SECOND LOAN MODIFICATION
AGREEMENT
This Second
Loan Modification Agreement (this “Loan Modification
Agreement”) is entered into as of March 18, 2009, by and
among (a) SILICON VALLEY BANK , a California corporation,
with its principal place of business at 3003 Tasman Drive, Santa
Clara, California 95054 and with a loan production office located
at One Newton Executive Park, Suite 200, 2221 Washington Street,
Newton, Massachusetts 02462 (“Bank”) and (b)
PARADIGM HOLDINGS, INC. , a Wyoming corporation, with
offices at 9715 Key West Avenue, Rockville,
Maryland 20850 (“Holdings”), PARADIGM
SOLUTIONS CORPORATION , a Maryland corporation, with offices at
9715 Key West Avenue, Rockville, Maryland 20850
(“Solutions”), CALDWELL TECHNOLOGY SOLUTIONS LLC
, a Maryland limited liability company, with offices at 17001
Science Drive, Suite 100, Bowie, Maryland 20715
(“Caldwell”) and TRINITY INFORMATION MANAGEMENT
SERVICES , a Nevada corporation, with offices at 9715 Key West
Avenue, Rockville, Maryland 20850 (“Trinity”)
(hereinafter, Holdings, Solutions, Caldwell and Trinity are jointly
and severally, individually and collectively, referred to as
“Borrower”).
1.
DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS . Among
other indebtedness and obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a loan
arrangement dated as of March 13, 2007, evidenced by, among other
documents, a certain Loan and Security Agreement (working capital
line of credit) dated as of March 13, 2007, among Borrower and
Bank, as amended by a certain First Loan Modification Agreement
dated as of August 11, 2008 (as amended, the “Loan
Agreement”). Capitalized terms used but not
otherwise defined herein shall have the same meaning as in the Loan
Agreement.
2.
DESCRIPTION OF COLLATERAL . Repayment of the
Obligations is secured by (a) the Collateral as described in the
Loan Agreement, (b) the Intellectual Property Collateral as
described in a certain Intellectual Property Security Agreement
dated as of March 13, 2007 between Bank and Holdings (the
“Holdings IP Security Agreement”), (c) the Intellectual
Property Collateral as described in a certain Intellectual Property
Security Agreement dated as of March 13, 2007 between Bank and
Solutions (the “Solutions IP Security Agreement”), (d)
the Intellectual Property Collateral as described in a certain
Intellectual Property Security Agreement dated as of July 5, 2007
between Bank and Caldwell (the “Caldwell IP Security
Agreement”), and (e) the Intellectual Property Collateral as
described in a certain Intellectual Property Security Agreement
dated as of September 5, 2007 between Bank and Trinity (the
“Trinity IP Security Agreement”) (together with any
other collateral security granted to Bank,
the “Security
Documents”). Hereinafter, the Security Documents,
together with all other documents evidencing or securing the
Obligations shall be referred to as the “Existing Loan
Documents”.
3.
DESCRIPTION OF CHANGE IN TERMS .
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Modifications
to Loan Agreement.
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The Loan
Agreement shall be amended by deleting the following, appearing as
Section 2.1.1(b)(i):
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“ (i) The
aggregate face amount of all Financed Receivables outstanding at
any time based upon Federal Agency Accounts, Subcontractor Accounts
and Unbilled Accounts may not exceed the Facility
Amount. In addition, the aggregate amount of all Federal
Agency Account Advances, Subcontractor Account Advances, and
Unbilled Account Advances outstanding at any time may not exceed
Ten Million Dollars ($10,000,000.00).”
and inserting
in lieu thereof the following:
“ (i) The
aggregate face amount of all Financed Receivables outstanding at
any time based upon Federal Agency Accounts, Subcontractor Accounts
and Unbilled Accounts may not exceed the Facility
Amount. In addition and notwithstanding the foregoing,
the aggregate amount of all Federal Agency Account Advances,
Subcontractor Account Advances, and Unbilled Account Advances
outstanding at any time may not exceed Four Million Five Hundred
Thousand Dollars ($4,500,000.00).”
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The Loan
Agreement shall be amended by deleting the following, appearing as
Section 2.1.1(b)(iii):
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“ (iii) The
aggregate amount of all Unbilled Account Advances outstanding at
any time may not exceed Two Million Dollars ($2,000,000.00),
provided, however, such amount shall be Three Million Dollars
($3,000,000.00) at such time as when all HUD Account Advances are
repaid and Borrower has no ability to request that Bank make any
additional HUD Account Advances hereunder.”
and inserting in lieu thereof the
following:
“ (iii) The
aggregate amount of all Unbilled Account Advances outstanding at
any time may not exceed Two Million Dollars
($2,000,000.00).”
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The Loan
Agreement shall be amended by deleting the following, appearing as
Section 2.1.1(b)(iv):
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“ (iv)
The aggregate amount of all Federal Agency Account Advances,
Subcontractor Account Advances, Unbilled Account Advances, and HUD
Account Advances outstanding at any time may not exceed Twelve
Million Dollars ($12,000,000.00).”
and inserting in lieu thereof the
following:
“ (iv)
Intentionally omitted.”
