Amendment and Extension Agreement
Borrower: Pilot Network Services, Inc.
Address: 0000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Date: October 26, 2000
THIS AMENDMENT AND EXTENSION AGREEMENT is entered into between GREYROCK
CAPITAL, a Division of Banc of America Commercial Finance Corporation
("Greyrock"), whose address is 00000 Xxxxxxxx Xxxx., Xxxxx 0000, Xxx Xxxxxxx. XX
00000 and the borrower named above ("Borrower").
The Parties agree to amend the Loan and Security Agreement between them,
dated November 9, 1999 (the "Loan Agreement") and the Secured Promissory Note
made by Borrower to the order of Greyrock dated November 9, 1999 in the original
principal amount of $3,000,000 (the "Note"), as follows. (This Amendment, the
Loan Agreement, the Note any prior written amendments to the foregoing, signed
by Greyrock and the Borrower, and all other written documents and agreements
between Greyrock and the borrower are referred to herein collectively as the
"Loan Documents". Capitalized terms used but not defined in this Amendment,
shall have the meanings set forth in the Loan Agreement.)
1. Extension, The Maturity Date is extended to January 31. 2001, and
the provisions for automatic extension of the Maturity Date set forth in Section
6.1 of the Loan Agreement are deleted, so that Section 6.1 of the Loan Agreement
will read in its entirety as follows:
"6.1 Maturity Date. This Agreement shall continue in effect until January
31. 2001 (the 'Maturity Date')."
2. Note Extension. The date "October 31, 2000" in the first paragraph
of the Note is amended to read "January 31,2001".
3. Additional Covenants. The following new Section 8 is hereby added to
the Schedule to the Loan Agreement.
"8. Additional Covenants. The Borrower covenants as follows:
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(1) Net Income. Borrower shall have net income or loss
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(computed on the basis of generally accepted accounting
principles) in each of the following months in the
following amounts:
October 2000 Maximum net loss of $2,750,000
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Greyrock Capital Amendment and Extension Agreement
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November 2000 Maximum net loss of $2,750,000
December 2000 Maximum net loss of $1,750,000
January 2001 Maximum net loss of $1,500,000
(2) Cash on Hand, Borrower shall maintain cash on hand of not
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less than the following amounts at the following dates, and
shall provide evidence of the same to Greyrock, reasonably
satisfactory to Greyrock, by the said dates:
at 10/31/00: $4,250,000
at 11/17/00: $4,500,000
at 11/30/00: $4,500,000
at 12/15/00: $4,500,000
at 12/31/00: $3,750,000
at 01/12/01: $4,000,000
at 01/31/01: $3,500,000.
(3) Audits. Without limiting any of the provisions of Section
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5.3 of the Loan Agreement, Greyrock shall have the
right, once every 30 days, to conduct inspections and
audits on Borrower's premises, to inspect the Collateral
and to audit and copy Borrower's books and records, and
the charge therefor shall be $600 per person per day
(or such higher amount as shall represent Greyrock's
then current standard charge for the same), plus
reasonable out of pocket expenses. The limitations on the
cost and number of such audits in Section 5.3 of the Loan
Agreement shall not apply to audits hereunder.
(4) Lockbox Agreements. Borrower shall enter into, and shall
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cause its banks to enter into, lockbox and/or restricted
account agreements, on terms acceptable to Greyrock in its
good faith business judgment, no later than November 15,
2000.
Any breach of any of the foregoing covenants in this Section 8 shall
Constitute an immediate Event of Default, and the same shall not be
subject to any cure period provided in Section 7.1 of the Loan
Agreement."
4. Representations True. Borrower represents and warrants to Greyrock
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.
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Greyrock Capital Amendment and Extension Agreement
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5. General Provisions, This Amendment, the Loan Agreement, the Note,
and the other Loan Documents set forth in full all of the representations and
agreements of the parties with respect to the subject matter hereof and
supersede all prior discussions, representations, agreements and understandings
between the parties with respect to the subject hereof. Nothing herein
constitutes a waiver of any default or Event of Default, known or unknown which
may exist. Except as herein expressly amended, all of the terms and provisions
of the Loan Agreement, the Note and the other Loan Documents shall continue in
full force and effect and the same are hereby ratified and confirmed.
Borrower: /S/ Xxxxxxxx Xxxxxxx Greyrock:
PILOT NETWORK SERVICES, INC. GREYROCK CAPITAL,
a Division of Banc of America Commercial
Finance Corporation
President or Vice President
By /S/
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By /S/ Xxxxxxxxx Wail
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Title VP
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By
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Secretary or Ass't Secretary
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