1
EXHIBIT 10.1
THIS MODIFICATION AGREEMENT, dated as of
May 31, 1996, by and between FIRST UNION
NATIONAL BANK (formerly known as FIRST
FIDELITY BANK, NATIONAL ASSOCIATION), a
national banking association organized
under Acts of Congress, with a place of
business at 000 Xxxxx Xxxxxx, Xxxxxx,
Xxx Xxxxxx 00000, hereinafter called
"Bank", and ALPHANET SOLUTIONS, INC., a
New Jersey corporation, with its chief
executive office at 0 Xxxxxxxxx Xxxxxx,
Xxxxx Xxxxxx, Xxx Xxxxxx 00000,
hereinafter called "Borrower".
RECITALS
WHEREAS, Borrower and First Fidelity Bank, National Association, New
Jersey ("FFBNANJ") entered into a Loan and Security Agreement dated August 5,
1987 as modified by Modification Agreements dated February 24, 1989, May 23,
1990, July 31, 1991, June 30, 1992, March 17, 1993, July 14, 1993, June 29,
1994, December 14, 1994 and May 24, 1995, and by letter agreements dated as of
April 20, 1994, March 2, 1995 and as of December 19, 1995 (said agreement as so
modified the "Loan Agreement"); and
WHEREAS, Bank is the successor by consolidation to FFBNANJ pursuant to
authorization under 12 U.S.C. Section 215; and
WHEREAS, said Loan Agreement, inter alia, sets forth the terms and
conditions of a revolving credit facility by Bank to Borrower through May 31,
1996 of up to Seven Million Dollars for the period April 1 through September 30,
and up to Nine Million Dollars for the period October 1 through March 31; and
WHEREAS, Borrower has applied to Bank for an extension through May 30,
1997 of the term of said revolving credit facility and for a modification to the
interest rates on Advances under the revolving credit facility, and for
modifications to certain of the other terms and conditions set forth in the Loan
Agreement;
WHEREAS, Bank has approved the application of the Borrower on the terms
and condition set forth herein.
-1-
2
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto adopt the above recitals and agree as
follows:
1. Capitalized terms not defined herein but defined in the Loan Agreement
shall have the same meanings ascribed to such terms in the Loan Agreement.
2. Paragraphs 1.30, 1.37, 1.42, 1.46, 1.48 and 1.53 of the Loan Agreement
(the definitions of Eligible Loan Value of Eligible Accounts, Bank Affiliate,
Interest Period, Libor Margin, Payment Date and Second Tier Base Rate Margin)
are hereby modified to read as follows:
1.30 "ELIGIBLE LOAN VALUE OF ELIGIBLE ACCOUNTS" means up to
seventy-five (75%) percent of the face amount of Eligible
Accounts, less returns and discounts, offsets, contra
balances, credits or allowances of any nature, at any time
issued, owing, granted or outstanding.
1.37 "BANK AFFILIATE" means First Union Corporation and any of its
direct and indirect affiliates and subsidiaries.
1.42 "INTEREST PERIOD" means with respect to each LIBOR Loan, the
period commencing on the date such Advance commences to be a
LIBOR Loan as elected by the Borrower and ending one, two, or
three months thereafter as Borrower may elect in the
applicable interest rate request and thereafter, each period
commencing on the last day of the immediately preceding
Interest Period and ending one, two, or three months
thereafter as selected by the Borrower, but in no event after
the Expiration Date; subject, however, to the following
provisions: (i) if any Interest Period would otherwise end on
a day which is not a New York business day, that Interest
Period shall be extended to the next succeeding New York
business day unless the result of such extension would be to
carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately
preceding New York business day; and (ii) any Interest Period
that begins on the last New
-2-
3
York business day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the
last New York business day of a calendar month and (iii) if
the Borrower selects an Interest Period which would end after
the Expiration Date, the duration of such Interest Period
shall be shortened to one or two months such that the end of
such Interest Period shall occur prior to or of even date with
the Expiration Date.
1.46 "LIBOR MARGIN" means for each Interest Period applicable to
LIBOR Loans, a rate per annum equal to one and one half
percent (1 1/2%).
1.48 "PAYMENT DATE" means (A) with respect to Prime Rate Loans and
Second Tier Loans the first day of each month, and (B) with
respect to LIBOR Loans the last day of the Interest Period.
1.53 "SECOND TIER PRIME RATE MARGIN" means a rate per annum equal
to one percent (1%).
3. Article I of the Loan Agreement is hereby modified to add paragraphs
1.58 through 1.65 as follows:
1.58 "EXPIRATION DATE" means the earlier of (a) May 30, 1997 or
such later date as the term of the revolving credit facility
under paragraph 2.1 hereof may be extended to in accordance
with paragraph 8.11 hereof or (b) the date of termination of
the revolving credit facility upon the occurrence of an Event
of Default.
1.59 "LIBOR" means, with respect to each day during each Interest
Period, the rate (rounded to the next higher 1/100 of 1%) for
U.S. dollar deposits of a one, two, or three month maturity
equivalent to the period selected by the Borrower as the
Interest Period as reported on Telerate page 3750 as of 11:00
a.m., London time, on the second London business day before
the relevant Interest Period begins (or if not so reported,
then as determined by the Bank from another recognized source
or interbank quotation), adjusted for reserves by dividing
that rate by 1.00 minus the LIBOR Reserve. Notwithstanding the
foregoing, if the Borrower has hedged the LIBOR-based rate by
entering into an interest rate agreement with Bank, LIBOR
shall be rounded five
-3-
4
decimal places in accordance with the 1991 Definitions
published by the International Swaps and Derivatives
Association, Inc.
1.60 "LIBOR RESERVE" means the maximum percentage reserve
requirement (rounded to the next higher 1/100 of 1% and
expressed as a decimal) in effect for any day during the
Interest Period under the Federal Reserve Board's Regulation D
for Eurocurrency liabilities as defined therein.
1.61 "LOAN DOCUMENTS" means this Agreement, all notes, mortgages or
other documents executed and delivered by Borrower or any
Obligor hereunder, and any amendments, renewals, modifications
or supplements thereto, or substitutions therefore from time
to time.
1.62 "LONDON BUSINESS DAY" means a day on which commercial banks
are open for dealings in U.S. Dollar deposits in the London
(England, U.K.) interbank market.
1.63 "PRIME RATE" means the rate of interest established by Bank
from time to time as its reference rate in making loans but
which does not reflect the rate of interest charged to any
particular person and is not tied to any external rate of
interest or index. The rate of interest charged hereunder
shall change automatically and immediately as of the date of
each change in the Prime Rate without notice to Borrower.
1.64 "PRIME RATE LOANS" means each Advance on which interest
thereon is in accordance with the terms of this Agreement
based on the Prime Rate.
1.65 "PRIME RATE MARGIN" means a rate per annum equal to one
quarter of one (1/4%).
4. Paragraph 2.1 of the Article II of the Loan Agreement is hereby
modified to read as follows:
2.1 REVOLVING CREDIT FACILITY (A) So long as no Default nor Event
of Default exists, Bank may, from time to time hereafter,
through the Expiration Date, lend to the Borrower such amounts
as the Bank may determine or issue standby letters of credit,
in form satisfactory to Bank, based upon the Eligible Loan
Value of Eligible
-4-
5
Accounts as may exist from time to time and as reported by
Borrower to Bank in a borrowing base report in the form of
exhibit 2.1 annexed hereto which is to be submitted with each
request for an Advance hereunder by a Notice of Borrowing
under Revolving Credit in the form of exhibit 2.1(A) annexed
hereto, but not to exceed the Revolving Credit Borrowing Base
and provided that the aggregate outstanding balance of standby
letters of credit shall not exceed Two Million Five Hundred
Thousand ($2,500,000.00) Dollars. The Borrower shall repay,
and shall pay interest on, the aggregate unpaid principal
amount of all Advances in accordance with the provisions of
this paragraph 2.1. Bank shall have the right, from time to
time, in the good faith exercise of its discretion, upon
notice to Borrower, to alter the percentage of the Eligible
Loan Value of Eligible Accounts. Each month Bank may render to
Borrower a statement of the status of the loans provided for
herein, which Borrower hereby agrees shall be deemed to be an
account stated and correct and acceptable to and binding on
Borrower unless Bank shall receive a corrected statement of
exceptions from Borrower within thirty (30) days after the
monthly statements have been rendered to Borrower. For each
standby letter of credit issued hereunder which is security
for the obligations of Borrower to a third party with respect
to the "floor planning" or similar financing of Inventory,
Borrower shall pay to Bank a fee of one (1%) percent on a per
annum basis of the principal amount of each such standby
letter of credit. For all other standby letters of credit
issued hereunder Borrower shall pay to Bank a fee of two (2%)
percent on a per annum basis of the principal amount of each
such standby letter of credit. For each standby letter of
credit to be issued hereunder Borrower shall execute and
deliver to Bank the Bank's standard standby letter of credit
agreement and application. All such loans and financial
accommodations shall be payable on the Expiration Date or as
otherwise set forth in this Agreement.
(B) Interest on Advances.
-5-
6
(i) The Borrower agrees to notify the Bank
orally or in writing at least two (2)
Business Days (with respect to LIBOR Loans)
prior to each date it requests interest on
the Advances, or a portion thereof, to be
based on LIBOR. Each such notice shall be
irrevocable and confirmed immediately by
delivery to the Bank of a LIBOR rate
request. Each LIBOR rate request shall
specify:
(a) the date from which interest is to
accrue based on LIBOR, which shall
be a London Business Day;
(b) the aggregate amount of Advances on
which interest is to be based on
LIBOR; and
(c) the duration of the Interest period
applicable thereto.
(ii) No more than three (3) Interest Periods with
respect to LIBOR Loans shall be outstanding
at any time.
(iii) All LIBOR Loans shall be in the principal
amount of Two Hundred Fifty Thousand and
00/100 ($250,000.00) Dollars or an integral
multiple thereof.
(iv) The Borrower may not elect to have interest
on the Second Tier Loans to be based on
Libor.
(v) On all Advances as to which Borrower has
not, in accordance with the foregoing,
selected to have interest based on LIBOR,
interest shall be based on the Prime Rate as
set forth in subparagraph (C)(i) below.
(C) Interest Rate and Payment Dates.
(i) (a) Each Prime Rate Loan, other than Second
Tier Loans, shall bear interest on the daily
outstanding principal amount thereof for
each day such Prime Rate Loan is outstanding
at a rate per annum equal to Prime Rate in
effect from time to time minus the Prime
Rate
-6-
7
Margin. Such interest shall be payable in
arrears on each Payment Date; (b) All Second
Tier Loans shall bear interest on the daily
outstanding principal amount thereof for
each day such Second Tier Loans are
outstanding at a rate per annum equal to the
Prime Rate in affect from time to time plus
the Second Tier Prime Rate Margin. Such
interest shall be payable in arrears on each
Payment Date.
(ii) Each LIBOR Loan shall bear interest for each
Interest Period applicable thereto, on the
daily outstanding principal amount thereof,
at a rate per annum equal to LIBOR plus the
LIBOR Margin. Interest shall be payable in
arrears for each Interest Period on each
Payment Date.
(iii) If all or a portion of the principal amount
of any LIBOR Loan shall not be paid at the
end of the applicable interest period or not
continued as Libor Loan as set forth below,
such Advance shall be converted to a Prime
Rate Loan at the end of the Interest Period
therefor.
(D) Conversion and Continuation Options.
(i) The Borrower may elect from time to time to
convert a LIBOR Loan to a Prime Rate Loan by
giving the Bank at least one (1) Business
Day's prior irrevocable notice of such
election, provided that conversion of a
LIBOR Loan to a Prime Rate Loan shall only
be made on the last day of an Interest
Period with respect thereto. The Borrower
may elect from time to time to convert a
Prime Rate Loan to a LIBOR Loan, in each
case by giving the Bank at least two (2)
Business Days' prior irrevocable notice of
such election. Each notice to be given by
the Borrower pursuant to this paragraph,
-7-
8
shall be confirmed by delivery to the Bank
of a written notice, which shall specify:
(a) the date on which such rate
conversion shall take effect;
(b) the aggregate amount of the
Advances to be converted on such
date;
(c) whether the Advances to be
converted are LIBOR Loans, or Prime
Rate Loans;
(d) whether the Advances, after
conversion, will be LIBOR Loans or
Prime Rate Loans; and
(e) in the case of a LIBOR Loan, the
duration of the Interest Period
applicable thereto.
All or any part of the outstanding principal of a LIBOR Loan,
or a Prime Rate Loan, may be converted as provided herein,
provided that partial conversions shall be in an aggregate
principal amount of a minimum of Two Hundred Fifty Thousand
($250,000.00) Dollars or an integral multiple thereof.
(ii) A LIBOR Loan may be continued as such upon
the expiration of an Interest Period with
respect thereto by compliance by the
Borrower with the notice provisions
contained in this paragraph, provided that a
LIBOR Loan may not be continued as such when
any Event of Default has occurred and is
continuing, but shall be automatically
converted to a Prime Rate Loan on the last
day of the subject Interest Period.
(iii) If the Borrower shall fail to give notice to
convert or continue a LIBOR Loan in the
manner required by paragraphs (i) or (ii)
above, the Borrower shall be deemed to have
elected to convert the LIBOR Loan to a Prime
Rate Loan on the last day of the Interest
Period applicable thereto.
-8-
9
(E) Computation of Interest. Interest on the Advances and
fees and other amounts calculated on the basis of a
rate per annum shall be computed on the basis of
actual days elapsed over a 360-day year. The rate of
interest on Prime Rate Loans shall change when and as
the Prime Rate changes without notice to Borrower.
(F) Prepayment. Prime Rate Loans may be prepaid in whole
or in part, in multiples of $25,000.00, at any time
without premium or penalty. Libor Loans may be
prepaid, in whole or in part, without premium or
penalty only on the last day of an Interest Period;
provided, however, that any partial prepayments shall
be in a principal amount of not less than
$250,000.00, or multiples thereof. Any prepayment
shall include accrued and unpaid interest to the date
of prepayment on the principal amount prepaid and all
other sums due and payable hereunder. All payments
received on the Advances may be applied in such order
as the Bank in its sole discretion shall determine.
(G) Indemnification. The Borrower shall indemnify the
Bank against the Bank's loss or expense in employing
deposits as a consequence of (i) the Borrower's
failure to make any payment when due under the
Advances, or (ii) any prepayment of a LIBOR Loan on a
date other than the last day of the applicable
Interest Period ("INDEMNIFIED LOSS OR EXPENSE").
(H) Additional Costs. If, at any time, a new, or a
revision in any existing law or interpretation or
administration (including reversals) thereof by any
government authority, central bank or comparable
agency imposes, increases or modifies any reserve or
similar requirement against assets, deposits or
credit extended by the Bank, or subjects the Bank to
any tax, duty or other
-9-
10
charge (except tax on the Bank's net income), and any
of the foregoing increases the cost to the Bank of
maintaining its commitment or reduce the amount of
any sum received or receivable by the Bank under the
Advances, within 15 days after demand by the Bank,
the Borrower agrees to pay the Bank such additional
amounts as will compensate the Bank for such
increased costs or reductions ("ADDITIONAL COSTS").
(I) Match Funding. The amount of such (i) Indemnified
Loss or Expense, or (ii) Additional Costs outlined
above shall be determined, in the Bank's sole
discretion, based upon the assumption that the Bank
funded 100% of that portion of the Advances to which
the LIBOR-based rate applies in the applicable London
interbank market.
(J) Unavailability of Interest Rate. If, at any time, (i)
the Bank shall determine that, by reason of
circumstances affecting foreign exchange and
interbank markets generally, LIBOR deposits in the
applicable amounts are not being offered to the Bank;
or (ii) a new, or a revision in any existing law or
interpretation or administration (including
reversals) thereof by any government authority,
central bank or comparable agency shall make it
unlawful or impossible for the Bank to honor its
obligations under the Advances, then (A) the Bank's
obligation, if any, to make or maintain a LIBOR Loan
shall be suspended, and (B) the applicable
LIBOR-Based Rate shall, for the remainder of the term
of the Advance, immediately be converted to the Prime
Rate minus the Prime Rate Margin
(K) Commitment Fee. On the first Business Day after the
end of each calendar quarter hereafter, Borrower
shall pay to Bank a commitment fee equal to one
eighth of one (1/8%) percent on a per annum basis, of
the amount by which
-10-
11
the daily average outstanding balance of the loans
and letters of credit under this paragraph 2.1 are
less than the maximum dollar amount in effect from
time to time of the revolving credit facility under
this paragraph 2.1.
5. Subparagraph 5.9(c) of Article IV of the Loan Agreement is hereby
modified to read as follows: "(c) Any mandatory prepayment
under (a) above shall be applied first to Second Tier Loans,
second to Prime Rate Loans, and third to LIBOR Loans, and as
to LIBOR Loans, if more than one (1) Interest Period is in
effect, then to such LIBOR Loans in the order of the Interest
Periods with the shortest remaining number of days.
6. Paragraph 5.13 of the Loan Agreement is hereby modified to read as
follows:
5.13 AUDIT AND OTHER REPORTS (A) Borrower agrees that within one
hundred twenty (120) days of the end of each fiscal year, it
will furnish Bank with detailed audited financial statements,
including a balance sheet, profit and loss statement, cash
flow statement and surplus reconciliation, certified on an
unqualified basis, by an independent certified public
accountant satisfactory to Bank and a copy of the borrower
10-K filing as of such year end; (B) Borrower will also
furnish quarterly similar statements uncertified except for a
certification by an officer of Borrower as to their
correctness and a copy of the Borrower's 10-Q filing as of
such quarter end within sixty (60) days of the end of each
fiscal quarter. All such statements shall be on a consolidated
and consolidating basis and in accordance with GAAP; (C)
simultaneous with the submission of the statements required
under "A" and "B" above, Borrower shall cause to be submitted
to Bank a certificate of the chief financial officer of
Borrower in the form of exhibit 5.13 annexed hereto setting
forth the calculations of the financial tests described in
paragraph 5.17 hereof and stating whether or not, to the best
of said officer's knowledge, after diligent inquiry a Default
or Event of Default exists, and if such exists, specify the
nature thereof and the steps Borrower is taking to remedy
same; (D) promptly after the furnishing thereof to third
parties, Borrower shall furnish to Bank copies of any
statements, reports, proxy material, registration
-11-
12
statement and prospectus furnished to any holder of any
securities of Borrower or filed with any regulatory agency or
agencies; (E) promptly, but no later than five (5) days after
a responsible officer of Borrower shall become aware of (i) a
Default or Event of Default hereunder, (ii) a Reportable Event
or "prohibited transaction" as such term is defined in ERISA,
(iii) litigation against Borrower or any Subsidiary in excess
of $25,000.00 not fully covered by insurance (iv) changes in
the executive management of Borrower or (v) the termination or
threatened termination of or claim of breach by Borrower or
any Subsidiary of any material contract, agreement or
obligation, or of any claim of patent infringement, Borrower
shall furnish to Bank a written notice specifying the
existence thereof and the action Borrower or any Subsidiary is
taking or proposes to take with respect thereto; (F) Borrower
will furnish to Bank prompt written notice if: (i) any
indebtedness of Borrower or any Subsidiary is declared or
shall become due and payable prior to its stated maturity, or
called and not paid when due or (ii) a default shall have
occurred under any note or the holder of any such note, or
other evidence of Indebtedness, certificate of security
evidencing any such indebtedness or any obligee with respect
to any Indebtedness of Borrower or any Subsidiary has the
right to declare any such Indebtedness due and payable prior
to its stated maturity as a result of such default; (G)
Borrower also agrees to furnish to Bank (i) with reasonable
promptness a copy of any "management letter" or similar report
furnished to it by its accountants and such other data and
information concerning it and its Subsidiaries as from time to
time may be requested by Bank and (ii) a copy of its federal
tax return promptly, but no later than five (5) days, after
the filing of same.
7. Paragraph 5.26 of the Loan Agreement is hereby modified to read as
follows:
5.26 "REPORTS OF COLLATERAL" If as of the end of any month there
are any outstanding loans or standby letters of credit issued
under paragraph 2.1 hereof, Borrower shall within fifteen (15)
days of the end of each such month furnish to Bank
-12-
13
an aging of its Accounts, an aging of its accounts payable and
an inventory report and certificate, each in form satisfactory
to Bank.
8. Paragraph 8.11 of the Loan Agreement is hereby modified to read as
follows:
8.11 "EXPIRATION DATE" The revolving credit facility provided for
in paragraph 2.1 hereof shall have a term through May 31, 1997
or such later date as the Bank may agree to in writing. All
such loans and financial accommodations shall be payable on
the Expiration Date or as otherwise set forth in this
Agreement. If, on the Expiration Date, there are any
outstanding Bank Letters of Credit, Borrower shall, in
addition to paying and satisfying in full the outstanding
loans under paragraph 2.1, pay to Bank an amount equal to the
aggregate outstanding balance of all such Bank Letters of
Credit and which shall automatically be subject to a lien in
favor of Bank to secure all Liabilities to Bank including with
respect to said Bank Letters of Credit. Any sums paid to Bank
shall be applied first to the Liabilities of Borrower to Bank
other than with respect to said Bank Letters of Credit, in
such order as Bank may determine, and last to the Liabilities
with respect to the Bank Letters of Credit. Notwithstanding
the expiration of the term, the rights of Bank hereunder and
the obligations of Borrower hereunder, including and
Liabilities with respect to loans and other financial
accommodations made after the Expiration Date, further
including but not limited to the grant of security interests
in and liens on the Collateral as set forth in Article III
hereof, shall remain in full force and effect until all of the
Liabilities of Borrower to Bank and each Bank Affiliate are
satisfied in full.
9. Article VIII of the Loan Agreement is hereby modified to add paragraphs
8.17 through 8.21.
8.17 "INTEREST LIMITATION" It is the intention of Bank and Borrower
to conform strictly to the laws of the State of New Jersey or
the laws of such other jurisdiction which may be found to
apply to the subject transaction relating to the maximum rate
of interest which may be lawfully contracted for or charged.
Nothing contained in this Agreement or any other Loan Document
shall be construed to mean that Borrower has
-13-
14
contracted to pay or is obligated to pay any sum or sums to
Bank in excess of those which may lawfully be charged or
contracted for under applicable law of the State of New Jersey
or other applicable law. If any provision of this Agreement or
any of the other Loan Documents shall require payment of any
sum or sums of interest in excess of the maximum permitted
rate which may be lawfully contracted for or charged, then
Borrower and Bank agree that such result is as a consequence
of their inadvertence and/or mistake, and the interest charge
for which Borrower is liable under this instrument shall be
recomputed for the sole and limited purpose of determining the
extent of the obligations and liabilities of Borrower to Bank
so that the interest charges for which Borrower is liable
shall not exceed the maximum permitted rate which is
determined to be applicable. Additionally, any sums of
interest which are collected by Bank from Borrower or other
source in connection with the loan evidenced hereby which are
in excess of the maximum permitted rate shall, for the sole
and limited purpose of determining the extent of the
obligations and liabilities of Borrower to Bank, be credited
against the amount of principal for which Borrower is liable
to Bank after giving effect to any recomputation and
adjustment required pursuant to the foregoing provisions of
this section, or if such outstanding principal balance and
interest are paid in full, any such excess shall be remitted
by Bank to Borrower.
8.18 'INDEMNIFICATION' Borrower hereby agrees to and does hereby
indemnify, protect, defend and save harmless Bank and any
member, officer, director, official, agent, employee and
attorney of Bank, and its respective heirs, successors and
assigns (collectively, the "Indemnified Parties"), from and
against any and all losses, damages, expenses or liabilities
of any kind or nature and from any suits, claims or demands,
including reasonable counsel fees incurred in investigating or
defending such claim, suffered by any of them and caused by,
relating to, arising out of, resulting from, or in any way
connected with the Loan Documents and the transactions
contemplated therein or the Collateral (unless caused by the
gross negligence or willful misconduct
-14-
15
of the Indemnified Parties) including, without limitation: (i)
losses, damages, expenses or liabilities sustained by Bank in
connection with any environmental cleanup or other remedy
required or mandated by any environmental law; (ii) any untrue
statement of a material fact contained in information
submitted to Bank by Borrower and/or any Obligor or the
omission of any material fact necessary to be stated therein
in order to make such statement not misleading or incomplete;
(iii) the failure of Borrower and/or any Obligor to perform
any obligations herein required to be performed by Borrower
and/or any Obligor; and (iv) the ownership, construction,
occupancy, operations, use and maintenance of any of
Borrower's and/or the Obligor's properties. The provisions of
this paragraph shall survive termination of this Agreement and
the other Loan Documents.
8.19 SEVERABILITY AND CONSISTENCY The illegality, unenforceability
or inconsistency of any provisions of this Agreement or any
instrument or agreement required hereunder shall not in any
way affect or impair the legality, enforceability or
consistency of the remaining provisions of this Agreement or
any instrument or agreement required hereunder. The Loan
Documents are intended to be consistent. However, in the event
of any inconsistencies among any of the Loan Documents, such
inconsistency shall not affect the validity or enforceability
of Loan Document. The Borrower agrees that in the event of any
inconsistency or ambiguity in any of the Loan Documents, the
Loan Documents shall not be construed against any one party
but shall be interpreted consistent with the Bank's policies
and procedures.
8.20 INTEGRATION; NO THIRD PARTY BENEFICIARY This Agreement and the
other Loan Documents constitute the sole agreement of the
parties with respect to the subject matter hereof and thereof
and supersede all oral negotiations and prior writings with
respect to the subject matter hereof and thereof. The Borrower
and the Bank do not intend any of the benefits of this
Agreement to inure to any third party, and no third party
shall have any status, right, or entitlement under this
Agreement.
-15-
16
8.21 JUDICIAL PROCEEDINGS; WAIVERS THE BORROWER AND THE BANK
ACKNOWLEDGE AND AGREE THAT (i) ANY SUIT, ACTION OR PROCEEDING,
WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY THE
BANK OR THE BORROWER OR ANY SUCCESSOR OR ASSIGN OF THE BANK OR
THE BORROWER, OR ON WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH
RESPECT HERETO OR THERETO SHALL BE TRIED ONLY BY A COURT AND
NOT BY A JURY AND EACH PARTY WAIVES THE RIGHT TO TRIAL BY
JURY; (ii) EACH WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; AND (ii) THIS
SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT
AND THE BANK WOULD NOT EXECUTE THIS AGREEMENT IF THE WAIVERS
SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.
10. Borrower acknowledges that as of the date hereof there is owing by
Borrower to Bank on account of the revolving credit facility provided for in
paragraph 2.1 of the Loan Agreement the principal sum of $zero plus interest,
which sum is owing without defense, set off or counterclaim, and Bank has, under
said paragraph 2.1, issued on behalf of Borrower standby letters of credit in
the aggregate outstanding sum of $2,030,142.51.
11. Borrower represents that:
(a) each and every representation heretofore made by Borrower in the
Loan Agreement is true and correct as of the date of this Modification
Agreement,
-16-
17
(b) no consent or approval of, or exemption by any person is required
to authorize, or is otherwise required in connection with the execution and
delivery of this Modification Agreement and the other loan documents provided
for herein, which has not been obtained and which remains in full force and
effect,
(c) Borrower has the power to execute, deliver and carry out this
Modification Agreement and all documents executed in connection herewith, and
this Modification Agreement and such other documents are valid, binding and
enforceable as against Borrower in accordance with their terms,
(d) no material adverse change in the financial condition of Borrower
has occurred since the date of the most recent financial statements of Borrower
dated March 31, 1996 submitted to Bank, and the information contained in said
statements and reports is true and correctly reflects the financial condition of
Borrower as of the dates of the statements and reports, and such statements and
reports have been prepared in accordance with GAAP and do not contain any
material misstatement of fact or omit to state any facts necessary to make the
statements contained therein not misleading, and
(e) No Default or Event of Default exists under the Loan Agreement.
12. Borrower hereby confirms the security interests and liens granted by
Borrower to Bank in and to the Collateral in accordance with the Loan Agreement
and other Loan Documents as security for its Liabilities to Bank.
13. Borrower agrees to pay any and all expenses, including reasonable
counsel fees and disbursements, incurred by Bank in connection with the
preparation and execution of this Modification Agreement and all other documents
executed in connection herewith.
14. This Modification Agreement is intended to supplement and modify the
Loan and Security Agreement dated August 5, 1987 as modified between FFBNANJ and
Borrower and the rights and obligations of the parties under said Loan and
Security Agreement and all other Loan Documents shall not in any way be vacated,
modified or terminated except as herein provided. All terms and conditions
contained in each and every agreement or promissory note or other evidence of
indebtedness of Borrower to Bank are incorporated herein by reference. If there
is a conflict between
-17-
18
any of the provisions heretofore entered into and the provisions of this
Modification Agreement, then the provisions of this Modification Agreement shall
govern.
15. This Modification Agreement shall be construed in accordance with the
substantive laws of the State of New Jersey without regard to conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Modification
Agreement to be executed and delivered as of the day and year first above
written.
ALPHANET SOLUTIONS, INC.
BY: /s/ XXXX XXXXXX
---------------------------
NAME: Xxxx Xxxxxx
TITLE: Vice President and
Chief Financial Officer
FIRST UNION NATIONAL BANK
BY: /s/ XXXXXXXXXXX X. XXXXXXXXXX
---------------------------------
NAME: Xxxxxxxxxxx X. XxXxxxxxxx
TITLE: Vice President
-18-
