AMENDMENT NO. 2 TO
AMENDMENT NO. 8 AND WAIVER TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 2, dated as of December 29, 2000, to Amendment No. 8 and
Waiver, dated as of August 11, 2000, as amended by Amendment No. 1, dated as of
December 12, 2000 (the "Eighth Amendment"), to the LOAN AND SECURITY AGREEMENT,
dated as of September 30, 1998 (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"), DATA
SYSTEMS NETWORK CORPORATION, a Michigan corporation ("Old Borrower") and
TEKINSIGHT SERVICES INC., a Delaware corporation ("New Borrower").
Preamble
Pursuant to the Loan and Security Agreement, Foothill
established a revolving line of credit for the benefit of Old Borrower. Pursuant
to the Merger Agreement (as defined in the Eighth Amendment) Old Borrower merged
into New Borrower, with New Borrower continuing as the Surviving Corporation.
Pursuant to the Eighth Amendment, 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
Amendment No. 1 to the Eighth Amendment to, among other things, extend such date
to December 31, 2000. The parties hereto now desire to extend this date to
January 12, 2001. Accordingly, New Borrower and Foothill hereby agree as
follows:
1. Definitions. All terms used herein which are defined
in the Eighth Amendment and not otherwise defined herein shall have the meanings
given to such terms in the Eighth Amendment.
2. Replacement Loan and Security Agreement. Section 7 of
the Eighth Amendment is hereby amended and restated as follows:
"7. Replacement Loan and Security Agreement.
The parties hereto agree to negotiate during the 151-day period
following the Effective Date with a view to entering into either (i)
a loan and security agreement and related agreements that would
supercede the Loan and Security Agreement and Loan Documents or (ii)
amendments to the Loan and Security Agreement and Loan Documents on
terms and conditions to be determined. If no such agreements are
executed and delivered on or before the date which is 151 days after
the Effective Date, all Notes shall automatically mature, and all
principal, interest, reimbursement obligations and fees then accrued
and outstanding under any Loan Document shall be immediately due and
payable together with a fee in the amount of two percent (2%) of the
Maximum Revolving Amount then in effect. Notwithstanding the provisions
of Section 3.6 of the Loan and Security Agreement, the Early
Termination Premium payable at any time during the 151-day period
following the Effective Date shall be two percent (2%) of the Maximum
Revolving Amount then in effect."
3. Conditions and Covenants.
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 "Amendment 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 Amendment 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 Amendment
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 New Borrower and Parent.
(iii) All legal matters incident to this Amendment
shall be satisfactory to Foothill and its counsel.
4. Representations and Warranties. New Borrower hereby
represents and warrants to Foothill as follows:
(a) New 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 Eighth Amendment, as amended
hereby.
(b) The execution, delivery and performance of this Amendment
by New Borrower, and the performance by New Borrower of the Eighth Amendment, 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 Eighth Amendment, as amended
hereby, constitute the legal, valid and binding obligations of New Borrower,
enforceable against New 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 New Borrower
of this Amendment and the performance by New Borrower of the Eighth Amendment,
as amended hereby.
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(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 Amendment Effective Date as though made on and as of the Amendment
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 Amendment
Effective Date or will result from this Amendment becoming effective in
accordance with its terms.
5. 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 Amendment 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 the
Eighth Amendment, as amended by this Amendment, and (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.
6. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 2 to be executed and delivered as of the date set forth on the
first page hereof.
TEKINSIGHT SERVICES INC.,
a Delaware corporation
By: /s/ Xxxx Xxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxx
Title: VP Finance
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: Xxxxxxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Vice President
Acknowledged and Agreed upon
this 29th day of December, 2000
XXXXXXXXXX.XXX,
a Delaware corporation, as Guarantor
By: /s/ Xxxx Xxxxxxxxx
---------------
Name: Xxxx Xxxxxxxxx
Title: VP - Finance
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