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EX 10.20
Amendment No. 15 to Loan Agreement dated September 23,1999 between the Company
and WITECH Corporation
AMENDMENT NUMBER FIFTEEN TO LOAN AGREEMENT
THIS AMENDMENT to the Loan Agreement entered into as of October 4,
1993, between ARI NETWORK SERVICES, INC. ("ARI") and WITECH CORPORATION
("WITECH"), as amended (the "Loan Agreement"), is dated September 23, 1999.
B A C K G R O U N D:
This Amendment to the Loan Agreement reflects the mutual understanding
and agreement of the parties to amend the Loan Agreement regarding the provision
by WITECH of a credit facility to ARI.
NOW, THEREFORE, the parties agree as follows:
1. The amount stated in Paragraph 2.2 of the Loan Agreement shall be
changed to One Million Dollars ($1,000,000).
2. In Exhibit 1.1 to the Agreement, in the definition of "Total Loan
Commitment," the reference to "Three Million Dollars ($3,000,000)" is deleted
and "One Million Dollars ($1,000,000)" is substituted therefor.
3. In Exhibit 2.2(a), the reference to "Three Million Dollars
($3,000,000)" is deleted and "One Million Dollars ($1,000,000)" is substituted
therefor.
4. New Paragraphs 2.1.A. and 2.2.A. shall be added to the Loan
Agreement to read as follows:
2.1.A. Term Loan. Subject to the terms and conditions hereof,
as of September 30, 1999, One Million Dollars ($1,000,000) of the
outstanding principal amount of Revolving Credit Loans shall be
converted into a term loan of the same amount (the "Term Loan").
2.2.A. Term Note. The obligation to repay the Term Loan shall
be evidenced by and repayable in accordance with the provisions of a
promissory note of ARI substantially in the form of EXHIBIT 2.2(b) (the
"Term Note"), dated September 30, 1999 and payable to the order of
WITECH, with interest thereon as provided in Paragraph 2.5. The
principal portion of the Term Loan shall be payable in thirty five (35)
equal monthly installments of Twenty Seven Thousand Seven Hundred
Seventy Eight Dollars ($27,778.00), due the first day of November, 1999
and on the same day of each successive month thereafter, plus a final
payment of the unpaid principal due on October 1, 2002.
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5. Paragraph 2.4 shall be amended to read as follows:
2.4. Prepayments. ARI may, at its option, without premium or
penalty, prepay the Revolving Credit Loans and the Term Loan made
hereunder, in whole or in part at any time. All payments shall be
applied first to indemnification and other amounts due hereunder, then
to interest and then to principal.
6. Paragraph 2.5 shall be amended to read as follows:
2.5. Interest Rate.
(a) The Revolving Credit Loans shall bear interest for the
period from and including the date thereof until maturity on the
unpaid principal amount thereof at a rate per annum equal to the
Prime Rate plus two percent (2%). The Term Loan shall bear
interest for the period from and including the date thereof until
maturity on the unpaid principal amount thereof at a rate per
annum equal to the Prime Rate plus three and one-quarter percent
(3 1/4%);
(b) If all or a portion of the principal amount of
any Revolving Credit Loan or the Term Loan made hereunder
shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all principal amounts outstanding
under the Revolving Credit Note and under the Term Note shall
bear interest at a rate per annum equal to the rate applicable
pursuant to (a) above plus four percent (4%) from the date of
such nonpayment until paid in full; and
(c) Interest on the Revolving Credit Note and on the
Term Note shall be payable in arrears on each Interest Payment
Date and at maturity.
7. WITECH agrees to purchase for One Million Dollars ($1,000,000) the
number of shares of ARI common stock obtained by dividing One Million Dollars
($1,000,000) by $5 1/8, rounded to the nearest full share. The purchase price
shall be paid by reducing the principal amount of Revolving Credit Loans
outstanding under the Loan Agreement. The exercise price of the warrants to
purchase ARI stock held by WITECH will not be adjusted as a result of such stock
purchase. WITECH represents and warrants that it is acquiring such shares of
common stock for investment purposes only without a view to the sale or other
disposition thereof, that it acknowledges that any such shares have not been
registered under the Securities Act of 1933, as amended, or applicable state
securities laws, and may not be sold, transferred or otherwise disposed of in
the absence of such registration or an exemption from the registration
requirements. The stock certificates representing such shares may bear a legend
with respect to the foregoing restrictions on transfer.
8. The provisions of Paragraph 4 of that certain Amendment Number
Fourteen to Loan Agreement between ARI and WITECH (relating to repayment of the
Bridge Loan with the
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proceeds of equity offerings), as well as similar provisions of prior Amendments
to the Loan Agreement, shall be deleted in their entirety.
9. Subject to the amendments described herein, the Loan Agreement, as
amended, and associated documents and agreements remain in full force and
effect.
10. As further consideration for this Agreement, ARI agrees to pay
WITECH a closing fee equal to 1 1/4% of the Term Loan, or $12,500.
11. As further consideration for this Agreement ARI agrees to issue to
WITECH a warrant (the "Warrant") to purchase 30,000 shares of common stock at
$5 1/8 per share, substantially in the form of Exhibit A.
12. The purchase and sale of the ARI common stock, the issuance of the
Warrant, the amendment to the Loan Agreement and ARI's payment of the closing
fee shall occur and be effective on September 30, 1999, provided, (a) the Board
of Directors of ARI shall have approved this Agreement, the Warrant and the sale
of common stock to WITECH, and (b) ARI shall have received assurances,
satisfactory to it, that the sale of ARI common stock and issuance of the
Warrant as contemplated hereby would not require shareholder approval, and would
not constitute a corporate governance violation, under the rules of the National
Association of Securities Dealers, Inc. applicable to ARI. If such conditions
are not satisfied by September 30, 1999, this Agreement shall terminate without
liability to either party.
13. This Agreement contains the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and supersedes all
prior arrangements or understandings with respect thereto. This Agreement shall
be governed by the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers as of the date first
above written.
WITECH CORPORATION ARI NETWORK SERVICES, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
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Xxxxxxx Xxxxxxxxxx, President Xxxxx X. Xxxxxxx, Chairman, President
and Chief Executive Officer
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Exhibit 2.2(b)
TERM NOTE
$1,000,000.00 September 30, 0000
Xxxxxxxxx, Xxxxxxxxx
FOR VALUE RECEIVED, the undersigned, ARI NETWORK SERVICES, INC., a
Wisconsin corporation ("ARI"), hereby unconditionally promises to pay to the
order of WITECH CORPORATION (`WITECH'), in lawful money of the United States of
America and in immediately available funds, the principal sum of One Million
Dollars ($1,000,000), payable in installments of principal as follows:
Commencing on November 1, 1999, and continuing on the first day of each month
thereafter until September 1, 2002, monthly payments of Twenty Seven Thousand
Seven Hundred Seventy Eight Dollars ($27,778.00) each, plus a final installment
of all unpaid principal, plus all accrued and unpaid interest, on October 1,
2002.
ARI also unconditionally promises to pay interest on the unpaid
principal amount outstanding hereunder at the rates and on the dates set forth
in Paragraph 2.5 of the Loan Agreement (as hereinafter defined).
WITECH is hereby authorized to record the date and amount of each
payment or prepayment of principal or interest in the books and records of
WITECH and any such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded.
This Term Note may be prepaid at any time, in whole or in part, as
provided in the Loan Agreement.
ARI and each guarantor and endorser hereof hereby waives presentment,
demand and protest and notice of presentment, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of this Term
Note.
This Term Note is the Term Note referred to in the Loan Agreement dated
as of October 4, 1993, as amended between ARI and WITECH (as the same may be
further amended, modified, supplemented, or restated from time to time, the
"Loan Agreement"), is entitled to the benefits thereof and is secured by certain
collateral of ARI as provided therein and in other loan documents. References
should be made to the Loan Agreement for terms and provisions which bear upon
this Term Note and the payments to be made hereunder. All capitalized terms used
in this Term Note, unless herein defined, shall have the meaning ascribed to
such terms in the Loan Agreement.
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Upon the occurrence of any Event of Default specified in the Loan
Agreement, the amounts then remaining unpaid on this Term Note may be declared
to be or may become immediately due and payable as provided in the Loan
Agreement.
ARI NETWORK SERVICES, INC.
By:
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Name:
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Title:
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Exhibit A
WARRANT
This is to certify that for value received, including, without
limitation, the agreement of WITECH Corporation ("WITECH") to enter into
Amendment Number 15 to that certain Loan Agreement, dated October 4, 1993, as
amended (the "Loan Agreement") with ARI NETWORK SERVICES, INC. (the "Company"),
WITECH is entitled to purchase shares of the Company's $.001 par value Common
Stock, subject to the terms and conditions more fully set forth herein.
1. Number of Shares. This Warrant shall permit WITECH to purchase
Thirty Thousand (30,000) shares of Common Stock, as adjusted hereunder
(the "Underlying Shares"). In the event of any stock dividend, stock split,
reverse stock split, recapitalization or reorganization or any similar
transaction, the number of shares of the Common Stock that the holder hereof may
acquire upon exercise hereof and the Exercise Price shall be proportionately and
appropriately adjusted.
2. Exercise Price. The Underlying Shares of the Common Stock that may
be acquired by WITECH pursuant to the exercise of this Warrant may be acquired
by WITECH at a per share price of $5 1/8 (the "Exercise Price").
3. Adjustment of Exercise Price. In the event that ARI issues any
shares of Common Stock (other than to directors, employees or former directors
or employees of the Company upon the exercise of stock options) (the "Newly
Issued Common Stock") or warrants (other than the warrants originally issued to
or held by WITECH) or other securities convertible into Common Stock (other than
stock option grants to directors or employees) ("Newly Issued Securities") at
any time while this Warrant is outstanding and the price per share of such
Newly Issued Common Stock or the exercise price per share under such Newly
Issued Securities is less than the Exercise Price hereunder, the Exercise Price
hereunder with respect to any Underlying Shares shall be reduced to the per
share price of such Newly Issued Common Stock or the exercise price under such
Newly Issued Securities.
4. Exercise. This Warrant may be exercised at any time on or before
September 30, 2006, as to all or part of the Underlying Shares. To exercise this
Warrant, WITECH shall present to the Company this Warrant, together with the
Exercise Price for the number of Underlying Shares to be purchased, in cash or
by certified check or bank draft drawn on immediately available funds, whereupon
this Warrant shall be exercised to the extent specified, and WITECH shall be the
holder of record of the number of shares of Common Stock purchased. Certificates
evidencing such shares shall be delivered to WITECH within a reasonable time but
not exceeding ten (10) days after this Warrant shall have been exercised as
provided herein.
5. Representations and Warranties. The Company hereby represents and
warrants to WITECH as follows:
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(a) The Company has full corporate power and authority to execute
this Warrant and perform its obligations hereunder.
(b) The execution and delivery of this Warrant and the consummation
of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part
of the Company. This Warrant has been duly executed by properly
authorized officers of the Company, and constitutes a legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
(c) Neither the execution and delivery of this Warrant nor the
consummation of the transactions contemplated hereby will
violate or result in any violation of or be in conflict with or
constitute a default under any term or condition contained in
any judgment, decree, order, statute, rule or governmental
regulation applicable to the Company or any of its subsidiaries
or any of its or their assets.
(d) The Company shall at all times from the date hereof until such
time as its obligations hereunder terminate, reserve for
issuance upon exercise of this Warrant, that number of shares of
the Common Stock equal to the maximum number of shares of the
Common Stock which may be acquired pursuant hereto. Any shares
issued pursuant to the exercise of this Warrant shall be duly
and validly issued, fully paid and nonassessable (other than as
provided in Section 180.0622(2)(b) of the Wisconsin Statutes and
the case law interpreting such statute), shall be free and clear
of all liens, security interests, charges, claims or
encumbrances, and shall not have been issued in violation of any
preemptive rights of any stockholders of the Company.
6. Miscellaneous
(a) This Warrant has not been registered under the Securities Act of
1933, as amended (the "Act"), but rather has been issued
pursuant to an exemption therefrom. This Warrant may not be
transferred or assigned except as expressly permitted herein,
and then only in accordance with a valid registration statement
or an exemption from registration under the provisions of the
Act.
(b) This Warrant shall not entitle the holder hereof to any rights
as a stockholder of the Company, either at law or in equity;
specifically, this Warrant shall not entitle the holder hereof
to vote on any matter presented to the stockholders of the
Company or to any notice of any meetings of stockholders or any
other proceedings of the Company.
(c) If any term, provision, covenant or restriction contained in
this Warrant is held by a court or a federal regulatory agency
of competent jurisdiction to be invalid, void
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or unenforceable, the remainder of the terms, provisions and
covenants and restriction contained in this Warrant shall remain
in full force and effect, and shall in no way be affected,
impaired or invalidated. If for any reason such court or
regulatory agency determines that this Warrant will not permit
the holder hereof to acquire the full number of shares of the
Common Stock provided in Paragraph 1, above, it is the express
intention of the Company to allow the holder hereof to acquire
such lesser number of shares as may be permissible, without any
amendment or modification hereof.
(d) This Warrant shall in all respects be governed by and construed
in accordance with the internal laws of the State of Wisconsin.
(e) This Warrant may not be modified, amended, altered or
supplemented, except upon the execution and delivery of written
agreement executed by the Company and the holder hereof.
(f) This Warrant constitutes the entire agreement of WITECH and the
Company with respect to the matters contained herein, and
supersedes all prior agreements and understandings between the
parties with respect thereto.
IN WITNESS WHEREOF, the Company has executed and delivered this Warrant
effective as of this 30th day of September, 1999.
ARI NETWORK SERVICES, INC.
By:
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Xxxxx X. Xxxxxxx,
Chairman, President and
Chief Executive Officer
Attest:
By:
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Xxxx X. Xxxxxxx, Secretary
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