September 23, 2008
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September 23,
2008
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Aftersoft
Group, Inc.
Regus
House
Heronsway
Xxxxxxx Xxxxxxxx Xxxx
Xxxxxxx
XX0 0XX
Xxxxxx
Xxxxxxx
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Re:
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Amendment No. 1 to
Loan Agreement
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Dear
Sirs:
Reference
is made to the Revolving Credit and Term Loan Agreement dated as of December 21,
2007 (the “Loan
Agreement”), by and between ComVest Capital, LLC (the “Lender”) and
Aftersoft Group, Inc. (the “Borrower”). All
capitalized terms used herein without definition have the respective meanings
ascribed to them in the Loan Agreement.
The
Borrower has advised the Lender that the Borrower failed to comply with Section
6.17 of the Loan Agreement for the four (4) consecutive quarters ended June 30,
2008, and that the Borrower anticipates that it will not be in compliance with
such Section 6.17 for any of the four (4) quarter periods ending September 30,
2008 through and including June 30, 2009. The Lender is ready,
willing and able to waive such non-compliance for the four (4) quarter periods
ending June 30, 2008 and September 30, 2009, to modify Section 6.17 of the Loan
Agreement for the four (4) quarter periods ending December 31, 2008 through and
including June 30, 2009, and to effect certain other modifications to the Loan
Documents, all subject to and in accordance with the terms and conditions of
this Amendment No. 1.
This will
confirm the agreement of the Lender and the Borrower to make the following
amendments to the Loan Agreement, the Term Note and Warrant No. CV-2 (issued
pursuant to the Loan Agreement).
1. Waivers. The
Lender hereby waives the Borrower’s failure to comply with Section 6.17 of the
Loan Agreement for the four (4) consecutive quarters ended June 30, 2008, and
for the four (4) consecutive quarters ending September 30, 2008, provided that
such waivers are limited to such four (4) quarter periods, and shall not
constitute a waiver with respect to any other period or with respect to any
other provision of the Loan Agreement in any other respect.
2. Amended
Covenant. Section 6.17 the Loan Agreement is hereby amended so
as to read in full as follows:
Section
6.17. Coverage Test. Permit, as of the end of any
quarter of any Fiscal Year, the ratio of (a) EBIDA minus Capital Expenditures
incurred to maintain or replace capital assets, to (b) Debt Service, for the
four (4) consecutive quarters then ended to be less than the minimum ratio for
such period set forth below (and the Borrower hereby acknowledges that such
minimum ratios have been set based on 80% of the Borrower’s projected ratios for
the subject periods):
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Four
Consecutive
Fiscal Quarters
Ending
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Minimum
Coverage
Ratio
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December
31, 2008
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0.62
to 1.00
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March
31, 2009
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0.71
to 1.00
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June
30, 2009
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0.50
to 1.00
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On
or after September 30, 2009
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1.25
to 1.00
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3. Term Loan
Amortization.
(a) Section
1(b) of the Term Note is hereby amended so as to read in full as
follows:
(b) Principal. The
Principal of this Note shall be payable (i) in eleven (11) equal monthly
installments of $208,333.33 each, due and payable on the first day of each
calendar month commencing January 1, 2010 and continuing through and including
November 1, 2010, and (ii) a final installment due and payable on November 30,
2010 in an amount equal to the entire remaining principal balance of this
Note.
(b) A
photocopy of this Amendment No. 1 may be attached to the Term Note to evidence
the foregoing amendment, and/or the Borrower shall, upon request of the Lender
at any time, execute and deliver to the Lender a replacement Term Note
reflecting such amendment.
4. Amendment to Warrant No.
CV-2. In consideration of the waivers, amendments and
deferrals granted by the Lender in this Amendment Xx. 0, Xxxxxxx Xx. XX-0 issued
by the Borrower to the Lender pursuant to the Loan Agreement is hereby amended
so as to reduce the exercise price thereunder to $0.11 per share (subject to
further adjustment(s) hereafter in accordance with such Warrant). A
photocopy of this Amendment No. 1 may be attached to Warrant No. CV-2 to
evidence such exercise price reduction, and/or the Borrower shall, upon request
of the Lender at any time, issue a replacement Warrant reflecting such exercise
price reduction.
5. Expenses. The
Borrower shall pay or reimburse the Lender for its costs and expenses (including
reasonable attorneys’ fees) incurred in connection with the preparation of this
Amendment No. 1.
6. Reaffirmation.
(a) The
Borrower hereby reaffirms all of its representations and warranties in the Loan
Documents on and as of the date hereof, as if expressly made on and as of the
date hereof.
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(b) The
Borrower hereby (i) confirms the ongoing validity of all of the Obligations
outstanding on the date hereof and on the effectiveness of this Amendment No. 1,
(b) confirms that such Obligations are owing without reservation, defense,
counterclaim or offset, (c) confirms that, after giving effect to this Amendment
No. 1, neither the Borrower nor any Subsidiary has any claims or causes of
action against the Lender or any of its Affiliates, managers or officers, and
(d) acknowledges, confirms and agrees that none of the amendments to be effected
by this Amendment No. 1 shall constitute a novation of any of the Obligations
outstanding immediately prior to the effectiveness of this Amendment No.
1.
(c) The
Borrower hereby reaffirms the validity of all of the liens and security
interests heretofore granted to the Lender as collateral security for the
Obligations, and acknowledges that all of such liens and security interests, and
all collateral heretofore pledged as security for the Obligations, continues to
be and remains collateral for the Obligations from and after the effectiveness
of this Amendment No. 1.
7. Representations and
Warranties. Each of the Lender and the Borrower hereby
represents and warrants that (a) this Amendment No. 1 has been duly and validly
authorized by all necessary corporate or company action on such party’s part,
(b) this Amendment No. 1 has been duly executed and delivered by such party’s
duly authorized officer, and (c) this Amendment No. 1 constitutes such party’s
valid and binding obligation, enforceable against such party in accordance with
its terms.
8. Ongoing Force and Effect;
Waiver and Amendment. Except as expressly set forth herein,
all of the terms and conditions of the Loan Agreement and the other Loan
Documents remain unchanged and in full force and effect. All
references to the Loan Agreement, Notes and/or Warrants in any other Loan
Documents shall hereafter mean and refer to the Loan Agreement, Notes and/or
Warrants as amended by this Amendment No. 1. This Amendment No. 1 may
not be amended or modified, nor may any performance required hereunder be
waived, except pursuant to a written agreement signed by the party to be charged
therewith.
9. Governing
Law. This Amendment No. 1 shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
conflicts of laws principles.
[The
remainder of this page is intentionally blank]
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Kindly
confirm your agreement to the foregoing by countersigning a counterpart copy of
this Amendment No. 1 in the space provided below.
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Very
truly yours,
COMVEST
CAPITAL, LLC
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By:
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/s/ Xxxx X. Xxxxxxx | |
| Xxxx X. Xxxxxxx, Managing Director | |||
Acknowledged,
Confirmed and Agreed To:
AFTERSOFT
GROUP, INC.
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/s/
Xxx
Xxxxxxx
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Name: Xxx
Xxxxxxx
Title: President
and CEO
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