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EXHIBIT 10.17
AMENDMENT TO LOAN DOCUMENTS
THIS AMENDMENT TO LOAN DOCUMENTS (this "Amendment") is made as of
December 18, 1998, by and between UBICS, INC. (the "Borrower"), and PNC BANK,
NATIONAL ASSOCIATION (the "Bank").
WITNESSETH:
WHEREAS, the Borrower, under its previous name of UB Information &
Consultancy Services, Inc., has executed and delivered to the Bank (or a
predecessor which is now known by the Bank's name as set forth above), one or
more promissory notes, letter agreements, loan agreements, security agreements,
mortgages, pledge agreements, assignments and other agreements, instruments,
certificates and documents more fully described on Exhibit A attached hereto and
made a part hereof (collectively, the "Loan Documents") which evidence or secure
some or all of the Borrower's obligations to the Bank for one or more loans or
other extension of credit (the "Obligations"); and
WHEREAS, the Borrower and the Bank desire to amend the Loan Documents as
provided for below, in order to reflect the change of the Borrower's name to
UBICS, Inc., and for the other purposes set forth below, all on the terms and
conditions set forth in this Amendment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Each of the Loan Documents is amended as set forth in Exhibit A. Any
and all references to any Loan Document in any other Loan Document shall be
deemed to refer to such Loan Document as amended hereby. Any initially
capitalized terms used in this Amendment without definition shall have the
meanings assigned to those terms in the Loan Documents.
2. This Amendment is deemed incorporated into each of the Loan
Documents. To the extent that any term or provision of this Amendment is or may
be deemed expressly inconsistent with any term or provision in any Loan
Document, the terms and provisions hereof shall control.
3. The Borrower hereby represents and warrants that (a) all of its
representations and warranties in the Loan Documents are true and correct, (b)
no default or Event of Default exists under any Loan Document, and (c) this
Amendment has been duly authorized, executed and delivered and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms.
4. The Borrower hereby confirms that any collateral for the
Obligations, including but not limited to liens, security interests, mortgages,
and pledges granted by the Borrower or third parties (if applicable), shall
continue unimpaired and in full force and effect.
5. This Amendment may be signed in any number of counterpart copies and
by the parties hereto on separate counterparts, but all such copies shall
constitute one and the same instrument.
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6. This Amendment will be binding upon and inure to the benefit of the
New Borrower and the Bank and their respective heirs, executors, administrators,
successors and assigns.
7. Except as amended hereby, the terms and provisions of the Loan
Documents remain unchanged and in full force and effect. Except as expressly
provided herein, this Amendment shall not constitute an amendment, waiver,
consent or release with respect to any provision of any Loan Document, a waiver
of any default or Event of Default thereunder, or a waiver or release of any of
the Bank's rights and remedies (all of which are hereby reserved). THE BORROWER
EXPRESSLY RATIFIES AND CONFIRMS THE CONFESSION OF JUDGMENT AND WAIVER OF JURY
TRIAL PROVISIONS (IF APPLICABLE).
WITNESS the due execution hereof as a document under seal, as of the date first
written above.
ATTEST: UBICS, INC.
/s/ Xxxxxxx X. Xxxx By:/s/ O'Xxxx Xxxxxxxx
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Print Name: M. B. Hira Print Name: O'Xxxx Xxxxxxxx
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Title: Sr. V.P. & CFO
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/s/ O'Xxxx Xxxxxxxx By:/s/ Xxxxxxx X. Xxxx
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Print Name: O'Xxxx Xxxxxxxx Print Name: M. B. Hira
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Title: President
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PNC BANK, NATIONAL ASSOCIATION
/s/ O'Xxxx Xxxxxxxx /s/ Xxxxx X. Xxxxxx
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Print Name: O'Xxxx Xxxxxxxx Xxxxx X. Xxxxxx, Vice President
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321025
AMENDMENT TO LOAN DOCUMENTS
EXHIBIT A
A. The "Loan Documents" that are the subject of this Amendment include the
following (as any of the foregoing have previously been amended, modified or
otherwise supplemented):
1. Letter Agreement dated July 26, 1996 (the "Agreement");
2. Committed Line of Credit Note in the amount of $500,000.00 dated July 31,
1996 (the "Note");
3. Disclosure for Confession of Judgment dated July 31, 1996;
and
4. Security Agreement dated July 31, 1996.
B. The Loan Documents are hereby amended as follows:
1. The name "UB Information & Consultancy Services, Inc." is hereby
deleted from the Loan Documents and the name "UBICS, Inc." is hereby inserted in
lieu thereof wherever it appears.
2. This Amendment shall be effective upon the fulfillment of the
following conditions precedent, including receipt by the Bank of the following
documents, which in all cases shall be in form and substance satisfactory to the
Bank:
(a) This Amendment, duly executed by the Borrower and the Bank.
(b) UCC-3 Financing Statements executed and delivered to the Bank
reflecting the Borrower's name change..
(c) A certified copy of the documents filed by the Borrower with the
Delaware Secretary of State to effect the Borrower's name change.
(d) Such other documents and instruments as the Bank reasonably deems
necessary to carry out the intent and purpose of this Amendment.
3. The Borrower agrees to reimburse the Bank for all costs and expenses
incurred by the Bank in connection with this Amendment and the other agreements,
instruments and documents described herein, including but not limited to filing
and recording fees.
4. Extension of Expiration Date. The Agreement and Note are hereby
amended by extending the Expiration Date from August 30, 1998, to August 30,
1999, on which date the entire principal balance and any accrued but unpaid
interest shall be due and payable. This extension is effective as of August 31,
1998.
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5. Section (1) of the Agreement entitled "Type of Facility and Use of
Proceeds" is hereby amended and restated to read in its entirety as follows:
"1. Type of Facility and Use of Proceeds. This is a committed revolving
line of credit under which the Borrower may request and the Bank,
subject to the terms and conditions of this letter, will make advances
to the Borrower from time to time until the Expiration Date, in an
amount in the aggregate at any time outstanding not to exceed
$1,000,000.00 (the "Line of Credit"). The availability of advances
under the Line of Credit will be subject to a borrowing base formula.
At no time shall outstanding indebtedness under the Line of Credit
exceed the Borrowing Base, defined to mean the lesser of (a) the
maximum principal amount of the Line of Credit, and (b) 70% of accounts
less than 90 days past due. The Borrower will be required to deliver
periodic Borrowing Base Certificates as set forth on Exhibit "A",
reporting on its accounts, in order to demonstrate the availability of
advances under the borrowing base formula. The "Expiration Date" means
August 30, 1999, or such later date as may be designated by the Bank by
written notice to the Borrower. Advances may be used for working
capital or other general business purposes of the Borrower."
6. Section 5(a) of the Agreement under the heading entitled "Security"
wherein the Bank required Xxxxx Xxxxxx to guarantee all indebtedness of the
Borrower to the Bank is hereby deleted in its entirety. The Bank, for valuable
consideration, the receipt of which is hereby acknowledged, and intending to be
legally bound, hereby releases and dissolves such guaranty agreement and the
provisions thereof shall be of no force and effect. The Guarantor is forever
freed, exonerated and discharged of and from the guaranty agreement, and every
part thereof.
7. Section (B) under the heading entitled "Financial Reporting
Covenants" on Exhibit "A" of the Agreement is hereby amended and restated to
read in its entirety as follows:
"(B) When there are outstandings under the Line of Credit, the Borrower
will deliver to the Bank within 45 days following the close of each
fiscal month, the Borrower's detailed schedule of accounts receivable
analysis and a borrowing base certificate."
8. Sections (A) and (B) under the heading entitled "Financial
Covenants" on Exhibit "A" of the Agreement are hereby amended and restated to
read in its entirety as follows:
"(A) The Borrower will maintain at all times a minimum total
stockholder's equity of $14,750,000.00, to be reset annually.
(B) The Borrower will maintain a ratio of Funds from Operations
coverage to Uses of at least 1.0 to 1. "Funds from Operations" means
net income plus other non-cash items. "Uses" means Current Maturities
plus Unfunded Capital Expenditures plus distributions. "Current
Maturities" the current principal maturities of all indebtedness for
borrowed money (including but not limited to amortization of
capitalized lease obligations) having an original term of one year or
more, as well as any prepayments of such indebtedness prior to
scheduled maturity. "Unfunded Capital Expenditures" means capital
expenditures made from the Borrower's funds other than borrowed funds."
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9. The Section on Exhibit "A" entitled "Financial Covenants" is
hereby amended by adding subsection (D) to read in its entirety as follows:
"(D) The Borrower will maintain at all times a minimum of
$1,000,000.00 in unrestricted and unencumbered liquid assets."
10. Fees. Beginning on the last day of the quarter after the date
of this Amendment and continuing on the last day of each quarter thereafter
until the Expiration Date, the Borrower shall pay a commitment fee to the Bank,
in arrears, at the rate of one-quarter of one percent (1/4%) per annum on the
average daily balance of the Line of Credit which is undisbursed and uncancelled
during the preceding quarter. The commitment fee shall be computed on the basis
of a year of 360 days and paid on the actual number of days elapsed.
11. Our willingness to grant this amendment is subject to your
representing, by your execution of this amendment in the space above and with as
a condition to each advance under the Note, that you have reviewed the areas
within your business and operations which could be adversely affected by, and
have developed or are developing a program to address on a timely basis the risk
that certain computer applications used by you may be unable to recognize and
perform properly date-sensitive functions involving dates prior to and after
December 31, 1999 (the "Year 2000 Problem"). The Year 2000 Problem will not
result, and is not reasonably expected to result, in any material adverse effect
on your business, properties, assets, financial condition, results of operations
or prospects, or your ability to duly and punctually pay or perform your
obligations under the Agreement and the Note.
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