Exhibit 10.2
JOINDER AGREEMENT AND NINTH
AMENDMENT TO
LOAN AND SECURITY
AGREEMENT
THIS JOINDER AGREEMENT AND NINTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
“Agreement”) is made and entered into as of the 20th
day of December, 2006, among FCC, LLC, d/b/a First Capital ,
a Florida limited liability company (“Lender”),
FOREFRONT GROUP, INC. , a Florida corporation formerly known
as Datrek Professional Bags, Inc. (“ForeFront Group”),
MILLER GOLF COMPANY , a Florida corporation formerly known
as Miller Acquisition, Inc. (“Miller”), FOREFRONT
BURTON, INC. , a Florida corporation (“ForeFront
Burton”), and FOREFRONT DEVANT, INC. , a Florida
corporation (“ForeFront Devant”; ForeFront Group,
Miller, ForeFront Burton and ForeFront Devant are referred to
herein individually as a “Borrower” and collectively as
the “Borrowers”).
W
I T N
E S S E T H
:
WHEREAS, ForeFront Group, Miller,
ForeFront Burton and Lender entered into that certain Loan and
Security Agreement dated as of October 15, 2004 (as amended,
restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”); and
WHEREAS, ForeFront Group, Miller and
ForeFront Burton have requested that Lender consent to the
formation of ForeFront Devant and the acquisition by ForeFront
Devant of certain assets and the assumption of certain liabilities
of Devant, Ltd., a North Carolina corporation
(“Seller”), pursuant to that certain Asset Purchase
Agreement of even date herewith among ForeFront Devant, ForeFront
Holdings, ForeFront Group, Seller, James M. Sheppard, Jr., Mary Ann
Sheppard Chambers, Rebecca Sheppard Roberts and Deborah Ann
Sheppard (the “Asset Purchase Agreement”; the Asset
Purchase Agreement and all agreements, documents, certificates and
other items executed and/or delivered in connection therewith are
referred to herein as the “Acquisition Documents”);
and
WHEREAS, Borrowers have requested
that Lender finance the transaction contemplated by the Acquisition
Documents (the “Acquisition”) and that Lender include
the accounts receivable and other assets of ForeFront Devant in the
borrowing base described in the Loan Agreement to the extent that
such assets satisfy the eligibility standards set forth therein;
and
WHEREAS, Lender is willing to grant
such consent and provide such financing (subject to the terms and
conditions of the Loan Agreement) so long as ForeFront Devant
becomes an additional borrower under the Loan Agreement and causes
Lender to have a perfected, first-priority security interest in all
of its assets; and
WHEREAS, ForeFront Devant is willing
to join the Loan Agreement as an additional borrower;
and
WHEREAS, Borrowers and Lender desire
to amend the Loan Agreement as set forth herein.
NOW, THEREFORE, in consideration of
the foregoing premises, and other good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
1. Defined Terms . All
capitalized terms used herein and not otherwise expressly defined
herein shall have the respective meanings given to such terms in
the Loan Agreement.
2. Joinder of ForeFront Devant as
a Borrower . The Loan Agreement is hereby amended such that
each reference to “Borrower” thereunder shall be deemed
to be a reference to each Borrower. ForeFront Devant hereby
acknowledges and agrees that (a) it is familiar with the Loan
Agreement and the other Loan Documents, and (b) from and after
the date hereof, it is jointly and severally liable with ForeFront
Group, Miller and ForeFront Burton for all outstanding Obligations.
Borrowers acknowledge and agree that Lender is making an
accommodation to Borrowers by permitting the addition of ForeFront
Devant to the Loan Agreement as an additional borrower by means of
this Agreement, rather than requiring that Borrowers incur the cost
and expense of amending and restating the Loan Agreement.
Accordingly, each reference in the Loan Agreement to
“Borrower” shall be construed in the manner most
favorable to Lender in determining whether such reference applies
to all Borrowers or to any Borrower. For example, the grant of the
security interest set forth in Section 5(a) of the Loan
Agreement shall be construed to be a grant of a security interest
by each Borrower, while Section 13(a)(vi) of the Loan
Agreement shall be construed such that a Default shall exist if any
Borrower becomes insolvent or institutes (or has instituted against
it) a bankruptcy proceeding.
3. Grant of Security Interest by
ForeFront Devant . Without limiting the generality of
Section 2 above, ForeFront Devant hereby pledges, assigns and
grants to Lender, for the benefit of itself and its Affiliates, a
lien on and security interest in all right, title and interest of
ForeFront Devant in and to the Collateral (including, without
limitation, all of ForeFront Devant’s accounts, inventory,
equipment, general intangibles, chattel paper, goods, documents,
instruments, investment property, letter-of-credit rights, letters
of credit and deposit accounts (as such terms are defined in the
UCC), in each case whether now owned or existing or hereafter
acquired or arising) as security for all of the
Obligations.
4. Representations and Warranties
Regarding Seller, ForeFront Devant and Acquisition . Borrowers
represent and warrant to Lender as follows:
(a) the following information is
true and correct with respect to Seller:
Exact Legal Name: Devant,
Ltd.
Type of Organization:
Corporation
State of Organization: North
Carolina
State Organizational Identification
Number: 0040705
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(b) The chief executive office and
substantially all of the property of Seller is located at 3011
Walkup Avenue, Monroe, North Carolina 28110. Other than the address
specified in this clause (b), Seller has not maintained its chief
executive office or any property at any other location in the past
five years.
(c) The following information is
true and correct with respect to ForeFront Devant:
Exact Legal Name: ForeFront Devant,
Inc.
Type of Organization:
Corporation
State of Organization:
Florida
State Organizational Identification
Number: P06000138585
(d) The chief executive office of
ForeFront Devant is located at 835 Bill Jones Industrial Drive,
Springfield, Tennessee 37172.
(e) ForeFront Devant is duly
organized and validly existing under the laws of its state of
organization; the execution, delivery, and performance of this
Agreement, the Loan Agreement and the other Loan Documents to which
ForeFront Devant is a party are within ForeFront Devant’s
corporate powers, have been duly authorized, do not violate
ForeFront Devant’s constituent documents or any law or
regulation, including without limitation, any law or regulation
relating to occupational health and safety or protection of the
environment, applicable to ForeFront Devant, or any indenture,
agreement, or undertaking to which ForeFront Devant is a party or
by which ForeFront Devant or ForeFront Devant’s property is
bound; and this Agreement, the Loan Agreement and the other Loan
Documents to which ForeFront Devant is a party constitute valid,
binding and enforceable obligations of ForeFront Devant in
accordance with the terms hereof and thereof, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, moratorium or other similar laws applicable to
creditors’ rights generally or by generally applicable
equitable principles affecting the enforcement of creditors’
rights.
(f) ForeFront Group owns 100% of the
outstanding capital stock of ForeFront Devant, and ForeFront Devant
has no subsidiaries.
(g) Borrowers have furnished to
Lender true, complete and correct copies of all of the Acquisition
Documents (including any schedules, exhibits and annexes thereto)
as in effect on the date hereof. None of the Acquisition Documents
has been amended, supplemented or modified, and the Acquisition
Documents constitute the complete understanding among the parties
thereto in respect of the Acquisition and the other matters and
transactions covered thereby. Each Acquisition Document has been
duly executed and delivered by the parties thereto and is a legal,
valid and binding obligation of each such party, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors’ rights generally or by general equitable
principles.
(h) On the date hereof, the
transactions contemplated by the Acquisition Documents will have
been consummated in accordance with all applicable laws and, except
as consented to in
3
writing by Lender, in the manner provided
therein in accordance with the terms thereof without any material
waivers or amendments thereto, and each of the material conditions
to such consummation set forth in the Acquisition Documents shall
have been fulfilled without any waiver of any thereof.
5. Multiple Borrower Matters
.
(a) Borrowers’ Agent .
Borrowers hereby appoint ForeFront Group, and ForeFront Group shall
act under the Loan Agreement and the other Loan Documents as, the
agent, attorney-in-fact and legal representative of all Borrowers
for all purposes, including requesting advances and receiving
account statements and other notices and communications to
Borrowers (or any of them) from Lender. Lender may rely, and shall
be fully protected in relying, on any request for an advance,
disbursement instruction, report, information or any other notice
or communication made or given by ForeFront Group, whether in its
own name, as Borrowers’ Agent, or on behalf of one or more
Borrowers, and Lender shall not have any obligation to make any
inquiry or request any confirmation from or on behalf of any other
Borrower as to the binding effect on it of any such request,
instruction, report, information, other notice or communication,
nor shall the joint and several character of Borrowers’
obligations under the Loan Agreement and the other Loan Documents
be affected, provided, that the provisions of this paragraph shall
not be construed so as to preclude any Borrower from taking actions
permitted to be taken by a “Borrower” under the Loan
Agreement or any other Loan Document.
(b) Joint and Several
Liability .
(i) All loan advances ma
