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Exhibit
10.2
NINTH AMENDMENT TO NOTE AND
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT TO NOTE AND LOAN AND SECURITY AGREEMENT ("Ninth
Amendment") made this 8th day of January, 2009 by and among
Allin Corporation , successor by name change to Allin
Communications Corporation, a Delaware corporation, Allin
Interactive Corporation, a Delaware corporation, Allin Network
Products, Inc., successor by name change to Netright, Inc., a
California corporation, Allin Holdings Corporation, a Delaware
corporation, CodeLab Technology Group, Inc., a Delaware
corporation, Allin Investment-Delaware, Inc., a Delaware
corporation and Allin Investment-Cal, Inc., a Delaware
corporation, all with a current mailing address of c/o Allin
Corporation, 400 Greentree Commons, 381 Mansfield Avenue,
Pittsburgh, Pennsylvania 15220-2751 (collectively, the
"Borrower")
A N D
S & T BANK , having its office at 800 Philadelphia
Street, Box 190, Indiana, Pennsylvania 15701, (hereinafter referred
to as "Bank").
WITNESSETH:
WHEREAS, Allin Communications Corporation, a Delaware
corporation, Allin Interactive Corporation, a Delaware corporation,
Allin Digital Imaging Corp., a Delaware corporation, Kent
Consulting Group, Inc., a California corporation, Netright, Inc., a
California corporation, Allin Holdings Corporation, a Delaware
corporation, and KCS Computer Services, Inc., a Pennsylvania
corporation (the "Original Borrower") executed and delivered to
Bank a Revolving Credit Note dated October 1, 1998 (the
"Note") in the original principal amount of Five Million Dollars
($5,000,000.00), (the "Loan") representing sums advanced or to be
advanced pursuant to a Loan and Security Agreement between the
Original Borrower and the Bank dated October 1, 1998, as such
Loan and Security Agreement may be amended, modified or
supplemented from time to time (the "Loan Agreement").
WHEREAS, such Note and Loan Agreement were modified by an
Amendment to Note and Loan and Security Agreement, dated
March 25, 1999 (the "First Amendment"), by a Second Amendment
to Note and Loan Security Agreement, dated September 30, 1999
(the "Second Amendment"), by a Third Amendment to Note and Loan
Security Agreement, dated September 28, 2001 (the "Third
Amendment"), by a Fourth Amendment to Note and Loan Security
Agreement, dated September 26, 2005 (the "Fourth
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Amendment"), by a Fifth Amendment to Note and
Loan Security Agreement, dated September 26, 2005 (the "Fifth
Amendment"), by a Sixth Amendment to Note and Loan Security
Agreement, dated September 6, 2006 (the "Sixth Amendment"), by
a Seventh Amendment to Note and Loan Security Agreement, dated
June 28, 2007 (the "Seventh Amendment"), and by an Eighth
Amendment to Note and Loan and Security Agreement dated
May 16, 2008 (the "Eighth Amendment") (the First Amendment,
Second Amendment, Third Amendment, Fourth Amendment, Fifth
Amendment, Sixth Amendment, Seventh Amendment, Eighth Amendment and
this Ninth Amendment are collectively referred to herein as the
"Amendments");
WHEREAS, the parties hereto desire to amend the Note, the Loan
Agreement, and all other documents executed in connection with the
Loan (the "Loan Documents") to inter alia, reduce the Loan
Amount and to remove Allin Consulting of Pennsylvania, Inc.,
successor by name change to KCS Computer Services, Inc., a
Pennsylvania corporation and Allin Corporation of California
d/b/a Allin Consulting, successor by name change to Kent Consulting
Group, Inc., a California corporation as Borrower and add
Allin Investment-Delaware, Inc., a Delaware corporation and
Allin Investment-Cal, Inc., a Delaware corporation as
Borrower.
NOW THEREFORE, in consideration of the foregoing recitals, and
in further consideration of the mutual covenants contained herein,
and intending to be legally bound hereby, the parties hereto agree
as follows:
1. The foregoing recitals are incorporated herein and made a
part hereof, as and for the agreement of the parties.
AMENDMENTS
2. Allin Corporation of California, a California corporation and
Allin Consulting of Pennsylvania, Inc., a Pennsylvania corporation
are hereby deleted as Borrower and released from liability and
obligation under the Note, Loan Agreement and the other Loan
Documents. Bank’s security interest in that certain portion
of the Collateral, as defined in the Loan Agreement, which is owned
exclusively by Allin Corporation of California, a California
corporation (the "Allin California Collateral") and Allin
Consulting of Pennsylvania, Inc., a Pennsylvania corporation (the
"Allin Pennsylvania Collateral") and which shall be transferred to
Dell Inc. or an affiliate of Dell, Inc. in connection with the
Stock Purchase Agreement, is hereby released and terminated.
3. Allin Investment-Delaware, Inc., a Delaware corporation, and
Allin Investment-Cal, Inc., a Delaware corporation, are hereby
added as Borrower and each of them hereby agree to be bound by all
of the terms, conditions, duties and obligations of the Note, Loan
Agreement and the other Loan Documents as if they were a party to
such documents at the time they were originally executed. All
references in the Loan Documents to the Borrower shall hereafter be
deemed to refer to Borrower as comprised of Allin Corporation,
successor by name change to Allin Communications Corporation, a
Delaware corporation, Allin Interactive Corporation,
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a Delaware corporation, Allin Network Products,
Inc., successor by name change to Netright, Inc., a California
corporation, Allin Holdings Corporation, a Delaware corporation,
CodeLab Technology Group, Inc., a Delaware corporation, Allin
Investment-Delaware, Inc., a Delaware corporation, and Allin
Investment-Cal, Inc., a Delaware corporation.
4. Paragraph 1.2(a) of the Loan Agreement is deleted in its
entirety, and in lieu thereof, the following provision is
inserted:
(a) Borrowing Base Calculation . The maximum borrowing
availability under this Agreement applicable to the Revolving
Credit Loans shall be equal on any day during the term of this
Agreement to the lesser of (i) Three Million Five Hundred
Thousand and 00/100 Dollars ($3,500,000.00) , or
(ii) eighty percent (80%) of the aggregate gross amount
of Qualified Accounts (the lesser of the amounts described in
clauses (i) and (ii) of this sentence is sometimes
referred to in this Agreement as the "Borrowing Base").
5. Notwithstanding any contrary provision contained in the Note,
Loan Agreement or in any other Loan Document, the maximum principal
amount of the Loan is hereby decreased from Five Million
and 00/100 Dollars ($5,000,000.00) to Three Million Five
Hundred Thousand and 00/100 Dollars ($3,500,000.00) , and all
references contained in the Note, Loan Agreement or any other Loan
Document to the loan amount are hereby modified and amended to read
Three Million Five Hundred Thousand and 00/100 Dollars
($3,500,000.00) which sums Borrower promises to repay to the
order of Bank in accordance with the terms of the Note.
6. Following execution of this Ninth Amendment, Bank agrees that
it shall, within a reasonable period of time, file UCC Financing
Statement Amendments with the Secretary of State of the State of
California and with the Department of State of the Commonwealth of
Pennsylvania, as applicable, to release the Allin California
Collateral and the Allin Pennsylvania Collateral, respectively. In
addition, financing statements shall be filed with the State of
Delaware perfecting Bank’s security interest against Allin
Investment-Delaware, Inc., a Delaware corporation and Allin
Investment-Cal, Inc., a Delaware corporation.
7. Following the execution of the Ninth Amendment, and in any
event, no later than January 12, 2009, Borrower shall make a
payment in the amount of $1,314,695.00. This payment shall be
applied first to interest at the Applicable Interest Rate, then to
other charges due hereunder or under any other Loan Documents, and
lastly to reduction of the principal balance of the Loan.
8. The execution of this Ninth Amendment to Note and Loan and
Security Agreement shall be deemed the execution of a Note in the
amount of Three Million Five Hundred Thousand and 00/100 Dollars
($3,500,000.00) upon the terms and provisions
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contained in the Note executed by Borrower in
favor of Bank, dated October 1, 1998, as modified by the
Amendments, and shall serve as additional evidence of
Borrower’s liability, promise and undertaking, to repay the
outstanding principal sum of up to Three Million Five Hundred
Thousand and 00/100 Dollars ($3,500,000.00) to Bank in
accordance with the terms, covenants, provisions and conditions
contained in the Note, the Loan and Security Agreement and the
other Loan Documents, and as modified herein, which terms,
covenants, provisions and conditions are incorporated herein by
reference thereto.
9. Anything contained herein to the contrary notwithstanding,
this Ninth Amendment to Note and Loan and Security Agreement will
not forfeit the precedence or prior in time lien or priority of the
financing statements or any other security held by the Bank, its
successors and assigns, on the Collateral as defined in the Loan
Agreement.
10. THE BORROWER AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR ANY
ATTORNEY OF ANY COURT OF RECORD WITHIN THE UNITED STATES OR
ELSEWHERE, UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT UNDER THE
LOAN AGREEMENT, UNDER THE REVOLVING CREDIT NOTE OR UNDER ANY OF THE
OTHER LOAN DOCUMENTS, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST
THE BORROWER AS OF ANY TERM IN FAVOR OF THE BANK OR ANY HOLDER OF
THE REVOLVING CREDIT NOTE, FOR ALL SUMS DUE AND UNPAID UNDER THE
REVOLVING CREDIT NOTE, WHETHER BY ACCELERATION OR NOT, WITH OR
WITHOUT DECLARATION, WITH COST OF SUIT, RELEASE OF ALL ERRORS,
WITHOUT STAY OF EXECUTION AND WITH FIVE PERCENT (5.0%) ADDED
COLLECTION FEE. THE BORROWER ALSO WAIVES THE RIGHT OF INQUISITION
OF ANY REAL ESTATE LEVIED ON, VOLUNTARILY CONDEMNS THE SAME,
AUTHORIZES THE PROTHONOTARY OR CLERK TO ENTER THE WRIT OF EXECUTION
ON SAID VOLUNTARY CONDEMNATION, AGREES THAT SAID REAL ESTATE MAY BE
SOLD ON A WRIT OF EXECUTION, AND ALSO WAIVES AND RELEASES ALL
RELIEF FROM ANY AND ALL APPRAISEMENT, STAY OR EXEMPTION LAW OF ANY
STATE NOW IN FORCE OR ENACTED IN THE FUTURE. IF A COPY OF THE
REVOLVING CREDIT NOTE, VERIFIED BY AFFIDAVIT OF THE BANK OR ANY
SUCH HOLDER OF THE REVOLVING CREDIT NOTE OR SOMEONE AUTHORIZED TO
ACT ON THE BEHALF OF THE BANK OR ANY SUCH HOLDER, HAS BEEN FILED IN
SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL
REVOLVING CREDIT NOTE AS A WARRANT OF ATTORNEY. THE AUTHORITY AND
POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST THE BORROWER WILL
NOT BE EXHAUSTED BY ANY SINGLE EXERCISE OF THE AUTHORIZED POWER,
AND THE SAME MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS THE
HOLDER DEEMS NECESSARY OR DESIRABLE; AND THIS INSTRUMENT WILL BE A
SUFFICIENT WARRANT.
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COVENANTS, REPRESENTATIONS AND
WARRANTIES
11. The Borrower confirms and agrees that the terms:
"Loan Document" and "Loan Documents" as defined in the Loan
Agreement each include within their respective meanings this
Amendment and all other documents and instruments executed or to be
executed by the Borrower in connection with the Ninth Amendment,
which are collectively referred to herein as the "Ninth Amendment
Documents."
12. The Borrower ratifies, confirms and reaffirms, without
condition, all the terms and conditions of the Loan Agreement and
the other Loan Documents and agrees that it continues to be bound
by the terms and conditions thereof as amended by the Amendm
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