execution
and delivery by Borrower (including all Joining Borrowers) to DLL of an Amended
and Restated Secured Revolving Credit Note in the maximum principal amount of
$32,000,000 and an Amended and Restated Secured Floorplan Loan Note in the
maximum principal amount of $32,000,000;
(C) Execution
and delivery to DLL by each of Emtec Global and Aveeva of a
Collateral Pledge Agreement pursuant to which Emtec Global and Aveeva shall
pledge and grant a security interest in favor of DLL in all of the equity
interests of their respective Subsidiaries (including all other Joining
Borrowers), subject to the limitations of Section 3.1 of the Loan and Security
Agreement (as amended hereby) regarding the extent of DLL’s liens in the Voting
Capital Stock of foreign Subsidiaries, to secure the Obligations of Borrower
owing to DLL, and execution and delivery to DLL by each Subsidiary of Emtec
Global and Aveeva (other than Aviance) of a Pledge Acknowledgement in the form
of Exhibit A attached to each such respective Collateral Pledge Agreement,
and
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(D) Payment
by Borrower of all reasonable fees, costs and expenses (including without
limitation any and all reasonable legal fees and expenses) incurred by DLL in
the negotiation, preparation and execution of this
Amendment. Borrower hereby authorizes the DLL to charge the
Borrower’s revolving loan account with the amount of all such costs and expenses
of DLL in satisfaction thereof, and requests that DLL make one or more Revolving
Credit Loan(s) on or after the date hereof in an aggregate amount equal to the
total amount of all such costs and expenses, and that DLL disburse the proceeds
of such Revolving Credit Loan(s) in satisfaction thereof
5. Post Closing
Covenants. Borrower acknowledges that as an accommodation to
Borrower, DLL has agreed to close on this Amendment, and to have this Amendment
become effective, upon the satisfaction of only the Effectiveness Conditions set
forth in Section 4 above, without the prior satisfaction of other conditions
that DLL would otherwise require as conditions precedent to the effectiveness of
this Amendment. Therefore, in consideration of this agreement and
accommodation by DLL, Borrower hereby covenants and agrees that, no later than
January 31, 2009, Borrower shall cause each of the conditions and covenants set
forth in this Section 5 below (the “Post Closing Covenants”) to be fully
satisfied and performed to the satisfaction of DLL and its counsel in their
Permitted Discretion. Borrower specifically acknowledges and agrees
that: (i) in the event that any one or more of the Post Closing Covenants is not
fully satisfied and performed to the satisfaction of DLL and its counsel in
their Permitted Discretion by January 31, 2009, an immediate and automatic Event
of Default shall be deemed to have occurred under the Loan and Security
Agreement and in consequence thereof, DLL shall immediately and automatically
become entitled to exercise all of the rights and remedies available to DLL
under the Existing Loan Documents (or any future Loan Documents that may
hereafter be executed and delivered by the parties hereto), at law and in equity
as a consequence of such an occurrence of such Event(s) of Default under the
Loan and Security Agreement (specifically including without limitation all
rights and remedies described in Section 7.2 of the Loan and Security Agreement)
and (ii) without limiting the generality of the foregoing, in the event that any
one or more of the following Post Closing Covenants is not fully satisfied and
performed to the satisfaction of DLL and its counsel in their Permitted
Discretion by January 31, 2009, under no circumstances whatsoever shall any
Loans of any kind be made based on any Floorplanned Inventory and/or Receivables
of any Joining Borrower, even if DLL acting in its sole and absolute discretion
shall elect to make any Loans of any kind in respect of the assets of any of the
other Borrower entities despite the existence of the Event(s) of Default that
will automatically arise under the preceding clause (i) as a result of
Borrower’s failure to satisfy and perform any of the Post Closing
Covenants. The Post Closing Covenants are as follows:
(A) Delivery
to DLL of an updated Perfection Certificate with information for all Borrower
entities, including all Joining Borrowers;
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(B) Delivery
to DLL of a certificate of the secretary or assistant secretary of each Borrower
entity (including each Joining Borrower): (i) certifying the name,
title and signature of the officer of such Borrower entity executing this
Amendment and/or any other related instrument, document or agreement on behalf
of such Borrower entity (which shall expressly state that such officer was a
duly appointed offer of such entity as of the date hereof and at all times
thereafter through the date of such certificate), (ii) either (x) certifying
that there has been no change as of the date of such certificate to any of the
articles of incorporation or bylaws (or, if applicable, certificate of formation
or operating agreement) of such Borrower entity since the delivery by such
Borrower entity of such documents to DLL in connection with the original Closing
Date, or (y) if there has been any such change (and without exception in the
case of each Joining Borrower) certifying full and complete copies of each such
organizational document (including all amendments thereto) as in effect on the
date of such certificate as attached thereto (and each such certificate/articles
of incorporation or certificate of formation provided under this clause (y)
shall be a certified copy recently provided by the appropriate governmental
official in such Borrower entity’s jurisdiction of organization) and further
certifying that such organizational documents were the full and complete
versions of such organizational documents as in effect on the date hereof),
(iii) the good standing of such Borrower entity in its jurisdiction of
organization on the date hereof and as of the date of such certificate and
attaching a recent good standing certificate issued by the appropriate
governmental official in such jurisdiction and (iv) a copy of the resolutions
and/or written actions or consents of the boards of directors (or member(s)
and/or manager(s), if applicable) of such Borrower entity authorizing and/or
ratifying the execution of this Amendment and/or any other related instrument,
document or agreement (including the Amended and Restated Secured Revolving
Credit Note and Amended and Restated Secured Floorplan Loan Note) and the
performance of the transactions contemplated hereby and thereby;
(C) Delivery
to DLL by Borrowers of an opinion letter from Borrower’s counsel addressing such
matters regarding Joining Borrowers as DLL may require in its Permitted
Discretion;
(D) Receipt
and review by DLL of such lien searches (including at DLL’s option in its sole
discretion Uniform Commercial Code financing lien searches, judgments and state
and federal tax lien searches) against Joining Borrowers showing no Liens on the
Collateral of each Joining Borrower (other than Liens permitted under the Loan
Documents);
(E) Delivery
to DLL of certificates of insurance evidencing insurance coverage for each
Joining Borrower satisfying the requirements for such Joining Borrower under the
Loan and Security Agreement;
(F) Establishment
of appropriate Blocked Accounts for the Joining Borrowers and execution and
delivery of appropriate blocked account agreements with respect thereto by the
applicable Borrower entities, DLL and the banks at which such Blocked Accounts
will be maintained,
14
(G) Delivery
to DLL of all stock certificates/equity certificates for all applicable
Subsidiaries of Emtec Global and Aveeva (excluding Aviance and any such
Subsidiary that is not a corporation and which has not “opted-in” to Article 8
of the Uniform Commercial Code) pledged by Emtec Global and Aveeva to DLL
pursuant to the respective Collateral Pledge Agreements executed by Emtec Global
and Aveeva in favor of DLL described in Section 4(C) above, each accompanied by
an appropriate stock power or other instrument of transfer executed in
blank;
(H) Delivery
to DLL of a certificate signed by an appropriate officer of each Borrower entity
(including each Joining Borrower): (i) certifying as true and complete an
amended and restated Exhibit A to the Schedule setting forth the provisions
regarding the representations and warranties as to each individual Borrower
entity (including each Joining Borrower) as of the date of such
Certificate (and upon delivery of such certificate, Exhibit A to the Schedule
shall be deemed to have been amended and restated in its entirety in the form of
such new Exhibit A delivered with such certificate), (ii) representing and
warranting that as of the date of such certificate, and after giving effect to
such amendment and restatement of Exhibit A to the Schedule, all warranties and
representations made to DLL under the Loan and Security Agreement and all other
Existing Loan Documents by Borrower (including each Existing Borrower and each
Joining Borrower) are accurate in all material respects as though made on the
date hereof, and specifically reaffirming and restating all of the
representations and warranties required under Sections 6(B) through (D) of this
Amendment below as to each Existing Borrower and each Joining Borrower as of the
date of such certificate, and (iii) certifying that as of the date of such
certificate, no Event of Default, or event that with the passage of time or
giving of notice or both will become an Event of Default, exists under the Loan
and Security Agreement or any other Existing Loan Documents; and
(I) Execution
and delivery to DLL by Avaiance of a Pledge Acknowledgement in the form of
Exhibit A attached to the Collateral Pledge Agreement of Aveeva described in
Section 4(C) above, and
(J) Payment
by Borrower of all reasonable fees, costs and expenses (including without
limitation any and all reasonable legal fees and expenses) incurred by DLL in
the documenting and coordinating the satisfaction of the Post Closing
Conditions. Borrower hereby authorizes the DLL to charge the
Borrower’s revolving loan account with the amount of all such costs and expenses
of DLL in satisfaction thereof, and requests that DLL make one or more Revolving
Credit Loan(s) on or after the date hereof in an aggregate amount equal to the
total amount of all such costs and expenses, and that DLL disburse the proceeds
of such Revolving Credit Loan(s) in satisfaction thereof.
6. Representations and
Warranties. Borrower represents and warrants to DLL
that:
(A) Both
immediately prior and after giving effect to this Amendment, all warranties and
representations made to DLL under the Loan and Security Agreement and all other
Existing Loan Documents as to Existing Borrowers are accurate in all material
respects as though made on the date hereof (except to the extent any such
representation and warranty was made only as of a specific, earlier
date).
15
(B) Borrower
has all requisite power and authority to execute and deliver the Amendment and
each other document to be delivered in connection herewith to which it is a
party (including the Amended and Restated Secured Revolving Credit Note and
Amended and Restated Secured Floorplan Loan Note) and to perform all of its
Obligations hereunder and under the Loan and Security Agreement and all other
Existing Loan Documents as amended hereby and has not taken any steps to wind
up, dissolve or otherwise liquidate its assets, and without limiting the
generality of the foregoing, each Joining Borrower has all such requisite power
and authority to enter into and perform all of its obligations under this
Amendment and the Loan and Security Agreement and all other Existing Loan
Documents as amended hereby (including the Amended and Restated Secured
Revolving Credit Note and Amended and Restated Secured Floorplan Loan Note) as
provided for herein and particularly in Section 1 of this Amendment
above.
(C) The
execution and delivery by Borrower (specifically including each
Joining Borrower) of this Amendment, and the performance by it of the
transactions herein contemplated (i) have been authorized by all necessary
corporate action and (iii) do not and shall not constitute a violation of any
applicable law or of Borrower’s Articles or Certificate of Incorporation or
By-Laws (or, if applicable, Certificate of Formation or Operating Agreement) or
any other document, agreement or instrument to which such entity is a party or
by which such entity or its assets are bound.
(D) Each of
Amendment, and any assignment, instrument, document, or agreement executed and
delivered in connection herewith, and the Loan and Security Agreement and all
other Existing Loan Documents as amended hereby, are the legal, valid and
binding obligations of Borrower (specifically including each Joining Borrower)
enforceable against Borrower in accordance with its terms subject to the effect
of any applicable bankruptcy, fraudulent transfer, moratorium, insolvency,
reorganization or other similar laws affecting the rights of creditors generally
and the effect of general principles of equity whether applied by a court of
equity or law.
(E) Both
immediately prior and after giving effect to this Amendment, no Event of
Default, or event that with the passage of time or giving of notice or both will
become an Event of Default, exists under the Loan and Security Agreement or any
other Existing Loan Documents.
7. Collateral.
(A) To secure
the payment and performance of all of the Obligations when due, each Existing
Borrower hereby reconfirms and restates its grant under the Loan and Security
Agreement and the other Existing Loan Documents of a security interest and lien
in favor of DLL on all of its Collateral (including all Excess Cash Collateral),
whether now owned or hereafter acquired, created or arising and wherever
located. Each Existing Borrower hereby confirms and agrees that all
security interests and liens granted under the Loan and Security Agreement and
the other Existing Loan Documents to DLL continue in full force and effect and
shall continue to secure the Obligations. All Collateral remains free
and clear of any Liens other than Permitted Encumbrances. Nothing
herein contained is intended to in any manner impair or limit the validity,
priority and extent of DLL’s security interest in and liens upon the
Collateral.
16
(B) Without
limiting the generality of the joinder of Joining Borrowers into the Security
Agreement as provided for in Section 1 of this Amendment above, each Joining
Borrower hereby grants to DLL (i) a first priority security interest (subject
only to Permitted Encumbrances) in all of such Joining Borrower's now owned or
hereafter acquired or arising Receivables, Chattel Paper, Commercial Tort
Claims, Deposit Accounts (and all funds and monies from time to time on deposit
therein), Documents, Equipment, General Intangibles, Goods, Instruments,
Inventory, Investment Property, Letter-of-Credit Rights, life insurance
policies, Trademarks, Copyrights, Licenses and Patents, all of such Joining
Borrower 's money and cash, any and all property now or at any time hereafter in
DLL's possession (including claims and credit balances and any and all Excess
Cash Collateral), and all proceeds of the foregoing (including proceeds of any
insurance policies, proceeds of proceeds and claims against third parties) and
all Supporting Obligations, products, accessions and all books and records
related to any of the foregoing and (ii) assigns, transfers and sets over to DLL
all of its right, title and interest, powers, privileges and other benefits of
all leases, rental agreements and related documents entered into by such Joining
Borrower with respect to any Equipment leased by such Joining Borrower as lessor
or lessee together with all income, proceeds and other benefits
thereof.
(C) Without
limiting the generality of the foregoing paragraphs (A) and (B), Borrower
(specifically including each Joining Borrower) acknowledges and agrees that the
Obligations secured by the Collateral and the grants of security interests and
liens in the Collateral by Borrower in favor of DLL include all present and
future loans, advances, debts, liabilities, obligations, covenants, duties and
indebtedness at any time owing by Borrower to DLL, whether evidenced by the Loan
and Security Agreement, any note or other instrument or document or otherwise,
whether arising from an extension of credit, opening of a letter of credit,
banker's acceptance, loan, guaranty, indemnification or otherwise, whether
direct or indirect (including, without limitation, those acquired by assignment
and any participation by DLL in Borrower's debts owing to others), absolute or
contingent, due or to become due, and that the foregoing would include any such
debts, liabilities, obligations and indebtedness owing to DLL from Borrower in
connection with any operating or capital lease.
8. Ratification of Loan
Documents. Except as otherwise expressly set forth herein, all
of the terms and conditions of the Loan and Security Agreement and the other
Existing Loan Documents are hereby ratified and confirmed and continue unchanged
and in full force and effect. All references to the Loan and Security
Agreement shall mean the Loan and Security Agreement as modified by this
Amendment. Borrower hereby acknowledges and agrees that this
Amendment constitutes a "Loan Document" under the Loan and Security
Agreement. Accordingly, it shall be an Event of Default under the
Loan and Security Agreement if (i) any representation or warranty made by
Borrower under or in connection with this Amendment shall have been untrue,
false or misleading in any material respect when made, or (ii) Borrower shall
fail to perform or observe any term, covenant or agreement contained in this
Amendment.
17
A. Confirmation of
Indebtedness. Borrower hereby acknowledges and confirms that
as of the close of business on December 4, 2008, Borrower is indebted to Lender,
without defense, setoff, claim or counterclaim under the Loan Documents, in the
aggregate principal amount of $12,778,482.50, comprised of (a) $11,462,407.53
with respect to Revolving Credit Loans and (b) $1,316,074.97 with respect to the
Floorplan Loan. Borrower hereby confirms and agrees that the
foregoing Obligations, together with all other Obligations (whether representing
outstanding principal, accrued and unpaid interest, accrued and unpaid fees or
any other Obligations of any kind or nature) currently owing by Borrower under
the Loan and Security Agreement and the other Loan Documents, as reflected in
the books and records of DLL as of the date hereof, are absolutely and
unconditionally and jointly and severally owing from and payable by Borrower,
and Borrower is jointly and severally indebted to DLL with respect
thereto, all without any set-off, deduction, claim, counterclaim or defense of
any nature.
B. Release. Borrower
acknowledges and agrees that it has no actual or potential claim or cause of
action against DLL relating to the Loan and Security Agreement or any Loan
Document and/or the Obligations arising thereunder or related thereto, in any
such case arising on or before the date hereof. As further
consideration for the agreements of DLL as set forth herein, Borrower hereby
waives and releases and forever discharges DLL, and its officers, directors,
attorneys, agents, professionals and employees (all collectively the “Released Parties”) from any
liability, damage, claim, loss or expense of any kind that Borrower had, may now
have or may hereafter have against any one or more of the Released Parties
arising out of or relating to this Amendment, the Loan and Security Agreement or
any Existing Loan Document and/or the transactions described herein or therein
or contemplated hereby or thereby and/or the Obligations arising herefrom or
therefrom or relating hereto or thereto and/or any actual or alleged actions,
conduct, inaction or omission on the part of any one or more of the Released
Parties, to the extent arising or occurring on or before the date
hereof.
9. Governing
Law. THIS
AGREEMENT, AND ALL MATTERS RELATING HERETO AND ARISING HEREFROM (WHETHER
SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), INCLUDING WITHOUT LIMITATION
ENFORCEMENT OF THE OBLIGATIONS, SHALL BE INTERPRETED IN ACCORDANCE WITH THE
INTERNAL LAWS (AND NOT THE CONFLICT OF LAWS RULES) OF THE COMMONWEALTH OF
PENNSYLVANIA GOVERNING CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE. Without limiting the generality of the joinder of Joining
Borrowers as provided for in Section 1 of this Amendment above, each Borrower
specifically acknowledges that the provisions of Section 9.26 of the
Loan and Security Agreement regarding consent to jurisdiction and service of
process are incorporated herein by reference.
10. WAIVER OF JURY
TRIAL. DLL
AND BORROWER EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (i) THIS
AMENDMENT; (ii) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN DLL
AND BORROWER; OR (iii) ANY CONDUCT, ACTS OR OMISSIONS OF DLL OR BORROWER OR ANY
OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS
AFFILIATED WITH DLL OR BORROWER; IN EACH OF THE FOREGOING CASES, WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
18
11. Counterparts. This
Amendment may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original, and such counterparts together shall
constitute one and the same respective agreement. Signature by
facsimile or other electronic transmission (including email transmission of a
PDF copy of any signature) shall bind the parties hereto.
12. Joint and Several
Obligations of Borrower. If more than one Person is named as
the “Borrower” above, or hereafter becomes a “Borrower” hereunder by means of a
joinder, amendment or other modification hereto or to the Loan and Security
Agreement, then all references herein to “Borrower” shall be deemed to be a
joint and several reference to each and every such Borrower entity and/or to any
such Borrower entity as the context shall require. The liability of
all such Borrower entities for the Loans and other Obligations shall be joint
and several as further provided for in Section 9.29 of the Loan and Security
Agreement.
13. Miscellaneous. All
terms, conditions, promises, covenants, provisions and warranties hereof and of
the Loan Documents shall inure to the benefit of and bind DLL's and Borrower's
respective representatives, successors and assigns (but Borrower may not sell,
assign or transfer any interest in this Amendment or any other Loan Document, or
any portion thereof, including, without limitation, any of Borrower's
obligations, rights, title, interests, remedies, powers and duties hereunder or
thereunder). Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without limiting the generality of the joinder of
Joining Borrowers as provided for in Section 1 of this Amendment above, each
Borrower specifically acknowledges that the provisions of Section
9.17 of the Loan and Security Agreement regarding injunctive relief, Section
9.22 of the Loan and Security Agreement regarding liability and damages and
Section 8.1 of the Loan and Security Agreement regarding costs and expenses and
indemnities are incorporated herein by reference.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
SIGNATURES
ON FOLLOWING PAGES
19
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the day and year
first above written.
|
DE
XXXX XXXXXX FINANCIAL SERVICES, INC.
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Credit
Manager
|
BORROWER:
EXISTING
BORROWERS:
EMTEC INC. (a Delaware
corporation)
By: /s/Xxxxxxx X.
Xxxxxxxx
(SEAL)
Name: Xxxxxxx
X. Xxxxxxxx
Title: Treasurer
EMTEC INC. (a New Jersey
corporation)
By: /s/Xxxxxxx X.
Xxxxxxxx
(SEAL)
Name: Xxxxxxx
X. Xxxxxxxx
Title: Treasurer
EMTEC VIASUB LLC (a Delaware
limited liability company)
By: /s/Xxxxxxx X.
Xxxxxxxx
(SEAL)
Name: Xxxxxxx
X. Xxxxxxxx
Title: Assistant
Treasurer
EMTEC FEDERAL, INC. (formerly known
as WESTWOOD COMPUTER CORPORATION) (a New Jersey corporation)
By: /s/Xxxxxxx X.
Xxxxxxxx
(SEAL)
Name: Xxxxxxx
X. Xxxxxxxx
Title: Assistant
Treasurer
[Signature
Page 1 of 2 to First Amendment to DLL/Emtec Loan and Security Agreement and
Schedule]
JOINING
BORROWERS:
EMTEC GLOBAL SERVICES LLC (formerly
known as EMTEC FEDERAL SERVICES LLC, formerly known as WESTWOOD FEDERAL
SERVICES, LLC) (a Delaware limited liability company)
By: /s/Xxxxxxx X.
Xxxxxxxx
(SEAL)
Name: Xxxxxxx
X. Xxxxxxxx
Title: Treasurer
LUCEO, INC. (an Illinois
corporation)
By: /s/Xxxxxxx X.
Xxxxxxxx
(SEAL)
Name: Xxxxxxx
X. Xxxxxxxx
Title: Treasurer
EBUSINESS APPLICATION SOLUTIONS,
INC. (a New Jersey corporation)
By: /s/Xxxxxxx X.
Xxxxxxxx
(SEAL)
Name: Xxxxxxx
X. Xxxxxxxx
Title: Treasurer
AVEEVA, INC. (a Delaware
corporation)
By: /s/Xxxxxxx X.
Xxxxxxxx
(SEAL)
Name: Xxxxxxx
X. Xxxxxxxx
Title: Treasurer
[Signature
Page 2 of 2 to First Amendment to DLL/Emtec Loan and Security Agreement and
Schedule]
[Borrower’s Notary Pages
on Following Pages]
