AMENDMENT NO. 9 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 9, dated as of March 30, 2001 (this "Amendment"), to the LOAN
AND SECURITY AGREEMENT, dated as of September 30, 1998 (as amended by AMENDMENT
NO. 1 dated as of September, 1999, AMENDMENT NO. 2 AND WAIVER, dated as of
September, 1999, AMENDMENT NO. 3, dated as of December 13, 1999, AMENDMENT NO.
4, dated as of January 12, 2000, AMENDMENT NO. 5, dated as of March 24, 2000,
AMENDMENT NO. 6, dated as of May 26, 2000, AMENDMENT NO. 7, dated as of July 17,
2000 and AMENDMENT NO. 8 AND WAIVER, dated as of August 11, 2000 (as amended to
date) as hereafter modified, amended and/or restated from time to time, the
"Loan and Security Agreement"), among FOOTHILL CAPITAL CORPORATION, a California
corporation ("Foothill") and TEKINSIGHT SERVICES INC., a Delaware corporation
("Borrower").
Preamble
Pursuant to the Loan and Security Agreement, Foothill established a
revolving line of credit for the benefit of Borrower. Pursuant to Amendment No.
8 and Waiver, the parties agreed to negotiate during the 120-day period
following the Effective Date (as defined in the Eighth Amendment) with a view to
entering into a replacement loan and security agreement. Whereas, the 120-day
period expired as of December 12, 2000, the parties entered into Amendments No.
1, 2, 3, 4 and 5 to Amendment No. 8 and Waiver to, among other things, extend
such date further. Whereas such date expires on the date hereof, the parties
hereto now desire to extend the term of the Loan and Security Agreement to March
31, 2002, to amend the EBITDA financial covenant and to include a minimum
Availability requirement, in each case on the terms and conditions set forth
herein. Accordingly, Borrower and Foothill hereby agree as follows:
1. Definitions. All terms used herein which are defined
in the Loan and Security Agreement and not otherwise defined herein are used
herein as defined therein.
2. Changes to Definitions.
(a) Section 1.1 of the Loan and Security Agreement
is hereby amended by adding the following definitions, in appropriate
alphabetical order:
"'Amendment No. 9 to Loan and Security
Agreement' means Amendment No. 9, dated as of March 30, 2001, to Loan and
Security Agreement, among Borrower and Foothill."
"'Maturity Date' has the meaning set forth in
Section 3.4."
(b) Section 1.1 of the Loan and Security Agreement
is hereby amended by deleting the definitions of "Early Termination Premium and
"Renewal Date" in their entirety.
3. Term. Section 3.4 of the Loan and Security Agreement
is hereby amended in its entirety to read as follows:
"3.4 Term. This Agreement shall become
effective upon the execution and delivery hereof by Borrower
and Foothill and shall continue in full force and effect for a
term ending on March 31, 2002 (the "Maturity Date"). The
foregoing notwithstanding, Foothill shall have the right to
terminate its obligations under this Agreement immediately and
without notice upon the occurrence and during the continuance
of an Event of Default."
4. Effect of Termination. Section 3.5 of the Loan and
Security Agreement is hereby amended in its entirety to read as follows:
"3.5 Effect of Termination. On the date of
termination of this Agreement, all Obligations (including
contingent reimbursement obligations of Borrower with respect
to any outstanding Letters of Credit) immediately shall become
due and payable without notice or demand. No termination of
this Agreement, however, shall relieve or discharge Borrower
of Borrower's duties, Obligations, or covenants hereunder, and
Foothill's continuing security interests in the Collateral
shall remain in effect until all Obligations have been fully
and finally discharged and Foothill's obligation to provide
additional credit hereunder is terminated."
5. Early Termination by Borrower. Section 3.6 of the Loan
and Security Agreement is hereby amended in its entirety to read as follows:
"3.6 Early Termination by Borrower.
Notwithstanding Section 3.4, Borrower has the option, at any
time upon 90 days prior written notice to Foothill, to
terminate this Agreement by paying to Foothill, in cash, the
Obligations (including, but not limited to, the unpaid balance
of the Accommodation Fee (as defined in Amendment No. 9 to
Loan and Security Agreement), an amount equal to 102% of the
undrawn amount of the Letters of Credit, and any Obligations
that become due and payable during such 90 day period), in
full, provided that, Borrower shall not be required to pay any
fee for the privilege of exercising its rights under this
Section 3.6."
6. Termination Upon Event of Default. Section 3.7 of the
Loan and Security Agreement is hereby amended in its entirety to read as
follows:
"3.7 Intentionally Omitted."
7. Financial Covenants.
(a) Section 7.20(a) of the Loan and Security
Agreement is hereby amended in its entirety to read as follows:
"(a) EBITDA: EBITDA, measured at the
end of each calendar quarter, of not less than the
required amount set forth in the following table for
the applicable period set forth opposite thereto:
Calendar Quarter Ending: EBITDA
June 30, 2001 $500,000
September 30, 2001 $500,000
December 31, 2001 $500,000
March 31, 2002 $500,000;"
(b) Section 7.20 of the Loan and Security Agreement
is hereby amended by replacing the period at the end thereof with the following"
; or" and adding the following new paragraph (c):
"(c) Minimum Availability: minimum Availability
of $100,000 at all times."
8. Notices. The address for Xxxxxxx Xxxx & Xxxxx LLP set
forth in Section 13 of the Loan and Security Agreement is hereby amended by
deleting "900 Third Avenue" and substituting in lieu thereof "919 Third Avenue".
9. Conditions and Covenants.
(a) This Amendment shall become effective only
upon satisfaction in full of the following conditions precedent (the first date
upon which all such conditions have been satisfied being herein called the
"Effective Date"):
(i) The representations and warranties
contained in this Amendment and in Section 5 of the Loan and Security Agreement
and each other Loan Document shall be correct on and as of the Effective Date
as though made on and as of such date (except where such representations and
warranties relate to an earlier date in which case such representations and
warranties shall be true and correct as of such earlier date); no Default or
Event of Default shall have occurred and be continuing on the Effective Date or
result from this Amendment becoming effective in accordance with its terms.
(ii) Foothill shall have received two (2)
counterparts of this Amendment, duly executed by Borrower and Parent.
(iii) All legal matters incident to this
Amendment shall be satisfactory to Foothill and its counsel.
10. Representations and Warranties. Borrower hereby represents
and warrants to Foothill as follows:
(a) Borrower (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (ii) has all requisite corporate power, authority and legal right to
execute, deliver and perform this Amendment, and to perform the Loan and
Security Agreement, as amended hereby.
(b) The execution, delivery and performance of this
Amendment by Borrower, and the performance by Borrower of the Loan and Security
Agreement, as amended hereby (i) have been duly authorized by all necessary
corporate action, (ii) do not and will not contravene its charter or by-laws or
any applicable law, and (iii) except as provided in the Loan Documents, do not
and will not result in the creation of any Lien upon or with respect to any of
its respective properties.
(c) This Amendment and the Loan and Security
Agreement, as amended hereby,constitute the legal, valid and binding obligations
of Borrower, enforceable against Borrower in accordance with its terms.
(d) No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or other Person
is required in connection with the due execution, delivery and performance by
Borrower of this Amendment and the performance by Borrower of the Loan and
Security Agreement, as amended hereby.
(e) The representations and warranties contained
in Section 5 of the Loan and Security Agreement and each other Loan Document are
correct on and as of the Effective Date as though made on and as of the
Effective Date (except to the extent such representations and warranties
expressly relate to an earlier date in which case such representations and
warranties shall be true and correct as of such earlier date) and no Default or
Event of Default has occurred and is continuing on and as of the Effective Date
or will result from this Amendment becoming effective in accordance with its
terms.
11. Continued Effectiveness of the Loan and Security
Agreement and Loan Documents. Borrower hereby (i) confirms and agrees that each
Loan Document to which it is a party is, and shall continue to be, in full force
and effect and is hereby ratified and confirmed in all respects except that on
and after the Effective Date of this Amendment all references in any such Loan
Document to "the Loan and Security Agreement", the "Agreement", "thereto",
"thereof", "thereunder" or words of like import referring to the Loan and
Security Agreement shall mean the Loan and Security Agreement as amended by this
Amendment, (ii) confirms and agrees that to the extent that any such Loan
Document purports to assign or pledge to Foothill, or to grant a security
interest in or Lien on, any collateral as security for the obligations of
Borrower from time to time existing in respect of the Loan and Security
Agreement and the Loan Documents, such pledge, assignment and/or grant of the
security interest or Lien is hereby ratified and confirmed in all respects, and
(iii) confirms that Foothill is authorized, at its option, without prior notice
to Borrower, to charge any fees payable by Borrower pursuant to Section 12(e) of
this Amendment to Borrower's Loan Account.
12. Miscellaneous.
(a) This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment.
(b) Section and paragraph headings herein are
included for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.
(c) This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
(d) Borrower will pay on demand all reasonable
fees, costs and expenses of Foothill in connection with the preparation,
execution and delivery of this Amendment including, without limitation,
reasonable fees disbursements and other charges of Xxxxxxx Xxxx & Xxxxx LLP,
counsel to Foothill.
(e) In consideration of the willingness of Foothill
to enter into this Amendment and to consummate the transactions contemplated to
occur hereunder, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower irrevocably agrees to pay
in cash to Foothill, a non-refundable accommodation fee (the "Accommodation
Fee") in the amount of $200,000, which shall be deemed to be fully earned on the
date of this Amendment, but shall be payable in installments as follows: (A)
$25,000 on each of April 1, 2001, May 1, 2001, June 1, 2001 and July 1, 2001 and
(B) $100,000 on March 31, 2002 (the "Final Installment"); provided however, that
the Final Installment will be waived by Foothill if in Foothill's sole
discretion Foothill extends the Maturity Date until March 31, 2004, pursuant to
terms and conditions acceptable to Foothill in its sole discretion, including
without limitation, the inclusion of an early termination premium, which such
early termination premium shall be in an amount equal to two percent (2%) of the
Maximum Revolving Amount then in effect if the Loan and Security Agreement shall
be terminated at any time after March 31, 2002 but on or prior to March 31,
2003, and one percent (1%) of the Maximum Revolving Amount then in effect if the
Loan and Security Agreement shall be terminated at any time after March 31, 2003
but on or prior to March 31, 2004.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered as of the date set forth on the first
page hereof.
TEKINSIGHT SERVICES INC.,
a Delaware corporation
By:
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Name:
Title:
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
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Name:
Title:
Acknowledged and Agreed upon
as of this 30th day of March, 2001
XXXXXXXXXX.XXX,
a Delaware corporation, as Guarantor
By:
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Name:
Title:
